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The new Newt thing

Draft me! Draft me! Newt Gingrich has a big idea and thinks you'll like it so much he'll just have to run for president, says Fortune's Nina Easton.

By Nina Easton, Fortune Washington bureau chief

(Fortune Magazine) -- Inside a modest hotel meeting room in Tempe, Ariz., a dozen health-care thinkers kill time with small talk as they await the unfaded celebrity aura that is Newt Gingrich.

Like scores of companies before and since, the one sponsoring this forum on health-care reform has paid a princely sum to hear Gingrich's ideas on transforming what is probably the most stubbornly archaic industry around, where 21st-century leaps in cancer treatment coexist with doctors still scribbling illegibly on prescription pads. The evening's events open with this private session, where only conference panelists and hosts are permitted access to the former House Speaker. His keynote address comes hours later, after dinner.

But right now Gingrich is running late. He has spent the afternoon out on the campaign trail, starring at a fundraiser for an Arizona Congressman doomed to become one of the GOP's surprise defeats in the upcoming November election. When Gingrich finally arrives, he is sweaty and distracted. And when he takes his seat, he makes clear that he wants his small audience to do the talking.

One by one, the speakers explain to Gingrich their ideas on the conference's theme: how to extend the reach of LeanSigma, a newfangled, trademarked system combining Lean and Six Sigma process-management techniques that is already in use at such hospitals as Johns Hopkins and Massachusetts General.

Just 15 minutes in, it's showtime, as Gingrich leaps to the whiteboard in the front of the room, blue felt-tip pen in hand, to dispense with the cherished management theory of the people paying him tonight.

"I don't mean to be argumentative," he says, as he scribbles a chart on the history of management reform, tucking dates alongside names like Motorola and Deming and Ohno, all the while peppering the group with questions. "But I'm dubious about externalized systems. It becomes a cult."

No one is insulted. On the contrary, everyone is enthralled by Gingrich and his well-informed romp through management history. ("There's this whole romantic side to him," Gingrich says enthusiastically about management guru W. Edwards Deming. "He wrote religious songs.") Newt Gingrich - adopted son of an Army man, history professor at West Georgia College - has always succeeded by exceeding expectations.

Few believed this puckish politician, who can sound like a cross between self-help guru Tony Robbins and futurist Alvin Toffler, could lead the Republican Party to overthrow entrenched Democrats in charge of the House of Representatives for 40 years. Fewer still believed he could resurrect his reputation after his ignoble fall from power four years later.

And this year, as he throws warm-up pitches for a 2008 presidential campaign, hoping that his big ideas, combined with his grass-roots popularity, will produce a "draft Newt" movement, even his most ardent loyalists doubt he can pull it off. "He's a better Moses, leading the party out of the wilderness, than he is a King David, running the show," says Frank Lavin, a veteran of Republican administrations who now serves as commerce undersecretary.

While Gingrich has plenty to say on national security and social issues, the core of his resurrection and unusual race for President are his ideas on health costs - a national migraine that has driven the likes of General Motors toward bankruptcy, put insurance out of reach for 46 million Americans, and now threatens to strangle the economy by ballooning entitlement costs. The problem is so severe that state governors - most recently California's Arnold Schwarzenegger - have given up on Washington and are promoting their own sweeping reform plans.

Gingrich got a headstart on the issue at the turn of the millennium, when he began building his credibility as the voice of free-market-style reform. He has preached his evolving message to business and health groups around the country. In Washington he has transformed his reputation from polarizing politico to business visionary who might strategize with Health and Human Services Secretary Michael Leavitt one day and Senator Hillary Clinton the next.

What Gingrich has to say is not so much a unified theory as a way of rearranging the way we look at things - a refusal to accept the cultural status quo. At the Tempe conference, Gingrich politely listens to such proposals as applying Toyota-style production-control techniques to the health system - and then slices through them with an alternative mantra of competition, deregulation, modernized information systems, and personal responsibility.

Leave the middleman out. Force doctors and hospitals, Medicare and Medicaid, to disclose pricing and compete with one another. Put all the latest information on databases so that American consumers can go online, plug in their personal health profile, and shop for the best prices on drugs and services.

In other words, in Gingrich's world consumer health care should look more like Travelocity.

At age 63, Newton Leroy Gingrich is still one of the most restless minds on the political landscape, embodying what education philosopher George Kneller described as the ability to "look afresh at what we normally take for granted." He has even reinvented afterlife for a fallen politician. Eight years after stepping down as House Speaker, Gingrich runs a for-profit think tank, the Center for Health Transformation, that promotes his ideas while ensuring a handsome living for the former public servant. He doesn't lobby on behalf of specific clients; aides say he doesn't want confusion about whose interests he is representing when he counsels, say, the Secretary of Defense or Senate leaders.

Instead, the center offers policy ideas to companies that want to get health-care costs off their backs but oppose government-imposed, universal-health-insurance plans as costly and burdensome. The center's roster of 75 clients is impressive, including insurers Blue Cross & Blue Shield and GE Healthcare, providers like the American Hospital Association, and employers like GM (Charts) and Ford (Charts). Clients pay fees ranging from $10,000 to $200,000 a year.

Along with lecture fees of $50,000 a speech, at the rate of about 60 per year, Mr. Speaker's new career is making him rich. Customers think he's worth it, providing a much-needed vision to an industry that is "30 times more complicated than defense," says Ron Wince, president of Guidon Performance Solutions, which sponsored the Tempe speech. Gingrich, he adds, also spreads innovative ideas in a business that is "incredibly bad at sharing best practices."

The other piece of Gingrich's life is pure politics. He stumps at the same grass-roots venues as officially declared contenders for president. In public opinion polls the former speaker regularly ranks in the top tier of Republican hopefuls and is routinely described by political analysts as the wild card in the 2008 race.

"He is arguably the best orator the party has, whatever the venue - whether it's the donor community or grass roots," says Michigan GOP chair Saul Anuzis. "Every time you listen to him, it's an 'aha!' moment."

Gingrich's own epiphany about a presidential run dates back three years, when he picked up Harold Holzer's "Lincoln at Cooper Union." The book tells the story of how Lincoln's lengthy 1860 speech in New York City - an intellectually rigorous rebuttal of slavery's legal grounding - wowed the Eastern establishment and transformed a gawky, badly dressed Western politician into a leading presidential candidate. Gingrich saw himself in this story of the underestimated outsider making good, despite the seeming hubris of comparing himself to Lincoln, and it now underpins his unorthodox quest for the presidency.

At an outdoor bar in Tempe, capping a long day of being the center of attention, Gingrich orders a Guinness to unwind. "I don't get tired as much as I literally run out of adrenaline flow," he tells me. "I'm like a jazz musician; this is all a performance art."

But when I ask about his '08 intentions, he revives. He explains that he read Holzer during the last presidential campaign, at a time when he had become disgusted that debates over critical national issues were overshadowed by mudslinging. "It was so painfully clear by the summer of 2004 that my party, which had this opportunity to be the great, change-oriented, modernizing institution, was committed to winning by proving that John Kerry didn't deserve three Purple Hearts or some other nonsense," he says.

Gingrich has in mind a different strategy, which was reported exclusively by Fortune on CNNMoney.com last November. For the next nine months Gingrich intends to promote sweeping solutions to difficult issues of the day - particularly health care and national security - and then, like Lincoln in 1860, see if the call comes.

While such other GOP candidates as Senator John McCain, former Massachusetts governor Mitt Romney, and former New York City mayor Rudolph Giuliani are hiring consultants and building donor networks, Gingrich has formed a tax-exempt advocacy group to raise money and promote his policies. He will wait until September - the eve of primary season - to announce whether he has the support to make it official.

"I was fascinated by Holzer's portrait of Lincoln spending three months at the Springfield state library, putting together the definitive argument about the Constitution, the Founding Fathers, and slavery, turning it into a 7,300-word speech, giving it once in New York, once in Rhode Island, once in Massachusetts, once in New Hampshire, and then going home," Gingrich says. "I was struck by the sheer courage of the self-definitional moment that said, 'We are in real trouble, we need real leadership, and if I'm who you think we need, here's my speech.' And he doesn't give another speech for the rest of the year."

This, then, is the model for his own candidacy. "I am seeking to create a movement to win the future by offering a series of solutions so compelling and so deeply drawn upon the American people that if the American people say I have to be President, it will happen," he says.

Gingrich also says things like "If you want to shape history, it's useful to actually know history" without a hint of self-consciousness. And there's the rub. Spend any time listening to the man and it quickly becomes clear that he still hasn't learned to control the clunky ego he tripped over as Speaker in the 1990s, eventually losing the respect of many of his GOP colleagues. Of the other Republican contenders for President he says, "We're not in the same business. They are running for the White House. I am trying to change the country."

As a leader, Gingrich sometimes looks over his shoulder and finds himself marching alone. In the spring of 1997 the House speaker's public approval rating, at 28 percent, was lower than that of George W. Bush today. Just three years after he led the Republican Party's historic 1994 capture of the House using the banner of its Contract With America, Gingrich was under fire on ethics charges. He had been outmaneuvered by President Clinton during a budget fight and government shutdown. The New York Daily News lampooned him as the CRYBABY! who threw a tantrum after a presidential snub aboard Air Force One. In the fall of 1998 the House Republicans he had paraded toward the impeachment of President Clinton suffered defeat, losing five seats.

But the most bone-breaking part of Gingrich's fall was the in-house treason of fellow Republicans, who tried to stage a coup in 1997. House GOP leader John Boehner, a close Gingrich ally during the 1994 Republican takeover, said members mounted an insurrection against Gingrich because they tired of his egocentric and erratic leadership. "There was no design" to Gingrich's management, Boehner recalls. "He'd make these giant pronouncements, and everybody would go, 'Huh?'"

After the election losses, Gingrich resigned. In November the Gingrich chapter on Capitol Hill officially closed, as House Republicans were swept from power, portrayed by their Democratic foes as ethically challenged. Gingrich had spent a dozen years devising a plan to take power. He had spent only four years actually wielding it.

But grudges are for backward-looking people. Gingrich is a man of the future. Beneath the ego, there's a likable, ebullient quality to the man, best captured in the portrait that hangs in the Speaker's lobby on the second floor of the Capitol. Amid all the other dark and sober suits hanging on the wall, Gingrich stands out in superhero Technicolor, against an electric blue sky, holding his Contract With America as if it's the Sunday Bible and he wants to share the good word.

When he left Capitol Hill, Gingrich matter-of-factly told former Majority Leader Dick Armey, his top lieutenant, that his downfall was "historically correct." Then he plunged into studying everything he had missed during his 20 years in the House. He immersed himself in math and science, trying at first to home-school himself. "I spent one afternoon studying fractals, which is a very complex mathematics," he recalls. "It was hopeless."

He exploited his contacts at MIT, Stanford, NASA, and the National Science Foundation to get personal tutorials on everything from physics to nanotechnology. He threw himself into Civil War history, co-writing what-if? novels that played out alternative endings to key battles.

Gingrich, who has a Ph.D. from Tulane University in European history, still saw himself as a player in American history. He says that by the end of two decades in Congress, he had completed a cycle in his life that he compares in length to that of the cicada, the insect that emerges every 17 years. "My planning horizons are 17 years. I want to give you a sense of scale," he explains, as if helping me focus on his long view of things. "I also do what I think the country needs. I don't operate under personal ambition."

What does the country need now? In Gingrich's view, a health-care system that reflects our modern digital economy. He has earned respect among even the most wonkish health-care audiences with his understanding of what he calls the "most complex use of knowledge humans engage in, a stunning decentralized collection of subcultures, guilds, and decision points." And he cuts through that thicket with some simple (and radical) ideas for change.

To Gingrich, health care is rife with anachronisms, where nurses try to read the doctors' scrawls on paper medical records even as the industry experiences bursts of life-saving innovations, such as a cellphone that can test diabetics and transmit the results (one of Gingrich's favorite gadget references).

At root, Gingrich wants to subvert the system with a healthy dose of competition and information flow. States, he says, should borrow the idea of former Florida Governor Jeb Bush, who launched twin Web sites so that consumers could comparison-shop drugs and search listings of hospitals with the best-quality track records. At myfloridarx.com, consumers can see Lipitor selling at $114.78 at one local pharmacy vs. $138.55 at another. There's also floridacomparecare.gov, where consumers can compare both price and quality records of hospitals, surgery centers, and health plans.

"In one case there were two hospitals five miles apart," he says. "One hospital did a cardiovascular procedure at 20 times more quality for 20 percent of the cost. It's the beginning of a different world" - one that Gingrich wants to extend through Medicare and federal employee insurance systems. But Gingrich's cost-saving mission also takes him into wilder territory, where he envisions a future of "medical tourism." Medicare, he says, should foot air-travel costs for senior citizens to get procedures in states where they are far cheaper.

In Gingrich's vision, two other healthcare cultures need to change: Consumers need to regain a sense of ownership lost in the insurance system ("When was the last time you washed a rental car?" he likes to say), and providers need incentives to prevent disease rather than just treat it. He favors financial rewards to doctors for preventive treatment, and to patients - especially those in Medicaid and Medicare - for following their doctors' advice.

None of these ideas address the nation's biggest health-care crisis - those 46 million uninsured Americans. Here, Gingrich is willing to use the heavy hand of government to force consumers to take responsibility for their health, not just rely on coverage provided by employers. He favors national legislation similar to the law that Romney pushed through in Massachusetts, forcing individuals to buy health insurance just as they are required to purchase auto insurance - though providing some government assistance to those who can't afford it.

"Schwarzenegger has raised the right question," Gingrich says, "which is how we can get to 100 percent coverage of every individual. Like Romney, his biggest problem will be getting a liberal Democrat state legislature not to make it so bureaucratic and so expensive it cannot work."

There is a sweep and clarity to Gingrich-think that inevitably prompts the management experts in his audiences to take notes. He has the same effect on the political trail, a phenomenon that feeds his gnawing presidential ambitions. "He's dying for it," says a person who has known him for years.

By all accounts, Gingrich is astute enough to appreciate the risks of an official presidential run. Ethics issues during his congressional tenure "took care of themselves. He was cleared. But it's something that will need to be explained," says Michigan's Anuzis. The bigger problem, Anuzis says, are Gingrich's two divorces: "That's an issue with social conservatives." Still, for a man who believes he can change the course of history (and did it once), the White House is like honeysuckle.

"There are 3,300 counties, 17,000 elected school boards, 60,000 cities and towns, 14,000 state legislators, 50 governors, and 535 elected federal legislators," he says. "My hope is to create a wave that sweeps through that entire system and in a context that obviously includes the presidency."

It's a strategy that would be considered far-fetched if this were any other politician. But Gingrich's impact on the 2008 race - whether he runs himself or uses the season as a forum to promote himself and his ideas - has to be taken seriously.

Aside from his high standing in polls, there is the fact that Gingrich has routinely defied the odds and reinvented himself with convincing results. Says his friend Dick Armey: "He's never been a parochial member of Congress. He has big ideas and has had them for a long time. He's not going to appear to have just discovered them for the purposes of an election. And that's a good place to be for an '08 candidate."  Top of page

 
 
 
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