Report: Daschle to Head Health and Human Services
Moments after the Obama-Biden Transition team announced former Sen. Tom Daschle (D-S.D.) would head a health care policy working group in the new administration, MSNBC reports that Daschle will serve as the next secretary of health and human services.
The appointment, if confirmed, suggests Obama is serious about making health care reform a top priority. Daschle, now a professor at Georgetown University and distinguished fellow at the Center for American Policy, has long been an advocate for comprehensively overhauling the nation’s existing private health care system. Daschle published a book on the topic recently. In a piece for The Huffington Post earlier this year, Daschle outlined his proposal to create a Federal Health Board, modeled after the Federal Reserve Board.
Just as the Federal Reserve ensures certain standards, transparency and performance for our banking industry, the Fed Health would ensure harmonization across public programs of health-care protocols, benefits, and transparency. Ultimately, the Fed Health would offer a public framework within which a private health-care system could operate more effectively and efficiently.
The Fed Health could help reduce administrative costs. Roughly 30 cents of every dollar in health care is spent on administration rather than health benefits. Our administrative costs, on a per capita basis, are seven times higher than that of our peer nations. Each state has their own system for Medicaid and insurance regulation. We have different health-care systems for active duty military members versus veterans. And private insurers spend billions trying to enroll the healthy and avoid the sick. A Federal Health Board that sets evidence-based standards for benefits and quality for federal programs and insurance will lower this complexity and thus costs.
The Fed Health could also promote quality and save money by making the health-care system more transparent. Today, the lack of transparency in the system makes it virtually impossible for people to grasp what they are paying for and who provides them with the best care. This shroud of secrecy allows for wildly different prices for similar quality care. For example, a Pennsylvania report on heart surgery found hospitals with similar outcomes charge from $20,000 to $100,000. The Board, by ensuring transparency, would increase competition based on price and quality rather than cream skimming and cost sharing.
Additionally, the Fed Health could set standards for quality and coverage, promoting best practices and identifying the trade-offs on services. It would use information on the comparative clinical and cost effectiveness of different treatment options to set standards for Federal programs. The Congressional Budget Office recently credited this idea with the potential to produce substantial system-wide savings.
Whether Obama intends to integrate Daschle’s Federal Health Board into his existing plan to reduce health care costs remains to be seen. But the pick should allay the fears of conservatives that Obama intends to replace the existing infrastructure with a “socialized,” government-funded and run health care system.