The Status Quo? Think Again

February 8, 2010

The last time a major effort at health care reform was tried, it died an ignoble death. Bill and Hillary Clinton were certain that they had read the political signals correctly and that health care reform was a winning issue for them. Bill Clinton framed health care as an essential economic issue after he was elected and before he became President. He included health care as a major issue at the economic summit he held in December, 1992. Bill Clinton got it then. Remember? “It’s the economy, stupid!”

At the time, business leaders who attended the summit were quoted as saying that they were “wowed” by his command of the issues and commitment to fixing the economy. In a news conference after the summit, the President-elect listed the ideas where he believed there was consensus. “Repairing the nation’s health care system” was high on that list.

Well, he was wrong. There wasn’t a consensus about “repairing the nation’s health care system.” Much has been written about why health reform failed in 1994 — that’s not my focus right now. Rather, I think it is important to understand this issue: Consensus on the need for reform.

In the early 1990s, much was said about rising health care costs. At that time, health care cost trends were in double digits and employers were increasingly talking about the economic burden of health care premiums. Consumers, too, were talking about their fears of losing health coverage. The press reported about people staying in jobs to avoid becoming ineligible for coverage due to pre-existing conditions. “Job lock” was the term given to employees’ fear of changing jobs. It was easy to read the signals in those days as a mandate for fundamental change in the health care system.

What became increasingly clear as the health reform debate went forward, however, was that the desire for change was a mile wide and an inch deep. Consumers and employers began to be concerned as the dimensions of “reform” began to take shape. Opponents were easily able to characterize the health care proposals as taking away health care security — not giving it. In the end, the proposals failed because the public (consumers and employers alike) decided that they were more afraid of the changes being proposed than they were of the “status quo.”

When the Clinton proposals failed, most thought that the health care system in place at the time would pretty much stay as it was. But, in fact, that’s not what happened. Employers were serious that they wanted change in health care — they just couldn’t coalesce around a single vision of what that change would entail. So, after the failure of health reform at the federal level, almost overnight, employers changed the health benefit plans they offered quite dramatically. The country moved almost wholesale into managed care.

For a time, that strategy seemed to be working. Health care trends moderated and analysts were claiming victory for reform. The only problem was that consumers hated the “reforms” they got. Almost as quickly as benefit plans were changed, the “managed care backlash” started. Laws were passed to limit what health plans could do and employers retrenched in face of employee complaints. And the “status quo” of the early 1990s? Long gone.

Are there lessons from the Clinton years for today’s foray into health care reform? As someone might say, “you betcha.” While the public might be fearful of the current proposals for health reform, it shouldn’t be fooled into thinking that the failure of these sets of proposals means that the status quo will stay in place. One thing is certain: change in health care will come one way or another.