Deja Vu Health Care Reform: Hillary Care is the wrong feeling

by: Divorced one like Bush

Ok folks. It’s real, this familiarity with the health care reform debate. It is a real memory you are experiencing, that deja vu feeling. Only, the reason it seems so much as deja vu is because what your being told is the trigger of the deja vu is not the real memory. Hillary Care is not the correct memory for the current debate and thus it “feels” like you have been there before: deja vu. However, you really have been there before, and thus it is a real memory, not a similar feeling. It was Nixon, 1971. And, the experience of the mind games that are being tempted upon you are as real and cautioning a memory as having burned your hand on a hot pan, or caught a knief falling.

February 17, 1971

Ehrlichman: We have now narrowed down the vice president’s problems on this thing to one issue, and that is whether we should include these Health Maintenance Organizations like Edgar Kaiser’s Permanente thing.
Nixon: Now let me ask you…You know I’m not to keen on any of these damn medical programs.
Ehrlichman: This is a private enterprise one.
Nixon: Well that appeals to me.
Ehrlichman: Edgar Kaiser is running this Permanente deal for profit. And the reason that he can, the reason he can do it…I had Edgar Kaiser come in, talk to me about this. And I went into some depth. All of the incentives are toward less medical care. Because the less care they give them, the more money they make.
Nixon: Fine
Ehrlichman: …and the incentives run the right way.
Nixon: Not bad.

February 18, 1971
Nixon’s Special Message to Congress proposing a National Health Strategy

I’m going to start with his last paragraph:

Nineteen months ago I said that America’s medical system faced a “massive crisis.” Since that statement was made, that crisis has deepened. All of us must now join together in a common effort to meet this crisis–each doing

Going forward, I only excerpted the parts related to insurance because the truth now as then is that the real issue when this nation talks about health care reform, is that we are only talking about how the money will travel to pay for it. Cost controls are always second and presented as a results of how the money will travel. Improved outcomes are always third and a result of how the money will travel. Tort reform equals how the money will travel. More people having access? Again a result of how the money will travel.

What follows are Nixon’s arguments for keeping a private system. The points should all sound very familiar. There are a few items however that might surprise you as to him being a republican compared to today’s “republican”. In the end, it is still the republican (and now also DLC) ideology of free market rhetoric supporting a discussion of what I consider the false market in “health care reform”: The third party, the middleman.

This is long after the jump. Please take the time to read Nixon’s words. Reading such history first hand is the only means we have for growing a more mature social personality.

As you read, pay attention to the reasoning and expected results, then compare them to today. Today, is the actual results. The results are what we are living.

Recognize the sales pitch. Recognize the appeal to humanistic needs as part of the pitch for the product. Nixon was not trying to sell a better America. That was just jive talk to sell HMO’s. Recognize such in today’s presentation.

Continuing Nixon’s presentation:
Our record, then, is not as good as it should be. Costs have skyrocketed but values have not kept pace. We are investing more of our nation’s resources in the health of our people but we are not getting a full return on our investment.

This new strategy should be built on four basic principles.
1. Assuring Equal Access
2. Balancing Supply and Demand.
3. Organizing for Efficiency. There are two particularly useful ways of doing this:

A. Emphasizing Health Maintenance. In most cases our present medical system operates episodically–people come to it in moments of distress–when they require its most expensive services. Yet both the
system, and those it serves would be better off if less expensive services could be delivered on a more
regular basis… In short, we should build a true “health” system-and not a “sickness” system alone. We should work to maintain health and not merely to restore it.
B. Preserving Cost Consciousness. As we determine just who should bear the various costs of health care, we should remember that only as people are aware of those costs will they be motivated to reduce them. When consumers pay virtually nothing for services and when, at the same time, those who provide services know that all their costs will also be met, then neither the consumer nor the provider has an incentive to use the system efficiently.

4. Building on Strengths. We should also avoid holding the whole of our health care system responsible for failures in some of its parts. There is a natural temptation in dealing with any complex problem to say: “Let us wipe the slate clean and start from scratch.” But to do this-to dismantle our entire health insurance system, for example–would be to ignore those important parts of the system which have provided useful service…

One of those strengths is the diversity of our system–and the range of choice it therefore provides to doctors and patients alike. I believe the public will always be better served by a pluralistic system than by a monolithic one, by a system which creates many effective centers of responsibility–both public and private–rather than one that concentrates authority in a single governmental source.


In recent years, a new method for delivering health services has achieved growing respect. This new approach has two essential attributes. It brings together a comprehensive range of medical services in a single organization so that a patient is assured of convenient access to all of them. And it provides needed services for a fixed contract fee which is paid in advance by all subscribers.

Such an organization can have a variety of forms and names and sponsors. One of the strengths of this new concept, in fact, is its great flexibility. The general term which has been applied to all of these units is “HMO”–“Health Maintenance Organization.”
The most important advantage of Health Maintenance Organizations is that they increase the value of the services a consumer receives for each health dollar. This happens, first, because such organizations provide a strong financial incentive for better preventive care and for greater efficiency. A fixed-price contract for comprehensive care reverses this illogical incentive. Under this arrangement, income grows not with the number of days a person is sick but with the number of days he is well. HMO’s therefore have a strong financial interest in preventing illness, or, failing that, in treating it in its early stages, promoting a thorough recovery, and preventing any reoccurrence. Like doctors in ancient China, they are paid to keep their clients healthy. For them, economic interests work to re-enforce their professional interests.

…So is this administration. That is why we proposed legislation last March to enable Medicare recipients to join such programs. That is why I am now making the following additional recommendations:
2. To help new HMO’s get started-an expensive and complicated task–we should establish a new $23 million program of planning grants to aid potential sponsors–in both the private and public sector.
At the same time, we should provide additional support to help sponsors raise the necessary capital, construct needed facilities, and sustain initial operating deficits until they achieve an enrollment which allows them to pay their own way. For this purpose, I propose a program of Federal loan guarantees which will enable private sponsors to raise some $300 million in private loans during the first year of the program.
(In 2009 dollars that’s: $1,594,443,347.32 using the Consumer Price Index, $1,270,112,394.52 using the GDP deflator, using value of consumer bundle, $1,572,128,637.06 using the unskilled wage, $2,589,331,122.17 using the nominal GDP per capita, $3,796,805,962.20 using the relative share of GDP)

In my State of the Union Message, I pledged to present a program “to ensure that no American family will be prevented from obtaining basic medical care by inability to pay.” I am announcing that program today. It is a comprehensive national health insurance program, one in which the public and the private sectors would join in a new partnership to provide adequate health insurance for the American people.

In the last twenty years, the segment of our population owning health insurance has grown from 50 percent to 87 percent and the portion of medical bills paid for by insurance has gone from 35 percent to 60 percent. But despite this impressive growth, there are still serious gaps in present health insurance coverage. Four such gaps deserve particular attention. (Ok, well this has definitely been reversed.)
First–too many health insurance policies focus on hospital and surgical costs and leave critical outpatient services uncovered… Because demand goes where the dollars are, the result is an unnecessary–and expensive— overutilization of acute care facilities. The average hospital stay today is a full day longer than it was eight years ago. (Yup, fixed that one.)

A second problem is the failure of most private insurance policies to protect against the catastrophic costs of major illnesses and accidents. Only 40 percent of our people have catastrophic cost insurance of any sort and most of that insurance has upper limits of $10,000 or $15,000. This means that insurance often runs out while expenses are still mounting. For many of our families, the anguish of a serious illness is thus compounded by acute financial anxiety. Even the joy of recovery can often be clouded by the burden of debt–and even by the threat of bankruptcy.
A third problem with much of our insurance at the present time is that it cannot be applied to membership in a Health Maintenance Organization–and thus effectively precludes such membership. No employee will pay to join such a plan, no matter how attractive it might seem to him, when deductions from his paycheck–along with contributions from his employer–are being used to purchase another health insurance policy.

The fourth deficiency we must correct in present insurance coverage is its failure to help the poor gain sufficient access to our medical system. Just one index of this failure is the fact that fifty percent of poor children are not even immunized against common childhood diseases. (We are above 80% now.) The disability rate for families below the poverty line is at least 50 percent higher than for families with incomes above $10,000.

Our National Health Insurance Partnership is designed to correct these inadequacies–not by destroying our present insurance system but by improving it. Rather than giving up on a system which has been developing impressively, we should work to bring about further growth which will fill in the gaps we have identified. To this end, I am recommending the following combination of public and private efforts.

1. I am proposing that a National Health Insurance Standards Act be adopted which will require employers to provide basic health insurance coverage for their employees. (Guess that answers the question of why we have an employment based system. Oops! Hey, no Walmart then either.)

2. I am also proposing that a new Family Health Insurance Plan be established to meet the special needs of poor families who would not be covered by the proposed National Health Insurance Standards Act–those that are headed by unemployed, intermittently employed or self-employed persons.
Accordingly, I propose that the part of Medicaid which covers most welfare families be eliminated. The new Family Health Insurance Plan that takes its place would be fully financed and administered by the Federal Government. It would provide health insurance to all poor families with children headed by self-employed or unemployed persons whose income is below a certain level. For a family of four persons, the eligibility ceiling would be $5,000.
(I’ll say it for Fox News: Democrat President Nixon today proposed…)

Our program would also require the establishment in each State of special insurance pools which would offer insurance at reasonable group rates to people who did not qualify for other programs: the self-employed, for example, and poor risk individuals who often cannot get insurance. Did I hear something about co-ops?)

I also urge the Congress to take further steps to improve Medicare. For one thing, beneficiaries should be allowed to use the program to join Health Maintenance Organizations. (Well it took 30+ years, but they got that: Medicare Advantage.)

…To begin with, there simply is no need to eliminate an entire segment of our private economy and at the same time add a multibillion dollar responsibility to the Federal budget. Such a step should not be taken unless all other steps have failed.
More than that, such action would be dangerous. It would deny people the right to choose how they will pay for their health care. It would remove competition from the insurance system–and with it an incentive to experiment and innovate…There is a better way–a more practical, more effective, less expensive, and less dangerous way–to reform and renew our nation’s health system.

38 years since this speech. A speech that has all the same talking points regarding a private, free market based system as we heard with Hillary Care and today. We did the employer based HMO version of private insurance after the other version (BCBS employer based) did not work including the HMO medicare experiment in this decade. We are worse off than ever by all reports from all parties. It was not “ a better way–a more practical, more effective, less expensive, and less dangerous way…”. It has failed. People are in more danger today. All other ways have failed: a no health insurance system, an employer based non-profit private system, an employer based for profit private system and privatizing a single payer, government run system. The time has come. We have met the exception that Nixon gave the nation. We can now prove or disprove that there is such a creature as the “rational consumer”.

Ehrlichman: Edgar Kaiser is running this Permanente deal for profit. And the reason that he can, the reason he can do it…I had Edgar Kaiser come in, talk to me about this. And I went into some depth. All of the incentives are toward less medical care. Because the less care they give them, the more money they make.
Nixon: Fine
Ehrlichman: …and the incentives run the right way.
Nixon: Not bad.

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