The Fall of John Kitzhaber, Who Was Supposed to Save Healthcare Reform

The fall of Oregon Gov. John Kitzhaber does not mean that much for the Democratic Party.

Oregon stood out in 2014's midterms, a blue utopia where Republicans could make no inroads. Portland newspapers were breaking stories about the ethics problems of Kitzhaber's fiancee for weeks before the election.

Polling showed Kitzhaber losing a solid lead over the Republicans' candidate, Dennis Richardson. But Oregon was not about to elect Richardson, a conservative who denied man-made climate change and called homosexuality a vice like smoking.

Kitzhaber won; Democrats grew their majority in the state Legislature. Kitzhaber's resignation will make Oregon Secretary of State Kate Brown the nation's latest Democratic governor. 

So power won't change hands, but a decade-long policy campaign will get a little more dirt kicked on its grave. Oregon was the second blue state that hoped to use the Affordable Care Act to radically reform health insurance — and stumbled.

In December, Vermont Gov. Peter Shumlin bailed on his dream plan of a single-payer healthcare in one state, a response to cost overruns and to his unexpectedly narrow 2014 victory.

Kitzhaber, who came out of retirement to run for governor in 2010, hoped to turn Oregon into a laboratory of progressive healthcare fixes. He's going to leave as a mug.

For the people who helped Kitzhaber into power, it's unspeakably sad. "I would not believe what I am reading is possible," said Joe Trippi, the Democratic strategist who helped elect Kitzhaber in 1994 and 1998. "I would get into a trench with him anytime on any issue and trust him to make the right decision. Maybe if I had kept in contact I would be able to understand or explain it. I can't."

Trippi had been with Kitzhaber at every stage of his campaigns. Kitzhaber was a doctor who entered politics to work on fixing healthcare. As president of Oregon's senate he'd fought for a waiver to allow the state to ration — though everyone else hated that word — coverable treatments.

As governor, he'd implemented those changes. In his first term, Kitzhaber cut the percentage of uninsured Oregonians from 17 percent to 11 percent, with numbers even lower among children. When he left Salem in 2003, he remained fantastically popular with voters (much less so with legislators), and with Trippi he founded a grass-roots reform campaign called the Archimedes Project. 

It didn't go so well. Kitzhaber had come up with a very specific design for reform. Even Oregon's Democratic legislators (and Kitzhaber's Democratic successor as governor) junked it. A campaign to put the Archimedes package of Medicare and Medicaid reform on the state ballot sputtered. 

So Kitzhaber ran again for governor. He'd learned from mistakes; plus the state had grown more Democratic since he'd left, with his party taking over the legislature. "We've had discussions on how you prioritize — and limits and rationing — that most states haven't had," he told NPR in 2009.

In 2010, after a narrow win, Kitzhaber said that the Affordable Care Act's mandates and subsidies would allow Oregon to conquer the problem of the uninsured, if Washington bureaucrats just "put their money where their mouth is." He had a partner in Oregon's senior senator, Ron Wyden, who'd included waivers in the ACA that would allow states to cover their residents their own way.

"The legislation would make it easier for states to get waivers for health care reform and Medicaid and allow states to address both in one waiver request," Wyden said in 2011. "An interested state could, for example, use the waiver process to cover Medicaid recipients as part of its new state private insurance exchanges."

Kitzhaber had returned at exactly the right time. In a 2013 profile typical of the Kitzhaber genre, reporter Sarah Kliff (then at The Washington Post, now at Vox) asked if the governor's reforms could "save American healthcare."

Kitzhaber got his waiver, which meant that federal Medicaid money flowed into the state annually and Oregon went to work on its reform plan.

"Medicaid by itself isn’t enough to change things," he told Kliff. “For a lot of hospitals, it’s maybe 7 percent of their business. We have another 600,000 people the state covers. If their health-care costs grow slower, it’s just a game changer for state budgets."

Another part of the change was the state's healthcare exchange, Cover Oregon. The state partnered with Oracle to create a coverage network. It won a $59 million "early innovator" grant from the federal government. And then, after two and a half years of internal fumbles that were ignored, Cover Oregon ... didn't work.

People couldn't log on. The makeshift paper-and-pen solution created to cover people who were right in the sweet spot for coverage barely worked. By the months before Kitzhaber's re-election, Oregon had ditched the state exchange and directed the uninsured to buy coverage on the federal exchange, HealthCare.gov.

Remarkably, Oregon voters did not hold this against Kitzhaber. Until his wife's ethical problems (including, allegedly, improper use of her title to make business deals), Kitzhaber was cruising to re-election. He just wasn't the national paladin of reform that he used to be.
And progressives could have used a paladin in a blue state.

In Michigan, Gov. Rick Snyder was signing off on right-to-work. In Wisconsin, Gov. Scott Walker was pulling the ground out from under teacher's unions. In Kansas, Gov. Sam Brownback was setting up a social Darwinist theme park. All of those governors were re-elected with mandates to tinker around in their laboratories of democracy.

Kitzhaber, low on allies and lacking credibility, has left the laboratory.