Braly's Obama Letter is a Bad Move

WellPoint CEO Angela Braly has told President Barack Obama by way of a letter that attacks on health insurers "must end."

I feel fairly comfortable in saying that Obama's attacks on health insurers will not end, Braly's letter notwithstanding, anytime soon. And here's why:

Support for Obama's health reform is weak. More American's opposed the health reform bill than supported it, and of those that were undecided at the time the bill passed, more have decided against it than in favor of it. Generally speaking, social programs do not begin with much popular support as they go against a very long tradition in the United States of self-determination and personal responsbility.

Backlash against health reform is strong. Tea partiers, 9/12 movements, and traditionally conservative organizations are using health reform as a rallying cry. Twenty states have launched legal challenges to the reform bill and more yet may be coming. Incumbent Senator Bob Bennett of Utah was recently decapitated (figuratively speaking) by his own Republican party due in no small part to his support of the Wall Street bailout and support of bipartisan health reform efforts.

In light of these two factors, Obama needs to work continually to gin up support for the health reform initiative and protect his party. If he doesn't, his party and centrist Republicans are facing certain slaughter in the November elections. That is why Secretary of Health and Human Services Kathleen Sebelius has become the most vocal Obama cheerleader, "trumpeting" health reform's immediate impact even as she cajoles insurers into acting early on select implementation issues.

Health insurers were the whipping boy of the Obama administration. Anthem's (a WellPoint subsidiary) ill-timed rate increase in California breathed life into what was a very nearly dead effort to pass a reform bill.

The AMA grudigngly supported Obama's reform in exchange for the "Doc fix," a change to Medicare reimbursement that the Congressional Budget Office recently re-estimated will cost $276 billion over the next 10 years - - an increase, by the way, of 33% over CBO's previous estimate and a giveaway of more than twice the entire estimated "savings" of the health reform bill itself.

Hospitals are community anchors and are untouchable despite growing skepticism over their financial practices. In rural communities, hospitals are often the only sizable employer other than government and school districts.

Patients, of course, are ultimately voters and so they must be made out as innocent if not unwitting victims.

And that leaves insurers. And hey, it worked in March because the health reform bill indeed became a reality.

So it is a fair bet that Obama will go back to the "health insurers are evil" well many, many times between now and November.

Braly now says the country has a history of coming together after tough debates, and "health reform should be no different." This conciliatory statement underestimates the robustness of the backlash against reform, and will ultimately serve only to hearten the administration in its effort to gain support for its agenda - - from anywhere they can get it.

WellPoint would have been better served by throwing an elbow. Eighty-five to ninety percent of the increasing cost of insurance is due to the increasing cost of care. Health care payors are largely hamstrung by restrictive state and federal laws from pursuing efforts to reduce the cost of care, and the administration has done nothing but protect physicians and drug manufacturers from downward price pressure. WellPoint would have been better off asking why Obama is working so hard on only 12% of the problem while ignoring the other 88%.