ANALYSIS: Herman Cain’s historic health reform histrionics

Introduction

I have no inside information about the nature of GOP presidential candidate Herman Cain’s relationship with two women who claimed Cain made unwelcome advances toward them when he headed the National Restaurant Association in the 1990s. I do, however, have first-hand knowledge of a mutually beneficial affair Cain was engaged in around that same time — with the health insurance industry.

Soon after President Bill Clinton unveiled his health care reform proposal in October 1993, the nation’s big insurers and other special interests joined forces under the auspices of the Healthcare Leadership Council to develop a strategy to kill it. I made several trips to HLC meetings in Washington as a representative of CIGNA to participate in the planning sessions.

One of the outcomes of those brainstorming meetings was a nationwide health care reform videoconference, sponsored by the leadership council and underwritten by CIGNA, at which Cain, virtually unknown to the public at the time, played a key role.

Although it was billed as a forum “in which experts will examine the provisions of President Clinton’s health care proposal against the major alternative plans,” the real purpose of the 20-city videoconference was to turn the country’s business leaders against the Clinton blueprint.

The event cost hundreds of thousands of dollars, some of which was used to hire 60 Minutes correspondent Lesley Stahl to moderate the program. One of my colleagues who worked with Stahl told me she complained afterwards that she had been led to believe that the video conference would be a balanced pro and con discussion of the Clinton plan, which in fact it was never intended to be.

The panel that Stahl moderated included Rep. Nancy Johnson, then a Republican congresswoman from Connecticut (whose campaign finance chair was then-CIGNA HealthCare president Larry English); Alain Enthoven, a Stanford University professor who was considered the father of a reform proposal favored by the industry (and which English helped shape as a member of Enthoven’s “Jackson Hole” group); Michael Bromberg, then executive director of the Federation of American Health Systems (with whom CIGNA and other insurers had a close working relationship); David Scherb, then vice president of compensation for PepsiCo and chair of the Washington Business Group on Health (of which CIGNA was a member); and Cain, who was identified in the invitation as “an entrepreneur who revitalized the franchised chain of Godfather’s Pizza stores and has an excellent understanding of small business issues.” Democratic Rep. Jim Cooper of Tennessee, lead sponsor of the industry’s favorite reform bill, was scheduled to participate but had to cancel at the last minute.

Cain turned in such a good performance from the insurers’ point of view — he charged that the Clinton proposal would hurt small businesses and result in thousands of people losing their jobs — that the Healthcare Leadership Council and other industry groups suggested him for other forums at which the Clinton plan would be discussed.

Lo and behold, just weeks after his star turn at the HLC/CIGNA videoconference, Cain appeared before a much larger, nationally televised event that Clinton’s PR team must still have nightmares about. It was Clinton’s own Town Hall meeting on his health care reform plan, originating in Kansas City. One of the people selected to ask Clinton a question via satellite from Omaha, where Godfather’s is based, was none other than Herman Cain.

Before a live television audience of millions of Americans, Cain charged that the provision of the Clinton plan that would require employers to provide coverage for employees working more than 30 hours a week would result in business failures and the layoff of thousands of workers. Although Clinton replied that his plan would provide subsidies for small businesses to defray the cost of providing health insurance, Cain challenged Clinton’s assertion that his plan would not have much of a negative impact on any business’s bottom line. “Quite honestly, your calculation is inaccurate,” Cain told the president.

Insurance company executives were ecstatic. And the media took notice. The Atlantic later called Cain’s performance an “auspicious debut on the national political stage.” Former GOP congressman and housing secretary Jack Kemp was so charmed by Cain that he reportedly chartered a plane to Omaha to meet Cain and to encourage him to get involved in politics.

Had Clinton’s people known in advance what Cain was going to say, they surely would have had the president point out that soon after Pillsbury put him in charge of their Godfather’s subsidiary, Cain closed more than 250 stores and laid off thousands of workers. (Note to the national media: you might want to look into that.)

According to a 1988 New York Times story about the pizza chain, Godfather’s had once been the fastest-growing food chain in the country and had 911 restaurants at its peak in 1984. Today it has 622.

Cain doesn’t talk a lot about what he would do in health care except to work to repeal “ObamaCare.” But his website reveals he is still a good friend of the insurance industry.

The few things he says he is for — including tort reform and encouraging health savings accounts — are items that the insurance industry wants badly. Cain clearly is still beholden to his old friends — the ones who gave him his big start.