America's Bitter Pill
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12 Union opposition: Again, this is from several of the books mentioned, but particularly from “Remedy and Reaction.”
13 The AMA spent what in 1949 was an astounding $1.5 million to campaign against the plan, labeling it as socialized medicine that would be “the key to the arch of a socialist state,” which would destroy doctors’ independent relationships with their patients and lead to doctors becoming government employees: Starr, Social Transformation of American Medicine, 285.
14 In 1940, fewer than ten million Americans had private healthcare. By 1950, 76.6 million enjoyed that protection: This comes directly from Altman and Shactman, Power, Politics, and Universal Health Care.
15 By the time the candidates appeared that night in Las Vegas in 2007, 162 million nonelderly Americans: Buchmueller and Monheit, “Employer-Sponsored Health Insurance and the Promise of Health Insurance Reform.” National Bureau of Economic Research Working Paper No. 14839, April 2009: http://www.nber.org/papers/w14839.
16 In 1965, Medicare had been projected by a House of Representatives committee to cost $12 billion by 1990: The projections of the House Ways and Means Committee can be found at http://ssa.gov/history/pdf/Downey%20PDFs/Social%20Security%20Amendments%20of%201967%20Vol%205.pdf.
17 Its actual cost by then was $110 billion: This can be found at http://medicare.commission.gov/medicare/history.htm.
18 Emilia Gilbert—a school bus driver earning about $1,800 a month, whom I wrote about in the Time article—fell victim to these coverage gaps: This is one of the cases included in my Time special report. I interviewed Ms. Gilbert and had full access to all of Ms. Gilbert’s bills.
19 Medicare, which pays hospitals based on their costs, plus overhead and a small profit margin, for providing each service, would have paid about $825 for all three tests: Determining how much Medicare will pay for a given treatment or test is a frustrating, complicated process. First, it requires determining what is called the “HCPCS code” that Medicare assigns to the procedure being billed. If it is a hospital treatment, the hospital’s charges are tied to a code called a DRG. Figuring out the correct code often takes help from a doctor or other medical professional in order to translate the acronyms and abbreviations on the bill into a precise identification of the procedure. Then, one must consult a difficult-to-navigate Centers for Medicare and Medicaid Services website—http://www.cms.gov/apps/physician-fee-schedule/search/search-criteria.aspx—and add in factors such as the location where the treatment took place (because Medicare payments take regional cost factors into account), and whether it took place in a hospital or at an outpatient facility (which gets paid less). When that information is entered, the result is the price that Medicare will pay that hospital or clinic for the treatment or test in question.
20 In describing the forces that impelled the push for healthcare reform, Harvard Business Review would later cite a 2007 study: Brad Evans, “Obamacare Website,” Harvard Business Review, March 18, 2013.
21 Yale New Haven, which has a tax exemption as a nonprofit institution, was on its way to recording operating income of more than $125 million: As noted above, all hospital and salary data in the text is taken from the nonprofit hospitals’ IRS Form 990 filings, which are available at http://www.guidestar.org/.
22 President Bill Clinton had appointed his wife to come up with a plan for a massive overhaul of the country’s healthcare system: For the history of Hillarycare I reviewed multiple archives of various publications, particularly The New York Times, but the source I relied on most was the classic history of Hillarycare by master journalists Haynes Johnson and David Broder: The System: The American Way of Politics at the Breaking Point (Little, Brown, 1996). In addition, I drew from Blumenthal and Morone, The Heart of Power, cited above.
23 The answer was Mitt Romney and a young economics professor named Jonathan Gruber (Gruber bio and history with Romneycare): Gruber; former White House National Economic Council director Larry Summers; and David Cutler, the Otto Eckstein Professor of Applied Economics at Harvard, who was the senior healthcare adviser to the Obama 2008 primary campaign.
24 an idea first floated in 1989 by economist Stuart Butler: Stuart Butler, “Assuring Affordable Healthcare for All Americans,” an October 2, 1989, lecture that was subsequently published by the Heritage Foundation and can be found at http://healthcarereform.procon.org/sourcefiles/1989_assuring_affordable_health_care_for_all_americans.pdf.
25 Nixon announced a plan that would force employers to buy insurance for all of their workers: Details of the Nixon plan are from White House press office archives and from Starr, Remedy and Reaction, and Blumenthal and Morone, The Heart of Power.
26 Romney, citing the original Heritage Foundation article, would deride the “free riders” who refuse to buy insurance and call the mandate “the ultimate conservative idea”: I found this because the Web publication Business Insider discovered it in Michael Kranish and Scott Helman’s biography of Romney, The Real Romney. See http://www.businessinsider.com/guess-what-mitt-romney-once-called-the-ultimate-conservative-idea-2012-8#ixzz23kadtNvH.
27 On the stage with Romney, celebrating the governor’s signing of what would come to be called Romneycare (Romneycare celebration at Faneuil Hall): The event was videotaped and is available on YouTube: https://www.youtube.com/watch?v=-GL6Sw_U1gk. I also interviewed four people who were there, including Gruber.
28 Obama had promised a union rally that he would fight for the single-payer system: The pro-reform group Physicians for a National Health Program found a video of then state senator Obama’s speech to a union rally and posted it on YouTube: http://www.pnhp.org/news/2008/june/barack_obama_on_sing.php.
29 Obama’s team was less enthusiastic about the idea that the issue would fire up the troops: According to a senior Obama campaign political aide, a mid-level policy adviser, and a junior person in the polling operation.
30 was not how Mary Fowler, then sixty-two, had planned to spend her retirement: Information about Liz Fowler and her family is from Liz Fowler, her mother, Mary, and—briefly—her father, Robert. Fowler’s account of her history working for Max Baucus was corroborated by three colleagues who served on Baucus’s Senate staff; the academic degrees and honors listed in the text were independently checked.
31 WellPoint, the insurer that rejected Mary, traced its roots: The history of WellPoint is taken from its website: http://www.wellpoint.com/AboutWellPoint/CompanyHistory/.
32 Healthcare spending as a percent of England’s gross domestic product is lower, but outcomes are better in England, compared to the United States: There are several agencies that report on these comparisons, including the Organization for Economic Cooperation and Development (OECD). The OECD studies can be found at http://www.oecd.org/els/health-systems/health-data.htm. A vivid comparison of healthcare expenditures and results for the United States and England (as well as many other countries) can be found at table 2 in this report from the Commonwealth Fund: http://www.commonwealthfund.org/~/media/files/publications/fund-report/2013/nov/1717_thomson_intl_profiles_hlt_care_sys_2013_v2.pdf. The relevant numbers, as reported in table 2, are that in 2011 England spent 9.4 percent of its gross domestic product on healthcare, while the United States spent 17.7 percent. Among other healthcare quality measurements, the rate of “avoidable deaths”—defined as deaths that would have been “amenable to health care”—was 13 percent lower in England. The British system, which citizens can supplement by paying for private care, attracts regular public complaints, particularly over long waits for elective surgery. But another measurement in the same table shows that in polls taken in 2010, the system’s overall approval rating was 62 percent compared to 29 percent in the United
States.
CHAPTER 3: MAX, BARACK, HILLARY, BILLY, AND THE GATHERING CONSENSUS
1 Baucus told Fowler and the rest of his staff that he was determined to set the stage for systemic healthcare reform in 2008: Fowler.
2 When Baucus, then sixty-six, met with his staff to discuss healthcare, he often talked about Lester Skramsted: David Schwartz and Fowler, who were senior aides to Baucus.
3 Hillary Clinton was furious about the Kennedy endorsement: Senior Clinton policy adviser Neera Tanden.
4 Kennedy and Baucus formed an alliance to lay the groundwork for healthcare reform: Although supplemented with interviews of many of the key players—such as Fowler, senior Kennedy healthcare aide John McDonough, and two senior aides to Republican senators—much of this material is derived from the excellent account provided by John McDonough in his book Inside National Health Reform (University of California Press, 2011), which chronicles the journey of Obamacare through Congress from the perspective of a top Kennedy aide.
5 The Obama campaign called the ad “Billy”: The ad can be viewed on YouTube: https://www.youtube.com/watch?v=NCRO0g9CfAw.
6 Karen Ignagni was thinking the same thing in the summer of 2008: Ignagni and then-AHIP vice president for communications Robert Zirkelbach.
7 The individual market was in deeper trouble. In fact, it was in danger of drying up completely: Special Report from the United Hospital Fund, published by the New York State Health Foundation, 2012, http://nyshealthfoundation.org/uploads/resources/BP4-20120820-B.pdf.
CHAPTER 4: “THIS IS WHAT I THOUGHT THE SENATE WOULD BE LIKE”
1 the June 16, 2008, healthcare summit that Baucus and Fowler had organized: I obtained a transcript of the Baucus healthcare summit proceedings. It does not seem to be available online.
CHAPTER 5: A NEW PRESIDENT COMMITS, AND HIS CAMP DIVIDES
1 Neera Tanden had been the Clinton campaign’s chief domestic policy adviser (Neera Tanden’s background and decision to join Obama campaign): Tanden, two close associates, publicly available biographical material, and the Jason Horowitz Washington Post profile cited in the text.
2 Tanden attended her first meeting with the new boss and his senior staff: Tanden, two Obama political aides, one of whom was there.
3 “You know,” Obama said, “I think maybe Hillary was right about the mandate”: Tanden.
4 Most of the Obama people, including newly appointed chief of staff Rahm Emanuel, didn’t want to bother with healthcare in the early days of the administration: Rahm Emanuel, Zeke Emanuel, Peter Orszag, Neera Tanden, former Senator Tom Daschle, and White House healthcare adviser Bob Kocher, among others.
5 some of the people being asked to frame Obama’s economic package disagreed (early debates during the transition about the substance of reform): The same sources as listed immediately above, as well as Jonathan Gruber and David Cutler.
6 Daschle had a better idea. He would do both: Rahm Emanuel, Zeke Emanuel, and Daschle.
7 Lambrew treated Emanuel as if she thought he was a know-it-all: DeParle, Zeke Emanuel, two Obama policy aides, and one congressional staffer who frequently witnessed the interaction between the two. (Lambrew declined repeated requests to be interviewed, so I never could ask her what she thought.)
8 To Emanuel, Lambrew was the naïve, left-wing policy wonk: Zeke Emanuel, Nancy-Ann DeParle, and a close colleague of Zeke Emanuel.
9 Jarrett thought that extending coverage should, indeed, win out over fights about cost control: Summers, Orszag, Zeke Emanuel, Rahm Emanuel, DeParle, and Kocher.
10 Summers, Orszag, Kocher, Zeke Emanual, and the rest of the economic team, however, saw reform in terms of their turf: Summers, Orszag, Zeke Emanuel, Kocher, Gruber, and Cutler.
11 Lambrew was fine with that prescription. Expanding coverage was the priority: Zeke Emanuel, DeParle, Gruber, and Orszag.
12 He, too, was confident the new Obama team could go further than Gruber thought: Daschle.
CHAPTER 6: EVERY LOBBYIST’S FAVORITE DATE
1 Baucus’s staff sent their white paper to the Obama transition team as a courtesy, and incorporated minimal suggestions: Kocher, Fowler, and Zeke Emanuel.
2 Baucus had wanted to draft actual legislation. Fowler convinced him not to: Fowler.
3 However, Baucus was sure of one thing: Fowler and a senior member of Ted Kennedy’s staff who was privy to a conversation Kennedy had with Baucus.
4 An initiative that Grassley had pressed Baucus to include was also something Zeke Emanuel was obsessed with: Senator Charles Grassley, Zeke Emanuel, and two senior aides to Grassley.
5 In fact, Baucus and his team had wanted to go further: Fowler, Kocher.
6 The white paper—Baucus’s “Call to Action”: The text of this document can be found in a PDF at the Senate Finance Committee website: http://www.finance.senate.gov/.
7 Ted Kennedy’s HELP Committee: I credit McDonough’s Inside National Health Reform in the text, but, although I also relied on newspaper archives and interviews with others who were involved, I want to emphasize again how much his account provided the foundation for my reporting and description of these events in particular.
CHAPTER 7: PUNTING TO CAPITOL HILL
1 Rahm Emanuel saw the sudden talent and leadership gap as one more reason to question whether the new president ought to push ahead: Rahm Emanuel, Zeke Emanuel, Tom Daschle, David Cutler.
2 “I am going to do this,” he promised Orszag: Orszag.
3 Yet Obama took an almost instant liking to DeParle, as did Valerie Jarrett: DeParle, Rahm Emanuel, and Zeke Emanuel.
4 Zeke Emanuel would soon tell a friend that he thought the President was “mesmerized by her; maybe it’s that they both lost parents early on, or something”: The friend insisted on anonymity, but during one of our interviews Zeke Emanuel said almost the same thing to me.
5 Kocher and Zeke Emanuel had been working on the spreadsheet since December: Zeke Emanuel and Kocher. I reviewed a copy of the spreadsheet.
6 Fowler and Baucus would arrive the next day for a lunch with Kennedy: Fowler and Vicki Kennedy.
7 a dinner held the night of the inaugural in a private room at Washington’s Caucus Room restaurant (venue, conversation, and attendees at Frank Luntz Inauguration Night dinner): Luntz.
CHAPTER 8: DEAL TIME
1 Antonios “Tony” Clapsis, a bearded, wiry twenty-eight-year-old who loved crunching numbers (background on Clapsis and his hiring): Clapsis, Fowler, and two other aides to members of the Senate Finance Committee.
2 Republican senator Olympia Snowe was insisting that she would support reform only if it were paid for without any such broader tax measures: Senator Snowe, Fowler, Senator Grassley, and DeParle.
3 First to the table, beginning in early March, were the pharmaceutical companies, represented by several of Tauzin’s deputies from PhRMA: Tauzin, Fowler, Clapsis, Zeke Emanuel, Amgen’s chief lobbyist David Beier, DeParle, and a chief executive of one of the pharmaceutical companies who was directly involved in the negotiations. I also reviewed internal memos and emails related to these negotiations.
4 an unusual meeting took place in a conference room at the Democratic Senatorial Campaign Committee headquarters: Extensive emails and other documents related to this meeting and to the PhRMA negotiations, including those quoted in the text, were subpoenaed by the House Energy and Commerce Committee, which made them available to reporters. In addition, members of the staff of the committee, as well as Tauzin, Fowler, DeParle, and two others who asked not to be named, were interviewed about all of the events surrounding the PhRMA negotiations and the secret campaign fund.
5 The hospitals were next up at the Finance Committee negotiating table (hospital negotiations and deal): Clapsis, Fowler, DeParle, and three executives of hospitals who were kept informed of the negotiations.
6 The latest report, for 2008, had claimed hospitals provided $36 billion in uncompensated care: This “fact sheet”
from the American Hospital Association: http://www.aha.org/search?q=charity+care&site=redesign_aha_org.
7 That $36 billion represented only about 5 percent of all hospital revenue in 2008: This report from CMS, showing 2008 hospital revenue of $746.5 billion: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/downloads/proj2008.pdf.
8 National Journal would discover the reality, and peril, of healthcare having replaced steel as Pittsburgh’s dominant industry: The National Journal, January 31, 2013.
9 Romoff soon began leading a charge to consolidate (UPMC history and acquisition strategy): UPMC chief executive officer Jeffrey Romoff, UPMC vice president Paul Wood, and Beyond the Bounds, a history of the hospital system published by UPMC in 2009.
10 UPMC controlled 55 percent of the market for hospital and outpatient clinical services in the region: Romoff, Wood, and a review of documents associated with the suit.
11 Karen Ignagni, whose AHIP represented Highmark and all the other insurers, was also game to negotiate with the Baucus team (insurers’ negotiations): Ignagni, Zirkelbach, AHIP press releases and white papers, Clapsis, Fowler, and Schwartz.
12 the medical technology and device industry negotiations: A senior lobbyist for the industry, Clapsis, Fowler, and DeParle.
CHAPTER 9: BEHIND CLOSED DOORS: WHITE HOUSE TURF WARS, INDUSTRY DEALS, AND SENATE WRANGLING
1 a briefing memo for the president (wrangling over the DeParle memo): I saw one staff member’s detailed entries in a journal about the wrangling over the DeParle memo, and I read the final memo. I also interviewed two White House advisers (who were on opposite sides of the dispute) about it.