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.

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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.

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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.

By Chris Lowe July 05, 2009