Former Senate Majority Leader Tom Daschle (D-SD)’s new book Getting It Done: How Obama and Congress Finally Broke the Stalemate To Make Way for Health Care Reform comes out next week, but this morning he spoke to me about some of the concessions the administration made to pass reform and the shortcomings in the Affordable Care Act.

In his book, Daschle reveals that after the Senate Finance Committee and the White House convinced hospitals to to accept $155 billion in payment reductions over ten years on July 8, the hospitals and Democrats operated under two “working assumptions.” “One was that the Senate would aim for health coverage of at least 94 percent of Americans,” Daschle writes. “The other was that it would contain no public health plan,” which would have reimbursed hospitals at a lower rate than private insurers.

I asked Daschle if the White House had taken the option off the table in July 2009 and if all future efforts to resuscitate the provision were destined to fail:

DASCHLE: I don’t think it was taken off the table completely. It was taken off the table as a result of the understanding that people had with the hospital association, with the insurance (AHIP), and others. I mean I think that part of the whole effort was based on a premise. That premise was, you had to have the stakeholders in the room and at the table. Lessons learned in past efforts is that without the stakeholders’ active support rather than active opposition, it’s almost impossible to get this job done. They wanted to keep those stakeholders in the room and this was the price some thought they had to pay. Now, it’s debatable about whether all of these assertions and promises are accurate, but that was the calculation. I think there is probably a good deal of truth to it. You look at past efforts and the doctors and the hospitals, and the insurance companies all opposed health care reform. This time, in various degrees of enthusiasm, they supported it. And if I had to point out some of the key differences between then and now, it would be the most important examples of the difference.

Despite being “taken off the table” as a result of the “understanding,” the White House continued to publicly deny claims that it was backing away from the provision even as it tried to focus on other aspects of the bill. “Nothing has changed,” said Linda Douglass, then communications director for the White House Office of Health Reform in August of 2009 and many times thereafter. “The president has always said that what is essential is that health insurance reform must lower costs, ensure that there are affordable options for all Americans and it must increase choice and competition in the health insurance market. He believes the public option is the best way to achieve those goals.”

Daschle also said that he was disappointed that the law did not include greater specificity about ways to control health care spending and reform the delivery system. “I’m concerned that we are going to do potentially not achieve all that we might have achieved had we been more specific,” he said. “We lay out a very clear 10-year schedule, with great specificity about how insurance reform is going to work…[but] we don’t do that nearly as much with cost-containment and with delivery reforms.” “I think we could have put into the legislation specific targets and actions that would be required have to do with unnecessary care, in terms of primary care, transparency and even a more ambitious and delineated schedule for HIT, moving away from fee-for-service.”

Asked about the future of health reform, Daschle said he was “reasonably confident” that the government would prevail in the state legal challenges to the individual mandate, although admitted that “given the unpredictability of the Supreme Court as well as other appeals courts, it’s not as much of a closed case as I think as it should be.” He also expressed concern that newly elected Republican governors would refuse to implement the law, but said he had “two sources of general confidence building” about the GOP promise to defund the law, should they regain control of the House.

“A lot of what we did in health care reform has more of an entitlement than a discretionary funding base. So as an entitlement, they would really have to change the law rather than simply not fund in order for it to be effected. The entitlement sections of the legislation are going to be fairly immune from defunding,” Daschle predicted. He also added that approval will likely increase as different benefits become available.

Daschle’s book, published by St. Martin’s Press, comes out next Tuesday, October 12th. To read more of my interview with Daschle, including his response to whether or not Obama advocated for progressive ideas, click here. Read more

Paul Bedard of U.S. News and World Report previews Former Senate Majority Leader Tom Daschle’s new book, Getting It Done: How Obama and Congress Finally Broke the Stalemate to Make Way for Health Care Reform. The book is due out October 12th, and if this excerpt about 10 Healthcare Reform Pitfalls is any indication, we’re in for a good dose of honesty about the future politics of reform:

1. Higher premiums. While he says that “there is little risk” that everyone’s health insurance premium will go up, “it is unrealistic to expect that none of us will see any increases.”

2. Preexisting condition gap. 2010 will see that children with preexisting conditions can’t be rejected by health insurance companies, but adults won’t get that benefit for another four years.

3. Shrinking Medicare payments to doctors. 2011 will see payments to Medicare Advantage plans frozen and payments to providers will increase at a slower rate as it becomes official policy to expect healthcare providers to become more efficient.

4. Increased senior premiums. In 2011 more high-income seniors will start paying higher premiums. They will also get less of a subsidy for prescription drug coverage.

5. Cuts in Medicare Advantage. In 2012, Obama’s reelection campaign year, Daschle says that “there will be some significant healthcare events this year that are not politically safe.” Such as: Payments to Medicare Advantage plans will now be cut, not just frozen.

6. Mediare-cutting panel. Also in 2012, Obama will have to appoint a board charged with “tightening Medicare spending even more.” Daschle concedes that “in an election year, the appointment of the board is sure to lead to a new round of overheated charges about what the board might to do seniors’ care.”

7. Medicare tax boost. Come 2013, Daschle reports that individuals earning more than $200,000 a year and couples earning $250,000 a year or more will see a boost in Medicare taxes, ironically called the “HI tax,” short for hospital insurance tax. s.

8. Change in healthcare deduction. Also in 2013, the healthcare spending deduction will change. Where you can now deduct anything spent over 7.5 percent of your income, the new base will be 10 percent of annual income. Seniors get an extension on the 7.5 percent rate until 2017.

9. Employer tax. If employers have more than 50 full-time workers and do not provide coverage, they will be fined $2,000 for each employee. If they provide “expensive” coverage, they’ll also pay a fine.

10. Individual penalty. In 2016, with most of the reforms, in place, individuals who don’t have health insurance will be fined $695 a year, or 2.5 percent of annual income, whichever is greater.

Talk about spilling cold water on the much touted Democratic belief that Americans will fully embrace health care reform once it becomes law. Daschle’s perspective offers a more realistic take on the long road to not just selling reform to the public, but also dealing with many of the challenges that it brings for different constituents. Universal coverage won’t be painless and the cost containment provisions — excise tax, medicare panel — will generate tougher headlines than anything we’re seeing today. The question for lawmakers will be: do we stick with these policies or abandon them for short-term political gain. The history on this is mixed — with Congress, patching one cut, but offsetting it with others — but it’s also worth arguing that many of these cuts (particularly the Medicare adjustments that will come from the board) are actually politically advantageous since they do not directly target benefits.

Over at ThinkProgress, Faiz Shakir reports that “in an emailed statement to Bloomberg News, Health and Human Services Secretary Kathleen Sebelius said she’s open to the idea of dropping a public health insurance option in favor of a medical-insurance cooperative,” even if the proposed co-operative is a mosaic of state-based programs.

Sebelius explained that the administration was open to any proposal that would “have a comprehensive approach that lowers costs” and provides “coverage for everyone.” “The administration remains open to all serious ideas including national and state co-ops as well, public plans modeled on Medicare, as long as such plans achieve the president’s goals of reducing cost, improving quality and giving Americans real health-care choice,” Sebelius said.

But it’s a unclear that a national cooperative — much less state-based cooperatives — would be able to lower costs. A single health insurance plan has limited scope to influence the practices of providers and other insurers. It lacks the clout of Medicare — which can drive system innovations and payment reforms — Medicare-like administrative efficiencies, or the ability to use Medicare leverage to ensure a large provider network that accepts Medicare prices. A new cooperative health care plan won’t be able to lower costs and drive private insurers to aggressively bargain with providers (and pass the saving on to its beneficiaries in the form of lower premiums). Multiple cooperatives — operating as non-profit health insurance plans — would have even less market leverage to bargain for lower prices.

In fact today, during a press briefing with reporters, former Sen. Tom Daschle — who has been criticized for failing to strongly advocate on behalf of the public plan — argued, “I can’t think of a tool that more effectively controls costs than a public option. I mean every study that has been done on a public option shows what remarkable cost savings you can derive”:

Actually as I said at the beginning, the degree to which Republicans make themselves less and less relevant is the degree to which a public option is more and more likely, because we are negotiating with the Democrats rather than the Republicans who oppose it. So I would say that a reconciliation vehicle would probably have a pure public option just because most likely it will only involve Democrats deciding what that reconciliation package will be.

Watch it:

Health care reform isn’t all about a public option, but a public option may be essential to sustaining the effort. Progressives certainly shouldn’t allow the perfect to be the enemy of the good — a health care bill that provides coverage to more Americans but lacks a public option is better than no reform at all. But Democratic lawmakers should be careful not to sacrifice good policy for the sake of winning one or two Republican votes. As the New York Times reports this morning, there is “Little Hope for G.O.P. to Support Health Bill.” Republican opposition is rooted in ideological stubbornness and a political unwillingness to allow Democrats to win on the issue, not sound policy rebuttals. As GOP word-smith Frank Luntz has conceded, Republicans will label Obama’s reform effort a “government takeover” of health care regardless of the actual proposal and they continue to misrepresent and lie about the consequences of a public option.

But as Daschle points out, if Republicans continue to lie and obstruct reform, they may push Democrats into reconciliation and, ironically, contribute to the creation of a robust public option. Unfortunately, it’s not yet clear that everyone in the administration agrees that this is good policy.

Transcript: Read more

Tom Daschle’s deep political connections and interest in health care wonkery made him a prime candidate for the health care job. He really wanted to reform the system and he had the political ability and connections to make it happen. Nobody questioned Daschle’s commitment to reform, but some commentators and lawmakers were still surprised about his decision to step aside. Here is a sampling of the live cable coverage:

SUSAN PAGE: I think not inevitable. I think Tom Daschle probably could have gotten confirmed….In fact, I think you saw support from a fair number of Republican senators. [MSNBC, 2/3/2008]

CHRIS CILLIZZA:If we had been doing this interview at 9:00 this morning or 8:30 this morning, I would have said he’s probably going to make it. He’s going to come out a little bruised but he’ll make it. [MSNBC, 2/3/2008]

TOMMY THOMPSON: Oh I think he would have [been confirmed] – I think there is no question that whoever Obama nominates they are going to get confirmed because of the overwhelming superiority of numbers that the democrats have. [Fox News, 2/3/2008]

ED HENRY: I can tell you, just in the last couple of hours, I’ve spoken to some of Tom Daschle’s confidants, and they were insisting he was going to make this…This is a big shocker at the White House. [CNN, 2/3/2008]

Sen. John Kerry (D-MA) also expressed disappointment. “I wish Tom Daschle had not decided to withdraw his nomination for Secretary of Health and Human Services,” Kerry said in an issued statement. “This was no ordinary appointment and today is not a good day for the cause of health care reform.”

Daschle seemed to believe that his tax controversy distracted from health reform, but critical media coverage may have also influenced his decision. As Andrea Mitchell points out, “Daschle specifically cited the New York Times–which I take to mean this morning’s editorial calling for his nomination to be withdrawn. Surely it wasn’t the only factor, but it was probably a non-trivial one.”

Moreover, a source close to Daschle says “he didn’t have the stomach for the fight.” “The double-barreled combination of a blistering New York Times editorial and a front-page story raising questions about President Obama’s commitment to ethics reform in Washington convinced Daschle he had to go.”

Daschle’s choice to step down certainly places more pressure on Obama to use the presidential bully pulpit and convince the American people that the economy demands health reform.

Still, the need for health reform may eclipse this set back. With the right team, we can still make it happen.

Since his tax improprieties and industry ties have become the stuff of headlines, Tom Daschle has withdrawn his nomination for the Health and Human Services post.

The real question is whether Daschle will hold on to his appointment to head the White House Office on health reform. Remember that Obama also tapped tapped Daschle “to lead a new White House Office of Health Reform, a position that comes with a West Wing office and a voice in virtually all of the administration’s major domestic policy debates.”

Still, Daschle’s withdrawal from HHS certainly undermines the probability of imminent reform. Obama nominated Daschle for his intimate knowledge of Congressional procedure, his progressive policy solutions, familiarity with health care policy, and the lessons he learned fighting for health reform in 1993.

This isn’t to say that Daschle is somehow so uniquely suited for the job that the health care system will rot without him. Other leading contenders for the job, Govs. Howard Dean (D-VT) or Kathleen Sebelius (D-KS), could serve as powerful advocates for health care reform.

While progressives are working to build bipartisan support for affordable health care reform, some conservatives have started laying the groundwork for a misinformation campaign against universal coverage.

Just this week, the Washington Times published two editorials mis-characterizing Tom Daschle’s Federal Health Board (FHB) proposal as a big-government take-over of health care. In truth, the Board (which is not part of President-elect Obama’s proposal) is designed to tackle the status quo: address the inequalities of the health insurance market, lower health costs and increase access to care. Here are some facts about what the federal health board would do:

Fifteen years ago, during President Clinton’s efforts to reform the health care system, conservatives launched almost identical attacks against affordable health reform. As Ben Furnas points out, if opponents of reform succeed today, “the next 15 years are likely to resemble the last 15.”

Speaking at a forum in Denver yesterday, incoming Health and Human Services Secretary Tom Daschle stressed the importance of moving quickly on health care reform. “The economy is going to be directly related to our capacity and our ability to reform the healthcare system in the months ahead,” Daschle explained.

After identifying the problems plaguing the system — rising costs, poor access to care, billions of dollars in unnecessary spending, lack of transparency — Daschle identified “the status quo” as “the most costly option of all” and promised to begin a “successful process” that “will ultimately bring us to a conclusive and successful effort in the not too distant future to bring meaningful health reform to people all over this country“:

And I believe that in a sense it’s really like our federal aviation system. Our job in government is to get everybody from here to there safely. You can fly coach, business or first class, but we want to make sure however you fly you get there safely. The same can be said for healthcare.

Echoing President elect Barack Obama’s campaign health care plan, Daschle envisioned a private-public partnership that lowers costs, guarantees access to affordable care, improves quality, “shift it away from sickness and on to wellness,” and invests in health infrastructure. “If you like what you have, you ought to be able to keep it. But if not we ought to pool the resources of those who aren’t in a system they like and offer them the same plan of options that members of congress have,” Daschle explained.

The former senator underscored the incoming administration’s grassroots approach to health care reform, promising to “reach out in as many ways as we possibly can…with full transparency.”

If you wish submit your own view as to what you consider “to be the biggest problem facing our healthcare system today,” click here.