declining, from 69 percent in 2000 to 60 percent in 2007. Initial government responses came primarily at the state level, with roughly a dozen state legislatures debating major reforms around this time. Business confidence was the major justification. Pennsylvania governor Ed Rendell, for instance, argued for reform by stressing the costs indirectly imposed on business by the large number of uninsured people in the state: “It is a tremendous deterrent for businesses that are considering locating in Pennsylvania to know that in addition to paying for their own employees’ health coverage, they will be subsidizing the costs of the uninsured,” whom emergency rooms could not legally turn away.40
By George W. Bush’s second term, these threats had developed into formal demands for government action. Deere & Company CEO Robert Lane conveyed the demand when he warned Congress that rising costs could lead to the “limiting of covered services, loss of employer-provided health care … and even a loss of American jobs, both in the manufacturing and service sectors.” Bush’s January 2006 State of the Union address emphasized healthcare, which, as the Wall Street Journal noted, was “rare for a Republican.” The reason was not public opinion but business opinion. Providers were being pushed to find “more efficient ways of delivering services,” not by consumers but by other business sectors: the providers were “under pressure from health-insurance providers, who are themselves under pressure from large corporations.”41
The presidential campaigning of 2007–08 led to increased talk of reform in Washington, but not merely to appeal to voters. In early 2008, Senate Finance Committee chair Max Baucus, whose staff would play the central role in crafting what became the ACA, committed to advancing a healthcare reform in 2009 regardless of the election’s outcome. At that moment, he rehired former staffer Liz Fowler, fresh from a stint at the nation’s top health insurer, who would write much of the bill herself. In June he and other members of Congress hosted a healthcare summit featuring top business executives.42
The industrial and commercial corporations with the largest and most expensive health plans were the foremost proponents of reform. But many health industry sectors also had grievances with the status quo. Health insurers in California, for instance, had “been falling short of their enrollment targets because the overall market [wasn’t] growing.” For this reason, they liked Republican governor Arnold Schwarzenegger’s proposal to make the purchase of insurance mandatory. They saw it as representing “real opportunities for our business,” given that it would “expand the industry’s market by four million to five million currently uninsured Californians—something health plans have been unable to do despite heavily marketing new products.”43 In contrast to 1993–94, when health industry resistance had sunk the Clinton health reform initiative, by 2009 healthcare providers and insurers were open to major reforms, as long as they addressed their specific complaints. Policymakers, for their part, were keenly attuned to health industry wishes, just as they were attuned to those of other business sectors. John McDonough, the top adviser on health reform for the Senate’s Health, Education, Labor, and Pensions (HELP) Committee, recalls that prior to 2009, “business, insurers, manufacturers, [and] medical organizations were all calling for comprehensive reform.”44
Support for reform by healthcare insurers and providers stemmed partly from the desire to preempt an independent overhaul of the healthcare system—which might lead to a single-payer insurance system, strict regulations on price-gouging providers, and other policies favored by the public and long present in other high-income nations. A staggering 82 percent of the public thought the US healthcare system either needed “fundamental changes” or should be “completely” rebuilt. Very few wanted the healthcare sector to be less regulated.45 If business was “on the menu,” rather than “at the table,” the reforms might prove inimical to their interests. Industry thus took preemptive action to shape the debate over reform. In December 2008, America’s Health Insurance Plans (AHIP), the top insurers’ lobby, released a comprehensive reform proposal that specifically excluded a single-payer system and government control of healthcare prices.46
This same preemptive logic guided much of the broader corporate world, even those companies without a direct stake in the healthcare sector. Many business leaders feared that an efficient publicly-run program would increase the appeal of government-run alternatives to private capital. The Wall Street Journal reported that corporate leaders were willing to incur some added costs as a result of reform as long as it preserved “a market-oriented health-care system.” But if the reform included an expanded Medicare system and/or government price controls, then the US might reach “a tipping point where the reforms needed to preserve an innovative, market-based health system may become politically impossible.”47 Thus, the rising pressure of healthcare costs on employers, coupled with healthcare executives’ fear of something worse if they stayed on the sidelines, lay behind the diverse corporate support for reform. By 2008 business leaders across the corporate world had decided that reform was necessary, while health industry leaders had decided that reform was inevitable. Shaping that reform then became the name of the game.
And shape it they did. Since they were the “commercial interests who [would be] most affected by the proposed change,” and since their “permission” was thus necessary, Democratic leaders in Congress invited them to help design the reform. John McDonough of the Senate HELP Committee reported that Senator Ted Kennedy “directed us to bring together key system ‘stakeholders’ to see whether they could find consensus on a path to reform.” Those stakeholders included “consumers, disease advocacy, business, insurance, physician, hospital, labor, pharmaceutical, and other organizations.” Although patients constituted the vast majority of the real stakeholders, they were a clear minority among the stakeholders invited to the table; in contrast, each industry sector was invited to send its own representatives. Three decades earlier, the Carter administration had taken the same approach, which, as one critic noted, may seem like “sound democratic practice, but it is also a formula for building fortifications around the status quo.”48
The resulting “consensus” was clear before Obama entered the White House. By inauguration time, business and its representatives on the key congressional committees (Table 1) had already determined the basic framework of whatever legislation would emerge. Certain options were entirely off the table. Single-payer insurance, or “Medicare for All,” was immediately ruled out by Democratic leaders. Of the presidential candidates in the 2008 Democratic primary, all except Dennis Kucinich had committed by early 2007 to keeping private insurance intact. In 2008, the two key Senate committees involved in early drafts, Max Baucus’s Finance committee and Kennedy’s HELP committee, unequivocally rejected single payer. The Baucus-Fowler team’s white paper of November 2008 was vague on details, but its “one clear position” was its opposition to single payer. Advocates of single payer, let alone socialized medicine, were entirely excluded from even testifying before Baucus’s people.49
Table 1: The Senate Finance Committee’s ties to the healthcare sector (partial list)
| Name | Position | Ties to Health Industry | Notes |
| Max Baucus (D-MT) | Chair of Senate Finance Committee (SFC) | Received $253k in industry donations in 2007–10, plus $201k in donations from industry lobbyists in 2007–09 VP for Public Policy and External Affairs, WellPoint insurance co., 2006–08 | 3 of 5 top donors in 2007–12 were healthcare or health insurance firms Helped write healthcare reform
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