2010: John Kitzhaber's health politics, the governorship, and why he might not seek it

Chris Lowe

If he pushes his signature approach to health care reform at the Oregon state level in the way he proposed for the 2007 legislative session, Dr. John Kitzhaber probably can't gain the 2010 Democratic gubernatorial nomination.

However, after the failure of legislation he backed in 2007, the former governor appears to have switched political strategies for advancing his health agenda. Still, key constituencies might need reassurances and commitments, involving "transactional politics" of a sort Dr. Kitzhaber sees as an obstacle to needed reform.

Whether Kitzhaber would even be interested in the governorship appears to turn on whether he thinks he could use the office to create wider and deeper "non-transactional" political conversations and agreements outside of formal government, about common aims and methods in a reformed health system, and to take those conversations into the national arena.

The depth of the current economic crisis means projected persistence of high unemployment, even under optimistic scenarios for a financial turnaround. The next governor probably will have to devote much or most of his or her time to jobs, and to budget negotiations or battles over education, human services and public safety. The crisis thus seems likely to make the governorship less attractive to Dr. Kitzhaber.

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Since leaving the governorship in 2003, Kitzhaber has devoted himself to health system reform. There is no indication that health reform has ceased to be his overriding personal priority. He has developed a brilliant analysis of why our current fragmented and incomplete health care/insurance system is on the road to collapse, and why most current reform proposals, based essentially on expanding that system, would merely accelerate our travels down that road. He also offers a largely persuasive vision of what restructuring for an equitable health system, as opposed to an illness treatment system, should look like. (The link is to page with 33 minute video embedded, well worth the time. It does not launch the video directly.)

The problem, however, as he says, is how to get from here to there. In 2006 and 2007 he hoped to use Oregon legislation (small pdf) to drive national debate, by attempting to secure extraordinary federal legal exceptions, which would enable Oregon to conduct a state-level experiment in such restructuring.

If he were to renew that state-level proposal, he wouldn't be able to get much support, if any, from labor unions, from senior citizen advocacy groups, or, perhaps, from state legislators who back the current Oregon Health Fund Board process. Moreover I would expect unions and elder advocacy groups to actively support one of his opponents, and actively seek to prevent Kitzhaber being nominated.

However, Dr. Kitzhaber probably would not renew such a proposal for an Oregon experiment if he ran for governor. His recent public statements identify the problem of getting from here to there, but specify no mechanism in any detail. Moreover, in a talk to core Archimedes/WCDB activists (direct link to 20 minute video) in September 2007, Kitzhaber explicitly deprecated legislative debates. They are, he said, hopelessly obstructed for achieving the kind of reform needed, due to transactional interest politics, i.e. politics of what will I/my group gain or lose? He urged instead work to build agreement on end goals, in fora outside of formal government, then legislating incrementally to get there.

Even so, the talk first linked above was given at an Oregon Health Foundation event called "Summit of Leaders: The Role of States in Driving National Health Reform," so revisiting Dr. Kitzhaber's 2006-07 effort to use Oregon law to drive national health reform seems to be in order.


Kitzhaber's approach to health reform is rather oblique to both the terms of national debate and to what is implied in the Oregon Health Fund Board (OHFB) process. When passing SB 329 that created that process, Ben Westlund, Mitch Greenlick, Alan Bates & others essentially blew off the substance of Kitzhaber's Archimedes Movement/We Can Do Better proposals, embodied in a different bill, SB 27.

Dr. K's approach in 2007 would require "capturing" current employer and employee tax exclusions for health care benefits as a form of income, as well as "public monies" spent on Medicare. Both actions would require large changes in federal law.

His approach then would also require a different waiver of Medicaid rules than the OHP currently gets, or than will be needed for OHFB developments. However, unlike ending benefits tax exclusions and getting resultant revenues into state coffers, or redirecting Medicare funds, provisions for Medicaid waivers already exist in federal law.

Elimination of "categorical" distinctions, based on income in the case of Medicaid, on age and disability in the case of Medicare, and on employment benefit status in the case of tax exclusions, remains part of Dr. K's general vision, if not his vision for state law as a tool. He does not address other categorical public spending for the V.A., for the military health system, or for the Indian Health Service.

Kitzhaber's 2006-07 proposals would create a relatively limited, universal, state funded "core benefit" of services focused on prevention, primary care, and early stage disease management. It would be funded by combining and redistributing the three kinds of "categorical" public revenue. The proposals would essentially form a narrow, limited version of "state level single payer for some services." "Services" would be much redefined, in priorities, in reimbursement methods & incentives to providers, and in behavioral and choice of care incentives for patients and not-yet-patients.

Whether such a state-level system could be constructed to protect it from being poached or raided for other purposes, in the face of state budget shortfalls & balanced budget requirements, is nice question. The current economic crisis and 2009 budget debates pose the question more starkly by than it appeared in 2007.

How big the "core benefit" would be would depend on funding levels. Beyond whatever the cutoff point was for services ranked in priority a la OHP, "coverage" would come through private insurance or charity.

Unions already oppose more limited restrictions on benefit deductibility proposed by Ron Wyden among others in national debates. I would expect them to fight fiercely against the total end to tax exemption Kitzhaber proposed in 2007 -- possibly joined by some or many employers.

Dr. K's proposals for changing Medicare in Oregon would have constituted a radical violation of the social contract made with current and future retirees in the Medicare system, IMO. I would expect vigorous opposition from AARP and other elder-oriented groups, as indeed SB 27 faced in 2007, and maybe even from Ron Wyden, insofar as he retains elders as a base constituency.

If Dr. Kitzhaber were to renew those proposals in that form, I also would oppose him on those grounds, despite liking him in many other regards and thinking his ideas important and useful. I have thought about this for several years from the fringes of the Archimedes Movement.

Meanwhile the OHFB is moving us toward a version of the failing "Massachusetts Model." Dr. K's proposals were quite different in philosophy and mechanism, and he has been critical of that model. The OHFB proposals would also require federal waivers on Medicaid, but different ones from those Dr. K's proposals would require if renewed.

As noted, Dr. Kitzhaber no longer publicly advocates legislation like that he backed in the 2007 legislative session. He has explicitly articulated an alternative strategy of seeking to build extra-legislative consensus on shared goals as a means eventually to overcome "transactional" interest politics. If he decided he really wanted the Democratic gubernatorial nomination, he probably could reassure groups representing core DP constituencies with commitments that he would not be pursuing state-level legislation adversely affecting their interests.

It is less clear if he would want to pursue such transactional politics, especially given the likelihood that the economic crisis would reduce his scope as governor to promote nationally the kind of conversations to develop shared goals he now favors strategically.


Concerning that larger project, Dr. Kitzhaber does not appear yet to have entirely grasped one key consequence of his focus on some categorically distributed public monies (or in the case of non-taxation of benefits, foregone revenues): the transactional costs to elders & employees with benefits are visible, but what private corporate interests in insurance, pharmaceuticals and hospitals would be asked to give up, if anything, remains opaque. Private corporate interests except those of employers remain outside the scope of discussion as defined.

As a result, the idea of incremental changes remains suspect. As long as the only visible interests to be affected by the increments are those currently funded directly with public monies, such changes cannot and should not be trusted, given the power of big corporate money when matters are left behind the scenes.

As currently articulated, "all stakeholders" are supposed to be at the table, but only the stakes of some holders are visibly on the table.

Nor is it clear whether the voice of stakeholder groups will be proportional to their numbers, or only to their wealth, as in the current corrupted national legislative debates.

Medicare, with its social contract character, will be a particularly tough nut for Dr. K's strategy to crack. Kitzhaber and his top staffers should give more attention to single payer ideas as a possible solution to that problem.

Despite wide support among Archimedes/WCDB activists and their less active penumbra, the idea of a single payer system is given short shrift by the ex-governor and top staffers. This appears to be partly because of the commitment to incrementalism, and partly because single payer turns on favoring broad popular stakeholders at the expense of the profits of private insurers, pharmaceutical companies, and for-profit hospital companies.

Most often, when communicating to activists, impatience with single payer is articulated through claims that it only addresses the payment system, but not the underlying health system. However, those claims are mistaken. The most prominent single payer proposal, HR 676, proposed by Rep. John Conyers, in fact is premised on many of the systemic reforms Dr. Kitzhaber seeks, beginning with eliminating the categorical separations, apart from the V.A. and military systems, though not ending there.

In particular, because it is framed in terms of extending and improving Medicare for all, shoring up the system with the stability and cost controls of a universal risk pool, as well as reforms in what is delivered and how, the approach taken by HR 676 offers a solution to the problem of not breaking faith with seniors and the disabled, or the social contract embodied in the Medicare program. It is also a solution completely compatible with Archimedes/WCDB's values and principles for ultimate restructuring. The Archimedes/WCDB leadership would do well to take more seriously both keeping faith with seniors & the disabled, and HR 676.

  • (Show?)

    Thanks, for a long and thoughtful essay. I'm sure you're right that Kitzhaber's decision to run for Governor will rest, in part, on whether he thinks health reform will be achievable. Certainly, that's why I suggested to him back in 2006 that he ought to run for president. (He laughed.)

    In any case, I am curious about how you think that a single state would manage a single-payer system. Setting aside the politics, how would you prevent sick people from flocking here in droves - and bankrupting the state? States, of course, cannot restrict in-migration from other states. We could set a short residency requirement, but I doubt any period longer than a year or two would survive an equal protection challenge.

  • LT (unverified)

    "Unions already oppose more limited restrictions on benefit deductibility proposed by Ron Wyden among others in national debates. I would expect them to fight fiercely against the total end to tax exemption Kitzhaber proposed in 2007 -- possibly joined by some or many employers. "

    OK, let's see who unions support for Gov. Do they support someone like Dr. Bates if Kitzhaber doesn't run? Or DeFazio if he decides to leave Congress? Or some other legislator or Congressman?

    I believe that this state would be blessed if we had someone running on a "big idea" like this, win or lose.

    I read once in a history class about the different governance models of different Indian tribes. One model for a nomadic tribe was, to put it simply, how many people followed which leader. Suppose there was an argument (between 2 younger leaders, younger vs. older, etc) about which way the nomadic tribe should travel. Suppose one gave arguments about the need to go north, and another said they would be better off (more game, better weather, whatever) if they headed west. The next morning, if most of the group decided to go north, the first man became the new leader, if they went west, the second would become the new leader, or if they headed out in a totally different direction (SE?) then neither of them became leader, someone new did instead.

    This shows a BIG idea which Kitzhaber could run on if he chose.

    Someone else could have a different BIG idea (maybe how to restructure the tax system, improve education, etc.) and we would see who voters followed.

    I really do think this state is in the situation of the Indian tribe not knowing what direction to travel.

    Having known both men for decades, I will say about Dr. John Kitzhaber what I said about Sen. Pres. Courtney. They are strong individuals who work very hard on what they decide to do. If either decided to run for Gov. it would be a strong, substantial campaign. But it is their decision, and no one else will make it for them.

    Great essay---we need more intelligent debate like this!

    Maybe Jack Roberts could write one about potential big ideas for Republicans which are more detailed than "tax cuts create jobs, but don't worry about how to pay for them"?

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    LT, thanks for the kind words & interesting questions & thoughts.

    Kari, Guess I didn't make myself clear, I think Gov. Kitzhaber has always set his reform sights nationally, and now is less inclined to make Oregon an experiment. My single payer comments were about his national vision.

    However, what the heck: 1) That's how Canada did it -- a march through the provinces to a national system. Of course, Canada has a lot fewer provinces. Still, when Tommy Douglas' Saskatchewan passed single payer it didn't reconcentrate population there. People in other places said, "Hey, that looks good, let's have that here too."

    Yet, some of Canada's current difficulties (small relative to ours) reflect weakness of the national system the Conservative national government trying to put more on the provinces. I'd really prefer an approach more like HR 676 to Bernie Sanders S 703.

    2) We could consider regional compacts. The California legislature has actually passed a single payer bill twice, vetoed twice by Gov. Schwarznegger. Califoria is more populous than Canada & would certainly have e large enough risk pool. Oregon & Washington could conceivably join in a regional system with California if law-writing was coordinated.

    3) A state that instituted single payer gain economic competitive advantages. Companies would be relieved of the burden of ever-escalating benefit costs, and labor conflict or declining employee morale over dividing those costs, an incentive to relocate here. Entrepreneurs would come to escape uninsurance or the inflated costs of the individual insurance market. More potential entrepreneurs would take the plunge to start businesses knowing that it wouldn't be putting their families at unacceptable risk. Healthy workers would come for similar reasons. Health workers & providers would be attracted by the dramatic reduction of paperwork and changed incentives to develop relationships with patients and work with them more preventively and less when intervention is too little too late,

    Also probably a one-state s.p. system actually would not fully integrate 65 & older Medicare patients. Maybe it would take over the younger Medicare disabled, maybe would contribute something to Medicare premiums, or to reimbursement rates for primary care & integrated disease management, I don't know.

    Of course that's all rather rosy. We'd have big problems managing rapid population growth, infrastructure demands & an influx of people who wouldn't be familiar with Oregon land-use planning traditions. There would be major workforce transition, retraining & job placement issues to manage, for medical insurance clerical workers at both insurers and providers, lower & middle insurance managers (though they might tend to have more transferable quantitative analysis skills) and benefits managers in corporate personnel departments.

    Main point is, both your scenario & mine probably are exaggerated, but there are reasons to think that whatever migration effects there were would be better-rounded than you fear.

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    Kari, that's a pretty tired argument with not much data behind it. Did that happen in Massachusetts? No.

    People are proven to move for pretty much one reason: jobs. Don't think we're looking at that problem right now (at least if you exclude 20-something hipsters).

  • Jim Johnson (unverified)

    A lot of food for thought! I think Kitzhaber is looking more at the national picture.

  • JayZee (unverified)

    Nice post. Personally, I am not a fan of the Kitzhaber "Back to the Future" candidacy this time around. You are correct that most of his "big ideas" are more national in scope. At the state level, our biggest challenges in the near term are jobs and the economy, tax reform and providing stable funding for education and essential human services. Kitzhaber had his shot at all of these, failed to even engage in the fight and then declared Oregon "ungovernable." I would like to see a new generation of Oregon leaders step up to the plate and govern.

  • Steve Dill (unverified)

    Kitzhaber needs to understand that any health care reform which mirrors Massachusettes, or the Obama proposal, will cost thousands of jobs in Oregon!

    My web site has already seen the effects of health care reform, as our job board for medical sales representatives, http://www.gorillamedicalsales.com has had a dramatic decrease in the numbers of posted job openings, as medical device companies take a wait-and-see attitude before filling sales vacancies.

  • LT (unverified)

    So, JZ, would you support Peter Buckley?

    "Kitzhaber had his shot at all of these, failed to even engage in the fight and then declared Oregon "ungovernable." I would like to see a new generation of Oregon leaders step up to the plate and govern."

    A friend of mine worked for a Democratic state rep. who decided not to run for re-election---in 2006. When the 2007 session started, she said she wished he'd run for re-election, he would have enjoyed the 2007 session, and "he had served his time in hell".

    There is a night and day difference between the 2009 session with all its problems and the legislature when Kitzhaber was Gov.

    Sen. Republican leader said on the last day that he and Maj. Leader Devlin probably have more in common with most people, having been caucus leaders, and House Republican leader spoke of seeing the House Maj. leader as a person to work with, regardless of their differences.

    That is that the way it was earlier in this decade. I don't recall the year, but there was one time when the House under Speaker Minnis said of a just passed bill, "Well, the House has done its job, now it is the Senate's term. " Even Republican Senators made it very clear to Minnis that Sen. does not take orders from the House.

    If anyone wants a new candidate, more power to them. But please support your candidate for positive reasons, not because they aren't someone else.

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    Kitzhaber is critical of the Massachusetts plan and I am pretty sure of the Obama plan for the same reason -- that they expand the existing system in terms of "coverage" or try to, but don't do anything to alter the way health is promoted or care delivered.

    What he proposes might affect medical device sales, as he wants to redirect emphasis and rewards from specialized treatment of advanced illness to preventive, primary and early stage disease management care. On the other hand, such a change would probably expand employment in actual care delivery.

  • JTT (unverified)

    Chris- I severely disagree with your characterization of SB 329 as a version of the Massachusetts model. It is certainly a deviation from what Kitzhaber wanted in SB27, but definitely the product of 6 years of interim committees and legislative work. Sens. Bates and Westlund certainly had the failure of Massachusetts to control costs while expanding access in mind when constructing the OHFB. While I wasn't there this year and haven't tuned in to the health reform efforts too much this year and certainly haven't paid attention to the Archimedes group, I know robust reforms were passed this year (HB 2009 and HB 2116) to curb the increasing costs of care and insurance. I'm sure we will be hearing much more from the new Oregon Health Authority as Oregon's health care system becomes a model for country.

  • (Show?)

    Thanks JTT.

    Other comment readers, I urge you to pay attention to this comment because it is an area in which I could be wrong, or partly wrong. I encourage you to look into what's happening in Oregon in more detail, as I will do.


    One aspect that the Massachusetts model the emergent Oregon model do share in common is a punitive individual mandate, however.

    I have heard this defended as recently as April 16th by Dr. Bates on the grounds that this is the only way to get younger, healthier, lower-risk persons to buy insurance so that their low risk balances the risk pool and supports care for the older and sicker.

    In itself I find this argument disturbing, insofar as it imputes selfish choice not to be insured to younger uninsured people as their reason for lacking insurance, to the point that they deserve to be financially punished if they won't buy insurance. This argument is meanspirited and highly dubious, even among the young, who tend to have lower paying jobs and often jobs that don't offer benefits at all. And even if benefits are offered, they often are unaffordable given the low wages ("The Walmart Effect").

    It also presumes that most of those who go uninsured fall into this younger, "I'll take my chances" category.

    I just don't believe this. I think there are a great many low wage, or part time, or self-employed, or small business owning working people and their families who don't buy insurance because the "affordable" plans so restrict benefits and have such high deductibles that in effect they get nothing, or only a limited form of catastrophic insurance for their premiums.

    And even the "catastrophic" part can be next to useless for people at such income levels, a 20% co-pay, if it's that low, on a $20,000 set of bills may be effectively as beyond the ability of such persons to pay as the whole amount.

    It seems grossly unjust to force low and lower middle income working class people to buy lemon insurance providing few real benefits, or punish them financially for not doing so when they already struggle with limited incomes.

    These folks are the victims of the private insurance system scam which prevents them from getting effective insurance that is affordable. An "individual mandate" to participate in the same, and the justifications for the mandate, are forms of anti-worker blaming the victim.

  • Fireslayer (unverified)

    Good discussion.

    But it is clear to me that the health care crisis is purely national in scope and will require systemic overhaul not offered by Wyden and only partly addressed by Obama.

    <h2>Hence, I favor Gov/Doc Kitzhaber running for Wyden's seat. That would shake things up and remove a major stooge of the health care greed players.</h2>

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