Monday, October 7, 2013

A time when Republicans and Democrats worked *together* to create public value

Prologue:  Mitt Romney attended the Harvard Business School, where the motto was:  "Create value."  I taught across the river at Harvard's Kennedy School of Government, where our motto was a bit different, a slight twist:  "Create *public* value.  Despite our many differences, I believe we both believe in creating public value.

The Affordable Care Act (also known as "Obamacare"), like all legislation, indeed all things created by humans, is not perfect or ideal, but it has the potential to represent a big improvement over the status quo.  As it happens, my personal preference would have been something more like the Canadian model of Medicare for all ages, but that is not on the table here (and also not perfect either), so I am hopeful that the Affordable Care Act will succeed as well nationally as it did in Massachusetts.

As it happens, the textbook I have been using in my public finance class since the first edition came out in 2005, Public Finance & Public Policy, is written by MIT Professor Jon Gruber, who also happens to be the author of both RomneyCare and ObamaCare.

There is an intriguing PBS interview with him in which he describes how it was that he came to invent this model.

Prof. Gruber, of course, hails from MIT, which is a school full of brilliant problem solvers with an engineering mindset.  Back in the late 1990s, when the government actually had a fiscal surplus rather than a deficit, the government decided to spend some of it on grants to help the state come up with plans for health care reform.  Prof. Gruber received some of that money and did a study in 2000, which--as he puts it--sat on the shelf gathering dust (as many studies do) for a few years.  After Mitt Romney became governor of Massachusetts, he apparently pulled the study off the shelf--because Mitt Romney (a Harvard B-School graduate) is also a kind of policy wonk too.  (By the way, even though I certainly don't see eye to eye with Mitt Romney, that phrase "policy wonk" is meant affectionately.  I am a Democrat and would consider myself a policy wonk also!  Prof. Gruber is also a Democrat and would probably be comfortable being described as a policy wonk too, I think.)  Anyway, Mitt really liked the plan because the numbers worked out (and so did his green-eyeshade guys, his financial advisers, even though his political advisers were leery.)

Prof. Gruber gives a vivid description of his encounter with Mitt Romney and his advisors:

  1. PBS: So when Romney hears that you've got this model that verifies that "Hey, this is a good idea," and you say it at the meeting, what's he like when he hears it?
    Gruber: Like a real wonk, just very excited: "Wow! Isn't this cool? We can cover the uninsured. We don't have to raise taxes. We can end the free-rider problem. Isn't this neat?" ... he was very much in management consultant mode, like: "Here is a problem. I can solve it. Isn't that neat?" -- sort of engineering almost mode.
    Engineering in what sense?
    Just in a sense of kind of, you know -- I teach at an engineering institute -- in the sense of kind of, that's what engineers do. They are faced with constraints; they try to solve a problem. He seemed excited that faced with the constraints he was facing, he could solve this problem.
    So you could imagine him sitting at Bain & Company and under other circumstances. This was not unfamiliar territory to him.
    Not at all.
    One of those guys who just --
    -- runs his hand down the thing and says, "Argh, I like that."
    You know, I was very impressed. I came out of that meeting. I went home and told my wife and said: "As a Democrat, I'm very scared. This guy could be president." He was really very smart, well-spoken, and just really seemed to know his stuff and was very impressive in person.
    Did they have good people around the table?
    That's what was very interesting. His financial people were wonderful. Tim Murphy is really the guy you should be talking to, sort of one of the unsung heroes of this. He was his main point person to make this happen. Amy Lischko -- I worked with terrific people.
    His political people were actually opposed. I mean, basically the meeting largely consisted of him arguing with his political advisers. His political adviser was saying, "We don't think this is such a smart thing to do," and Romney is saying: "No. Check it out. I can do this. Isn't this neat? I can make this work."
    So actually, I was not that impressed with his political advisers because I didn't like what they were saying, but he sort of shot them down.
    You keep saying this was "neat." Did he actually use the words, "This was neat"?
    I don't remember. No. But that was sort of -- he had a bit of a "Gee, golly gee" attitude about [it]. "Isn't this cool? We can make this work." ...
    There is a big moment where the bill is signed. Take me there. Describe the environment. I know you were there.
  2. I was there. I was very excited. I got to bring my wife. That was really neat. I was one of several people Romney actually thanked in his speech, which was really cool, a very proud moment for my wife. That was very exciting. It was this big podium and was all -- Ted Kennedy made a joke about hell freezes over. "I thought hell would freeze over before I would work with Mitt Romney." And Mitt Romney said, "I can't believe I'm working with Ted Kennedy." And they all laughed and hugged. And then they had a speaker from the conservative Heritage Foundation, which is a very conservative think tank, speak about what a wonderful validation of conservative principles this was. And it was all wonderful. And everyone was super-happy.
    Daniel Webster looked down upon it all.
    It was great. It was just an absolutely thrilling moment.
The contrast between the harmonious working together of problem solvers in both parties for the common vs. today's political chaos and polarization could not be more stark.  Professor Gruber is a Democrat, but Mitt Romney recognized him as a "fellow smart guy" and they worked together to develop a great solution for Massachusetts, and Ted Kennedy came on board too.  The conservative Heritage Foundation also weighed in positively.

I truly hope we can come together as a country the way Massachusetts problem solvers came together as a state almost a decade ago.

A personal note epilogue:  By the way, I bought an Affordable Care Act policy for myself and my young adult daughter this weekend.  Even without subsidies, it is a great deal better than our current coverage.  Because we are in good health and fortunate to be able to cover small routine expenses easily, I chose a high deductible bronze policy from a top-ranked local HMO we have known and used for many years.  (The health plan organization was #1 in the state rankings in Consumer Reports and in the top 20 out of 600 nationally ranked plans.)  The premium is less than half the best price currently available to us on the open market for individuals in New York State, and it is also a much better deal than COBRA coverage under my late husband's large group policy from his employer.  There was an array of great choices for us from several different providers that were ranked high in the lists published by Consumer Reports, based on the National Council on Quality Assurance, a nonprofit health plan accreditation organization.

If plenty of people in good health (like my daughter and myself) sign on to buy plans on the exchange, it will succeed and be viable.  I hope that it will create value for our family and many other families in the future.

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