Receive the Bulldog Edition


Economic Blogosphere

Economic Journalists


economicprincipals.com banner

November 10, 2013
David Warsh, Proprietor


| contents |

Home Alone II?

The rollout of the Affordable Health Care Act is a public relations nightmare, no doubt about that. How serious are the problems with the implementation of the act itself?  The answer, at least according to Jonathan Gruber, of the Massachusetts Institute of Technology, who designed the measure, is that no one knows.

They won’t until the end of November, when the administration has promised to have its website working smoothly. Until January 1, when those whose insurance has been dropped must have some alternative. Until March 31, when the uninsured are required to buy a policy or pay a penalty. Or even until 2014 and 2016, when the next elections will have run their course.

That doesn’t mean there is any shortage of players eager to tell you what they think right now. They include former National Economic Council director Lawrence Summers.

“We’re home alone. There’s no adult in charge. Clinton would never have made these mistakes.” That was Summers, in 2010, complaining over dinner to Office of Management and Budget chief Peter Orszag about White House policy-making, as quoted in former Wall Street Journal reporter Ron Suskind’s book, Confidence Men: Wall Street, Washington, and the Education of a President. (Summers subsequently denied having made the remark.)

Summers was back in the news last week, this time as recipient while he was still in the White House of an incendiary four-page memo about the prospects for implementing the ACA prepared by one of his former Harvard deans.  And this time the grisly details are up on the Web.

David Cutler, of Harvard University, who advised the 2008 Obama campaign, then failed to get an administration job, wrote Summers six weeks after the president signed the Affordable Care Act, “I am concerned the personnel and processes you have in place are not up to the task, and that health reform will be unsuccessful as a result… I do not believe the relevant members of the Administration understand the President’s vision or have the capability to carry it out.”

He recently reaffirmed his views, telling the Post, “It’s very hard to think of a situation where the people best at getting legislation passed are best at implementing it. They are a different set of skills.”

Cutler’s 2010 memo, available on a social media publishing site, Scribd, was the jumping-off point of “HealthCare.gov: How political fear was pitted against technical needs,” a remarkable 2,800-word story in The Washington Post last week. Reporters Amy Goldstein and Juliet Eilperin described how Summer’s economic team had been defeated in a months-long White House “tug of war” by a health care team whose members had guided the passage of the statute through Congress, and who then took charge of putting it into effect.

Goldstein and Eilperin’s report is the first major attempt the plumb the mysteries of the rollout of the Affordable Care Act. From the headline on, they signal their intention to cover – eventually – all sides of what is, after all, a very complicated story. In this case they interviewed more than two dozen former administration officials and their business counterparts.  Their findings are too preliminary and diffuse to be very interesting. But the details are absolutely fascinating.

As always with daily newspapering, though, the most interesting stories tell only one side at a time. In this case it was the in-house critics’ view.  Cutler pulled no punches in his critique, titled “Urgent Need for Changes in Health Reform Implementation.”  The Centers for Medicare and Medicaid Services were demoralized, he said. At the Department of Health and Human Services, those charged with implementation were ill-suited to their jobs. “No one I interact with has confidence that your current personnel and configuration are up to the task,” he concluded.  “Summers, Orszag and their staffs agreed,” Goldstein and Eilperin flatly state in their story.

Was the memo prepared at Summers’s direction?  It’s hard to believe it wasn’t.  The story describes Cutler as “a trusted outside health adviser.”  Cutler is another of those whom Summers taught as a Harvard College undergraduate. Summers was part of the department that brought Cutler back to teach Harvard, and, as president of the university, he appointed Cutler associate dean of the Faculty of Arts and Sciences for Social Sciences in 2003.  Presumably he lobbied, without success, for Cutler to be given an administration job.  The Post writers say only that that the memo didn’t come from Cutler.  It clearly came from “the economic team.”

To understand how complicated is the landscape here, it’s necessary to recall the history of President Obama’s commitment to health care reform. The impulse came from former Senate Majority leader Tom Daschle, a political strategist and one-time presidential aspirant and who was among Obama’s first endorsers. Obama in turn chose to make his first priority health care reform plans that had been devised by Daschle, beginning with the Affordable Care Act, and nominated Daschle to be Secretary of Health and Human Services. It was Daschle who planned to name Cutler to head implementation at the CMS.   But when Daschle ran into political trouble (car service provided by health care companies not declared as income) and withdrew, Cutler’s route to CMS was blocked – perhaps by members of the Clinton health care team, whose plans he had opposed in the past. Cutler is a bold and knowledgeable  reformer, as his memo shows, but, no more than anyone else, does he know who might hire him next.  So at least in principle, it really matters who provided his memo to the Post. In practice, what counts is who Obama now hires to oversee ACA implementation.

Evidence is accumulating that Obama is simply not a good manager of the immensely complicate government over which he presides. (An unnamed White House aide solemnly avers to the Post team that the president ended every meeting with his health care staff with the admonition, “All that is well and good, but if the Web site doesn’t work, nothing else matters”) but a good manager would not just say it, but would also make it so.  His hand-picked point-person to oversee implementation was Nancy-Ann DeParle, a veteran manager of Medicare and Medicaid both in Tennessee and then in Washington during the Clinton years. In retrospect, the tip-off might have been when DeParle left the White House last August for a job in private equity. It is an angle yet to be explored.

But evidence is accumulating, too, of a long-simmering guerilla campaign by Clinton loyalists and other Democratic rivals to paint Obama as an indecisive leader and incompetent manager, as a means of creating a narrative for 2016 in which the next Democratic nominee runs against Obama’s shortcomings as well as whoever becomes the Republican nominee. A campaign to compare and contrast the styles of the Bill Clinton and Obama presidencies means that hardly anything  that is said about either one can be taken at face value.

Republicans, meanwhile, are heartened by the re-election victory of New Jersey Gov. Chris Christie. It is worth remembering that that individual mandate was originally a Republican idea for extending coverage to those who were previously insured – only one part of the nation’s enormous health care problems.  As MIT’s Gruber says, “It was only after president Obama put his name to it that it became the devil’s work.”

The GOP’s improvisational campaign against Obamacare is even nuttier than the long “Whitewater scandal” campaign that led to Bill Clinton’s impeachment – and even more counterproductive. It is hard to imagine a successful Republican candidate for the presidency who doesn’t somehow take back ownership of the individual mandate and promise to make it work. It will indeed be a governor who accomplishes that  – more than a few years off.

| contents |

One Comment

  1. Addicted wrote:

    Amid all the discussion about the failure of healthcare.gov (never mind that IT projects frequently fail. You need to look no further than Apple’s Maps and many attempts at cloud storage), somehow everyone seems to ignore the fact that healthcare.gov never should have existed. No one predicted that so many states would refuse to have their own exchanges. The states which did create their own exchanges are doing just fine.

    Tuesday, November 12, 2013 at 10:15 am | Permalink

One Trackback/Pingback

  1. […] end of the most recent entry by David Warsh at Economic […]

Post a Comment

Your email is never published nor shared.
Required fields are marked *

*
*


Skim past columns here.


Support Economic Principals by subscribing to its bulldog edition—receive the weekly via email a day before it is posted on the Web, and, as well, a quarterly Report to Subscribers.

To reach the proprietor, ask a question about the website or report a problem email warsh@economicprincipals.com.