Very Strange Bedfellows

The National Federation of Independent Business has been one of the stalwart defenders of health freedom. But its recent association with two activist liberal groups is raising eyebrows around town.

The NFIB was a leader in the 1990s in explaining to the American people the restrictions and complexities of the Clinton health reform initiative and the loss of freedom to Americans and especially small businesses. 

But something has changed 15 years later. The NFIB now has joined with the AARP and the Service Employees International Union (SEIU), as well as the Business Roundtable, in a campaign called "Divided We Fail."

The NFIB says the campaign provides a national platform to talk about why small business is so important to America and why rising health costs continue to be the number one concern of small businesses. The Business Roundtable sees it as a way to "catalyze new thinking" about high health costs.

The goals of the joint campaign sound innocuous enough. But it's important to look at the other agendas of these strange bedfellows, especially the SEIU. The union that represents one million service workers, primarily in hospitals and hotels, is working to build a number of coalitions to advance its agenda.

And what is that agenda?

The SEIU's "Vision for Reform" calls for "a universal health care system" with "guaranteed affordable health coverage for all Americans" and a "core health care benefit similar to the one that is available to federal employees."

The union wants all of the presidential candidates to have "a detailed, comprehensive health care plan that meets those principles." The SEIU says that "All of the major Democratic presidential candidates have met that challenge, unlike their Republican counterparts — an essential difference that SEIU members will highlight as they work to elect the next president," according to a February 4, 2008, SEIU news release.

The union plans to spend $75 million this year on its grassroots advocacy campaign, including paid advertising and a nationwide tour, to "make health care the central issue in the election…draw sharp distinctions between the Republican and Democratic presidential nominees' approach to health care…and to help elect a president committed to real solutions."

These business groups may have their own vision that incorporates more free-market principles. But are they prepared to spend $75 million to promote them? If not, they risk getting used in this effort.

The NFIB and Business Roundtable are not alone in their involvement in this strained coalition-building: Wal-Mart, Intel, General Mills, and AT&T, among others, announced last year they are working with SEIU to "overhaul the country's broken health care system…When this many different perspectives unite around a common goal, it makes very clear that health care reform is achievable," the May 8, 2007, release announces.

Maybe. Maybe not. I absolutely believe in coalitions and am a facilitator and supporter of many conversations among people who come from different ideological perspectives seeking consensus around core ideas. But there must be some common philosophical ground for a conversation or you wind up with an unworkable mismatch of policy.

It is crucial that principle and policy not be lost in a misguided attempt at reaching an artificial agreement that can't possibly hold up when writing new laws.

The 2008 election will provide a clear contrast between two different philosophies of health reform, as I described in my recent Wall Street Journal piece. It deceives voters to pretend that here is a middle ground between a much expanded role for government in our health sector and a properly functioning, patient-centered free market.

NFIB surveyed its members, and it found that more than half of them support an individual mandate — requiring individuals to purchase health coverage. Therein lies their support for universal coverage.

But do they understand that an individual mandate immediately morphs into an employer mandate, which NFIB adamantly opposes, because employers will be required to pay a government-determined share of the premiums? Is this the compromise that NFIB is prepared to make?

If businesses think an individual mandate is going to make their health care problems go away, they should think again.

Even Hillary Clinton criticized an individual mandate in 1994, saying, "The individual mandate…makes it very difficult to determine and monitor who is in the system and who is out. It would require tracking individuals as they move in and out of jobs, as they move in and out of the insurance market. It would require, in our view, the IRS to engage in an enormous administrative oversight of our health care system."

And the NFIB's solution to control costs? "Laws, regulations and insurance arrangements should direct health care spending to those goods and services that will maximize health." What? Is that really the NFIB calling for more laws and regulations over health care?

The affiliation with the SEIU should be causing heartburn for NFIB and Business Roundtable members. The SEIU boasts of its work in helping to pass the Massachusetts and Maine health care reengineering efforts and of the union's work in crafting and helping to pass the Wal-Mart bill in Maryland. The bill targeted Wal-Mart in requiring it to spend at least 8% of its payroll on health insurance. The bill was overturned by a U.S. District Judge as violating ERISA.

Now that is certainly a business-friendly record for the NFIB and the Business Roundtable (which has been less involved in the health debate in the past) to associate themselves with!

I do know that businesses want urgent action on health issues, but the agenda of the SEIU and the AARP, which has been lobbying for more government control over health care and pharmaceutical pricing, is very much out of sync with freedom in the choice of private health insurance and competitive market forces to bring down costs. That is the conversation we need to be having.

Principles matter. This coalition compromises the ability to educate the electorate about free-market solutions in health care.

Let's hope that other organizations don't follow suit. Otherwise, they will be compromised in their ability to move forward with policies that would create a truly competitive health sector and allow the U.S. to create a uniquely American solution to the challenges of a 21st century health sector.

Grace-Marie Turner


Require Freedom, Not Health Benefits
Grace-Marie Turner, Galen Institute
The Detroit News, 02/14/08

Across the country, every state requires insurers to cover certain medical services and providers, including essential services like emergency room care and lesser ones like acupuncture, massage therapy, and pastoral counseling. Mandates, which vary from a low of 14 in Idaho to a whopping 63 in Minnesota, can drive up insurance costs by as much as 50%, according to Grace-Marie Turner. One way to escape expensive health insurance mandates and regulations would be for Americans to be allowed to purchase health insurance policies from insurers in states that have more sensible health policy regulations. When looking for solutions to the rising number of uninsured in their states, lawmakers might first consider undoing the damage they have done with mandates and regulations that have made health insurance so expensive in the first place.

CDHC Prognosis
Doctor's Digest, Jan.-Feb. 2008

Consumer-driven health care can help foster a stronger doctor-patient relationship, according to Grace-Marie Turner. But the crucial relationship between the doctor and patient has been disconnected by the third-party payment system. "There are too many people with decision-making power that gets between the patient and the doctor," she says. With a middleman saying yes or no, what doctors and patients have is "Mother May I medicine," Turner says. "It's so demoralizing to physicians not to be able to do what they were trained to do. They wind up having health plans that are directing their practices and keeping them from spending the time they want, and need, to take care of patients." She finds, "Patients are sick of it, too. They want to be able to deal directly with their doctor to get good advice and care," she says. "When consumers have more access to healthcare information, doctors can do a better job of explaining things. That is especially important in helping people with chronic illnesses become partners in their care," Turner says.

Democrats' Health Plan Not So Harmless
Benjamin Zycher, Manhattan Institute
Investor's Business Daily, 02/14/08

Single-payer "universal" coverage is the enemy of health care, and it's the inevitable outcome of the Democratic proposals, writes Ben Zycher. Ostensibly, the Democratic candidates recognize the importance of private insurance options, and the proposals add a Medicare-like government insurance option to provide enhanced competition driven by supposedly lower administrative costs. But the government option would crush competition and render meaningless the Democratic promise to preserve choice. The inevitable result is waiting lists, denial of coverage, underinvestment in medical technologies and the long-run degradation of health care quality observed under all single-payer systems. And so the Democratic promise that those who prefer private coverage will be able to keep it, and that the health-insurance market would continue to enjoy the broader economic advantages offered by a private system, borders on the naïve or the cynical.

ERISA Pre-Emption: Implications for Health Reform and Coverage
William Pierron and Paul Fronstin
Employee Benefit Research Institute, 02/08

EBRI provides an overview of the issues relating to the Employee Retirement Income Security Act of 1974 (ERISA) and state and local attempts at comprehensive health insurance reform. It reviews the statute and its history, major case law relating to the interaction of ERISA and state law, and the implications of ERISA's pre-emption of state laws governing health insurance. It also presents the latest data on the number of health plan participants in both insured and self-insured ERISA-governed plans, and the trends related to self-insurance.

The President's Proposals for Medicaid and SCHIP: One Step Forward, One Step Back
Nina Owcharenko
The Heritage Foundation, 02/12/08

The Bush Administration's budget proposal for increased spending on SCHIP is a major departure from its previous position and a serious concern, writes Nina Owcharenko. Flooding the program with new money and focusing on expanding enrollment would defeat the fiscal rationale of a block grant. More important, it would undermine efforts to expand access to private health insurance by implying that a government-run health program is the preferred way to cover uninsured children in low-income families. Congress would be wise to reject the proposed increase in SCHIP funding and instead focus on enacting policies, such as health care tax credits, to make private health care coverage more affordable for low-income families, thus reducing the dependence on SCHIP and Medicaid.

The Manhattan Institute's Dr. David Gratzer argues that states badly need to experiment with their Medicaid and SCHIP programs. A few states are already rethinking their programs, and these experiments are the most exciting developments in health care. Twelve years ago, a bipartisan majority in Congress ended welfare as we knew it, sending poverty rates falling to the lowest levels in decades. The basic principle of that effort – state innovation – worked for welfare. It is also the key to health-care reform.

Senior Benefit Costs Up 24%
Dennis Cauchon
USA Today, 02/14/08

The cost of government benefits for seniors soared to a record $27,289 per senior in 2007, according to a USA Today analysis. That's a 24% increase above the inflation rate since 2000, and medical costs are the biggest reason. Last year, for the first time, health care and nursing homes cost the government more than Social Security payments for seniors age 65 and older. The average Social Security benefit per senior in 2007 was $13,184. The analysis finds that Medicare experienced the most explosive growth from 2000 to 2007. The Medicare prescription drug benefit, started in 2006, accounts for about a quarter of the increase in Medicare. Long-term care costs per senior have declined slightly in the past three years because of a move away from nursing homes to less expensive home care.


Grace-Marie Turner speaking on Health Beat of America
WSRQ-AM Radio Broadcast
Tuesday, February 19, 2008, 9:00 a.m. – 9:30 a.m.
Sarasota, FL

Looking Back to Look Ahead: Lessons for Today from the New Frontier and the Great Society
George Washington University School of Public Health and Health Services Lecture

Tuesday, February 19, 2008, Noon – 1:30 p.m. (Lunch included)
Washington, DC

Grace-Marie Turner speaking on Let's Talk
KLKC-AM Radio Broadcast
Wednesday, February 20, 2008, 8:35 a.m. – 9:00 a.m.
Parsons, KS

Human Organs for Sale?
Cato Institute Policy Forum
Thursday, February 21, 2008, 12:00 p.m. (Lunch included)
Washington, DC

Health on the Home Front: Focusing on Veterans' Needs
Oregon Health Forum Event
Tuesday, February 26, 2008, 7:00 a.m. – 9:00 a.m.
Portland, OR

Third National Pay for Performance Summit
Integrated Healthcare Association Event
February 27 – 29, 2008
Los Angeles, CA

Clinical Data as the Basic Staple of Health Learning: Creating and Protecting a Public Good
Institute of Medicine Event
February 28-29, 2008
Washington, DC

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at

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