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Taking pains

President Obama will struggle to increase health coverage while containing cost

Reform of healthcare has always eluded the Democratic Party and nothing in domestic politics matters to it more. The United States manages to spend almost 17 per cent of its national income on healthcare while 47 million of its citizens remain without insurance cover. The task that President Obama has set himself, in a strikingly ambitious broadcast to the nation, is to fix coverage and cost at the same time. To do either is difficult; to do both is improbable.

This is partly because the politics of healthcare have never been more labyrinthine, the powers never more separate. It was a clever tactical concession for the President to relinquish control of the programme to Congress and thereby avoid the resentment on Capitol Hill that scuppered the Clinton reforms. And the choice of Senator Edward Kennedy, the ailing grand old man of Democratic politics, to initiate the legislation was a neat symbol of the importance of the issue.

The legislation on the table would require all Americans to have health insurance and prohibit insurers from refusing to cover pre-existing conditions. But the political trading has only just begun. Democrats in the House of Representatives will table proposals that will include subsidies for lower-income Americans. Two proposals that Mr Kennedy omitted - a public programme to compete with private insurers and a mandate that employers provide benefits to workers- are being negotiated with Republicans.

It is likely that the House of Representatives and the Senate will produce separate Bills. There will then be an attempt to combine the best of both into a single proposition. All the while, the White House is trying to cajole the negotiations to their desired place. The power of the President has itself been reduced by the loss of Tom Daschle, his first choice as Health Secretary. Ezekiel Emanuel, brother of Rahm, is the President's adviser on healthcare based in the White House Budget Office. Nancy-Ann DeParle heads the White House Office of Health Reform. In the Department of Health and Human Services (HHS), Jeanne Lambrew runs the Office of Health Reform and Kathleen Sebelius is the newly appointed Secretary of the HHS. One can hope that coherence is the outcome of all this separate activity, but it is too much to expect.

That said, the basic terms of discussion have become clear. The main question is whether congressional Democrats will be able to include a government-funded health plan to compete with existing programmes. This public plan would have the scale to negotiate with providers and drug companies and would, therefore, set prices for the industry as a whole and set a floor on cost. Republicans oppose the move, regarding it as the first step towards socialisation. A public plan would, on this view, bleed business away from the prvate providers with whom it was ostensibly in competition. That would lead, in turn, to a gradual reduction in quality, with regulation proving less effective than competition at maintaining standards.

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President Obama himself has invested too much political capital in reform for nothing to happen. There will be a Bill. It will increase coverage and a victory will be declared. But the escalating cost will have been laid aside as too difficult an issue. It cannot be avoided for ever.