Cutter to Work Health Care Magic for White House

Stephanie Cutter, a senior Democratic operative, will oversee White House health care messaging for the 2010 elections. The job is short term in nature, with Stephanie returning to her media consulting firm, Cutter Media Group, in the near future.

Stephanie has her hands full with messaging inside Health & Human Services. She'll need to coach Dr. Don Berwick, Centers for Medicare/Medicaid Chief nominee. Dr. Berwick believes Obama's signature solution for cutting health care costs, pay for performance, is a "toxic daisy chain" and "a blunt instrument." Berwick knows well the losses caused by extrinsic motivation systems.

Cutter will need to reign in pesky Medicare actuary Richard S. Foster, the man who caused an uproar under President Bush by challenging his Prescription Drug benefit projections. It seems politicians' definition of "lower costs" is different from that of actuaries. Foster says PPACA will increase federal health care costs, that includes drastic physician fee cuts likely to be reversed by Congress.

What will be lower in absolute numbers is the number of Americans with employer sponsored health insurance. In 1998 168.5 million had workplace coverage. By 2019 it's 162 million, only the U.S. will have over 40 million more people.

Designers of the two major federal health initiatives in the last decade, Tom Scully and Nancy-Ann DeParle, never testified before Congress. However, they lined up plenty of conflicted testifiers. "Will anyone not on the board of a health care insurance company please raise your hand? Let the record show..."

Foster said hospitals could be in trouble under reform. CBS News reported:

The report projected that Medicare cuts could drive about 15 percent of hospitals and other institutional providers into the red, "possibly jeopardizing access" to care for seniors.

Mr. Foster missed the spate of hospital buyouts announced around the passage and signing of PPACA. Private equity underwriters (PEU's) are buying safety net facilities. Converting nonprofit community hospitals to for-profit is on Nancy-Ann DeParle's resume, alongside her PEU stamp of approval.

President Obama loves PEU's, seeing private investment as the answer to many of America's problems, banking, infrastructure, health care and education. PEU's expect 30% annual returns, load up companies with debt and interest expenses, set aggressive profit targets, bleed affiliates by dividend distribution, and employ the "toxic daisy chain" of pay for performance.

Private equity got a free pass under financial reform. They likely have another year breather on taxing carried interest like income, despite Obama's 2008 campaign promise.

Stephanie has her work cut out for her, but the Obama White House isn't new to running coordinated campaigns. The for-profit hospital lobby participated in a campaign style effort directed by the White House's Jim Messina. After an initial beating, the group rallied to pass PPACA.

It's a good thing she has a compliant media. How can she get them to push her lipstick coated close? Which corporations can she get to buy ads for the Blue Team? Maybe a PEU affiliate or two?

Update 4-3-22:   The average health insurance premium more than tripled for a family plan since PPACA passed in 2010.  Cost curve bent but in the wrong direction.  Concave went convex.