The Politics, Power Players Of Health Care Reform

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The Politics, Power Players Of Health Care Reform

TERRY GROSS, host:

This is FRESH AIR. I’m Terry Gross. Congress has made progress this week on
health care reform. To help us understand what the House and Senate are
considering, like what is the public option, and to analyze how politics and
special-interest groups are shaping what’s on the table, we’ve invited Jonathan
Cohn. He writes about health care politics for the New Republic, where he’s a
senior editor, and he writes the blog The Treatment. He’s also the author of
the book “Sick: The Untold Story of America’s Health Care Crisis and the People
who Pay the Price.”

Jonathan Cohn, welcome to FRESH AIR. One of the two Senate committees that had
to mark up a bill has done that. So we have one thing on the table that’s
finished for now that we can talk about. So let’s start there.

The Senate Health, Education, Labor and Pensions Committee has come up with its
version of a bill. What does it look like? What are the key things?

Mr. JONATHAN COHN (Editor, The New Republic): Well, the Senate – the key thing
to understand in the Senate is that you do have two committees writing bills.

You might think that the Senate Health Committee would be the committee with
the most jurisdiction over this because it has the word health in it. Actually,
in fact, that’s not entirely the case. They only have a few pieces of reform.

Anything to do with taxes, with Medicare and Medicaid, that all goes to the
Senate Finance Committee. So we don’t really yet know those parts of the
legislation, what they will look like. But the Health Committee does have some
very important areas of jurisdiction, and what they have done is they have put
forward a framework for how they would like these areas to look.

So one of the things they have told us, as they are in charge of, or one of the
committees in charge of, creating what you will hear about called exchanges.

In general, the idea here is to create a marketplace where people who don’t
work for large companies and don’t get, you know, good benefits, you know, at
affordable prices through their companies, individuals can go and buy insurance
the same way people who do work for large companies do.

So they can get insurance that, you know, offers sort of the basic set of
benefits you would want in an insurance policy. It’ll be available not at
outrageous rates, and most important, the insurance company is not going to say
to you, oh, you have a pre-existing medical condition, therefore we’re not
going to cover you at all, or we’re going to charge you four times as much.

This is a very important part of health reform. Anyone who’s ever tried to buy
insurance on their own and has gone through the gauntlet of that process
understands how difficult it is. The exchange is designed to fix that problem,
and that’s really one of the most important things they’ve done.

They also said that - they have called for creating a public insurance option,
and if you have followed this debate, you have undoubtedly heard about this.
It’s gotten a lot of attention, and the idea is that within this exchange, and
you know, within this marketplace, they want to make sure that there’s actually
a government-run insurance program that you could choose to enroll in
voluntarily, and the idea is that it would look something a little bit like
Medicare, and the theory is that, you know, people trust Medicare, they always
know it’s going to be there. Well, that would be the case here as well.

This is a plan run by the government. They’re not out to make a profit. So you
can have faith it will always be there for you, it will cover all the necessary
benefits, and a lot of people, I would include myself among them, believe that
actually health insurance happens to be something the government does pretty
well and that having this government, public insurance option out there would
be good for the competition. It would force all the private insurers to behave
and to keep up, and by introducing this public option we make insurance not

just for people who enroll in the government option but insurance for
everybody, we would make insurance for everybody a lot better.

GROSS: Well, let’s look at the public option a little bit more. Aren’t the
health insurance companies worried that because the government could negotiate
discount prices, because they’ll be representing so many people, that they can
under-price the insurance companies and the insurance companies will lose out?

Mr. COHN: Absolutely, they are worried about this. If you talk to the insurance
lobby, this is their number one concern, and it’s not just the insurance lobby.
You will hear from the drug makers, from the doctors, from the hospitals. A lot
of the interest groups involved with health care are worried that the public
insurance option will come in and basically Bigfoot them and push the private
insurers out of business just by undercutting them.

Now, there’s sort of - I think – I’d like to think there are two responses. The
first response is that to some extent, if the private insurance companies can’t
keep up, then maybe they shouldn’t be in the business. I mean, that’s sort of
the point here. We want to get insurance to people that is affordable. We want
to give them good benefits, and if it turns out the government can do that
better than private insurance, then maybe we ought to stop trying to fight that
and say, all right, well, let the government come in and do it, at least for,
you know, a large number of people.

Now, in fairness to the insurance lobby, I mean, it is not unreasonable for
them, I think, to think that, gee, the government has so many advantages, it
could basically under-price us so much and just drive us out of business -
while not paying a fair price to the doctors, to the hospitals, to the drug
makers, and so you’d end up in a world where it was all government insurance,
right? And the drug makers and the doctors and the insurers would make so
little money, a bunch of them would go out of business, or we’d all be in long
waiting lines because there wouldn’t be enough of them.

You know, in theory, this is a reasonable concern, but what you have to
remember is that the people who designed the public plan, who have been writing
this up, are quite well aware of this danger. Even if they wanted to create a
public plan that would do all of that, I don’t think the political power, they
don’t have the votes to do that.

So they have built into their conception of a public plan a number of
safeguards designed to make sure that the public plan never becomes that
powerful, that it never can just drive the private insurance companies out of
business simply because it happens to have big Uncle Sam behind it.

GROSS: Yeah, well, I think another concern for the insurance companies is that
they’re supposed to making a profit, they’re for-profit companies, whereas the
government doesn’t need to make a profit from insurance, which is another way
the government can undercut them. So what are some of the safeguards that
you’re referring to?

Mr. COHN: Well, and again, I again would say the fact that the government
doesn’t need to make a profit, I would consider that a feature, not a bug, and
that’s part of the issue here. I mean, we are dealing with a fundamental
question here of whether health care is something on which we should let
companies make a profit or at least make very large profits, and you know, if
the government - presence of a government plan forced all private insurance
companies to make lower profit margins, certainly, you know, I think that’s a
perfectly acceptable outcome.

Now, that said, like I said, you can take this too far, and I do think it is
important to have some safeguards. The safeguards I’ve seen, they involve
things like, you know, first of all, making sure that people in the public plan
have access to enough doctors and enough hospitals.

If indeed a public plan started paying far below what is appropriate, what
providers, what doctors, what hospitals could live on, you would see doctors
and hospitals turning away these patients, and so you have a kind of trigger in
there that says, well, wait a minute, if the number of participating doctors
falls below a certain amount, then there needs to be some review of payment
policies, or perhaps payments need to go up.

There are other requirements you can have about the – you know, one thing that
has come up is that, look, as a private company, you have difficulty. You have
to raise capital. You are required by law to keep reserves. If the public plan
can just keep yanking from the government Treasury money, money, money, anytime
it wants, it’s not going to be competing on a fair playing field.

So a lot of the proposals for a public plan say, okay, we can’t do that. We
have to give the public plan some start-up money to get started, but after
that, it’s got to be on its own. It’s got to sustain itself just like a private
insurance company would.

So those are the sorts of safeguards there are. And then there’s a more direct
set of safeguards built in, which is to say, look, we can just dictate by the
law that the public insurance option has to pay rates that are somehow some
fraction of what private insurance pays in an area.

In other words, it can never be too far below what the private insurers are
paying, and that’s another kind of way you can have a safeguard to prevent the
public plan from becoming too large, too powerful.

And you know, that’s really the point here. We want to set up a competition.
And I actually believe in the long run there are some things private insurance
does well. There are some things that public insurance does well. And I think
if you get them operating side by side, the competition actually might make for
a very strong health care system.

GROSS: And are you saying that as somebody who really prefers a single-payer,
universal health care system?

Mr. COHN: Well, you know, if we’re talking about what I personally believe - I
mean, I have said many times, if it were up to me, if I were king for a day, I
could wipe the slate clean, I would absolutely create something that looks like
a single-payer system, and you know, a single-payer system, in other words, a
system where the government is responsible for providing basic insurance to
everybody.

The system I always tell people that I would model us on, it would like what
they have in France, which actually looks a bit like Medicare. The government
gives everybody basic insurance, and then you’d have – people could buy private
supplemental insurance on top of that.

But I’m not king for a day. I can tell you quite assuredly that my political
views are not those of the people, for the most part, who are writing these
laws.

There may be some people who support the public option who do think and who do
want someday to get to a single-payer system, but the two things
(unintelligible) first of all, that’s not a majority view by any stretch of the
imagination. And I can tell you politically there is not a chance in the world
we’ll get anywhere close to that in this legislation. I mean, that’s just the
reality of politics.

If anything, Congress is well to the right, in other words I would say more
conservative than public opinion on this issue, and it is far more likely that
Congress would end up creating a reform system that had a very weak public plan
that would, frankly, you know, suffer and not thrive because it hadn’t been
given the proper resources and the proper tools, far more likely we would see
that than Congress would pass a plan in which they’d create this super,
gargantuan, all-encompassing public plan that would drive every other insurer
out of business, and you know, the next thing you know we have health care that
looks exactly like it does in Canada.

GROSS: My guest is Jonathan Cohn, a senior editor for the New Republic. He also
writes for the magazine’s health care blog, The Treatment. More after a break.
This is FRESH AIR.

(Soundbite of music)

GROSS: If you’re just joining us, my guest is Jonathan Cohn. He’s a senior
editor at the New Republic. He’s been writing about health care politics in the
magazine and on his blog, The Treatment. He’s also the author of the book,
“Sick.”

Well, let’s continue our kind of guide through health care politics right now.
One of the big questions on the table is who pays? Who pays for all this new
stuff that the people will be getting, and one idea is, you know, a tax on the
wealthy. Would you explain the proposal for that?

Mr. COHN: Absolutely, absolutely. The finances of reform basically work this
way. If you do health care reform right, over the long term it should pay for
itself. In fact, that’s a big reason why we’re doing reform. If you’ve heard
President Obama, he clearly feels quite strongly about this, that in the long
run, decades from now, and to some extent now, health care is going to drain
resources from other places that need it.

So the long-term goal is to create a health care system that saves money and
then in the long run can really pay for itself. Now, drawing it up on paper,
that’s easy to do. In the real world, you can’t do that overnight by flipping a
switch. It takes time.

If at the same time we want to make sure everybody has health insurance -
because after all, we’re not just concerned with the way health care is
draining resources out of our society, we worry about the burden it places on
individuals - we want to make sure everybody has insurance so that, you know,
people don’t have to go bankrupt because they get sick.

Well, if you want to do that, you have to spend a little money now. You have to
- in effect you have to spend a little money now to save some money later. And
the estimates, they vary - it depends on how you do it - but somewhere in the
neighborhood of a trillion dollars over 10 years you have to come up with.

Now, just to put that number in perspective, a trillion dollars over 10 years,
so that’s about $100 billion a year, and this is in the middle of a health care
economy that is more than $2 trillion every single year. So really, it’s not
that much money in the grand scheme of things, but you know, coming up with a
trillion dollars in Washington is not that easy.

You can do some of it by finding savings in the system. You know, we have a
very inefficient system. So you can find savings, but the other way to do it is
to raise some kind of new revenue through some kind of taxes.

Now, the House of Representatives, in their proposal, has been talking about a
surtax on very wealthy people. And basically it says if you are in the top one
or two percent of earners in this country, you’re going to have to pay higher
taxes, and you know, that is one way to generate the revenue.

It is extremely progressive. It takes money only from those people who have
still, you know, have done very well even in the down economy and can afford to
pay a little more money, and it does, you know, generate a lot of money. I
mean, the numbers I’ve seen suggest you can get about half of the money you
need to cover health care reform over the next 10 years through that sort of
surtax.

So that is one idea that’s on the table. But there are other ideas. The Senate
will almost certainly not use that. They will go with some other means, and you
know, it remains to be seen which of these different revenue ideas Congress
finally settles on.

GROSS: And what President Obama wants us to have - employers either provide
health insurance for their employees or make a payment that would go toward the
government program.

Mr. COHN: Absolutely, and this is – you know, when I was talking before about,
well, what are the different pieces you need to put in place, that is a very,
very important piece. The health care wonks call that an employer mandate, but
it’s really just sort of saying employers have to take responsibility. Either
you pay directly to give your employees health insurance, or if not, then you
have to pay some money into a big fund - because you know what? If you’re not
giving your workers insurance, a lot of them are going to have to get insurance
on their own, and they’re going to need assistance because they won’t be able
to afford it, so you have to bear some of that cost.

So it’s effectively saying employers, you know, we used to call this pay or
play. Either you give your employees health insurance, or you pick up some of
the cost of your employees getting insurance elsewhere, and when you do that,
it has a lot of good effects.

I mean, one of the effects it tends to have is that employers can’t tend to
keep offering insurance to their employees, and that’s one of the reasons that,
you know, if you’re one of those people out there and you say, gee, I like my
health insurance the way it is, I don’t want to lose it, why should I support
health care reform, well, that’s a reason, because if reform happens and if
President Obama and his supporters in Congress get their way, there will
basically be a requirement that says to employers, hey, you can’t just drop
your insurance because suddenly you’ve decided it’s a good way to get a leg up
on your competitors. You have to keep offering that insurance.

So that is why, you know, it’s a very important piece. It’s worth noting that
an employer mandate is not just good for the employees. It’s actually good for
a lot of employers too, because basically it puts all employers on a level
playing field.

You know, right now you have a situation where you are, say, in the grocery
business, and another grocer comes into your market, and you may be much better
– you’re much better at sort of finding good deals on produce, and you come up
with better offerings and you have a better check-out system, and that’s all
great. But if your new competitor is lousy at all those things but has figured
out a way not to provide really good health insurance to its employees, your
competitor is going to have lower prices, probably, and might drive you out of
business.

So what this says to business, this employer mandate says, you know what, we’re
just going to put everyone on the same plane when it comes to health insurance.
You all have to pay the same amount, and this way you can compete based on what
you do.

So if you’re a grocery store, be good at selling groceries. You build cars,
then do a good job at selling cars. You create software, then make the best
software programs, and if you do those things, you will succeed in business.

GROSS: Give us a sense of who the key players are in Congress who we should be
keeping an eye on, and let’s start with Chris Dodd. We were talking about the
Senate Health, Education, Labor and Pensions Committee, and he has been heading
that committee in the absence of Senator Kennedy. Just very briefly, give us a
sense of what he stands for in this debate.

Mr. COHN: I think, broadly speaking, he stands for the same values that Senator
Kennedy does. He is a liberal, and I don’t use that as a bad word here. I think
he believes that everybody should have insurance that has good benefits, that
allows choice of doctor, that is affordable, and to get that, it may take a lot
of government intervention. The government may have to regulate insurance very
hard.

It may have to raise some money somewhere, and I think as far as he’s
concerned, that’s okay. You do what you have to do to make sure people get good
health care, and I think that is his bottom line. And that, when you look at
the bill that his committee produced, I would argue that, you know, within the
realm of political reality, it does a pretty good job of that.

GROSS: Senator Max Baucus, he’s the head of the Finance Committee, where would
you position him?

Mr. COHN: Well, you know, Senator Baucus is a very interesting character. He is
not known as someone – he’s not particularly known as a liberal, certainly, and
in fact Democrats have long distrusted him. They think he works with
Republicans too much, and they don’t know where he stands.

To his credit, a year and a half ago, two years ago, Senator Baucus got out in
front on this issue. He made it very clear that this was his mission, to pass a
health care bill. I think he also wants to make sure everybody has good
benefits. I think he also wants to make sure that everybody has choice of
doctor. I think he also wants to make sure that the system becomes more
efficient so it doesn’t cost so much in the future.

The catch is that, you know, he is the head of the Finance Committee. So number
one, he’s actually got to find the money to pay for it; and number two, his
committee, if you look at who’s on it, is weighted a little more to the
conservative side.

The Republicans are very powerful there. There’s a tradition of working
together that you don’t see on all committees. And even the Democrats on the
finance committee tend to be a little more conservative.

So as a result, because he is committed to working with his whole committee, he
tends to produce legislation that is a little more conservative, and in this
context that would mean probably won’t cost as much, wouldn’t have the same
aggressive regulation, and wouldn’t make the same level of guarantees to the
American people that, say, Senator Dodd’s committee, the Senate Health
Committee would.

GROSS: Now, Senator Baucus has been working closely with Senator Charles
Grassley on the Finance Committee, and what does Grassley stand for?

Mr. COHN: Well, you know, and again, I think a lot of Republicans think about
Senator Grassley the way a lot of Democrats think about Senator Baucus. They
don’t entirely trust him because he does sometimes work with the other party.

You can look at any number of issues - for example, on the behavior of non-
profit hospitals. Senator Grassley over the years has been a real watchdog over
the behavior of charity hospitals when they’ve seemed to sort of defy their
charitable mission.

You know, when you heard these stories about hospitals that are supposed to be
taking care of the uninsured and then suing these people over their bills,
Senator Grassley got very worked up about that and really tried to do something
about it.

That said, he’s still a conservative, and at the end of the day I think what he
wants is not going to be what Senator Baucus and certainly not what most of the
Democrats want. At the end of the day, he’s going to be very nervous as a
government program gets bigger and more expensive.

He’s going to be much more reluctant to regulate the behavior of the private
insurance industry, and obviously I think that’s a perfectly respectable view
to have. But I think it’s important to realize that at some point that view
becomes incompatible with the view of people who want to do health care reform.
And so we hear a lot about the importance of bipartisan compromise. I think
it’s important to realize that a bipartisan compromise might mean simply not
accomplishing what you want to accomplish with health care reform.

GROSS: Jonathan Cohn will be back in the second half of the show. He’s a senior
editor at the New Republic, and he edits and is the primary writer for the
magazine’s health care blog, The Treatment. I’m Terry Gross, and this is FRESH
AIR.

(Soundbite of music)

GROSS: This is FRESH AIR. I’m Terry Gross back with Jonathan Cohn.

We’re talking about the politics of health care reform. Cohn writes about
health care issues for The New Republic and he edits and is the primary writer
for the magazine's health care blog, "The Treatment." He's also the author of
the 2007 book "Sick: The Untold Story of America's Health Care Crisis - and the
People Who Pay the Price.”

Senators and congressmen, of course, rely on campaign funding, and a lot of
campaign funding comes from lobbies, and a lot of the big lobbies are involved
in the health insurance debate - the pharmaceutical lobby, the health insurance
lobby. So do you think that there's a lot of behind the scenes conversations
going on between senators and congressmen and representatives from lobbies who
fund them? Do you think that lobbyists are saying if you vote for this kind of
expansive health care reform, we’re not going to contribute to your campaign
next time around?

Mr. JONATHAN COHN (Senior editor, author): Well there's no question there's a
ton of lobbying going on. It happens because these groups give money to
congressmen like you say, and then they say hey, we gave to your campaign, you
better vote the way we want you to. It also happens because these groups are
not stupid. They hire people who used to work on Capitol Hill and then they
dispatch these people who are familiar with Capitol Hill, who know all the
players, to go make their case.

What is interesting is the behavior of the lobbies. Every lobbyist, every
business, every health care interest is obviously out for its own good and its
own self interest but the calculus can be complicated. They all are out to cut
a deal. They all want a deal that's going to protect their income streams. But
they are being a little cautious. They are not firing - they are not coming in
guns blazing, and they are trying to actually offer some concessions.

Enough that they, number one, look good. They want to look good in the public
eye in case they do eventually have to turn against reform, but also to sort of
protect themselves. And you know the feeling is if you're part of the
conversation and you're playing ball that maybe you won't take such a big hit
when and if reform passes.

GROSS: Well let's look at what some of the lobbies are doing. Let's start with
the health insurance lobby. You wrote an article not long ago about the chief

lobbyist for AHIP, which is America's Health Insurance Plans. It's the health
insurance lobby group. What insights did you get from talking to her about why
the health insurance lobby is willing to talk now?

Mr. COHN: Well, I think this is a perfect example of the kind of behavior we
are seeing from all the different lobbying groups. If you are the health
insurance industry, if you're Karen Ignagni, who is the head of the trade that
represents the health insurance industry and you look at reform, one way to
look at it is to say gee, if this reform system passes we may get a whole lot
of new customers. That's nice to have. We'll have also the - our line of
business will be kind of predictable.

Yes, we may have to make slightly less profit on every person, but we'll have
more people to make profit on. So the big insurers in particular and these are
the ones who really she represents. The groups like Aetna and Cigna, they can
coexist in a reformed world. And so in general they have been talking. Now
talking is not the same as doing but they are talking to reformers.

They talk to the White House. They talk to members of Congress. And if you
listen to their rhetoric, they will tell you that hey, you know what? If you
want to pass these regulations that say we have to give insurance to everybody
even if they have preexisting conditions, we can make that work. You want to
give us a set of benefits that we have to provide everyone? Okay, we can make
that work too.

Now, the catch is - and you knew there was a catch - there are certain things
they don’t like. One of the things they really don't like again is this idea of
a public insurance option which they would consider a threat. So on the one
hand they are out there trying to talk and they're appearing at White House
events and they're saying we support this, we support this reform, we support
this reform. At the same time they are doing everything they can to kill the
public insurance option.

GROSS: Let's look at the pharmaceutical lobby. President Obama has gotten the
pharmaceutical industry to concede to what, eighty billion dollars in savings
by making certain cuts. What? What cuts?

Mr. COHN: Well, in affect this was a very complicated deal they arranged. If
you break it down, in affect what it says is that the pharmaceutical industry
is going to actually give a little money towards helping to fill in what you
may remember from the great Medicare drug debate or if you're on Medicare now,
as the doughnut hole. That's the gap in coverage you get if you're a senior
citizen and you're getting drug benefits through Medicare.

So the drug industry has said we'll give a little money to help fill that in
but the drug industry gets something out of this deal too. In fact, you can
make an argument that when you look at the extra business they’ll get and the
extra money they’ll get, they will be no worse off and quite possibly better
off. So in terms of these deals you look at, I have to say I didn't think the
drug industry deal was all that great a deal from the standpoint of health care
reform.

That said, there is the political virtue of it. If you see this primarily not
for about the dollar so much but about the political symbolism, remember two
key things. Number one, every day the drug industry is talking about why it
supports health care reform, it doesn't matter what it’s doing in private.
That's one day it is not spending every dollar and every breath it has
screaming at the top of its lungs that reform is a bad idea. I don’t know that
that particular deal was all that great on the policy merits, but in terms of
moving reform forward politically, I think it was significant.

GROSS: Let's just talk very briefly about the policy itself. The pharmaceutical
industry would be willing to contribute money to the so-called doughnut hole,
to fill that hole, but if you were in that hole, you’d also have to buy brand
name drugs and not generic drugs and the brand name drugs are considerably more
expensive than the generic drugs. So that's what you were referring to when you
were saying that the pharmaceutical industry probably wouldn’t lose much money
or that they might even make money, but what about the consumer? Would they
actually be ahead or behind with a deal like this if they had to buy brand name
drugs instead of generics?

Mr. COHN: Well, you know it's hard to say. The deal is vague enough that it...

(Soundbite of laughter)

Mr. COHN: ...depend a little bit on the actually details of how it was crafted.

GROSS: Right.

Mr. COHN: If, in fact, the doughnut hole is full, if there's no more doughnut
hole, then I think you know if you're giving people more insurance coverage
they would have better access to drugs. So in that sense they would be better
off. But as a consumer yes, you're paying for your drugs so you have to think
about the hit on your wallet for paying for your drugs but eventually you're
paying for this program too, right?

I mean you paid taxes to support this program and if forcing people to buy
brand name rather than generic drugs means that you're buying more expensive
drugs and that makes the whole program more expensive, well, in the long run
that's going to come out of your pocket some day as slightly higher taxes.

Now, I you know, I'd have to sit and talk to an economist. You'd have to sit
and run the numbers and they can vary depending on little tiny changes in the
policy whether consumers were ahead or behind. But I would just say generally
speaking that in terms of the drug industry, this is something still of a
pretty good deal for the drug industry. And health care reformers, I hope, by
the time they're done writing legislation, will be able to extract something a
little more substantial from the drug industry.

GROSS: If you're just joining us, my guest is Jonathan Cohn. He's a senior
editor for The New Republic. He's been writing a lot of about the politics of
health care in the magazine and on his blog which is called "The Treatment."
He's also the author of a book about health care reform which is called "Sick."

Let's take a short break here and then we'll talk some more. This is FRESH AIR.

(Soundbite of music)

GROSS: If you're just joining us, my guest is Jonathan Cohn. We’re talking
about the politics of health care reform. He writes about that subject for The
New Republic where he's the senior editor. He also has a blog about health care
politics called "The Treatment" and he's the author of a book called "Sick."

Let's look at the hospital industry and what kind of deal they’ve been making
with the Obama administration about what they're willing to give up in the
interest of health care reform. What have they offered to do?

Mr. COHN: Well, the hospital industry is a very interesting player in this
debate. I think most people think of hospitals, and same for the doctors, as
sort of the noble providers of services so you don't tend to think of them
necessarily as craving self interested as the drug makers or the insurers. But
if you talk to people in this debate they'll tell you that hospitals have
actually so far been one of the most difficult interest groups to work with.

The reason is simple. If you really want to make the health care system more
efficient, you want to look at making it more affordable in the long run.
Hospitals is where all the action's at. That's where most of the money is spent
and it’s the place where there's just you know we have so much evidence now
that so much of the treatment people get in hospitals, it's wasteful, it's
duplicative, it might even be harmful. So really what we want to do is we
really want to change the way hospitals behave.

Hospitals, naturally like any interest group are not so excited about the
prospect of change, at least as a group. So there's been a lot of tough
negotiations there. At some point President Obama said look, we want to change
the way hospitals are paid as a way to change the way they behave. In general
we’ve found that when you change the money behavior follows. You know, money's
a good incentive. And in affect he wanted to create changes that would have
freed up around two hundred, three hundred billion dollars over 10 years.

Now that figure got out and the hospital industry was not happy about that.
They said wow, that's a big cut to our payments. Maybe we need to make some
changes but surely we don't need to make changes that are that big. And so
there were a lot of negotiations and at the end of the day they came out and
said all right, we will sign off on changes that would in affect cut our
paychecks for the next 10 years on the order of a 150 billion dollars a year.

Now that's less than you know Obama administration was talking about. It's a
lot less than a lot of experts will tell you they could do, but it's still a
significant hit. And again, the dynamic here is pretty simple. It's not so much
that the hospitals are volunteering to give up that money. What they are
basically saying is they're saying to Congress if you want to have a vote, if
you want to pass a law that's going to take down our payments by a hundred and
fifty billion dollars we will not fight it. We will not get up and make a big
stink about it.

We will go along with it and it may be that behind the scenes the hospitals are
still working their best to gut the proposal, but again you know every day that
the Hospital Association of America is not out there screaming that reform is
awful, that is a day that reformers have won a political battle and that's the
way to think of this. And it makes it more likely that at the very end they can
pass a bill that will actually save money by in part, making some adjustments
to the way that hospitals are paid.

GROSS: Is the hospital industry getting anything in return for this concession?

Mr. COHN: Well absolutely. You know pretty much any industry that is looking at
reform right now; the starting point for conversation ought to be you are
getting forty-five million new paying customers. And just think about that for
a second. You know we have about a sixth of the country right now that is
uninsured. That is a large number of people who show up at the hospital and
can't pay their bills. So you're saying to the hospitals we’re going to take
that problem and we’re going to take it off your shoulders. You won't have to
worry about that, at least not as much as you have to worry about it now. So
right off the bat, I mean every hospital in America they're going to gain from
that.

The other thing that's going to be true for the hospitals is that the kind - no
one is talking about just cutting their payments. We’re not just saying we’re
just going to slash the money you get. The money will come out of the system of
changes designed to reward quality. So that hospitals that do a good job,
hospitals that do more with less, hospitals that get good outcomes, well, they
will be rewarded. So the message to hospitals is look, if you run a good
hospital, if you're efficient, if you're clean, if you're safe, if you actually
make your patients better, well guess what?

You're not only going to be fine, you might even do better. So that is I think,
you know, that's the message to the hospitals is that if we’re going to take
care of the charity care problem for you, so we'll - that huge burden will no
longer be falling in your lap. And in addition to that, you know we’re going to
create a system where if you do good, if you're good at what you do, hey you
know we’re going to reward that. We’re going to say you are doing things right
and we want to help you.

GROSS: Now let's look at the AMA, the American Medical Association. Who do they
represent now?

Mr. COHN: Well, that's a very good question. You know historically the AMA, if
you go back to the early history of health care reform, was the single most
important and single most affective lobby against reform. I mean they
basically, I don't want to say single handedly, but they were primarily
responsible for killing health care reform when Harry Truman tried it in the
late 40s and early 50s.

Today the AMA does not represent all doctors. Medical - the medical community
is very divided. And to some extent it’s divided along specialty lines. The
more you look at primary care doctors - if you look at pediatricians, you look
at family doctors, to some extent if you look at OB-GYNs - you will find that
these tend to be people who are strongly in favor of health care reform. They
are strongly in favor of figuring out a way to regulate the behavior of
insurance companies to emphasize quality and to really make sure that everybody
has insurance.

On the other hand, if you look at specialists, if you look at surgeons, the
orthopedists, the ophthalmologists, et cetera, they tend to be a lot more
conservative. They're more similar to where the entire medical community was
30, 40, 50 years ago.

The AMA I think more and more speaks for that second group of doctors, the
specialists, the surgeons. They focus a lot, quite frankly on the bottom line
income issues for their members. Now that's, you know, that's what groups do,
right? I mean every group represents its members. But what's interesting to me
is that you do find a lot of smaller organizations representing just certain
groups of doctors like the American Association of Family Practitioners, like
the group that represents the pediatricians. And if you talk to them they are
absolutely one hundred percent in favor of health care reform.

And so the AMA speaks for one group of doctors who tend to be more skeptical of
health care reform. But certainly, if you were to survey the entire medical
community of America, and there’s some survey data out there to support this
actually, you get a pretty big divide of opinion.

GROSS: So where does the AMA stand now? And have they made concessions?

Mr. COHN: Well, the AMA so far has been acting like any of the other health
care industry groups. It has made clear that it does not favor a strong public
insurance option primarily because it’s worried that a public insurance option
wouldn’t pay physicians enough. It has generally been skeptical, historically,
and as far as I know this is still its stance, of higher taxes on wealthy
people to pay for health care reform. And that’s because, you know, its members
would be among those people paying the taxes.

But again I think you will find, and if you talk to people in the reform
discussions, they will tell you that the AMA has been at the table because
there are other things the AMA cares about. The AMA would love to see some help
on malpractice reform. The AMA would also like to see a change in Medicare so
that every year the doctors aren’t faced with this steep cut in their payments,
which is something that happens now because the way the law is written.

So if Congress can reach out to the AMA and say look, we’ll do something about
malpractice and we’ll do something about this annual Medicare fee cut, then the
AMA may think to itself, and has sort of hinted and indicated that if that’s
where reform is going, you know, that is something it might able to live with.

GROSS: You know, a lot of people who are employed now have health insurance and
are reasonably happy with it. So what would health care reform, the way it’s
being discussed now, what would it mean to them?

Mr. COHN: Well, you know, I think it means two things. Number one, if health
care reform is done right. It will mean that over the coming years, it will not
cost as much as it otherwise would, or which is a very complicated way of
saying, it’ll be cheaper going down the road. And if you’ve seen your premiums
go up year after year after year – the idea of health care reform is to say
that, you know, we’ll never, you know, we’re never going to make health care
cost less than it does today.

But hopefully 20 years from now it won’t cost tons more than it does now. And
you won’t, you know, instead of paying a $1,000 extra year after year after
year, you would pay, you know, $100 or $200 extra, a year after year. So the
idea is basically to make this more affordable for you.

The other thing is that I think people don’t always appreciate the extent to
which their insurance today is already precarious. I mean this is the big
problem. You’re insured, you have good benefits from your company, and so you
think yourself ah, my life is good, why do I need a change? Well, here is why.
Because if nothing changes, if we leave the system the way it is, then tomorrow

you may find that your insurance isn’t there anymore. Or if it is there, it
won’t offer the same benefits. And even if it does offer the same benefits, you
may find that when you get sick - and everybody does eventually get sick or
have an accident or need some medical care - that you will suddenly discover
that oh, gosh, your insurance doesn’t cover what you need. Or maybe it has a
lifetime limit on benefits and you’ll exceed those.

People do not yet realize, I think, how vulnerable they already are. If you
realize that though, then I think hopefully people will realize that reform
does offer them something very, very important. It offers them security. They
may think they have that security now but truthfully they don’t.

GROSS: Do you see this medical reform heading toward genuine structural reform?

Mr. COHN: That really depends on how you define structural reform. And a lot of
it depends on political forces - I think we can’t yet know how they will play
out. I will say this: If the final - if Congress passes a law - and I do think
they will pass something - if Congress passes a law that looks like – that
resembles structurally what the House has put on the table, if it resembles
structurally what the Senate Health Committee passed, then I think we will have
done some structural reform. It will not be enough, I think.

I will feel there will have been a lot more we could have done and there will
be a lot more to do in the future. But we will have made some very important
changes. And again, I think the most important changes will be from the
standpoint of the consumer. I think you cannot overestimate the fact that any
of these reforms that go into effect, will mean - assuming they’re properly
funded and properly designed - will be a total change of life for people who
now are shut out from insurance because it’s too expensive or because they have
pre-existing conditions. That is a huge, huge change. And if nothing else goes
right – and, you know, we'll see how it goes - that would be a tremendous
accomplishment, something as large as we’ve done in this country, I would
argue, since the 1960s when we created Medicare. And if it’s not everything we
hoped it would be, if it’s not everything I hoped it would be, you know, at the
end of the day as I like to say, you know, that’s a good day’s work in
politics.

GROSS: Jonathan Cohn, thank you so much for talking with us.

Mr. COHN: Oh, it’s been my pleasure, thank you for having me.

GROSS: Jonathan Cohn is a senior editor at The New Republic. And he edits and
is the primary writer for the magazine’s health care blog, The Treatment. This
is one of a series of interviews we’re doing on health care reform. Coming up,
a new autobiographical film by the 81-year-old French director Agnes Varda -
the only woman among the French New Wave filmmakers of the early 1960s. John
Powers will have a review.

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'Beaches Of Agnes' Fetes An Aging Queen Of Tides

TERRY GROSS, host:

The French director Agnes Varda was the only woman among the filmmakers of the
French New Wave of the early 1960s. Over the years, she’s won numerous
international awards for such films as “Cleo from 5 to 7,” “Vagabond” and “The
Gleaners and I,” which are all available on DVD. Her latest film, an
autobiographical documentary called “The Beaches of Agnes,” has been widely
hailed as one of her finest. Our critic-at-large John Powers says it provides a
useful gateway to an important filmmaker's work and to thinking about our own
lives.

JOHN POWERS: Some filmmakers, like Orson Welles and Jean-Luc Godard, instantly
announce their greatness. With others, the greatness becomes clear when you
look back over their careers. Such is the case of Agnes Varda, the 81-year-old
French director whose reputation just keeps growing. So does her body of work.
At an age when most of us would be happy just to be breathing, she's making
some of the best and most original movies of her life. Varda belongs to that
astonishing era of French directors — Godard, Resnais, Rohmer, Truffaut,
Marker, Chabrol, Rivette, Malle and her late husband, Jacques Demy — for whom
cinema was almost a religious idea.

Varda has spent her whole life collecting images. It's her way of understanding
the world. So it's only natural that when it came time to give us her
autobiography, she'd do it on film. The movie is called “The Beaches of Agnes.”
And it's a wonderful portrait of a full life — smart, touching, sometimes
unabashedly silly, as when Varda dresses up as a potato. She shifts through the
diverse elements of her life, from her birth in Brussels in 1928 through the
self-inventing moment when she changed her name from Arlette to Agnes, to her
present-day status as an octogenarian grandmother and cinematic icon.

Although few things could seem more narcissistic than an autobiography, Varda
never slips into self-indulgence. She doesn't go all Mark Sanford on us,
dishing up private details we don't really want to know. Instead, Varda teaches
us how to understand our lives. We start not with our inner feelings, but with
the people and places that matter to us. That's why the film brims with
generous portraits of the people who matter to her — the bakers next door,
filmmaker Chris Marker, even her Hollywood pal Zalman King, the soft-core
impresario behind the cringeful “Red Shoe Diaries.” She takes time to celebrate
these people and many more, especially her beloved Demy, who made “The
Umbrellas of Cherbourg.” Almost 20 years after his death, his name can still
make her mist up.

Looking back over the 55 years of Varda's film career, it's tempting to say
that she's the most distinguished living woman filmmaker, but that would be to
insult her with faint praise. She's one of the most distinguished filmmakers,
period. Besides, such a gender-based designation locks her in a cinematic
ghetto — the world of chick flicks and movies devoted to so-called women's
issues, like abortion and raising kids — something Varda has largely tried to
avoid. In 1977, she did make an overtly feminist feature, “One Sings, the Other
Doesn't,” but frankly it was pretty sappy.

It actually said less about women's lives than the more oblique “Cleo from 5 to
7,” about a pop singer waiting to hear whether she has cancer. And “Vagabond,”
the fierce tale of a young female drifter who burns too hot for our chilly
world. Varda's deeply-rooted feminism reveals itself mainly in her ferocious
independence, in the way that she's always made the movies she's wanted to
make, however personal or eccentric. As “The Beaches of Agnes” makes clear,
Varda has a strong personality. And the result is one of the two best films
currently in our theaters.

It's worth noting that the other one, “The Hurt Locker,” a brilliant drama
about bomb-defusing soldiers in Iraq, was also directed by a world-class woman
filmmaker, Kathryn Bigelow. She, like Varda, has followed her own interests,
pointedly avoiding the female-film ghetto. Among other things, nobody is better
at action sequences than Bigelow. And nobody could be a better model for young
filmmakers, female or male, than Varda. She began her career at 26 by daring to
make a film about her home town — even though she knew almost nothing about
movies. And she's ending her career enlivened by the same youthful curiosity
about the world around her.

Near the beginning of “The Beaches of Agnes,” Varda tells us that she's quote
"playing at being an old lady." Though she's kidding, she's actually right. At
81, the playful Varda remains one of the youngest filmmakers around.

GROSS: John Powers is film critic for Vogue. He reviewed Agnes Varda’s new film
“The Beaches of Agnes.” It opened in New York and LA and will open in select
cities beginning in August. You can download Pod casts of our show on our Web
site freshair.npr.org.

I’m Terry Gross.
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Transcripts are created on a rush deadline, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of Fresh Air interviews and reviews are the audio recordings of each segment.