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Marketing ObamaCare

“While expanding coverage was a strong driver of demand for reform, this campaign promise was juxtaposed against another promise: to not raise taxes on the middle class.”

President Obama’s plans to reform Health Care have not gone as smoothly as he had hoped. Did Americans wake up one day and decide they didn’t want the reform they clamored for last year? Or is there a failure in Obama’s marketing strategy? Using the 4 P’s, we can see where things might have gone wrong.

PRODUCT

Obama’s promise of universal coverage and lower costs sounded great during his campaign, but like many planks of his election platform, he shied away from specific details. With polls showing that the majority of Americans are satisfied with their current health care coverage, why is Obama pushing reform? While upwards of 89% are satisfied with their personal care, about half of all Americans believe that the country’s health care system is in poor shape.

The driving force behind demand for reform is twofold: a desire to insure those without healthcare coverage (estimates around 46 million) and the prospect of decreasing the costs incurred by consumers. Unfortunately for Obama, those drivers have lost momentum as specific aspects of reform have begun to threaten a status quo that many voters like. As prospects for bending the cost curve dim and the costs of universal coverage have come to light, the nature of the product has changed in the minds of many Americans. Whether he can sell the plan he really wants through improved strategy or if he must change his plan to realign it with the interests of voters who have withdrawn support remains to be seen. However, what is certain is that he is likely to alienate at least some subset of the base that got him elected.

PROMOTION

Obama’s healthcare push got off on the wrong foot when he pursued an inside strategy to reform. Without crafting a specific bill, he delegated reform specifics to Congress, working with Democratic leadership and key Republicans to try and hammer out something ambitious and bipartisan. We’ll never know who was unreasonable at the table, but very quickly it became apparent that there would be no major bipartisan cooperation. Unfortunately for Obama, this gave Republicans the opportunity to go public. In a very short timespan, they activated their grassroots counterparts and began mobilizing the public against reform efforts. With a first-mover advantage on the outside strategy, it was difficult for Obama to muster support, particularly in states held by moderate Democrats who were already touchy about the costs of reform. As bits and pieces of proposed legislation got around and rumors of “death panels” consumed TV and radio talk shows, the White House started fighting back. Several public appearances and town hall meetings with the President were put together in key states. This was the appropriate move for Obama, but it was already too late.

PLACE

This is where Obama has really run into trouble. While most of his reforms are, on their face, changes that operate in the existing private sector, his pursuit of a public option opened the door to what the long-term consequences could look like. The argument goes something like this: if the government starts competing with the private market, the government (which can operate as a cost center with an endless supply of taxpayer revenue) will undercut private insurers to the point at which they will no longer be able to stay in business; after running the private guys out, ObamaCare will be the only remaining provider, ushering in an era of government-controlled health care.

While this scenario may sound farfetched to some, it resonates with many Americans, who find this conceptual shift repugnant to their values. Obama, seeing the magnitude of resistance to this aspect of this proposal, recently started moving away from his support of a public option. Whether you think this path to socialism is real or imagined, the damage is done and much of the trust between Obama and the crucial moderate independent voters who elected him has been lost.

PRICE

While expanding coverage was a strong driver of demand for reform, this campaign promise was juxtaposed against another promise: to not raise taxes on the middle class. After getting elected, Obama finds himself trapped between the two; unfortunately for proponents of universal coverage, middle-class moderates have withdrawn their support now that they see that taxing the rich and bending the cost curve won’t pay for it.

HOW TO SALVAGE HEALTH CARE REFORM

While the current strategy has failed to produce reform, there is a path forward that would salvage at least some of the opportunities for reform. First, Obama should start marketing his reforms in pieces. The breach in trust between him and moderates can be repaired by being highly transparent in the specifics of reform and by moving slowly. Most voters fear reform because so much is unknown to them. If reform were broken down into individual pieces, there is a greater chance he would get some traction. However, he would probably have to forgo a public option, which would cost him political support among his base.

Second, he should own reform. Leaving the details up to Members of Congress has opened the door to some radical ideas-by authoring the bill himself, not only could he control the content, but he could better tap his grassroots base. Calling on supporters to back a bill by Congressman X or Senator Y is much less effective than a call to action for the Obama Health Care Bill.

Last, Obama needs to map his selling strategy onto the decision-making unit. The real hurdles to reform are moderate Democrats in Congress. To win them over, you need to win over their constituents. After downgrading some expectations with liberal Democrats, work with moderate members of Congress (including Republicans) to find common ground on reform. There’s a chance that liberal Democrats will threaten to scuttle any plan that excludes a public option, but from a strategic point of view, those seats are far safer in 2010 than the seats of the moderate Democrats. If, at the end of the day, Obama fails to reform health care, he and the Democratic Party would be better off taking a middle of the road, moderate approach to reform, than a radical one that disenchants the independent voters who tipped the balance and elected him last year.

1 http://www.foxnews.com/politics/2009/06/24/obama-pushes-national-health-care-americans-happy-coverage/

2 http://www.nchc.org/facts/coverage.shtml

AUTHOR’S BIOGRAPHY
Patrick Wetherille is the co-founder of SecureOurFuture.org, a non-profit that advocates for Social Security reform and financial literacy among young people. Patrick has an MPP from Georgetown University and has served in the Office of Minnesota Governor Tim Pawlenty and the White House National Economic Council.

September 28, 2009
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