The new administration’s health
care ideas have both good and bad for our industry. We just
don’t know what we are up against yet.
Scott Sinder Sinder and Elizabeth Glidden
In his first official presidential address, President Obama
made just a single reference to health care, promising that his
administration would “wield technology’s wonders to
raise health care’s quality and lower its cost.” If
only it were that easy.
A few things, though, are clear. First, the president
committed his new administration to advancing the valuable work
begun under Secretary Michael Levitt’s Department of
Health and Human Services (HHS) to bring needed technology
reform to the health sector. These long-overdue advances should
help to eliminate mistakes and bring more efficiency to the
delivery and financing of health care in this country.
The president selected former Senate Minority Leader Tom
Daschle to lead HHS. (As of this writing, he had not yet been
confirmed.) President Obama also has created a new White House
Office of Health Reform. In the past, the creation of analogous
White House policy advisory offices like the National Security
Council or the National Economic Council has resulted in
difficult turf battles and disharmonious relationships between
the White House and the agencies whose roles some perceived as
at least partially being duplicated. In this case, however, the
president named someone very close to Secretary Daschle to be
the director of the new office: Tom Daschle.
Both Secretary Daschle and Director Daschle will be focused
on pushing through health care reform legislation that attempts
to accomplish at least some of the following:
- Create a National Health Insurance Exchange that would
function as a clearinghouse intended to make it easier for
businesses and individuals to shop for the best
- Reform medical malpractice insurance rates by
strengthening antitrust laws in a manner purportedly designed
to prevent insurers from overcharging doctors. The president
also would like to use the legislation to promote new medical
malpractice tort reform initiatives.
- Increase insurance industry competition in markets where
the insurance business purportedly is not competitive by
forcing insurers to pay out a share of their premiums for
patient care for the uninsured.
- Provide reinsurance for catastrophic coverage to reduce
insurance premiums for such coverage.
- Create a new tax credit that refunds up to 50% of
premiums paid by small businesses on behalf of their
- Require large employers that do not offer coverage to
their employees to contribute a percentage of payroll toward
the cost of the national plan.
- Require that health plans disclose the percentage of
premiums that goes to paying for patient care as opposed to
- Reward providers who see patients enrolled in the new
public plan, the National Health Insurance Exchange, Medicare
- Eliminate inequalities in health care by requiring
hospitals and health providers to collect, analyze and report
health care quality for disparity populations and hold them
accountable for any differences in treatment reflected in
- Require coverage for children.
- Investing an additional $10 billion a year over the next
five years to facilitate the system’s broad adoption of
standards-based electronic health information systems,
including electronic health records.
It’s quite a list. And each component has the
potential to fracture any coalition that Secretary/Director
Daschle may be able to assemble. To add to the magnitude of the
challenge, many members of Congress have their own ideas about
the direction in which the health reform efforts should move.
For example, Sen. Max Baucus, D-Mont., the chair of the Senate
Finance Committee, which has primary jurisdiction over health
care legislation in the Senate, released his own blueprint for
reform immediately after the election. He would guarantee
health insurance for all Americans by facilitating sales of
private insurance, expanding Medicaid and Medicare, and
requiring most employers to provide or pay for the health
benefits. Unlike the Obama plan, which mandates coverage for
children only, the Baucus plan eventually would require
everyone to have health insurance, with federal subsidies for
those who could not otherwise afford it.
Daschle, a veteran of the Hillary-Care debates, has a deeper
appreciation than most of the political complexities of the
health care reform debate. He has written a book dedicated, in
part, to examining the challenges that this type of reform
effort must overcome. A core proposal in the book is the
creation of a new federal health care body—described as a
Federal Reserve Board for health care—that would oversee
the reform effort in a way that would insulate it from the
daily scrutiny and tumult of the political arena.
However inconceivable it might seem at first blush, this
idea should be taken seriously. Many members of both parties
believe that reform is necessary, as do ever-expanding swaths
of the business and consumer rights communities. Delegating
responsibility for the hard decisions to an
“independent” oversight board for the sector would
obviate the need to actually reach political agreement on any
of the hard questions while at the same time giving all of the
reform-oriented stakeholders the opportunity to claim victory
that something positive was done.
Any such development has the potential to completely
federalize the entire health care sector, including the
insurance component. That could create opportunities (for agent
licensing, mandate harmonization, and solving the
value-added-services compensation conundrums, for example) as
well as an unpredictable range of threats that we can only
begin to fully imagine.
Sinder, a partner at Steptoe & Johnson, is CIAB General
Glidden is an associate in Steptoe’s Government Relations
& Public Policy Group. firstname.lastname@example.org.