Time for the Blue Dogs to Show Their True Colors

By Steven Pearlstein
Friday, July 24, 2009

In a Congress polarized by partisanship and ideology, the balance of power often falls these days to centrist Democrats who, in the House, go by the name of Blue Dogs. Over the years, I've never been able to tell whether the Blue Dogs were the mushy kind of centrists just trying to reconcile the demands of liberal leaders with the demands of their more conservative rural districts, or radical centrists who reject the tired, interest-group-driven ideas of the left and right and seek fresh solutions based on free markets, balanced budgets and social compassion.

With health-care reform, we're about to find out.

The challenge for the Blue Dogs is that they want an America where everyone has insurance but are reluctant to force workers to buy it or employers to help pay for it.

They understand that achieving universal coverage will require subsidies for low-income workers and small businesses, but they insist that none of those changes add to the federal deficit or raise anyone's taxes.

They want to introduce more competition into the private insurance market, but not if it comes from a government-run insurance plan.

They complain constantly about the need to rein in runaway Medicare costs while at the same time demanding higher Medicare reimbursement rates for doctors and hospitals in rural areas.

You see what I mean about mushy centrism?

That said, we can now thank the Blue Dogs for pushing House leaders to be more aggressive in making the kind of fundamental reforms in the way health care is delivered and paid for, which experts say is the surest way to reduce waste, improve health outcomes and put the brake on health spending.

The mechanism they've chosen to achieve these reforms is a new commission of outside experts that would recommend changes in Medicare policies and reimbursement rates for doctors and hospitals -- recommendations that would take effect unless rejected by the president or by Congress. The logic here is that the only way to reform Medicare is to insulate it from the political pressure of powerful special interests, and that Medicare, because of its size, will pave the way for similar reforms in the private insurance market.

The problem with using Medicare to serve as the leading edge of reform, however, is that it relies on a patient population, the elderly, that is least able and willing to embrace change. A better vehicle would be the new government-run insurance option that has become a political must-have for House leaders and President Obama. In return for dropping their opposition to such a "public option," the Blue Dogs could have insisted that it not be structured as a fee-for-service plan along the lines of Medicare but rather offer services through a network of high-quality, lower-cost hospitals and clinics that use teams of salaried doctors to provide coordinated care, along the lines of the Mayo and Cleveland clinics that Obama is always touting. In a competitive market, the success of such a government-run plan would force other insurers to follow suit.

There's still time for the Blue Dogs to improve their health-care reform plan in other ways.

If they really want to solve the doctor shortage in their home states, for example, they could propose a small tax on all hospital services and use the money to provide free education to all medical students -- in exchange for a few years of service in underserved communities.

If Blue Dogs were really the courageous fiscal conservatives they claim to be, they would insist on a more modest benefits package for the basic insurance policy that everyone would be required to buy under the House proposal.

And, to help pay for universal coverage, they would back some sort of tax on gold-plated benefit packages that encourage patients to consume too much health care or become indifferent to what things cost.

If Blue Dogs were eager to break the hold of special interests, they might have found a creative way to resolve the long-standing feud between doctors and plaintiff's lawyers over medical malpractice. Although doctors and their Republican supporters overstate the impact of exorbitant damage awards and malpractice premiums, plaintiffs' lawyers and their Democratic puppets understate the degree to which malpractice suits leads doctors to overtest, overprescribe and overtreat. A centrist solution would be to shield doctors from lawsuits when they follow protocols established by national medical boards. It might also set a reasonable cap on punitive damages -- but only in states that establish tough, independent boards to investigate and discipline doctors.

The problem with the Blue Dogs is that they tend to confuse centrism with splitting the difference between the warring camps, or making policy by choosing one from Column A and one from Column B. The more effective centrists use their political leverage to create a Column C.

Steven Pearlstein can be reached at pearlsteins@washpost.com.

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