Kathleen Sebelius, Healthcare Reform and the Budget

Today, according to the Associated Press and Washington Post, President
Obama will announce 
Kathleen Sebelius as his nominee for Secretary of
Health and Human Services. She has a once in a lifetime opportunity to
execute healthcare reform – a popular President, a sense of urgency,
and enough resources to get the job done. What are these resources?

You'll find the Office of Management and Budget FY2010 Budget Overview Document online The full FY2010 Budget is expected to be released this Spring.

Highlights from the Healthcare portion of the overview document include:

A reserve fund of more than $630 billion over 10 years to finance
fundamental reform of our health care system, funded half by new
revenue and half by savings proposals that promote efficiency and
accountability, align incentives for quality, and encourage shared
responsibility. Examples of new revenue include a proposal that
individuals earning more than $85,000 pay higher premiums for their
Medicare drug coverage starting in 2011. Examples of savings include a
revision of payments to insurers that provide Medicare Advantage plans.
Those payments have been on average 14% higher than what the government
typically spends per beneficiary. Under the budget proposal, insurers
would be required to competitively bid to offer plans beginning in
2012, which the administration believes would lower per-patient outlays.

The Budget expands research comparing the effectiveness of medical
treatments. Building on the unprecedented $1.1 billion included in the
Recovery Act for comparative effectiveness research, the Administration
will continue efforts to produce state-of-the-science information on
what medical treatments work best for a given condition.

* The
Budget includes language to "Strengthen Program Integrity," noting that
reducing fraud, waste, and abuse is an important part of restraining
spending growth and providing health care quality service delivery to
beneficiaries. The Budget proposes to dedicate additional resources
that will initially be targeted to improving oversight and program
integrity activities for the Medicare Prescription Drug Program (Part
D), Medicare Advantage, and the Medicaid Program.

* The Budget
includes over $6 billion within the National Institutes of Health (NIH)
to support cancer research. This funding is central to the President's
sustained, multi-year plan to double cancer research. These resources
will be committed strategically to have the greatest impact on
developing innovative diagnostics, treatments and cures for cancer.
This initiative will build upon the unprecedented $10 billion provided
in the Recovery Act, which will support new NIH research in 2009 and

* The Budget includes $330 million to address the shortage
of health care providers in certain areas. The Budget's new resources
will sustain the expansion of the health care workforce funded in the
Recovery Act.

*The Budget includes continued efforts to
accelerate the adoption of Health Information Technology, building on
funding provided in the Recovery Act.

The combination of a
reserve fund to accelerate transformation/additional coverage,
comparative effectiveness data, enhanced operations, a strong NIH, and
appropriate numbers of primary care physicians is a powerful array of

As with any change process, she'll encounter
resistance from some stakeholders and will be distracted by the tyranny
of the urgent (naming a new head of the FDA to help address the recent
peanut butter salmonella contamination problem, a perceived failure of
our food safety systems). However, I am confident that government,
payers, providers, and patients all recognize that our current
healthcare system provides low quality/high cost (poor value) care
which reduces our ability to compete in world markets. The FY2010
budget summary reflects a serious amount of resources and a commitment
to change that is likely to move us forward.

Best of luck Kathleen and welcome to Washington!

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12 replies »

  1. Before selling ourselves on the Canadian system, we probably ought to learn some lessons from them. Interesting prespective from a Canadian Ortho surgeon on how it affects patient care:
    “Without a private system, Canadian patients have nowhere to turn, which is why so many seek care in the United States. In fact, the United States is the private arm of the Canadian healthcare system.”
    “In his film “SiCKO,” Michael Moore contends that Canadian health care is free: This is absolutely not the case. Canadians pay out of their own pockets for about 30 percent of their health care for items—–such as physiotherapy, eye glasses, prosthetics, braces, dental care, podiatric care, and home help—that are often covered by insurance in other countries. They pay the other 70 percent through their taxes. As a Canadian taxpayer, I am upset that Mr. Moore or anyone else should call this “free” care.”
    “…patients had a 3-year wait for a consultation and a 1-year wait for surgery.”
    “Wait times for orthopaedic consultations in my practice have been more than 3 years because I can’t get OR time, clinic space, clinic support, or other services necessary for running an efficient practice.”
    “I have spent many years on hospital committees trying to improve access to care for my patients, with little progress. If I performed more surgeries, the hospital’s global budget would be exceeded, which is against the hospital’s interest.”
    “Patients in the United States and Canada face different challenges; a Canadian will never have to declare bankruptcy for medical bills but may become bankrupt because he couldn’t get access to care and had to quit his job as a result of his condition.”
    When we say the “state” or “feds” pay for it, that sounds nice, but where do you think they get the money from? Taxpayers and borrow it from other countries. Our system needs improvement, but lets not be naive about it and jump head-first into shallow water.

  2. Dear Kathleen Sebelius,
    Having lived with the NHS in England for 25 years, I couldn’t find fault with the way I was treated. I was in a NHS hospital twice. It was fine but no private rooms. And I even liked the food. People in England take for granted that when they are young that they will have to help pay–and not unhappily–for health care for those who are in need, as long as when they’re older and are in need that the younger workers will do the same. The public health of a nation should be a shared responsibility–moneywise. I’m an OAP and I certainly wouldn’t resent paying what I could afford–say a hundred dollors a month into a National insurance system. I say get the greed out of public health–meaning the insurance companies. We’d be better off as a country even if a NHS ran in the red than we are now using our present patchwork system of insurance companies. I don’t see it as imperative that a NHS should make a profit, because the only imperative I see is for all citizens (and many who are not–as in the UK)have access to care. How much less of a disaster would birdflu be if everyone could go to the local clinic and not have to stay away because they are without insurance or funds.Please look at all the different healthcare systems in countries that have them and find out what works and what doesn’t, because the US dosen’t have a monoply on good ideas. When a country has had a NHS system for a long time, they should have some of the right answers.
    Keith Groethe

  3. As a practical matter, we can never afford to give every citizen every medical procedure.
    Plenty of European countries has state mandated healthcare, but it is radically different than ours. No legal liability. That alone would end a lot of over testing and overtreatment. No dialysis for people over 60 or so. Here, we have a Federal program which pays for all chronic renal failure treatment. No treatment at all for “hopeless cases”. No modern treatments or drugs for the unconnected.
    If they don’t think you are sick, they kick you out of the ER and tell you to see your doctor.
    We need a tiered approach.
    Even a bare bones, actual acute medical care only plan, with no frills will break the medicare bank in a few years.
    Want more..buy insurance at community rates, possibly with a sur-charge if you don’t have continuous coverage.
    The outlook is very grim.

  4. It sound like now is a great time for individuals who are interested in the healthcare management profession.
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  5. Peter, how does Canada or any other state, province, sector etc account for income and population imbalances among different geographical areas? I see this as similar to school funding where within a state one can find big differences between different economic areas.
    I would not object to each state raising the level of coverage and services if desired, if they want to make their state pay for it and abide my a certain minimum standard of coverage.
    Tis is one of the problems I seem ot be reading about with NICED in Britain where there can be pretty vast differences on standards of care and what meds are covered when only mileage seperates a few towns and you are on the cheap side of the border.

  6. “What I have NEVER understood is why health care is a state expense instead of a Federal expense.”
    PKinSFLA, I agree with your comments but want to add that I would rather have the states administer Federal healthcare goals and regulations AND have a state portion of funding. This seems to work well in Canada where the Feds fund the lions share through fed taxes, but the provinces administer the federal program with certain provincial considerations and also fund a much smaller portion. The federal government uses it’s health funding power to make sure the provinces are, in general, abiding by the Canada Health Act. An example was extra billing by doctors. Docs found a way to override access charges by billing in addition to what medicare would pay. In Ontario this was tolerated for a while but the feds stepped in and enforced a change as it did not meet federal access and affordability goals. What this means is citizens can move from province to province and see pretty much the same healthcare system. There is no barrier, health wise, to job mobility.

  7. I just want to clarify some of my comments so Republicans understad that I am not using a blanked indictment of them for health care problems. I differentiate the different levels of representation and how elected leaders and their respective parties address the issue. I happen to live in Florida where Gov Crist takes heatlh coverage for the uninsured far more seriously then many other Republicans I have seen. The economic slowdown seriously effects state budgets and eventually places the financial cost of their care on the state as private coverage is lost with job loss.
    Several Republican friends I have have not a clue as to what happens to people who lose their job and health insurance and find out that COBRA cost up to a 1000 dollars in some cases while your UE insurance will be maybe 225 dollars a week. I can see that this math does not work , however, this bunch can’t seem to grasp why including partial payment for COBRA in the Stimulus package is very important.
    Our facility, an imaging center with a few offices has seen a prett large drop in volume (30 to 40%) as people skip coverage while others postpone elective surgery. The referring MD offices have seen a pretty dramitic drop in their volume which directly efects our business.
    Needless to say, health care is not recession proof and layoffs and pay/benefit cuts are now the norm.
    Sebelius as a Governor I believe makes here a far better choice as HHS head as she has direct experience with how the states have to deal with costs and how their state economy is effected.
    What I have NEVER understood is why health care is a state expense instead of a Federal expense. In other words, we do not tell the states that they need to raise and spend dollars collected from their own residents to run their own Defense Dept for national security. We have Social security and Medicare as federal run programs where no matter where you live in the USA, your benefits are not based on the state you reside in to pay for it.
    This leads to all sorts of goofy conversations I have with my Republican friends who can not unerstand that Medicare is not a socialist takeover and not a Canadian health plan as the Feds pay, but do not run or own the providers. Medicare is not without fraud and faults, however, it is a fast payer and we can run a business with their payments by being more efficient. Our problem is the sudden drop of PRIVATE insurance.
    I also have noticed that in talking to my friends that it is like talking to a cheap AM radio . The example given of what health care in the USA they believe Obama wants is always for some reason based on Britain and their system with nary a mention of any other country on the face of the earth. IN almost ever case I have been emailed about Britain not allowing some procedure or medication because of Britain’s NICE office, I find that it is covered by the other EU states!
    Finally, my anger with the GOP is based on not seeing any real initative for health care reform while in power except for endless rhetoric. I have personaly been in house meetings with my former congressman, a nice guy who was scheduled ot become the House Ways and Means Chairman who could not understand why health care was an issue he and the GOP needed to resolve. I gave him several clearcut examples of how this system is a business and employment jobs killer using examples such as.
    -New business growth and start ups not taking place as an older person with a family can not afford to give up health care to take risk without coverage compared to when they were say 20 with no family.
    -The interruption of someone who wishes to change jobs and move up because of the way their health coverage can change or the gap between coverage taking place.
    -The problem of small business people in his district who will tell you outright that health care costs kill them faster then taxes do as the costs increase yearly, coverage decreases and taxes are predictable and based on a fixed rate. My former congressmen lost the IND vote of just about every small business owner in his reelection to a Democrat who spent a lot of time with them about the their problems with health costs, as well as with providers who were hurting under arbitrary CMS cuts.
    -Being screwed when laid off when older if you are a few eyars form Medicare and find that the job market will not be so nice for you. You can’t even do volunteer work if you have a buy out as health costs and getting coverage will suspend your options.
    -I even mentioned to my congressmen about how idiotic it is that my wife changed jobs and found that her old coverage ended on a Friday while the new coverage would start her first day on Monday with the weekend havin ZERO health insurance. The old company said that they can not cover us but gave us a packet which was backdated to use if any health issue took place. With two kids in active sports as well as myself and wife, how does this great country come down to a Friggin back dated Fed Ex packet as health insurance?
    Health coverage and insurance needs to be like water, electricity and food. You do not think about it vanishing, you pay for it and get what you need and if you are too poor, there is way to get it with help.
    As I often tell my Republican friends, I am a real American because I do not wish for US Citizens to be at the bottom of the barrel with their health care . I feel embarrased that our citizens go bankrupt because of illness and think that there is something wrong, not right when a family has to have a G-D fundraiser in this great country to get surgery for their child.
    The FINAL blow to me and the GOP was when during Obama’s address to the nation the GOP reps sat on their asses when everyone else rose to express happyness because children’s health care was increased.
    Except for Gov Crist and several other GOP officials, bye bye GOP as seeing angry old guys sitting on their asses when they had a chance to show AMERICAN children and their parents that they count for something worth spending money on was too much for me.

  8. “She was first elected to the Kansas House of Representatives in 1986. In 1994 she left the House to run for state insurance commissioner and stunned political forecasters by winning – the first time a Democrat had won in more than 10 years. She is credited with bringing the agency out from under the influence of the insurance industry.[citation needed] She refused to take campaign contributions from insurers and blocked the proposed merger of Blue Cross Blue Shield of Kansas, the state’s largest health insurer, with an Indiana-based company. The decision by Sebelius marked the first time the corporation had been rebuffed in its acquisition attempts.”
    The above part sounds good.
    Christopher, for every plaintiff trial lawyer there is a defendant’s trial lawyer. Ever think you’d call a “trial lawyer” if you needed one?
    More info on Kathleen Sebelius re medical law suits. Seems to be a mixed bag.
    “During the 2007 legislative session, Sebelius vetoed S.B. 55, which — in her terms — sought to exempt the entire health care industry from the Kansas Consumer Protection Act. She signed a follow-up bill, H.B. 2451. From her office’s news relase:
    HB 2451 amends the Kansas Consumer Protection Act (KCPA) regarding health care providers. Under this bill, the KCPA will not provide a private cause of action or remedy against a licensed health care provider for personal injury or death resulting, or alleged to have resulted from medical negligence. This bill is the compromise that was reached after SB 55 was vetoed.”

  9. I hope Governor Sebelius will fight the insurance and drug lobbies and work for the rest of us! Martin Luther King said, “Of all the forms of inequality, injustice in healthcare is the most shocking and inhumane.”
    Only a single-payer approach will end the inhumanity of our failed healthcare insurance system, where profits are more important than patients’ health.
    Only a single-payer approach will end the current disgraceful practice of insurance companies refusing to pay for medical treatment, denying claims, and engaging in rampant price gouging that discourages patients from going to the doctor and has resulted in 50 million Americans without healthcare.
    The solution? NON-PROFIT, UNIVERSAL, SINGLE-PAYER HEALTHCARE. It works well in many, many countries around the world.
    HR 676, The United States National Health Insurance Act, would ensure that every American, regardless of income, employment status, or race, has access to quality, affordable health care services.
    The solution? The United States National Health Insurance Act, H.R. 676. You can read about it here: http://www.healthcare-now.org/hr-676/
    Ask your Representatives to co-sponsor HR676.
    Tell Senator Baucus to put Single-Payer Reform on the table: http://www.change.org/ideas/294/view_action/sen_baucus_we_need_accurate_numbers_not_creative_figuring

  10. Governor Sebelius is a great choice for HHS Secretary. She’s knowledgeable, respected, experienced, and about as bi-partisan as it gets. As the Democratic Governor of a deeply red state, Sebelius knows how to work with Republicans, and is respected by most from that party.

  11. I am very hopefull over her nomination. In reading about her backround in Kansas she has experience in being both for cost containment and expanding health coverage. Health care has been one of the fiercest disagreements with my conservative friends in recent history. I view myself as a conservative and am appaled at the lack of health coverage for many Americans. It may have something to do with both being employed in health care and being a patient and consumer of products and services.
    Most of the time I feel like I am debating a table top AM radio instead of someone who wants to cover American Citizens. How did we get to this point where many of the Republicans I know have not one solid proposal or bill to be introduced and debated to cover and remodel our patchwork system while many other countires enjoy the latest smart card technologies and have resolved the main reason why business leaves the USA to places where health care costs are under control?
    There is a boom in auto and industrial manufacturing within a 300 mile radius of Detroit, except that it is basically Ontario instead of the USA where costs and coverage are scattered in the fruited plains with no clear idea of rationality.
    Gov Sebelius will find out that the entire health-industrial complex so to speak will shake violently when threatened and the only way you will find solutions is by not worrying about pissing everyone off. That includes drug , medical device , insurance, imaging, hospital, food corporations and the doctors themselves.
    Skake the tree and see how much waste, fraud and price gauging will fall to the ground and how we have been idiots for decades by not solving this problem .

  12. A trial lawyer as head of HHS. Just what our health care system needs.