HEALTH CARE

  On January 25, Bill invited me and two guests to lunch in the President’s small study near the Oval Office: Carol Rasco, the newly named White House domestic policy adviser who had served in Bill’s administration in Arkansas, and our old friend Ira Magaziner, a successful business consultant who had produced a groundbreaking study on health care costs.

  Tall, angular and intense, Ira was prone to worry in the best of times, and on this day he seemed particularly anxious. In a few hours, Bill planned to unveil a health care task force and announce that it would produce reform legislation during his first one hundred days in office. Few on the White House staff knew that Bill had asked me to chair the task force or that Ira would manage the day-to-day operations as a senior adviser to the President for policy and planning. Ira had learned about his new job only ten days before the inauguration.

  Bill wanted to approach health care reform from a new angle, and Ira, with his brilliant and creative mind, had a knack for coming up with inventive ways of looking at issues.

  He also had private sector experience as the owner of a consulting business in Rhode Island that advised multinational companies on how to become more productive and profitable.

  After the Navy stewards brought us our food from the White House Mess, Ira delivered troubling news: Some Capitol Hill veterans were warning him that our timetable for delivering a health care reform bill in one hundred days was unrealistic. We had been encouraged by the electoral success of Harris Wofford, the new Democratic Senator from Pennsylvania who had campaigned on a health care platform and often told crowds: “If criminals have the right to a lawyer, working Americans have the right to a doctor.” But Ira was getting a different message.

  “They think we’re gonna get killed,” said Ira, who hadn’t touched his sandwich.

  “We’ll need at least four to five years to put together a package that will pass Congress.”

  “That’s what some of my friends are saying too,” I said. I had cared about this issue for a long time, well before Bill and I got into politics, and I believed that access to quality affordable health care was a right American citizens should be guaranteed. I knew that Ira felt the same way. That might explain why I didn’t run screaming from the room when Bill first broached the idea of my leading the task force and working with Ira on this signature initiative of his Administration. On this day, it was Bill’s boundless optimism and his determination that kept me in my chair.

  “I’m hearing the same thing,” Bill said. “But we have to try. We just have to make it work.”

  There were compelling reasons to push ahead. By the time Bill became President, thirty-seven million Americans, most of them working people and their children, were uninsured. They weren’t getting access to care until they were in a medical crisis. Even for common medical concerns they wound up in an emergency room, where care was most expensive, or they went broke trying to pay for medical emergencies on their own.

  In the early 1990s, one hundred thousand Americans were losing coverage each month, and two million were without coverage temporarily as they changed jobs. Small businesses were unable to offer coverage for their employees because of the exploding cost of health care premiums. And the quality of medical care was suffering, too: In an effort to control costs, insurance companies often denied or delayed treatment prescribed by doctors in deference to their corporate bottom lines.

  Rising health care costs were sapping the nation’s economy, undermining American competitiveness, eroding workers’ wages, increasing personal bankruptcies and inflating the national budget deficit. As a nation, we were spending more on health care―14 percent of our GDP―than any other industrialized country. In 1992, as much as $45 billion in health care costs was spent on administrative costs, rather than going to doctors, nurses, hospitals, nursing homes or other health care providers for direct care.

  This terrible cycle of escalating costs and declining coverage was largely the result of a growing number of uninsured Americans. Patients without insurance seldom could afford to pay for their medical expenses out-of-pocket, so their costs were absorbed by the doctors and hospitals that treated them. Doctors and hospitals, in turn, raised their rates to cover the expense of caring for patients who weren’t covered or couldn’t pay, which is why $2 aspirin tablets and $2,400 crutches sometimes appear on hospital bills. Insurers, confronted with having to cover higher doctor and hospital rates, began trimming coverage and raising the price of premiums, deductibles and copayments for people with insurance.

  As the price of premiums went up, fewer employers were willing or able to provide coverage for their workers, so more people lost their insurance. And the vicious cycle continued.

  Solving these problems was critical to the wellbeing of tens of millions of Americans and to our nation as a whole. But even so, we knew it was going to be an uphill battle.

  For most of the twentieth century, Presidents had tried to reform our nation’s health care system, with mixed success. President Theodore Roosevelt and other Progressive leaders were among the first to propose universal health care coverage nearly a century ago. In 1935, President Franklin D. Roosevelt envisioned a national health insurance system as a complement to Social Security, the cornerstone of his New Deal. The idea went nowhere, owing in large measure to opposition from the American Medical Association, the lobbying group representing the nation’s doctors, who feared governmental control over their practices.

  President Truman took up the cause of universal health care coverage as part of his Fair Deal and included it in his campaign platform in the 1948 election. He, too, was thwarted by well-financed and well organized opposition from the AMA, the U.S. Chamber of Commerce and others who opposed national health insurance on ideological grounds, suggesting it was linked to socialism and communism. Opponents also believed then, as now, that the existing system worked well enough as is, despite the paradox that the United States spends more on health care than any other nation yet doesn’t provide health insurance for everyone. After failing to overcome the opposition, Truman proposed the more modest―and practical―idea of providing health insurance for Social Security recipients.

  During the 1940s and 1950s, labor unions bargained for health care benefits in the contracts they negotiated for workers. Other employers began offering these benefits to nonunion employees. This led to an extensive employer-based health care system in which insurance coverage increasingly was linked to one’s employment.

  In 1965, President Johnson’s Great Society initiative led to the creation of Medicaid and Medicare, which provide federally funded health insurance for two underserved groups―the poor and the elderly. The programs serve seventy-six million individuals today.

  Johnson’s effort, made possible by his landslide victory in 1964 and a huge Democratic majority in Congress, still represents the biggest health care success of the twentieth century and the realization of President Truman’s goal.

  Funded by payroll contributions from workers, Medicare removed the worry for people over sixty-five by making them eligible for physician and hospital services. Although Medicare doesn’t cover prescription drugs―and should―it remains a popular and crucial service for older Americans, and its administrative costs are far lower than those of private health insurance companies providing coverage. Medicaid, the program that pays for care for the poorest Americans and those with disabilities, is funded jointly by the states and the federal government and is administered by the states according to federal rules.

  More politically vulnerable than Medicare because the poor are less politically powerful than the elderly, it has been a godsend for many Americans, especially children and pregnant women.

  President Nixon recognized the draining effects of health care costs on the economy and proposed a system of universal health care based on what’s known as an “employer mandate”: all employers would be required to pay for limited benefits for their employees.

  Although as many as twenty different health care proposals were introduced in Congress during the Nixon Administration, no proposal for universal coverage got a majority vote from a congressional committee until nearly twenty years later, in 1994.

  Presidents Ford and Carter―Republican and Democrat―also pursued reform in the 1970s, but they ran into the same political obstacles that had blocked change for most of the twentieth century. Over several decades, the health insurance industry had grown increasingly powerful. Many insurance companies opposed universal coverage because they feared it could restrict the amount they could charge and limit their ability to turn down high-risk patients. Some thought that universal coverage might sound the death knell for private insurance.

  The historical odds were against Bill because attitudes about health care reform were diverse, even among Democrats. As one expert put it, opinions are “theologically held”―thus impervious to reason, evidence or argument. But Bill felt he had to show the public and the Congress that he had the political will to move forward and make good on his campaign promise to take immediate action on health care. Reform was not only good public policy that would help millions of Americans, it also was inextricably tied to reducing the deficit.

  I shared Bill’s profound concerns about the economy and the fiscal irresponsibility of the prior twelve years, under the Reagan and Bush Administrations. Recent deficit projections by the Bush Administration camouflaged the real deficit by underestimating the effects of a stagnant economy, the impact of health care costs and federal spending on the savings and loan bailout. These costs had helped swell the projected deficit to $387 billion over four years―considerably higher than the estimate the departing Bush White House had released. But beyond budgetary concerns, I believed health care reform could relieve the anguish of working people throughout our wealthy country. As the wife of a Governor and now a President, I didn’t have to worry about my family’s access to health care. And I didn’t think anyone else should have to, either.

  My experiences serving on the board of Arkansas Children’s Hospital and chairing a state task force on rural health care introduced me to problems embedded in our health care system, including the tricky politics of reform and the financial quandaries faced by families who were too “rich” to qualify for Medicaid but too “poor” to pay for their own care. Traveling around Arkansas in the 1980s, and then around the United States during the presidential campaign, I met Americans who reinforced my belief that we had to fix what was wrong with the system. Bill’s commitment to reform represented our greatest hope of guaranteeing millions of hardworking men and women the health care they deserved.

  Bill, Ira, Carol and I walked out of the Oval Office, past the bust of Abraham Lincoln by Augustus Saint-Gaudens and across the narrow hall to the Roosevelt Room, where a crowd of cabinet secretaries, senior White House staff and journalists was waiting for what the official schedule listed as a “task force meeting.”

  Stepping into the Roosevelt Room is stepping back into American history. You are surrounded by banners from every U.S. military campaign and flags from each division of the U.S. Armed Forces, portraits of Theodore and Franklin Roosevelt and the Nobel Peace Prize medal that Theodore Roosevelt won in 1906 for mediating a settlement of the Russo-Japanese War. During our time in the White House, I added a small bronze bust of Eleanor Roosevelt so that her contributions as a “Roosevelt” would also be acknowledged in the room named for her uncle and husband.

  In this historic room, Bill declared that his administration would present a health care reform plan to Congress within one hundred days―a plan that “would take strong action to control health care costs in America and to begin to provide for the health care needs of all Americans.”

  Then he announced that I would chair a newly formed President’s Task Force on National Health Care Reform, which would include the Secretaries of Health and Human Services, Treasury, Defense, Commerce and Labor, as well as the Directors of Veterans Affairs and of the Office of Management and Budget and senior White House staff. Bill explained that I would work with Ira, the cabinet and others to build on what he had sketched out in the campaign and in his inaugural address. “We’re going to have to make some tough choices in order to control health care costs … and to provide health care for all,” he said. “I am grateful that Hillary has agreed to chair the task force, and not only because it means she’ll be sharing some of the heat I expect to generate.”

  Heat came from all directions. The announcement was a surprise inside the White House and federal agencies. A few on Bill’s staff had assumed I would be named domestic policy adviser (which Bill and I had never discussed). Others thought I would work on education or children’s health, largely because of my past experiences on these issues.

  Maybe we should have told more staff members, but sensitive internal information was already flowing out of the White House, and Bill wanted to break the story himself and answer the first questions raised.

  Many White House aides thought it was a great idea. Several of Bill’s key lieutenants heartily endorsed the idea, including Robert Rubin, Chairman of the National Economic Council and later Secretary of the Treasury. One of my favorite people in the administration, Bob is fabulously smart and successful, yet thoroughly self-effacing. He later joked about his extraordinary political acumen: He didn’t think my appointment would generate such intense political fallout. I was surprised by the reaction, too.

  Some of our friends gave us lighthearted warnings about what lay ahead. “What did you do to make your husband so mad at you?” Mario Cuomo, then Governor of New York, asked me during a White House visit.

  “What do you mean?”

  “Well,” Mario replied, “he’d have to be awfully upset about something to put you in charge of such a thankless task.”

  I heard the warnings, but I didn’t fully realize the magnitude of what we were undertaking.

  My work in Arkansas running the rural health care task force and the Arkansas Education Standards Commit tee didn’t rival the scale of health care reform. But both efforts were considered successful and made me excited and hopeful as I took on this new challenge. The biggest problem seemed to be the deadline that Bill announced. He had won the election in a three-way race with less than a majority of the popular vote―43

  percent―and he couldn’t afford to lose whatever political momentum he had at the beginning of the new administration. James Carville, our friend, adviser and one of the most brilliant tactical minds in American politics, had given Bill this warning: “The more time we allow for the defenders of the status quo to organize, the more they will be able to marshal opposition to your plan, and the better their chances of killing it.”

  Democrats in Congress were also urging us to move quickly. A few days after Bill’s announcement, House Majority Leader Dick Gephardt asked to meet with me. He was known on Capitol Hill for his Midwestern roots and sensibilities, as well as his command of budget issues. His compassion for people in need reflected his upbringing, and his commitment to health care reform was heightened by his son’s bout with cancer years earlier. Through position and experience, Gephardt would be a leading voice in any health care deliberations in the House. On February 3, Gephardt and his top health care aide came to my West Wing office to discuss strategy. For the next hour, we listened as Gephardt outlined his concerns about health care reform. It was an intense meeting.

  One of Gephardt’s chief worries was that we would be unable to unify Democrats, who were seldom united under the best of circumstances. Health care reform widened existing divisions. I thought of the old Will Rogers joke:

  “Are you a member of any organized political party?”

  “No, I’m a Democrat.”

  I knew of the potential divisiveness but hoped that a Democratic Congress would rally around a Democratic President to show what the party could accomplish for America.

  Democratic members had already begun to outline their own models for reform in order to influence the President’s plans. Some proposed a “single payer” approach, modeled on the European and Canadian health care systems, which would replace the current employer-based system. The federal government, through tax payments, would become the sole financier-or single payer-of most medical care. A few favored a gradual expansion of Medicare that would eventually cover all uninsured Americans, starting first with those aged fifty-five to sixty-five.

  Bill and other Democrats rejected the single-payer and Medicare models, preferring a quasi-private system called “managed competition” that relied on private market forces to drive down costs through competition. The government would have a smaller role, including setting standards for benefit packages and helping to organize purchasing cooperatives.

  The cooperatives were groups of individuals and businesses forged for the purpose of purchasing insurance. Together, they could bargain with insurance companies for better benefits and prices and use their leverage to assure high-quality care. The best model was the Federal Employees Health Benefit Plan, which covered nine million federal employees and offered an array of insurance options to its members. Prices and quality were monitored by the plan’s administrators.

  Under managed competition, hospitals and doctors would no longer bear the expense of treating patients who weren’t covered because everyone would be insured through Medicare, Medicaid, the veterans and military health care plans or one of the purchasing groups.

  Perhaps most important, the system would allow patients to choose their own doctors, a non-negotiable item in Bill’s view.