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Bredesen For Health Reform?! (updated With Alarm Bells)

Buzz this morning is that Phil Bredesen, governor of Tennessee, is under consideration to replace Tom Daschle in the administration. It's not clear whether this would be at the Department of Health and Human Services (more likely) or the White House Office of Health Reform (less likely). Of course, that's assuming the Office of Heatlh Reform remains constituted as it is now--which, by the way, is not a given.

In any event, the Bredesen talk is not completely idle speculation. I'm told that he's been discussed at high levels within the administration.*

(Thursday morning update: Marc Ambinder reporitng that Bredesen is a serious candidate.) 

This is not a good thing.

As governor, Bredesen presided over some drastic cuts to TennCare, Tennessee's once innovative effort to reform Medicaid. I wrote about these in my book, Sick: was a Democratic governor who would succeed in enacting the most sweeping cuts: Phil Bredesen of Tennessee. Bredesen knew a thing or two about health care: before getting into politics, he had made his fortune by founding a company called HealthAmerica—one of the ? rst commercial HMOs to cash in on managed care during the late 1980s. This experience, plus his con? dence in his own intellectual abilities (he had a physics degree from Harvard), convinced him that he could wring new ef?ciencies from Tennessee’s Medicaid system, just as his HMO had generated ?nancial savings—and hefty pro?ts—in the private market.

A lot of what Bredesen proposed to do—such as reducing fraud by providers and recipients, and improving the use of information technology—made sense. But when those quick ?xes  didn’t bring the TennCare budget under control, he unveiled a more straightforward plan: he would simply slash the program. More than 100,000 people who had quali?ed for TennCare because they were “medically needy” would lose their coverage altogether. Those allowed to remain in the program would have to make do with more limited bene? ts. The biggest change would be in the coverage of prescription drugs. “The sad reality is that we can’t afford TennCare in its current form,” Bredesen said. “It pains me to set this process in motion, but I won’t let TennCare bankrupt our state. This is the option of last resort.”

To be clear--and to give Bredesen his due--the budget situation really was getting dire. Tennessee is a conservative state in which raising taxes, in order to finance the program at proper levels, was probably not politically possible.

And, as I explain in the book, these sorts of funding problems are endemic to Medicaid--because, as a means-tested program, it lacks a powerful constituency to keep it strong. As the saying goes, programs for poor people stay poor. That's one of the big reasons to favor a universal health insurance system, one in which everybody has a stake. (Note that Medicare, which has an economically broader and more powerful constituency, doesn't have the same sorts of problems.)

But while Bredesen undoubtedly faced tough circumstances, he didn't exactly distinguish himself by coming up with creative solutions--or fighting for people who, after all, were among Tennessee's most vulnerable citizens. As liberal advocates protested planned cuts, he fought bitterly with them, threatening even more draconian measures if they wouldn't buy into his programme.

That's not the only reason Bredesen worries me, though. Another concern is characterological. He is typical of the top figures in the health industry I've met over the years: Self-made entrepreneurs a bit too convinced of their own brilliance, completely unaware that the strategies for making private insurers profitable don't help--and often hurt--the sicker, poorer people whom insurance should ideally protect. Their biggest fans are often people who know a ton about health care at the macro level, but haven't spent much time observing it on the ground--where reality is often messier than the statistics suggest.

That doesn't mean Bredesen has nothing to offer. In the long run, health care reform will require radically redesigining the way we deliver medical care, in ways that improve quality and efficiency. Bredesen and people like him have genuinely innovative ideas in this realm and it'd be good to tap them. And some of the hard choices we'll face as a country are the same hard choices Bredesen faced in Tennesese.

Put Bredesen in the room, where he can offer insights. But at the helm of HHS or health care reform? Sorry, no.

As it happens, the political optics of picking a former health care industry mogul would seem to make him a longshot. (Ezra has more on this.) For this and a dozen different reasons, other candidates, like Kansas Governor Kathleen Sebelius, make much more sense.

Still, Bredesen may get a serious look anyway. So be afraid. Not very afraid, just afraid.

*Update: This is based on information gained after the initial posting. I've also deleted a second part that, upon reflection, didn't have sufficiently strong sourcing. 

--Jonathan Cohn