Originally Published MD&DI November 2009
President to Industry: Get Involved in Healthcare Reform
Former president Bill Clinton addressed AdvaMed at its conference in Washington, DC, October 14. Following his remarks, he sat with Michael Musallem, chairman of AdvaMed, and answered some pointed questions about the effects of healthcare reform on the medical technology industry. He provided some political perspective and shared some advice on how the industry can participate and be heard. The following is a verbatim transcript of that discussion.
MICHAEL MUSSALLEM: You talked about the fact that you really believe that healthcare reform is going to happen. Can you contrast the political landscape now versus when you were in [office]—is it more complicated? Is it just the difference in the Senate?
PRESIDENT CLINTON: Well, no. I think there are several reasons. First of all, the cost variances, all the trends are the same but worse now. When I tried to do it, we were spending 14% of GDP on healthcare. The next highest were Switzerland and Canada at about 10 or 9 1/2. Now we are well over 16. Probably over 16 1/2. And the next highest is Switzerland at 11 1/2 and Canada at 10 ½. So the gaps are bigger. As I said, it is approximately $900 billion a year. When we just tried last time, we wound up with a lot of help from others getting medical inflation in line with the general rate of inflation so we reduced the number of people without insurance for the first time in a dozen years. And the good news was that we did it. The bad news was it kind of made people think, well, maybe it wasn’t such a big deal after all. Now, in this decade, all the trends have gone up again.
The congressional politics is much better now. The last time we had a majority in the House but a lot of those Democratic members were in districts that were really voting Republican in presidential elections. They would have voted a bill out but they were worried. But the main thing was Senator Dole had 45 senators so he only had to hold 41 of them to kill anything. He got a memorandum from Bill Kristol, a conservative, who said, ‘if you let Bill Clinton sign any kind of healthcare bill, you can forget it. We will be a minority for 30 years. You have to kill anything at all costs. And, by the way, you won’t be able to run for president very well if that happens.’ So I love Bob Dole. He is my friend. But he had told me before—I tried to get Dole—I wanted to present a joint bill with Dole. I said, ‘Why don’t we just put in one bill?’ He said, ‘No, you put in one, we’ll put in one, and we will show the differences between the parties and then we will reconcile.’ Then he got this memo that said you’re part of this deficit, you can’t run for president, if you let him sign a bill. You have to kill everything. They had the votes to kill everything and that’s exactly what they did. That’s really what happened. Everything else you have heard is basically wrong.
It is true that Hillary’s committee submitted a complete bill of 1350 pages. I think it is 150 pages shorter than the one that passed in the House this time. And it took 400 more pages out of federal law than it put in, something that is never included in the accounts of it. But the main important thing is we submitted a bill because the chairman of the House Ways and Means Committee, Dan Rostenkowski, insisted that we do so or he wouldn’t take it up, because that was the way the forces were arrayed. So all that stuff doesn’t amount to a hill of beans. It is just that we couldn’t overcome the inherent resistance in a filibuster. At this time, the numbers are so much different in the Senate and so if one person, Olympia Snowe, switches, and we don’t lose any Democrats, and I don’t think we will, you know, a moderate program, there is no filibuster.
MUSSALLEM: Just to follow up on that, the idea of having a bill that is bipartisan, is that important?
CLINTON: No, of course it is. It is important but, if you look at the stakes, if you can hold—if all the other—if Senator McConnell can hold all the other Republican senators, so they can say we are not responsible for this thing if it goes wrong, does that mean we shouldn’t pass the bill? No, I like it. Let me give you another example. In my production, you came in and said, well, we have the longest economic expansion in history, and we balanced the budget in my second term, with a Republican Congress. But what you didn’t say is that 90% of the budget balancing was done by my first budget, which was passed in 1993 without a single Republican vote, because Newt Gingrich got them to just say no.
Let me ask you, would it have been better for me to let these deficits keep exploding, say I’m sorry that the country is careening out of control and we are spending more money than we are taking in but I can’t get any Republican votes, therefore, I can’t do anything, therefore, you are stuck with the deficit? It didn’t happen. So we had a lot of members of our party actually lay down their seats in Congress in the face of horrendous attacks in 1994 because the Republican strategy of just say no worked. But they were wrong. And it was easy for them to pass the Balanced Budget Act when they won the Congress because we had done 90% of the work. We did all the hard lifting. It is one thing to talk conservative about the budget and another thing to deliver. People ask me all the time what we brought back to Washington. What great new economic idea. The answer is arithmetic. You know, two and two still is four here. But people—it is really popular to spend money and cut taxes. It is not popular to cut spending and raise taxes. But arithmetic requires it if you don’t want to drive your country into debt and be on your knees to time immemorial.
I am not sure, by the way, when we get this bill to the floor, if we get a good one, Senator Snowe may not be the only person Republican to vote for it. There are four or five others who want to. Really, they do. It is just a question of they are all arguing in the background, if we can just say no we can repeat 1994. And they can’t. It is a different country now. And we’ve watched the movie, now. We have seen this movie before. So I think they are wrong. I believe there is a real chance that we will have more Republican votes. Do I wish it? Yes. I liked when we passed health communications reform as a bipartisan vote. We passed reforms of the biggest after-school program we ever had, summer school program. We passed it with bipartisan votes. I passed a lot of things. The balanced budget bill, the welfare reform bill, were huge bipartisan votes. Two-thirds of both parties in both House. I like bipartisan votes. But you have to understand, there is still a contest that goes on behind the scenes here. They believe that if we pass healthcare reform that it will put the Democrats in the majority for 30 years. So no matter how reasonable they think it is, they think they should oppose it. As a matter of fact, they may be right about that this time, but because the country has changed. There are five or six of those Republican senators who want to vote for this, and I think they will.
MUSSALLEM: Thanks very much. I will try to get in the weeds a little bit here. In the progress that healthcare reform has made, and particularly, it got passed by Chairman Baucus’ committee yesterday, there are some amazing great steps forward for healthcare reform and this industry proudly is behind the great bulk of these. There is one provision in there that really has us concerned. You may not be aware of this but there is a $40 billion tax on our industry in that this helps pay for everything that is in that bill. We got concerned because, obviously, it feels as though our $40 billion gets lost in this $900 billion number somewhere, but this has a pretty devastating impact on us. We feel like we are creating innovations that really matter. We are creating jobs. And to some extent we are sort of killing the golden goose here. But we are struggling getting our message across. Do you have any advice for us? Are you familiar with this?
CLINTON: My advice to everybody in this, first of all, I don’t want to oversimplify this. In addition to the political factors that I mentioned earlier, health reform is difficult at any time because it is complex, and anything that is complex can be generally misunderstood. It is deeply personal. Anything that is deeply personal can spark fears. Right? And it is hard to change. The other problem we’ve got is that the Congressional Budget Office, in fairness to them, doesn’t know how to score savings from the things that might make the most difference over the long run—things that actually change the delivery system. And if you work for the Congressional Budget Office, you might not, either. But let me remind you, they underestimated the savings we got out of Medicare reform, for example, in my second term. They overestimated what even the Medicare drug benefit would cost once you put in some competition.
The Baucus committee is under a pretty rigorous system here to raise money for these costs because a lot of the cost savers, which I think will amount to hugely more than they think if we do this right, and we all move in good faith, can’t be costed out. So that is a problem. And as far as I know, he only got away with one gimmick. It is not really a gimmick. They do estimate certain cuts in physician fees and things that none of us really believe will happen, on a multiyear basis at least. But those things have been in the budget on and off for years. So I think my advice is simple. If you don’t like this, you need to go to the committee and go to the Senate and make sure the conference committee knows exactly what is wrong with it and why it would cost more over the long run in retarding technology and quality of healthcare than the benefits would be, and also suggest some other way for them to get the money. I think you should just actively play in the process. This is a highly complicated thing. They can’t possibly pass this bill without making a mistake or two. But we are making mistakes every day with the system we’ve got. I think you ought to make sure they know what the costs are and offer them an alternative to raise the money. That’s the best advice I can give you.
MUSSALLEM: That’s helpful. Following on to that same kind of notion…broadly we are passionate about medical technology and what it can do, and there has been a notion that we have gone from the century of the physical sciences being so important to, now, the century of life sciences. But at the same time, there seems to be a notion—even in our administration today—that medical technology is some of the reason that healthcare costs are growing. We struggle with penetrating that message about the value of our technology as opposed to potential perceived overuse. Do you have a thought on that?
CLINTON: Yes, I do. First of all, there ought to be some evidence. This should be an evidence-based opinion. That is, we ought to have the best evidence. Look, you can have overutilization of anything. You can churn the system. There has been a lot of—I notice the president went to Green Bay, Wisconsin the other day. He is trying to go to places that illustrate healthcare systems that seem to be working well at an affordable cost. But medical technology is just like any other thing that you buy. You can abuse it if you turn this thing into just bumper transactions. That is one of the things that is going to take us some time to work through. How do we deliver care in a way that moves away from fee for service toward a more comprehensive plan. But, on the other hand, if you look at the benefits that technologies have brought in terms of lengthening quality and length of life, and in terms of reducing hospitalization, particularly, I think it ought to be fairly easy to figure out if there are some places where there is abusive selling practices and isolate them without tarring the whole industry with that.
I think the most important thing we’ve got to do—this has been a real struggle—is to make this an evidence-based argument. I mean, this is really important. You know, one thing that broke my heart, a lot of these town hall meetings—look, I love a good political fight as much as the next person. I don’t mind somebody screaming at me and all that kind of stuff. But this is complicated. This is inherently complicated. This is a huge percentage of our economy and it is deeply personal to our lives. So we’ve got to have the evidence. That’s what I think. You ought to be able to make an unassailable case that medical technology has been a huge boon to American life and to the American economy. And then you ought to say to other people, where is your evidence that there have been abuses. Then, if the evidence is right, figure out how to fix that.
MUSSALLEM: Mr. President, thanks so much. It has been so valuable to have you join us at AdvaMed 2009.
CLINTON: Thank you. Look, folks, this is a privilege to be in a country where everybody cares what you think. I mean, you could be living someplace where they don’t. And nobody wins every argument and, alas, I’ve not won all of mine. So I just urge you to be happy warriors here. Go and try to get people to treat each other like neighbors and friends, and listen, and make evidenced-based decisions. Just put this back in the real world and help us start this process. Because even if you get like a little bit of a raw hit on this deal, there are going to be 15 changes next year. And after that there will be 15 more. We are rolling a ball up a hill towards what I believe will be a brighter tomorrow if we make a start. Thank you. God bless you all.
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