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Former HHS Secretary Leavitt Discusses Overhauling U.S. Health Care System

Kaiser Daily Health Policy Report

Wednesday, February 25, 2009


 Former HHS Secretary Mike Leavitt on Tuesday said the federal government must play an active role in reducing spending but not seek to become the sole solution in efforts to overhaul the U.S. health care system, CongressDaily reports. In an interview with National Journal staff, Leavitt warned that lawmakers should initially reject "three fake cures" before progress can be made on an overhaul: one is that "the market will fix this and everything will be fine, the second is that bureaucrats will fix it, and the other is that we just need to spend more money."


Leavitt laid out several proposals to move forward with an overhaul. He said that management of the Medicaid program should be turned over to the states, who would hire private insurance companies to provide coverage to residents that meet minimum standards set by HHS and Congress, with federal subsidies guaranteeing up to 57% of the cost.


Leavitt also said addressing the risings costs of programs such as Medicare, which drive up the overall costs of the health care system, is a key challenge for the Obama administration and Congress. He added that he predicts that Medicare could run out of funding as early as 2015, not 2019 as others have predicted. "Health care entitlements should be addressed now," he said. "We can solve this problem [of rising health care costs] very quickly" by rolling out a plan for an overhaul over the next five years, Leavitt said.


Leavitt said that he supports a free-market approach, but noted that "a market without rules or the capacity to resolve inequities or the capacity to subsidize those who are in hardship will not solve this problem." He said, "The important role here for the government is to organize an orderly and efficient market," adding that "government should set rules for expected behaviors within the marketplace and to cure inequities when someone cheats or treats another unfairly. There's got to be an enforcement mechanism. When a government organizes the market, it must have the means of subsidizing those in need of help, according to the norms of society -- and that's what government does best." After the organization, government should resist interfering with the free market for insurers to provide access to coverage and benefits, Leavitt said.


Leavitt also said that congressional Republicans need to unify behind an alternative to Democratic plans for slowing rising costs of the program, or they risk being left out of the overhaul debate (Hess, CongressDaily, 2/24).


Health Care Reform Expected To Proceed Without Key Participants

The Obama administration and Democrats in Congress are "poised to press ahead with a sweeping health care overhaul," but they will have to do it "without some of the key players they hoped would be leading the charge," CQ Today reports. According to CQ Today, "Obama appears ready to move" on a health care overhaul but "it's not clear that all the pieces are on the board."


A nominee for HHS secretary, after former Sen. Tom Daschle (D-S.D.) withdrew his nomination, has yet to be named. In addition, the new White House Office of Health Reform does not have an official leader, while leaders of other key health care agencies like FDA and CMS have yet to be nominated. Furthermore, Senate Health, Education, Labor and Pensions Committee Chair Edward Kennedy (D-Mass.) -- a leading advocate in Congress for health care reform and an ally of Obama's -- has "rarely been in Washington for Senate business" while undergoing treatment for cancer.


Despite the challenges, "Congress appears ready to press onward," CQ Today reports. Rep. Diana DeGette (D-Colo.) said, "We don't need an HHS secretary to get moving. We can start now," adding, "The Senate's already talking about a variety of proposals, and we can do the same" (Armstrong, CQ Today, 2/24).


Health Overhaul 'Key Player' Schwartz Profiled

Roll Call on Tuesday profiled Rep. Allyson Schwartz (D-Pa.), who "is poised to play a major role in the upcoming debate over health care reform" and is expected to "be a key player in other efforts to overhaul the health care system, beginning with the fight over the federal budget." Schwartz, who currently is vice-chair of both the House Committee on the Budget and the New Democrat Coalition, "has been intimately involved with the intricacies of the health care debate since the early 1990s" when she served in the Pennsylvania Legislature and co-authored the state's version of CHIP, Roll Call reports.


This year, Schwartz played active roles in the expansion of CHIP and the recently enacted $787 billion stimulus package, which included provisions for health care information technology for which she advocated (Langel, Roll Call, 2/24).