The Politics, Power Players Of Health Care Reform The New Republic senior editor Jonathan Cohn discusses power players of health care reform, including the insurance lobby, the pharmaceutical lobby, the American Medical Association and Congress.

The Politics, Power Players Of Health Care Reform

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TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross. Congress has made progress this week on health care reform. To help us understand what the House and Senate are considering, like what is the public option, and to analyze how politics and special-interest groups are shaping what's on the table, we've invited Jonathan Cohn. He writes about health care politics for the New Republic, where he's a senior editor, and he writes the blog The Treatment. He's also the author of the book "Sick: The Untold Story of America's Health Care Crisis and the People who Pay the Price."

Jonathan Cohn, welcome to FRESH AIR. One of the two Senate committees that had to mark up a bill has done that. So we have one thing on the table that's finished for now that we can talk about. So let's start there.

The Senate Health, Education, Labor and Pensions Committee has come up with its version of a bill. What does it look like? What are the key things?

Mr. JONATHAN COHN (Editor, The New Republic): Well, the Senate - the key thing to understand in the Senate is that you do have two committees writing bills.

You might think that the Senate Health Committee would be the committee with the most jurisdiction over this because it has the word health in it. Actually, in fact, that's not entirely the case. They only have a few pieces of reform.

Anything to do with taxes, with Medicare and Medicaid, that all goes to the Senate Finance Committee. So we don't really yet know those parts of the legislation, what they will look like. But the Health Committee does have some very important areas of jurisdiction, and what they have done is they have put forward a framework for how they would like these areas to look.

So one of the things they have told us, as they are in charge of, or one of the committees in charge of, creating what you will hear about called exchanges.

In general, the idea here is to create a marketplace where people who don't work for large companies and don't get, you know, good benefits, you know, at affordable prices through their companies, individuals can go and buy insurance the same way people who do work for large companies do.

So they can get insurance that, you know, offers sort of the basic set of benefits you would want in an insurance policy. It'll be available not at outrageous rates, and most important, the insurance company is not going to say to you, oh, you have a pre-existing medical condition, therefore we're not going to cover you at all, or we're going to charge you four times as much.

This is a very important part of health reform. Anyone who's ever tried to buy insurance on their own and has gone through the gauntlet of that process understands how difficult it is. The exchange is designed to fix that problem, and that's really one of the most important things they've done.

They also said that - they have called for creating a public insurance option, and if you have followed this debate, you have undoubtedly heard about this. It's gotten a lot of attention, and the idea is that within this exchange, and you know, within this marketplace, they want to make sure that there's actually a government-run insurance program that you could choose to enroll in voluntarily, and the idea is that it would look something a little bit like Medicare, and the theory is that, you know, people trust Medicare, they always know it's going to be there. Well, that would be the case here as well.

This is a plan run by the government. They're not out to make a profit. So you can have faith it will always be there for you, it will cover all the necessary benefits, and a lot of people, I would include myself among them, believe that actually health insurance happens to be something the government does pretty well and that having this government, public insurance option out there would be good for the competition. It would force all the private insurers to behave and to keep up, and by introducing this public option we make insurance not just for people who enroll in the government option but insurance for everybody, we would make insurance for everybody a lot better.

GROSS: Well, let's look at the public option a little bit more. Aren't the health insurance companies worried that because the government could negotiate discount prices, because they'll be representing so many people, that they can under-price the insurance companies and the insurance companies will lose out?

Mr. COHN: Absolutely, they are worried about this. If you talk to the insurance lobby, this is their number one concern, and it's not just the insurance lobby. You will hear from the drug makers, from the doctors, from the hospitals. A lot of the interest groups involved with health care are worried that the public insurance option will come in and basically Bigfoot them and push the private insurers out of business just by undercutting them.

Now, there's sort of - I think - I'd like to think there are two responses. The first response is that to some extent, if the private insurance companies can't keep up, then maybe they shouldn't be in the business. I mean, that's sort of the point here. We want to get insurance to people that is affordable. We want to give them good benefits, and if it turns out the government can do that better than private insurance, then maybe we ought to stop trying to fight that and say, all right, well, let the government come in and do it, at least for, you know, a large number of people.

Now, in fairness to the insurance lobby, I mean, it is not unreasonable for them, I think, to think that, gee, the government has so many advantages, it could basically under-price us so much and just drive us out of business -while not paying a fair price to the doctors, to the hospitals, to the drug makers, and so you'd end up in a world where it was all government insurance, right? And the drug makers and the doctors and the insurers would make so little money, a bunch of them would go out of business, or we'd all be in long waiting lines because there wouldn't be enough of them.

You know, in theory, this is a reasonable concern, but what you have to remember is that the people who designed the public plan, who have been writing this up, are quite well aware of this danger. Even if they wanted to create a public plan that would do all of that, I don't think the political power, they don't have the votes to do that.

So they have built into their conception of a public plan a number of safeguards designed to make sure that the public plan never becomes that powerful, that it never can just drive the private insurance companies out of business simply because it happens to have big Uncle Sam behind it.

GROSS: Yeah, well, I think another concern for the insurance companies is that they're supposed to making a profit, they're for-profit companies, whereas the government doesn't need to make a profit from insurance, which is another way the government can undercut them. So what are some of the safeguards that you're referring to?

Mr. COHN: Well, and again, I again would say the fact that the government doesn't need to make a profit, I would consider that a feature, not a bug, and that's part of the issue here. I mean, we are dealing with a fundamental question here of whether health care is something on which we should let companies make a profit or at least make very large profits, and you know, if the government - presence of a government plan forced all private insurance companies to make lower profit margins, certainly, you know, I think that's a perfectly acceptable outcome.

Now, that said, like I said, you can take this too far, and I do think it is important to have some safeguards. The safeguards I've seen, they involve things like, you know, first of all, making sure that people in the public plan have access to enough doctors and enough hospitals.

If indeed a public plan started paying far below what is appropriate, what providers, what doctors, what hospitals could live on, you would see doctors and hospitals turning away these patients, and so you have a kind of trigger in there that says, well, wait a minute, if the number of participating doctors falls below a certain amount, then there needs to be some review of payment policies, or perhaps payments need to go up.

There are other requirements you can have about the - you know, one thing that has come up is that, look, as a private company, you have difficulty. You have to raise capital. You are required by law to keep reserves. If the public plan can just keep yanking from the government Treasury money, money, money, anytime it wants, it's not going to be competing on a fair playing field.

So a lot of the proposals for a public plan say, okay, we can't do that. We have to give the public plan some start-up money to get started, but after that, it's got to be on its own. It's got to sustain itself just like a private insurance company would.

So those are the sorts of safeguards there are. And then there's a more direct set of safeguards built in, which is to say, look, we can just dictate by the law that the public insurance option has to pay rates that are somehow some fraction of what private insurance pays in an area.

In other words, it can never be too far below what the private insurers are paying, and that's another kind of way you can have a safeguard to prevent the public plan from becoming too large, too powerful.

And you know, that's really the point here. We want to set up a competition. And I actually believe in the long run there are some things private insurance does well. There are some things that public insurance does well. And I think if you get them operating side by side, the competition actually might make for a very strong health care system.

GROSS: And are you saying that as somebody who really prefers a single-payer, universal health care system?

Mr. COHN: Well, you know, if we're talking about what I personally believe - I mean, I have said many times, if it were up to me, if I were king for a day, I could wipe the slate clean, I would absolutely create something that looks like a single-payer system, and you know, a single-payer system, in other words, a system where the government is responsible for providing basic insurance to everybody.

The system I always tell people that I would model us on, it would like what they have in France, which actually looks a bit like Medicare. The government gives everybody basic insurance, and then you'd have - people could buy private supplemental insurance on top of that.

But I'm not king for a day. I can tell you quite assuredly that my political views are not those of the people, for the most part, who are writing these laws.

There may be some people who support the public option who do think and who do want someday to get to a single-payer system, but the two things (unintelligible) first of all, that's not a majority view by any stretch of the imagination. And I can tell you politically there is not a chance in the world we'll get anywhere close to that in this legislation. I mean, that's just the reality of politics.

If anything, Congress is well to the right, in other words I would say more conservative than public opinion on this issue, and it is far more likely that Congress would end up creating a reform system that had a very weak public plan that would, frankly, you know, suffer and not thrive because it hadn't been given the proper resources and the proper tools, far more likely we would see that than Congress would pass a plan in which they'd create this super, gargantuan, all-encompassing public plan that would drive every other insurer out of business, and you know, the next thing you know we have health care that looks exactly like it does in Canada.

GROSS: My guest is Jonathan Cohn, a senior editor for the New Republic. He also writes for the magazine's health care blog, The Treatment. More after a break. This is FRESH AIR.

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GROSS: If you're just joining us, my guest is Jonathan Cohn. He's a senior editor at the New Republic. He's been writing about health care politics in the magazine and on his blog, The Treatment. He's also the author of the book, "Sick."

Well, let's continue our kind of guide through health care politics right now. One of the big questions on the table is who pays? Who pays for all this new stuff that the people will be getting, and one idea is, you know, a tax on the wealthy. Would you explain the proposal for that?

Mr. COHN: Absolutely, absolutely. The finances of reform basically work this way. If you do health care reform right, over the long term it should pay for itself. In fact, that's a big reason why we're doing reform. If you've heard President Obama, he clearly feels quite strongly about this, that in the long run, decades from now, and to some extent now, health care is going to drain resources from other places that need it.

So the long-term goal is to create a health care system that saves money and then in the long run can really pay for itself. Now, drawing it up on paper, that's easy to do. In the real world, you can't do that overnight by flipping a switch. It takes time.

If at the same time we want to make sure everybody has health insurance -because after all, we're not just concerned with the way health care is draining resources out of our society, we worry about the burden it places on individuals - we want to make sure everybody has insurance so that, you know, people don't have to go bankrupt because they get sick.

Well, if you want to do that, you have to spend a little money now. You have to - in effect you have to spend a little money now to save some money later. And the estimates, they vary - it depends on how you do it - but somewhere in the neighborhood of a trillion dollars over 10 years you have to come up with.

Now, just to put that number in perspective, a trillion dollars over 10 years, so that's about $100 billion a year, and this is in the middle of a health care economy that is more than $2 trillion every single year. So really, it's not that much money in the grand scheme of things, but you know, coming up with a trillion dollars in Washington is not that easy.

You can do some of it by finding savings in the system. You know, we have a very inefficient system. So you can find savings, but the other way to do it is to raise some kind of new revenue through some kind of taxes.

Now, the House of Representatives, in their proposal, has been talking about a surtax on very wealthy people. And basically it says if you are in the top one or two percent of earners in this country, you're going to have to pay higher taxes, and you know, that is one way to generate the revenue.

It is extremely progressive. It takes money only from those people who have still, you know, have done very well even in the down economy and can afford to pay a little more money, and it does, you know, generate a lot of money. I mean, the numbers I've seen suggest you can get about half of the money you need to cover health care reform over the next 10 years through that sort of surtax.

So that is one idea that's on the table. But there are other ideas. The Senate will almost certainly not use that. They will go with some other means, and you know, it remains to be seen which of these different revenue ideas Congress finally settles on.

GROSS: And what President Obama wants us to have - employers either provide health insurance for their employees or make a payment that would go toward the government program.

Mr. COHN: Absolutely, and this is - you know, when I was talking before about, well, what are the different pieces you need to put in place, that is a very, very important piece. The health care wonks call that an employer mandate, but it's really just sort of saying employers have to take responsibility. Either you pay directly to give your employees health insurance, or if not, then you have to pay some money into a big fund - because you know what? If you're not giving your workers insurance, a lot of them are going to have to get insurance on their own, and they're going to need assistance because they won't be able to afford it, so you have to bear some of that cost.

So it's effectively saying employers, you know, we used to call this pay or play. Either you give your employees health insurance, or you pick up some of the cost of your employees getting insurance elsewhere, and when you do that, it has a lot of good effects.

I mean, one of the effects it tends to have is that employers can't tend to keep offering insurance to their employees, and that's one of the reasons that, you know, if you're one of those people out there and you say, gee, I like my health insurance the way it is, I don't want to lose it, why should I support health care reform, well, that's a reason, because if reform happens and if President Obama and his supporters in Congress get their way, there will basically be a requirement that says to employers, hey, you can't just drop your insurance because suddenly you've decided it's a good way to get a leg up on your competitors. You have to keep offering that insurance.

So that is why, you know, it's a very important piece. It's worth noting that an employer mandate is not just good for the employees. It's actually good for a lot of employers too, because basically it puts all employers on a level playing field.

You know, right now you have a situation where you are, say, in the grocery business, and another grocer comes into your market, and you may be much better - you're much better at sort of finding good deals on produce, and you come up with better offerings and you have a better check-out system, and that's all great. But if your new competitor is lousy at all those things but has figured out a way not to provide really good health insurance to its employees, your competitor is going to have lower prices, probably, and might drive you out of business.

So what this says to business, this employer mandate says, you know what, we're just going to put everyone on the same plane when it comes to health insurance. You all have to pay the same amount, and this way you can compete based on what you do.

So if you're a grocery store, be good at selling groceries. You build cars, then do a good job at selling cars. You create software, then make the best software programs, and if you do those things, you will succeed in business.

GROSS: Give us a sense of who the key players are in Congress who we should be keeping an eye on, and let's start with Chris Dodd. We were talking about the Senate Health, Education, Labor and Pensions Committee, and he has been heading that committee in the absence of Senator Kennedy. Just very briefly, give us a sense of what he stands for in this debate.

Mr. COHN: I think, broadly speaking, he stands for the same values that Senator Kennedy does. He is a liberal, and I don't use that as a bad word here. I think he believes that everybody should have insurance that has good benefits, that allows choice of doctor, that is affordable, and to get that, it may take a lot of government intervention. The government may have to regulate insurance very hard.

It may have to raise some money somewhere, and I think as far as he's concerned, that's okay. You do what you have to do to make sure people get good health care, and I think that is his bottom line. And that, when you look at the bill that his committee produced, I would argue that, you know, within the realm of political reality, it does a pretty good job of that.

GROSS: Senator Max Baucus, he's the head of the Finance Committee, where would you position him?

Mr. COHN: Well, you know, Senator Baucus is a very interesting character. He is not known as someone - he's not particularly known as a liberal, certainly, and in fact Democrats have long distrusted him. They think he works with Republicans too much, and they don't know where he stands.

To his credit, a year and a half ago, two years ago, Senator Baucus got out in front on this issue. He made it very clear that this was his mission, to pass a health care bill. I think he also wants to make sure everybody has good benefits. I think he also wants to make sure that everybody has choice of doctor. I think he also wants to make sure that the system becomes more efficient so it doesn't cost so much in the future.

The catch is that, you know, he is the head of the Finance Committee. So number one, he's actually got to find the money to pay for it; and number two, his committee, if you look at who's on it, is weighted a little more to the conservative side.

The Republicans are very powerful there. There's a tradition of working together that you don't see on all committees. And even the Democrats on the finance committee tend to be a little more conservative.

So as a result, because he is committed to working with his whole committee, he tends to produce legislation that is a little more conservative, and in this context that would mean probably won't cost as much, wouldn't have the same aggressive regulation, and wouldn't make the same level of guarantees to the American people that, say, Senator Dodd's committee, the Senate Health Committee would.

GROSS: Now, Senator Baucus has been working closely with Senator Charles Grassley on the Finance Committee, and what does Grassley stand for?

Mr. COHN: Well, you know, and again, I think a lot of Republicans think about Senator Grassley the way a lot of Democrats think about Senator Baucus. They don't entirely trust him because he does sometimes work with the other party.

You can look at any number of issues - for example, on the behavior of non-profit hospitals. Senator Grassley over the years has been a real watchdog over the behavior of charity hospitals when they've seemed to sort of defy their charitable mission.

You know, when you heard these stories about hospitals that are supposed to be taking care of the uninsured and then suing these people over their bills, Senator Grassley got very worked up about that and really tried to do something about it.

That said, he's still a conservative, and at the end of the day I think what he wants is not going to be what Senator Baucus and certainly not what most of the Democrats want. At the end of the day, he's going to be very nervous as a government program gets bigger and more expensive.

He's going to be much more reluctant to regulate the behavior of the private insurance industry, and obviously I think that's a perfectly respectable view to have. But I think it's important to realize that at some point that view becomes incompatible with the view of people who want to do health care reform. And so we hear a lot about the importance of bipartisan compromise. I think it's important to realize that a bipartisan compromise might mean simply not accomplishing what you want to accomplish with health care reform.

GROSS: Jonathan Cohn will be back in the second half of the show. He's a senior editor at the New Republic, and he edits and is the primary writer for the magazine's health care blog, The Treatment. I'm Terry Gross, and this is FRESH AIR.

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GROSS: This is FRESH AIR. I'm Terry Gross back with Jonathan Cohn.

We're talking about the politics of health care reform. Cohn writes about health care issues for The New Republic and he edits and is the primary writer for the magazine's health care blog, "The Treatment." He's also the author of the 2007 book "Sick: The Untold Story of America's Health Care Crisis - and the People Who Pay the Price."

Senators and congressmen, of course, rely on campaign funding, and a lot of campaign funding comes from lobbies, and a lot of the big lobbies are involved in the health insurance debate - the pharmaceutical lobby, the health insurance lobby. So do you think that there's a lot of behind the scenes conversations going on between senators and congressmen and representatives from lobbies who fund them? Do you think that lobbyists are saying if you vote for this kind of expansive health care reform, we're not going to contribute to your campaign next time around?

Mr. JONATHAN COHN (Senior editor, author): Well there's no question there's a ton of lobbying going on. It happens because these groups give money to congressmen like you say, and then they say hey, we gave to your campaign, you better vote the way we want you to. It also happens because these groups are not stupid. They hire people who used to work on Capitol Hill and then they dispatch these people who are familiar with Capitol Hill, who know all the players, to go make their case.

What is interesting is the behavior of the lobbies. Every lobbyist, every business, every health care interest is obviously out for its own good and its own self interest but the calculus can be complicated. They all are out to cut a deal. They all want a deal that's going to protect their income streams. But they are being a little cautious. They are not firing - they are not coming in guns blazing, and they are trying to actually offer some concessions.

Enough that they, number one, look good. They want to look good in the public eye in case they do eventually have to turn against reform, but also to sort of protect themselves. And you know the feeling is if you're part of the conversation and you're playing ball that maybe you won't take such a big hit when and if reform passes.

GROSS: Well let's look at what some of the lobbies are doing. Let's start with the health insurance lobby. You wrote an article not long ago about the chief lobbyist for AHIP, which is America's Health Insurance Plans. It's the health insurance lobby group. What insights did you get from talking to her about why the health insurance lobby is willing to talk now?

Mr. COHN: Well, I think this is a perfect example of the kind of behavior we are seeing from all the different lobbying groups. If you are the health insurance industry, if you're Karen Ignagni, who is the head of the trade that represents the health insurance industry and you look at reform, one way to look at it is to say gee, if this reform system passes we may get a whole lot of new customers. That's nice to have. We'll have also the - our line of business will be kind of predictable.

Yes, we may have to make slightly less profit on every person, but we'll have more people to make profit on. So the big insurers in particular and these are the ones who really she represents. The groups like Aetna and Cigna, they can coexist in a reformed world. And so in general they have been talking. Now talking is not the same as doing but they are talking to reformers.

They talk to the White House. They talk to members of Congress. And if you listen to their rhetoric, they will tell you that hey, you know what? If you want to pass these regulations that say we have to give insurance to everybody even if they have preexisting conditions, we can make that work. You want to give us a set of benefits that we have to provide everyone? Okay, we can make that work too.

Now, the catch is - and you knew there was a catch - there are certain things they don't like. One of the things they really don't like again is this idea of a public insurance option which they would consider a threat. So on the one hand they are out there trying to talk and they're appearing at White House events and they're saying we support this, we support this reform, we support this reform. At the same time they are doing everything they can to kill the public insurance option.

GROSS: Let's look at the pharmaceutical lobby. President Obama has gotten the pharmaceutical industry to concede to what, eighty billion dollars in savings by making certain cuts. What? What cuts?

Mr. COHN: Well, in affect this was a very complicated deal they arranged. If you break it down, in affect what it says is that the pharmaceutical industry is going to actually give a little money towards helping to fill in what you may remember from the great Medicare drug debate or if you're on Medicare now, as the doughnut hole. That's the gap in coverage you get if you're a senior citizen and you're getting drug benefits through Medicare.

So the drug industry has said we'll give a little money to help fill that in but the drug industry gets something out of this deal too. In fact, you can make an argument that when you look at the extra business they'll get and the extra money they'll get, they will be no worse off and quite possibly better off. So in terms of these deals you look at, I have to say I didn't think the drug industry deal was all that great a deal from the standpoint of health care reform.

That said, there is the political virtue of it. If you see this primarily not for about the dollar so much but about the political symbolism, remember two key things. Number one, every day the drug industry is talking about why it supports health care reform, it doesn't matter what it's doing in private. That's one day it is not spending every dollar and every breath it has screaming at the top of its lungs that reform is a bad idea. I don't know that that particular deal was all that great on the policy merits, but in terms of moving reform forward politically, I think it was significant.

GROSS: Let's just talk very briefly about the policy itself. The pharmaceutical industry would be willing to contribute money to the so-called doughnut hole, to fill that hole, but if you were in that hole, you'd also have to buy brand name drugs and not generic drugs and the brand name drugs are considerably more expensive than the generic drugs. So that's what you were referring to when you were saying that the pharmaceutical industry probably wouldn't lose much money or that they might even make money, but what about the consumer? Would they actually be ahead or behind with a deal like this if they had to buy brand name drugs instead of generics?

Mr. COHN: Well, you know it's hard to say. The deal is vague enough that it...

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Mr. COHN: ...depend a little bit on the actually details of how it was crafted.

GROSS: Right.

Mr. COHN: If, in fact, the doughnut hole is full, if there's no more doughnut hole, then I think you know if you're giving people more insurance coverage they would have better access to drugs. So in that sense they would be better off. But as a consumer yes, you're paying for your drugs so you have to think about the hit on your wallet for paying for your drugs but eventually you're paying for this program too, right?

I mean you paid taxes to support this program and if forcing people to buy brand name rather than generic drugs means that you're buying more expensive drugs and that makes the whole program more expensive, well, in the long run that's going to come out of your pocket some day as slightly higher taxes.

Now, I you know, I'd have to sit and talk to an economist. You'd have to sit and run the numbers and they can vary depending on little tiny changes in the policy whether consumers were ahead or behind. But I would just say generally speaking that in terms of the drug industry, this is something still of a pretty good deal for the drug industry. And health care reformers, I hope, by the time they're done writing legislation, will be able to extract something a little more substantial from the drug industry.

GROSS: If you're just joining us, my guest is Jonathan Cohn. He's a senior editor for The New Republic. He's been writing a lot of about the politics of health care in the magazine and on his blog which is called "The Treatment." He's also the author of a book about health care reform which is called "Sick."

Let's take a short break here and then we'll talk some more. This is FRESH AIR.

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GROSS: If you're just joining us, my guest is Jonathan Cohn. We're talking about the politics of health care reform. He writes about that subject for The New Republic where he's the senior editor. He also has a blog about health care politics called "The Treatment" and he's the author of a book called "Sick."

Let's look at the hospital industry and what kind of deal they've been making with the Obama administration about what they're willing to give up in the interest of health care reform. What have they offered to do?

Mr. COHN: Well, the hospital industry is a very interesting player in this debate. I think most people think of hospitals, and same for the doctors, as sort of the noble providers of services so you don't tend to think of them necessarily as craving self interested as the drug makers or the insurers. But if you talk to people in this debate they'll tell you that hospitals have actually so far been one of the most difficult interest groups to work with.

The reason is simple. If you really want to make the health care system more efficient, you want to look at making it more affordable in the long run. Hospitals is where all the action's at. That's where most of the money is spent and it's the place where there's just you know we have so much evidence now that so much of the treatment people get in hospitals, it's wasteful, it's duplicative, it might even be harmful. So really what we want to do is we really want to change the way hospitals behave.

Hospitals, naturally like any interest group are not so excited about the prospect of change, at least as a group. So there's been a lot of tough negotiations there. At some point President Obama said look, we want to change the way hospitals are paid as a way to change the way they behave. In general we've found that when you change the money behavior follows. You know, money's a good incentive. And in affect he wanted to create changes that would have freed up around two hundred, three hundred billion dollars over 10 years.

Now that figure got out and the hospital industry was not happy about that. They said wow, that's a big cut to our payments. Maybe we need to make some changes but surely we don't need to make changes that are that big. And so there were a lot of negotiations and at the end of the day they came out and said all right, we will sign off on changes that would in affect cut our paychecks for the next 10 years on the order of a 150 billion dollars a year.

Now that's less than you know Obama administration was talking about. It's a lot less than a lot of experts will tell you they could do, but it's still a significant hit. And again, the dynamic here is pretty simple. It's not so much that the hospitals are volunteering to give up that money. What they are basically saying is they're saying to Congress if you want to have a vote, if you want to pass a law that's going to take down our payments by a hundred and fifty billion dollars we will not fight it. We will not get up and make a big stink about it.

We will go along with it and it may be that behind the scenes the hospitals are still working their best to gut the proposal, but again you know every day that the Hospital Association of America is not out there screaming that reform is awful, that is a day that reformers have won a political battle and that's the way to think of this. And it makes it more likely that at the very end they can pass a bill that will actually save money by in part, making some adjustments to the way that hospitals are paid.

GROSS: Is the hospital industry getting anything in return for this concession?

Mr. COHN: Well absolutely. You know pretty much any industry that is looking at reform right now; the starting point for conversation ought to be you are getting forty-five million new paying customers. And just think about that for a second. You know we have about a sixth of the country right now that is uninsured. That is a large number of people who show up at the hospital and can't pay their bills. So you're saying to the hospitals we're going to take that problem and we're going to take it off your shoulders. You won't have to worry about that, at least not as much as you have to worry about it now. So right off the bat, I mean every hospital in America they're going to gain from that.

The other thing that's going to be true for the hospitals is that the kind - no one is talking about just cutting their payments. We're not just saying we're just going to slash the money you get. The money will come out of the system of changes designed to reward quality. So that hospitals that do a good job, hospitals that do more with less, hospitals that get good outcomes, well, they will be rewarded. So the message to hospitals is look, if you run a good hospital, if you're efficient, if you're clean, if you're safe, if you actually make your patients better, well guess what?

You're not only going to be fine, you might even do better. So that is I think, you know, that's the message to the hospitals is that if we're going to take care of the charity care problem for you, so we'll - that huge burden will no longer be falling in your lap. And in addition to that, you know we're going to create a system where if you do good, if you're good at what you do, hey you know we're going to reward that. We're going to say you are doing things right and we want to help you.

GROSS: Now let's look at the AMA, the American Medical Association. Who do they represent now?

Mr. COHN: Well, that's a very good question. You know historically the AMA, if you go back to the early history of health care reform, was the single most important and single most affective lobby against reform. I mean they basically, I don't want to say single handedly, but they were primarily responsible for killing health care reform when Harry Truman tried it in the late 40s and early 50s.

Today the AMA does not represent all doctors. Medical - the medical community is very divided. And to some extent it's divided along specialty lines. The more you look at primary care doctors - if you look at pediatricians, you look at family doctors, to some extent if you look at OB-GYNs - you will find that these tend to be people who are strongly in favor of health care reform. They are strongly in favor of figuring out a way to regulate the behavior of insurance companies to emphasize quality and to really make sure that everybody has insurance.

On the other hand, if you look at specialists, if you look at surgeons, the orthopedists, the ophthalmologists, et cetera, they tend to be a lot more conservative. They're more similar to where the entire medical community was 30, 40, 50 years ago.

The AMA I think more and more speaks for that second group of doctors, the specialists, the surgeons. They focus a lot, quite frankly on the bottom line income issues for their members. Now that's, you know, that's what groups do, right? I mean every group represents its members. But what's interesting to me is that you do find a lot of smaller organizations representing just certain groups of doctors like the American Association of Family Practitioners, like the group that represents the pediatricians. And if you talk to them they are absolutely one hundred percent in favor of health care reform.

And so the AMA speaks for one group of doctors who tend to be more skeptical of health care reform. But certainly, if you were to survey the entire medical community of America, and there's some survey data out there to support this actually, you get a pretty big divide of opinion.

GROSS: So where does the AMA stand now? And have they made concessions?

Mr. COHN: Well, the AMA so far has been acting like any of the other health care industry groups. It has made clear that it does not favor a strong public insurance option primarily because it's worried that a public insurance option wouldn't pay physicians enough. It has generally been skeptical, historically, and as far as I know this is still its stance, of higher taxes on wealthy people to pay for health care reform. And that's because, you know, its members would be among those people paying the taxes.

But again I think you will find, and if you talk to people in the reform discussions, they will tell you that the AMA has been at the table because there are other things the AMA cares about. The AMA would love to see some help on malpractice reform. The AMA would also like to see a change in Medicare so that every year the doctors aren't faced with this steep cut in their payments, which is something that happens now because the way the law is written.

So if Congress can reach out to the AMA and say look, we'll do something about malpractice and we'll do something about this annual Medicare fee cut, then the AMA may think to itself, and has sort of hinted and indicated that if that's where reform is going, you know, that is something it might able to live with.

GROSS: You know, a lot of people who are employed now have health insurance and are reasonably happy with it. So what would health care reform, the way it's being discussed now, what would it mean to them?

Mr. COHN: Well, you know, I think it means two things. Number one, if health care reform is done right. It will mean that over the coming years, it will not cost as much as it otherwise would, or which is a very complicated way of saying, it'll be cheaper going down the road. And if you've seen your premiums go up year after year after year - the idea of health care reform is to say that, you know, we'll never, you know, we're never going to make health care cost less than it does today.

But hopefully 20 years from now it won't cost tons more than it does now. And you won't, you know, instead of paying a $1,000 extra year after year after year, you would pay, you know, $100 or $200 extra, a year after year. So the idea is basically to make this more affordable for you.

The other thing is that I think people don't always appreciate the extent to which their insurance today is already precarious. I mean this is the big problem. You're insured, you have good benefits from your company, and so you think yourself ah, my life is good, why do I need a change? Well, here is why. Because if nothing changes, if we leave the system the way it is, then tomorrow you may find that your insurance isn't there anymore. Or if it is there, it won't offer the same benefits. And even if it does offer the same benefits, you may find that when you get sick - and everybody does eventually get sick or have an accident or need some medical care - that you will suddenly discover that oh, gosh, your insurance doesn't cover what you need. Or maybe it has a lifetime limit on benefits and you'll exceed those.

People do not yet realize, I think, how vulnerable they already are. If you realize that though, then I think hopefully people will realize that reform does offer them something very, very important. It offers them security. They may think they have that security now but truthfully they don't.

GROSS: Do you see this medical reform heading toward genuine structural reform?

Mr. COHN: That really depends on how you define structural reform. And a lot of it depends on political forces - I think we can't yet know how they will play out. I will say this: If the final - if Congress passes a law - and I do think they will pass something - if Congress passes a law that looks like - that resembles structurally what the House has put on the table, if it resembles structurally what the Senate Health Committee passed, then I think we will have done some structural reform. It will not be enough, I think.

I will feel there will have been a lot more we could have done and there will be a lot more to do in the future. But we will have made some very important changes. And again, I think the most important changes will be from the standpoint of the consumer. I think you cannot overestimate the fact that any of these reforms that go into effect, will mean - assuming they're properly funded and properly designed - will be a total change of life for people who now are shut out from insurance because it's too expensive or because they have pre-existing conditions. That is a huge, huge change. And if nothing else goes right - and, you know, we'll see how it goes - that would be a tremendous accomplishment, something as large as we've done in this country, I would argue, since the 1960s when we created Medicare. And if it's not everything we hoped it would be, if it's not everything I hoped it would be, you know, at the end of the day as I like to say, you know, that's a good day's work in politics.

GROSS: Jonathan Cohn, thank you so much for talking with us.

Mr. COHN: Oh, it's been my pleasure, thank you for having me.

GROSS: Jonathan Cohn is a senior editor at The New Republic. And he edits and is the primary writer for the magazine's health care blog, The Treatment. This is one of a series of interviews we're doing on health care reform. Coming up, a new autobiographical film by the 81-year-old French director Agnes Varda -the only woman among the French New Wave filmmakers of the early 1960s. John Powers will have a review.

This is FRESH AIR.

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