Analyzing Romney’s Leadership On Health Care

BOSTON — The issue that defines Mitt Romney’s years as governor of Massachusetts is health care. It is sometimes a political albatross for the governor as he campaigns for president. But it is also proof, Romney says, that he could bridge party divisions in Washington.

Health care was rising on Romney’s agenda as he moved into the State House corner office in 2003. His friend Tom Stemberg, who founded Staples, had suggested that one of the best things he could do for the people of Massachusetts was to find a way to cover the uninsured. And Romney, in his second month on the job, talked about that interminable state budget buster, health care.

“We’re now seeing health care costs for the poor rising at double-digit rates,” Romney said with characteristic intensity. “That’s something that has to be brought in line in part with people picking up a small share of the cost of providing that service.”

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Many of the people Romney thought could pick up a share of the costs were getting free care at hospitals and clinics. The state was paying the charge of more than $1 billion a year through a free care pool.

“Romney decided the pool was broken,” recalls Amy Lischko, who helped draft Romney’s bill. “This all started with trying to fix the free care pool. Many people forget that.”

Romney filed legislation that would use money from the free care pool to create subsidized insurance. Here was Romney, a Republican governor, floating a major health care overhaul before a Legislature that was overwhelmingly Democratic.

“I doubt that my plan will be accepted without any changes,” Romney said at the time. “But I do believe that everyone recognizes that having a half million people who are uninsured isn’t good for them and isn’t good for the rest of our citizens who are paying taxes and paying for health care. We gotta fix this system to get everybody better health care coverage.”

Romney knew the Legislature was interested. Several months earlier, Senate President Robert Travaglini had outlined a proposal to cover half the state’s uninsured. House Speaker Salvatore DiMasi was planning his strategy on the issue. Romney met weekly with DiMasi and Travaglini, but legislators felt like the rest of the members were not worth the governor’s time.

“Gov. Romney did not let legislators into his office, you just did not come in,” says Patricia Walrath, a Democrat who was the House point person on health care while Romney was governor. She recalls two, maybe three meetings with him. Walrath says the contrast with prior Republican governors was startling.

“He had a whole different understanding as to how government should work,” Walrath says. “He was the CEO and when he said do it, everyone marched in step. It was not finding consensus, that was not the model that he used at all.”

Romney’s style was to delegate work with legislators to a few top aides. Those aides, not Romney, also handled relations with a broad coalition of health care, union and religious groups that held frequent rallies at the State House. The coalition agreed with Romney’s goal of covering the uninsured, but they opposed the coverage he proposed, calling his plan “Yugo” health care. Romney’s strategy was to inform, but not negotiate with these powerful consumer groups, says Tim Murphy, Romney’s Health and Human Services secretary.

“We were going to do what we were going to do but we were going to share information,” Murphy says. “We were going to let people know what our vantage points were, we were going to be transparent about that, and we felt that that was a way to build trust in the community.”

Critics argue that Romney only reached out to opponents when it was politically expedient. The governor and the late Sen. Edward M. Kennedy ran against each other in 1994 in a bitter U.S. Senate campaign. Now on the issue of covering the uninsured they formed a critical partnership. Romney needed Kennedy’s help in persuading federal officials to let Massachusetts use hundreds of millions of Medicaid dollars for a health coverage law. He thanked Kennedy publicly, many times.

But in the fall of 2005 the federal government was still threatening to withhold hundreds of millions of dollars. While Romney was in intense negotiations to secure the money, DiMasi filed a health coverage bill that Romney aides say made the governor’s job much more difficult. DiMasi wanted to tax employers who did not cover their employees. Consumer groups and some economists loved his plan, but Travaglini did not support the tax and Romney, in private, spoke vigorously against it.

In public, Romney was upbeat in response to DiMasi’s bill. “Let’s not let perfection be the enemy of the good. Let’s get something out there that moves us forward. We’re all speaking from the same book.” Aides say that while Romney was quick to criticize the Legislature on any number of issues, he did not do so with health care. “He intentionally took a different, more positive tone during the health care debate,” recalls the aide who would not identify herself for comment. “He did not want anyone throwing (verbal) bombs.”

DiMasi’s demand that employers pay for health insurance or pay a fine turned into a possible deal breaker that threatened defeat for everyone.

“There was a logjam for weeks and weeks,” says Michael Widmer, president of the Massachusetts Taxpayers Foundation. “There were various options being considered but none of them satisfied both the House and Senate.”

Widmer drafted some of those options and shuttled them across the marble lobby between the offices of the speaker and Senate president. Romney was not part of the negotiations, but Widmer kept Romney’s Secretary Murphy in the loop.

“They were opposed to having any tax on employers,” Widmer says. “I remember talking to Tim and he said, ‘Do we really have to do this because the administration’s opposed to it?’ I said, ‘Do you want a bill or not?’, essentially, because that’s what it came down to and something was going to have to give.”

In addition to opposing the employer tax, Romney’s aides say he didn’t think the state needed any new revenue to fund a coverage law. But in January, during his State of the State, Romney said he realized “some of you have your doubts about that. I know that the uncertainty could stall our progress or even end it and for that reason I put aside $200 million in a reserve account to fund our health care initiative.”

The money did not persuade DiMasi to give up the employer tax and strained relations between all three leaders continued. Romney grew increasingly frustrated. In late January, he made a rare personal appeal. Murphy was out walking on a Saturday when his Blackberry went off.

“It was an email from Mitt,” says Murphy. It said, “I’m going to write this letter and this is what I want it to say and I want to go and deliver it and I just want you to check a few things.”

Romney delivered letters the next day, a Sunday, to Travaglini and DiMasi at home. The wrinkle-free governor found Travaglini in sweat pants. DiMasi was not in to greet Romney. The letter, recalls Murphy, said: let’s get going, we can’t have an employer tax, but think about all the things that we could achieve.

“It was just one of those moments in time where he felt the need to personally intercede,” Murphy says. “That was not Mitt’s style. He did not walk down the hallways stopping in at offices, so when he does something like that, it has a little bit more weight to it.”

Romney’s letters did not end the stand-off between Travaglini and DiMasi. Jack Connors, the powerful chairman of Partners HealthCare, visited DiMasi’s office with a copy of “Animal House” and played the “nothing is over til we decide it’s over” scene. Travaglini and DiMasi finally started talking about an employer compromise after a dinner arranged by their wives. The final deal, drafted by a small group of business leaders, was a modest fine on employers (with 11 or more employees) who don’t offer health insurance. The bill sailed through the House and Senate.

At a well-orchestrated bill signing ceremony, ushers handed out programs and buttons while Romney took the stage at Faneuil Hall.

“Massachusetts, once again, is taking a giant leap forward,” Romney told the audience of health care and business leaders. “And it’s our faith in you that gives us the confidence to do just that.”

Legislators were all smiles during the ceremony, but minutes after, their mood soured. Romney aides told the press the governor would veto eight sections of the bill, including the Legislature’s carefully crafted compromise on that modest employer fine. Legislators had become increasingly wary of Romney’s motivations around the health care bill. Sen. Richard Moore suspected Romney vetoed the employer penalty because he knew it wouldn’t play well if he ran for president.

“This bill should have been based on what was best for the commonwealth,” Moore said, “not what would play well on a national stage. Those vetoes are just political vetoes.”

But Romney aide Murphy argues that the governor was genuinely interested in covering the uninsured and that legislators knew Romney would not support the employer penalty. Murphy says Romney can claim, based on the health care law, that he knows how to work with bipartisan groups to fix complicated policy problems.

“I look at Massachusetts health care reform and say this is your textbook example of how do it effectively and it really reveals to me the type of leader that Mitt is,” Murphy says.

Former Health Care for All Director John McDonough, who pushed for many changes to Romney’s bill, gives him credit for compromising on a version that was more generous than the one Romney proposed.

“It indicates a keen sense of political reality and that he is willing to adjust on policy details to achieve his overarching policy goal,” McDonough says. “We can see this in his willingness to compromise on the health care reform law and on his willingness to separate himself from key parts of that law in his quest now for the Republican nomination.”

How much credit Romney deserves for the law that some now call RomneyCare is still up for debate. DiMasi is often seen as the key player in sealing the deal. He’s in prison now for an unrelated conspiracy and fraud conviction. Travaglini had the first public proposal. Romney was the first to propose key parts of what became law, the Connector, the individual mandate and subsidized insurance. A folder representing the health care law rests on a table next to Romney in his official State House portrait. It remains his signature accomplishment and the best way to evaluate how Romney works as a lawmaker.