Czar Daschle's Health Superboard: So Sweeping As To Be Impractical
Tommy Thompson, the former Wisconsin governor and U.S. secretary of health and human services, once joked about the difference between being a governor and a Cabinet secretary: In Madison, action started when he made up his mind; in Washington, action started when he made up the mind of a 22-year-old White House staffer.
While a formal announcement is forthcoming, Tom Daschle has been offered and has accepted the job of secretary of health and human services by President-elect Obama. Daschle will also be the point man on health reform both for the transition and the administration—the health czar.
By picking the former majority leader of the Senate, the president-elect has shown that he understands the mistakes that bedeviled his predecessors.
President Bush tapped two governors to oversee the vast 65,000-employee department, but neither quite grew into the job, as illustrated by Thompson's joke.
For the crucial work of championing health care reform, President Clinton chose his wife and Ira Magaziner, who had helped write an economic plan for Rhode Island that was rejected by voters.
As Ezra Klein observes on his blog, "The resulting bill might have passed a meeting of the Brookings Institute's Executive Committee."
Unlike Thompson and Mike Leavitt, the current secretary of health and human services, Daschle understands Washington. He also understands Congress, unlike Clinton when she was just first lady and Magaziner.
Daschle has a strong interest in health reform and, with two co-authors, has literally written the book on what a Democratic administration should do. "Critical: What We Can Do About The Health Care Crisis" gives a preview of his thinking on health reform.
Daschle et al. bemoan the high cost of American health care and advocate considering the value of care. "We should spend money on expensive new technologies that benefit patients," they write. "We shouldn't waste it on ineffective, poor-quality care."
How to get better value? Daschle et al. look across the Atlantic: They like, for example, the United Kingdom's National Institute for Health and Clinical Evaluation, or NICE, which is "the single entity responsible for providing guidance on the use of new and existing drugs, treatments, and procedures."
They note that NICE doesn't simply tap the expertise of professional bodies but also weighs "economic evidence—how well the medicine or treatment works in relation to how much it costs."
Daschle et al. push the idea further, envisioning a superboard—he likens it to the Federal Reserve—that would compare drugs and treatments, then use the federal government's enormous buying power (Medicare, Medicaid, VA) and influence (published reports and public statements) to push the rest of us along.
"In choosing what it will cover and how much it will pay, it could steer providers to the services that are the most clinically valuable and cost effective, and dissuade them from wasting time and money on those that are neither." They even suggest that the board would recommend to the NIH and NIMH what to fund.
There are problems with this model. For one, it goes beyond the role of the Fed, which effectively sets just one price. It also goes well beyond the role of any equivalent health body across the Western world. For the most part, NICE looks at the funding of new drugs and devices—generating incredible controversy and criticism.
A health superboard is so bold as to be impractical. Can a government body really measure the "value" of every health service performed in the United States? Can it judge what's good care, right down to the level of the clinician and his prescription pad?
There's some precedence for this: Medicare, which has an endlessly complex pricing system, attempts to attach a dollar figure to 9,000-plus services—winning bipartisan criticism, since it badly overpays certain services (cardiac surgeries, for example) and underpays others (like ER care).
Medicare also has spectacular inconsistency, paying twice as much for a Florida man as his Minneapolis cousin, with no difference in health outcomes—a testament to the limitations of central pricing.
The superboard that Daschle et al. envision is far more sweeping, not simply paying for services as Medicare does, but weighing in on issues of quality and appropriateness.
That's not an attack on the fundamental idea: empowering people to make better choices for their health care. Daschle need not look to Britain for inspiration; in most of the economy, the market works, giving us information. Because of archaic pricing and regulatory hurdles, a government hand would be needed to improve health care transparency.
Daschle can find good ideas in the work already done by the Bush White House. He can push further: releasing more Medicare and Medicaid data and standardizing electronic medical records. The former will shed light on billions of dollars of health spending; the latter will allow us to better study health outcomes. Together, these steps, not bureaucrats, will help Americans make better decisions.
Unlike his predecessors, Daschle understands Washington. He needs to remember, though, how life works beyond the Beltway.
This piece originally appeared in Investor's Business Daily
This piece originally appeared in Investor's Business Daily