Health Care Reform Center

John K. Iglehart

Gail Wilensky, Ph.D., is an economist who served in the administration of President George H.W. Bush, first as the administrator of the Health Care Financing Administration (forerunner to the Centers for Medicare and Medicaid Services) and later as White House health policy advisor. In 1997, she became the first chair of the Medicare Payment Advisory Commission, and during the 2008 presidential campaign, she was an advisor to Senator John McCain (R-AZ). She is a senior fellow at Project HOPE. John Iglehart, a national correspondent for the Journal, interviewed Dr. Wilensky on August 7, 2009.

John Iglehart: Many Republicans oppose reform proposals put forward by Democrats. Do you consider the pursuit of health care reform an urgent matter?

Gail Wilensky: There is obviously a deep divide between the parties about what reform legislation should look like, but I do believe it is important that we press on with reform. We can’t continue the unsustainable health care spending of the past several decades, not to mention problems regarding the value of care, its clinical appropriateness, and a large and growing uninsured population.

Iglehart: How confident are you that by the end of 2009 a reform measure will be signed into law?

Wilensky: I think it’s likely that we will see a significant expansion in insurance coverage, maybe get to 93 to 95% of the population, through reform legislation. I’m quite discouraged that we will do anything significant about the other problems — slowing spending or improving value and clinical outcomes.

Iglehart: There are provisions in the Democratic reform bills that you oppose.¹ Of them, which one gives you the greatest pause?

Wilensky: The public plan is one of the most contentious issues, and I hope it will not be in a final bill. I believe that a public plan would ultimately unravel private insurance coverage in the United States.

Iglehart: Do you favor the increased regulation of private insurance plans that their advocates, America’s Health Insurance Plans, volunteered to accept early in the negotiating process, such as guaranteed issue of insurance, elimination of preexisting-condition requirements, and so forth? Is that good public policy?

Wilensky: I believe it is good policy. I favor regulations that would guarantee renewability of insurance policies, place limits on how much premium rates could vary according to the health status of an individual, and eliminate preexisting-condition exclusions, as long as most people are covered. If large blocks of people are allowed to remain uncovered, the system could saddle some insurers with a higher risk profile of covered lives that could make their products unaffordable. But as long as most people are covered, these regulations are an appropriate quid pro quo, and they should be adopted.

Iglehart: Over the past generation, the GOP’s interest in health-related legislation has been modest compared with the emphasis that Democrats have placed on these issues. One exception was the relentless drive of President George W. Bush to enact a Medicare outpatient prescription-drug benefit, a pursuit that most Democrats opposed because of the enhanced role it gave private health plans. In your view, what’s the reason for the modest Republican record on health care issues?

Wilensky: People sometimes accuse the Republicans of not having any ideas in health care. But I don’t think that’s true; it’s more a failure to aggressively promote their ideas once they are introduced. For example, the first President Bush introduced a very good proposal that would have provided coverage to every individual whose income was below 133% of the federal poverty level, reformed private insurance, and changed the medical liability system. But it was released too late in his term, and perhaps even more importantly, the passion for health care reform that President Clinton demonstrated and that now engages President Obama has never been articulated by Republican leadership in the executive branch or, in some instances, the Congress.

Similarly, you could say that George W. Bush put forward a reasonable reform proposal to expand coverage by providing tax deductions for people without employer-sponsored insurance. John McCain offered a plan that called for taxing the employer-paid insurance premiums of workers, just as their salaries are taxed. At the same time, his plan would have granted refundable tax credits to employees so they could purchase their own coverage rather than accept the insurance offered by their employers. Don’t forget, during the election campaign, Obama attacked McCain repeatedly for this proposal, although equalizing the tax treatment of all workers has long been supported by virtually all economists because the current policy favors people with higher incomes. Health issues have just not been a primary focus for Republicans. Even on an issue that Republicans feel passionate about — reforming how professional liability issues are addressed — they have been unable to enact legislation during the brief periods when they controlled Congress and the White House, or at least Congress, in the past decade or so.

Health care reform is a difficult challenge for both parties, as the August [2009] town hall meetings are underscoring. We can see it now with our Democratic president and substantial Democratic majorities in the House and Senate, and still some uncertainty about if, let alone what kind of, health care reform may be enacted.

Iglehart: The Obama administration has been promoting the idea of creating an Independent Medicare Advisory Council within the executive branch,² with the authority to make recommendations to the president on annual Medicare payment rates and other reforms, shifting some power from Congress to the executive branch. If the president disapproved the recommendations or Congress passed a resolution of disapproval, the recommendations would be null and void, although Congress would have to enact a bill with comparable savings within a short period. What’s your view of that idea?

Wilensky: I think it’s a bad idea. It would be trading off the difficulty Congress encounters when legislators face tough choices for granting power to a body that is unaccountable to the electorate. I find it very odd that the Congress has been unwilling to grant greater discretionary authority to the Centers for Medicare and Medicaid Services [CMS] at the same time that a few legislators — Senator Jay Rockefeller [D-WV] and Representative Jim Cooper [D-TN] — are sponsoring measures that would provide almost unlimited authority to an independent body of individuals who, once appointed, would be completely unaccountable to the American people. I think the right strategy is for Congress to approve the general structure of provider payment and the spending it deems appropriate, enact payment reforms, broadly defined, that it favors — bundling payments for physicians, moving to more accountable alignment between physicians and hospitals or between physicians and health care plans — and grant CMS far greater discretionary authority to implement these changes. After all, the CMS administrator is a presidential appointee, subject to confirmation by the Senate, reporting to a secretary who is similarly subject, who reports to the president, who is ultimately accountable to the American people.

Iglehart: So you favor providing CMS with greater resources to administer Medicare and Medicaid, even though members of Congress seem to criticize its performance at every turn?

Wilensky: Yes, and I’ve been one of a number of Republicans and Democrats^3,4 who have indicated that all recent administrations — and Congress as well — have starved CMS in terms of providing the kind of management resources and administrative support the agency needs to capably run Medicare and Medicaid.

Iglehart: You’ve been a strong advocate of greatly expanding the government’s investment in comparative-effectiveness research [CER].⁵ The administration’s stimulus package included $1.1 billion to fund an accelerated CER program. Do you anticipate that reform legislation will expand the available CER resources? And what kind of impact will such research have on practicing physicians and the content of medical care?

Wilensky: I am hopeful that we will continue to see additional funding and program implementation policies for CER in whatever reforms are passed by Congress. There are many questions — about governance, about where an entity should be located, about how priority setting should occur, about the involvement of patient advocates and industry in some of these deliberations — that were not addressed in the stimulus package. That was a jump-starting action for CER, but these critical questions of place and priorities must soon be resolved.

We invest so much in the NIH’s pursuit of basic research but often fail to rapidly translate the results of those efforts into clinical care. It is just enormously frustrating to me that many interests, including quite a few physicians, do not recognize CER as a companion project to NIH’s basic research that would help doctors and patients determine what are the most effective therapies for a particular condition or disease. And I am frustrated and disappointed by some of the Republican posturing, too, which asserts that additional information provided through CER is a threat or a first step to rationing care. I believe that providing information about what works when, and allowing that information to be used as part of a reimbursement decision, is reasonable and sensible.

Iglehart: You have been emphatic that, initially, a CER agenda should focus its greatest attention on medical and surgical procedures and their value, rather than on drugs and devices. Why?

Wilensky: Because that’s where the money is. I’m looking at this as a way to learn how to spend smarter and treat better, and that involves the use of medical procedures because we’ve had so little investment in comparative-effectiveness information in that area.

Dr. Wilensky reports serving on the boards of Cephalon, Quest Diagnostics, SRA International, and UnitedHealth Group.

Source Information

This article (10.1056/NEJMp0907415) was published on August 19, 2009, at NEJM.org.

References

1. Antos J, Wilensky GR, Kuttner H. The Obama plan: more regulation, unsustainable spending. Health Aff (Millwood) 2008;27:w462-w471. [Free Full Text]
2. Orszag PR. Letter to House Speaker Nancy Pelosi, July 17, 2009. Washington, DC: Executive Office of the President, 2009.
3. Butler SM, Danzon PM, Gradison B, et al. Crisis facing HCFA & millions of Americans. Health Aff (Millwood) 1999;18:8-10. [CrossRef][Medline]
4. Iglehart JK. Doing more with less: a conversation with Kerry Weems. Health Aff (Millwood) 2009;28:w688-w696. [Free Full Text]
5. Wilensky GR. The policies and politics of creating a comparative clinical effectiveness research center. Health Aff (Millwood) 2009;28:w719-w729. [Free Full Text]