As this issue of Healthcare Finance News went to press, we learned that Tom Daschle, former Democratic senator from South Dakota and Senate Majority Leader, was to be nominated secretary of the U.S. Department of Health and Human Services.
Daschle, a close advisor to President-elect Barack Obama, wasn’t known until recently as an expert on healthcare, but his nomination heartens many who believe that healthcare reform should come early in an Obama administration rather than later.
In recent years, while serving as a senior fellow at the Center for American Progress, Daschle has demonstrated a strong interest in the nuts and bolts of healthcare reform. He even co-wrote a book, Critical: What We Can Do About the Health-Care Crisis, in which he proposes solutions to the problems besetting U.S. healthcare.
But what exactly does Daschle think is wrong with American healthcare, and how does he envision the federal government’s role in fixing the industry’s problems?
In 2005, Daschle said support for reforming U.S. healthcare “has been eroded by myths about the strengths of the status quo and weaknesses of alternatives.” Those healthcare myths are, according to Daschle, that (1) Americans are the healthiest people in the world; (2) the United States is the best place to get sick; (3) covering all Americans will lead to healthcare rationing; (4) global competitiveness is hampered in comprehensive healthcare systems; and (5) we cannot afford to cover all Americans.
Very few close observers of U.S. healthcare would disagree with the first two myths and will concur with Daschle when he says the “negative aspects of other countries’ systems are frequently exaggerated.”
There are ongoing disagreements over the other three points, however, although Daschle addressed them pretty effectively in his recent book and in other writings and speeches while at the Center for American Progress.
For instance, he noted that by failing to have a coherent, coordinated health system, “the U.S. has its own system of rationing: rationing based on income, illness and insurance status.”
And count Daschle among those who believe that providing healthcare coverage for all Americans will actually enhance competitiveness rather than reduce it. He says countries with universal coverage have “predictable and broadly-financed costs” which tend to benefit businesses and give them a competitive advantage over U.S. firms.
Daschle recognizes that we can’t afford not to reform the healthcare system, and his statements appear to be more than lip service. He has said the United States must “create a new model for our health financing infrastructure that can provide better healthcare quality and access at a lower per capita cost.”
Indeed, but how best to bring down those costs?
One thing we can almost certainly expect from a Daschle-led HHS is a push to give Medicare and Medicaid the ability to negotiate drug prices directly with pharmaceutical companies. And he has indicated that group purchasing generally would be a way to reduce costs.
As HHS chief, Daschle would likely push for the creation of a “Federal Health Board” that would resemble the Federal Reserve Board for the banking industry. He has said the “Fed Health” would ensure harmonization across public programs of healthcare protocols, benefits and transparency and “offer a public framework within which a private healthcare system could operate more effectively and efficiently.”
Daschle has also complained about high administrative costs in U.S. healthcare – the “complexity, marketing costs and insurance overhead that result from our market-oriented healthcare system.” He cites the “cost shifting to insured people of unpaid bills from people moving in and out of coverage and not being able to afford care even when they are insured.”
As for covering the uninsured, Daschle has stated that this “could be done through the group insurance options that exist now.” But he admits that changing how we finance healthcare won’t be easy, given the “entrenched interests” that benefit from the current system.
It will be interesting to see whether the prescription for reform that Daschle advanced in recent years coheres with the Obama plan for which he will ultimately lobby on Capitol Hill.
Nevertheless, Daschle recognizes that our current system not only doesn’t work financially, but also has become fundamentally unjust and must undergo profound change.