Health Care Policy Is in Hands of an Ex-Senator

http://www.nytimes.com/2008/12/12/us/politics/12daschle.html

December 12, 2008
Health Care Policy Is in Hands of an Ex-Senator
By ROBERT PEAR

WASHINGTON — In selecting Tom Daschle to be his health and human services secretary, President-elect Barack Obama said Thursday that he wanted Mr. Daschle, a former South Dakota senator, to pursue something that had eluded federal officials for decades: securing “affordable, accessible health care for every single American.”

Whether Mr. Daschle, a former Senate majority leader, can succeed where others failed is unclear.

“Year after year,” Mr. Obama said, “our leaders offer up detailed health care plans with great fanfare and promise, only to see them fail, derailed by Washington politics and influence peddling.”

Even Mr. Daschle, who will also be director of a new White House Office of Health Reform, acknowledges that the task will be difficult. In a recent book, he portrays the health care industry as a collection of “special interests” and predicts they will wage “all-out war to defeat reform.”

Mr. Obama said Mr. Daschle, as head of the new office, would be the “lead architect” of proposals to expand coverage and rein in health costs.

Jeanne M. Lambrew, a former aide to President Bill Clinton, will be deputy director of the office.

Mr. Daschle is well versed in health policy and Senate procedure. But two of his ideas could reignite the kind of ideological warfare that sidetracked health care proposals in the past.

He wants to establish a Federal Health Board, a powerful independent entity modeled on the Federal Reserve, to decide which drugs, devices and treatments are covered by federal health programs. And he says the federal government should offer its own health insurance plan, to compete directly with private plans, a proposal that alarms many insurers and Republican members of Congress.

By giving Mr. Daschle double duty, Mr. Obama hopes to avoid a problem that contributed to the collapse of Mr. Clinton’s campaign for universal coverage in 1993-94. Donna E. Shalala, who was then health and human services secretary, and the experts in her department often had to take a back seat to Ira C. Magaziner, the health policy coordinator at the White House.

Mr. Obama said 45 million people had no health insurance and were struggling to pay “the runaway cost of health care.”

A major health care initiative “has to be intimately woven into our overall economic recovery plan,” Mr. Obama said, adding: “It’s not something that we can put off because we are in an emergency. This is part of the emergency.”

Mr. Daschle echoed that sense of urgency. “Our growing costs are unsustainable,” he said, “and the plight of the uninsured is unconscionable.”

With a larger majority in Congress, Democrats are increasingly optimistic that they can realize their dream of affordable health care for all next year.

Mr. Daschle brings a kind of moral passion to the campaign for more coverage. Health care, he says, is rationed on “the worst possible criteria: one’s ability to pay or one’s health condition.”

Mr. Daschle said his proposal to establish a Federal Health Board could “reduce or deny payment for new drugs and procedures that aren’t as effective as current ones.”

He predicts that such decisions will “rankle powerful interest groups, such as drug manufacturers.” And he is right. Critics say the board would be picking winners and losers among makers of drugs and medical devices.

David H. Nexon, senior executive vice president of the Advanced Medical Technology Association, a trade group for makers of medical devices, said that research comparing treatments could help doctors and patients make better decisions.

But, he said, “The medical device industry, life science companies and patient groups would have a real problem with a centralized decision-making operation that denied people access to safe, effective treatments or imposed a cost-effectiveness standard on therapies that would be covered by Medicare or other forms of insurance.”

Mr. Daschle himself writes that “doctors and patients might resent any encroachment on their ability to choose certain treatments, even if they are expensive or ineffective compared to the alternatives.”

Board members would be chosen by the president, subject to Senate confirmation, but would be largely “insulated from political pressure,” Mr. Daschle said.

The board could have a “spillover effect” in the private sector, Mr. Daschle said. Private insurers already follow many of Medicare’s coverage decisions. He said Congress could go further and link tax breaks for private insurance to compliance with the board’s recommendations — giving the government far more influence than it now has.

Mr. Obama said the idea of a Federal Health Board “holds great promise” for bridging ideological divisions.

In his book “Critical,” Mr. Daschle said that people without job-based insurance should be able to enroll in any of the health plans offered to federal employees, or in a new “government-run insurance program modeled after Medicare.”

Democrats said that private insurers would hold down costs and improve care if they had to compete with a public plan.

But Republicans said a government plan would have unfair advantages and could drive private insurers from the market.

Charles N. Kahn III, president of the Federation of American Hospitals, a trade group, said, “The prospects for health care reform are as good as they’ve been in decades.”

Hospital executives worry that hospitals would be underpaid by the new public plan, just as they say they are underpaid by Medicaid and Medicare. Many doctors decline to take Medicaid patients, saying payments are too low.

R. Alexander Vachon III, a health policy consultant for several Wall Street firms, said: “The probability that Congress will pass a major expansion of health insurance coverage next year is less than 40 percent. There’s lots of enthusiasm, but Democrats have been trying to do this for 74 years and have not succeeded.”

But Democrats point out that Mr. Obama will have strong allies on Capitol Hill, including three committee chairmen, Senators Edward M. Kennedy of Massachusetts and Max Baucus of Montana and Representative Henry A. Waxman of California.

Mr. Daschle, who turned 61 this week, was elected to the House from South Dakota at 30; he ousted a Republican senator eight years later. He was in the Senate for 18 years — 10 as Democratic leader — before he was defeated in 2004 by a Republican who said Mr. Daschle had become a creature of Washington.

Since then, he has worked as an adviser at a Washington law and lobbying firm, pursued his interest in health policy, stayed active in Democratic politics and kept an office at a liberal research and policy institute, the Center for American Progress.

Even though he was not a registered lobbyist, Mr. Daschle advised many health care companies and other corporations for which his firm lobbied.

Some consumer groups said the choice of Mr. Daschle appeared to violate the spirit of Mr. Obama’s promise to minimize the role of special interests.

“It appears that Daschle will have many potential conflicts of interest and will have to recuse himself on a significant number of matters affecting health care and pharmaceutical companies,” said David Arkush, director of Public Citizen’s Congress Watch, a consumer group.

Jen Psaki, a spokeswoman for the Obama transition team, said Mr. Daschle had “recused himself from participating in any health care matters being handled by his firm,” Alston & Bird. If confirmed, she said, he will not have any contact with the firm for two years.