Frog-marching America to a saner health system
By Matt Miller

(FORTUNE Magazine) – EPIC BUREAUCRACY AND WASTE. THOUSANDS dead for lack of basic services. Delays, paralysis, "blame games." I'm not talking New Orleans here--all of the above are standard procedure in our dysfunctional health-care system, where 18,000 people die each year for lack of insurance, according to the Institute of Medicine. The only thing more depressing than this toxic gumbo of injustice and inefficiency is the fact that no political leader has tried to shake things up since the Clinton health plan imploded 11 years ago.

Until now. If you're convinced that Washington's tinkering-as-usual will never drive the change we need, John Kitzhaber may be your man. Kitzhaber, 58, is the doctor-turned-politician who was Oregon's Democratic governor from 1995 to 2003. He was the force behind Oregon's innovative Medicaid reform in the early 1990s, when the state expanded coverage to poor folks and paid for it by limiting the procedures Medicaid would cover. Critics cried "rationing"; Kitzhaber replied, "You bet." We ration anyway, he argued; better to make the choices transparent and wise via community input and hard-nosed assessments of the value of care. How else can you promote the most cost-effective health for the broadest possible group? Sadly, the consensus eventually eroded, and Oregon's system reverted to the national norm.

But Kitzhaber is back, and he's itching once again to, as he puts it, "pass something illegal." Operating from a local foundation he heads, this self-appointed gadfly is launching a campaign to put a statewide health initiative on the ballot that would require waivers from federal rules to be implemented (i.e., violate the law). It would thus force Washington--and the press--to compare Oregon's idea with health care's insane status quo in ways that finally get people's attention.

Kitzhaber's approach is to add up all the public money available in Oregon for health care (including Medicare, Medicaid, and the tax subsidy for employer-provided health care) and then redirect that money's deployment. He's working with private- and public-sector groups to reach a consensus on the best way to spend this $6.3 billion, or $1,800 per person, to promote health for every Oregonian. The idea is to come up with a conceptual framework voters will be asked to approve, with details to be worked out in legislation. Whatever the fine print, the new model won't look like today's mishmash, in which aging millionaires effectively have their pills paid for by uninsured young families who earn $30,000. It will cover everyone, yet leave people free to spend whatever they want above a publicly funded basic benefit. The analogy Kitzhaber uses is public education: When funding gets tight, we don't say, "Let's cancel 11th grade." We trim the basic offering (e.g., larger classes); the reverse happens when coffers are flush.

Kitzhaber is essentially asking insurers, providers, and politicians to come to the table as citizens in search of a common good. They'll focus first on how to optimize health with the dollars available. Only then will they assess the economic impact on current stakeholders and how to mitigate it in ways that don't undermine the larger goal.

To the standard American voter, that may sound sweet, lovely--and utterly delusional. Insurers and bureaucrats working together to solve practical problems? Please. Kitzhaber, who concedes that such governance won't happen in D.C. on its own, believes that Oregon's civic spirit is still sufficiently intact to be a model for the nation. (He's also quick to point out that his public education model doesn't mean switching to a Canadian-style single-payer system. It simply ensures equity and universality in the way public resources are allocated.)

Kitzhaber's political strategy is to provoke--to be, as he calls it, "the random factor." "If you have a grenade with the pin pulled out," he says, "and you roll it into the Beltway in 2007 when everybody's jockeying to run for President ... it's going to be real hard to ignore."

MATT MILLER ( is a senior fellow at the Center for American Progress and the author of The Two Percent Solution: Fixing America's Problems in Ways Liberals and Conservatives Can Love.