Obama Quietly Cozies Up to Health-Care Industry

So it looks as though we are going to get a health-care-reform bill. Now the question is whether it will be reform, or "reform": whether it will improve the way we care for people in this country or, for the most part, be a taxpayer-funded boon to the warped and wasteful industry we already know. Call me naive or cynical—or both—but I can't quite get my mind around the notion that the way to bring "change we can believe in" is to cut an upfront deal with Billy Tauzin. (Click here to follow Howard Fineman).

Nothing against Billy, of course. At 66, Wilbert Joseph "Billy" Tauzin II is what he is: a Louisiana politician and former congressman with the Bayou-bred knack for cloaking brainpower and bare-knuckle tactics in bonhomie; a masterful mixologist of power and money; and, since 2005, the president of the Pharmaceutical Research and Manufacturers of America, which he joined (for a reported $2.5 million a year) shortly after playing the key congressional role in enacting a Medicare prescription-drug plan that is a bonanza for the industry he now (officially) serves.

Barack Obama ran on the claim that he would be the new sheriff in town, that he and his posse of fresh-faced Rhodes Scholars would tame the capital's ruling class. But the first thing that he and his tacticians, Rahm Emanuel and Jim Messina, did on health care was to strike a bargain with Tauzin. Big Pharma, it was agreed last June, would kick in $80 billion over 10 years to help shrink the "donut hole" in seniors' Medicare prescription-drug coverage and would spend $150 million on a pro-reform ad campaign. In exchange, the White House would oppose congressional attempts to extract more, and would specifically fight two common-sense, long-overdue reforms that Big Pharma fears most: allowing imports of cheaper drugs and empowering Medicare to negotiate directly with the industryto keep prices down, as the VA long has done. The administration has similar understandings with other stakeholders, such as the hospital and doctors' groups—and still hopes to engineer one with the health insurers.

I'm not surprised that Obama is operating this way. He was never really an outsider by nature. He is not an accusatory or rebellious sort; he has too many of the right credentials and connections, and revealed his penchant for the inside game when he got elected to the presidency of the Harvard Law Review by promising the conservatives on the editorial board that he would publish their articles.

I get the insider strategy that Obama and his people are pursuing. They are understandably desperate to avoid the kind of crib death that befell the Clinton reform effort in 1994. In that they've succeeded, though we are still many perilous roll calls away from the day, perhaps as late as Christmas, when a bill will reach the president's desk. In the meantime, the aim is to keep the stakeholders at the table in hopes of making it politically impossible for them to get up and leave the room at the last minute, and to try to play them off against each other. As the drugmakers, hospitals, and doctors have come aboard, the pressure has increased on the health insurers to do so—even though they have yet to get what they want: a flat-out guarantee from the president that there will be no "public option" insurance alternative in the bill.

But of course the real reason to stay in the room is that it's the place where the industry hopes to acquire tens of millions of additional, government-mandated—and, in many cases, taxpayer-supported—customers, all while simultaneously avoiding the imposition of any tough new federal cost-cutting measures.

And that is the way things are going so far—which is to say, same as it ever was. The Senate Finance Committee's bill, which passed out of committee on Tuesday, leans very hard on Medicare—but treads very lightly on the private sector. Sen. Bill Nelson, a Democrat from senior-dominated Florida, apparently had not gotten the memo about leaving Big Pharma alone. He wanted to offer two amendments, each of which would have taken another $100-billion-plus bite out the industry's Medicare revenue. Tauzin was not pleased. Neither was the White House. The senator was talked out of offering one amendment. He narrowly lost on the other after Messina, the White House aide, called to express his dismay and to remind everyone that a deal was a deal. Democrats celebrated the outcome as a victory. The only losers were the American people. But, hey, they weren't at the table.