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Mark McClellan on the Affordable Care Act: 'It's an important step.'

mcclellanm_portrait.jpgMark McClellan is the director of the Engelberg Center for Health Care Reform at the Brookings Institution. Before that, he served on George W. Bush's Council of Economic Advisers. Bush subsequently appointed him head of the Food and Drug Administration, and then director of the Centers for Medicare and Medicaid Services. We spoke this morning about the Affordable Care Act and the next steps.

Let's start with the basic question: Is this a step forward?

It's an important step. We have to do something about the problem of access to affordable health insurance. The bill unquestionably does that. The provisions related to changing provider payments are significant in terms of their potential for reducing spending growth, though I'd have liked to see more of those steps.

So which provisions do you find encouraging?

The provider payment reforms. The president likes to say that all the good ideas experts have are in the bill, and that's largely true when it comes to payment reforms. But since we don't know exactly which of those reforms work, we'll have to find out quickly. And that will require doing a fundamentally better job of running the pilot and demonstration programs in Medicare. Right now, we evaluate the reforms over 8 to 10 years. We need to lower that. Particularly since we've got the payment advisory commission that has some ability to modify payment rules, but it has some limitations (hospitals are excluded for 10 years). Since we don't have as much evidence as we need on what works to lower costs, we need to make sure they get that evidence as soon as possible.

People talk about the payment reforms in the bill a lot. Could you be specific about which ones you think are promising?

There are a lot of different ideas in there. Many of the ideas relate to pay for performance, paying more when doctors do particular things. I think those are important, but they're unlikely to transform health care by themselves. And they do run the risk of getting doctors and hospitals to teach to the test and be too specifically focused on the particular issues identified in the legislation.

More important, I think, are the reforms that pay doctors and hospitals more when they get better outcomes for people at a lower overall cost. That would be steps to encourage using nurse practitioners to help patients with chronic diseases manage their illness, changing where care is delivered from an inpatient to outpatient setting, paying for reducing the complication rate. The most important reforms on the payment side don't tell doctors and hospitals what they need to do or but support them when they figure out how to do things better.

And what would you have added to the bill?

I was part of a bipartisan group of economists and other health-care experts that did a report on bending the curve. On that list, but not included in full in the bill, was reform of the medical liability system. We also included a big emphasis on consumer side reforms. If people could take steps to stay healthier and reduce their complications, we could provide support for them as well. Under our current insurance arrangement, if you have a serious chronic disease where you need to go to the hospital for major surgery, you're probably going to be paying your out-of-pocket maximum no matter what. It shouldn't be like that. If people use providers who have demonstrated that they can get better outcomes with fewer complications, we should support them in that.

One interesting thing I find is that when I talk to health-care experts they talk about things that happen in hospitals and doctor's offices, as we're doing here. But the political discussions is mainly about insurance reforms. Do they fit together?

It all fits together. Unless you have compelling information on quality of care and cost of care, it's hard for them to make choices. And it's frustrating for everyone in the system right now. When I was at CMS, providers came to me and said we can show we're delivering better care at lower results, but we don't get paid for this. In fact, we lose money because we're doing less of the traditional billing: We've got fewer lab tests and doctor visits. I think this will help us get to where we can support those steps, but it's not a sure thing.

Let's say it's eight years from today, and you're brought back not just as director of CMS, but as health czar. What do you do to the system? What are the next steps?

There may be less expensive ways to provide insurance, and we'll know more about that in five years. I also want to make sure people can choose innovative kinds of plans and innovative kinds of care based on what we learn over the next five years. If we're making this investment now, then by five years from now we'll hopefully see insurance plans that look very different, that don't automatically make you pay $15,000 when you have a serious illness but reward you for making good decisions. I want to make sure our insurance exchange really promotes that kind of coverage. And by that point, we'll probably have to take some further steps in controlling costs.

By Ezra Klein  |  March 26, 2010; 9:02 AM ET
Categories:  Health Reform , Interviews  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Beneath the Obama agenda, the Obama agenda
Next: What do conservatives believe about health care?

Comments

If this is so wonderful why are there provisions in the bill that exempt the president, congress, senate and high level administration officials from having to participate?

Posted by: tjmlrc | March 26, 2010 9:59 AM | Report abuse

Mcclellan is the best thing from the bush administration. I have three words for him and I expect he agrees. Capitation with bonuses. Mass will show the way

Posted by: visionbrkr | March 26, 2010 10:13 AM | Report abuse

to tjmlrc:

There is no such provision in the bill; Obama has said numerous times that this is the same plan Congress has.

Posted by: mglbrown1 | March 26, 2010 10:21 AM | Report abuse

It's amazing how sensible some Republicans can be if they're not having to look over their shoulders and see a bunch a teabagger lunatics facing them in the primary.

Posted by: andym108 | March 26, 2010 10:37 AM | Report abuse

to tjmlrc:

There is no such provision in the bill; Obama has said numerous times that this is the same plan Congress has.

Posted by: mglbrown1

**********************************************************************

This is true; the catch is I believe Congress pays 50% and taxpayers pay the other 50% so they can buy into a solid gold plan for half of what it costs.

So we can buy it as well at 100% of what the premium is. For the record I think this is acceptable.

Posted by: theobserver4 | March 26, 2010 10:49 AM | Report abuse

mglbrown1,

No it isn't. The public will get theirs from insurance exchanges.
obama and the thugs get theirs from government insurance plans.
Regular employers will not be able to afford to subsidize employee health plans which will drive employees into the insurance exchanges.

Posted by: tjmlrc | March 26, 2010 10:51 AM | Report abuse

Whether it's the bill or companies are using the bill to stick it to workers, the result is the same -- the health care bill is already starting to screw over workers (yes, the ones paying for the bill). I don't have a link to the WSJ article, but below is one to Yahoo!.

In a nutshell, Catepillar, Verizon, and other large companies are reducing benefits and/or laying off workers... and citing the bill as a reason.

http://finance.yahoo.com/tech-ticker/businesses-react-to-rising-cost-of-obamacare-they%27re-cutting-benefits-450638.html?tickers=mdt,cat,vz,xlv,ixj,^dji,^gspc&sec=topStories&pos=2&asset=&ccode=

Posted by: Fletch_F_Fletch | March 26, 2010 10:52 AM | Report abuse

tjmlrc:

There is no such thing as a "government insurance plan" (except for Medicare, Medicaid, and VA). Look it up. The exchanges they use are made up of private insurers, just as in the new bill. the observer4 is correct that they do get a higher level plan at less cost.

Posted by: mglbrown1 | March 26, 2010 11:01 AM | Report abuse

You failed to ask an important question--would he be open to playing a big role in implementing ACA?

Posted by: bharshaw | March 26, 2010 11:10 AM | Report abuse

Wow.

A sober, serious discussion with a Republican appointee about the pros and cons of the bill and where we go from here.

What a tragedy for the country and for the Republican party that we couldn't have had more of this.

Posted by: Meridian1 | March 26, 2010 11:15 AM | Report abuse

tjmirc - you are wrong.

Straight form the bill text:

(d) MEMBERS OF CONGRESS IN THE EXCHANGE.

(i) REQUIREMENT. Notwithstanding any other provision of law, after the effective date of this subtitle, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are

(I) created under this Act (or an amendment made by this Act); or

(II) offered through an Exchange established under this Act (or an amendment made by this Act).

(ii) DEFINITIONS. In this section:

(I) MEMBER OF CONGRESS. The term Member of Congress means any member of the House of Representatives or the Senate.

(II) CONGRESSIONAL STAFF. The term congressional staff means all full-time and part-time employees employed by the official office of a Member of Congress, whether in Washington, DC or outside of Washington, DC.

Congress & Federal Employees choose plans from the list that they can afford. As part of their salary, 75% of the plan they choose is covered. The Military covers 100% of their healthcare. Big business often covers 100% of healthcare coverage, small business covers whatever they can afford. This will make healthcare insurance more affordable for everyone as the group covered will be larger.

The larger the group the better coverage is offered by the employer, and now individuals will get the same discount for large group coverage.

The price of the policy they select from the list will vary based on what they want and can spend, just as the price varies based on what each person in Congress & each Federal Employee wants and can spend.

Posted by: SCVoter | March 26, 2010 11:16 AM | Report abuse

Oops, there's another conservative who will have to be thrown from the party.

Posted by: Lomillialor | March 26, 2010 11:27 AM | Report abuse

Scvoter

That theory of larger is cheaper is wrong. If the larger group is sicker than a smaller group then their costs are higher. The only thing that's cheaper are the fixed costs which average 25% of total cost. I have a client who has 10% of the size of its parent company and its costs are 30% less. The average age of the subsidiary is 35. The average age of the parent company is 50.

Posted by: visionbrkr | March 26, 2010 11:27 AM | Report abuse

Scvoter

That theory of larger is cheaper is wrong. If the larger group is sicker than a smaller group then their costs are higher. The only thing that's cheaper are the fixed costs which average 25% of total cost. I have a client who has 10% of the size of its parent company and its costs are 30% less. The average age of the subsidiary is 35. The average age of the parent company is 50.

Posted by: visionbrkr | March 26, 2010 11:27 AM | Report abuse

@Fletch_F_Fletch

That's hardly an article, more of a Rep. talking point, in fact I heard the same thing out of Boehner last night.

Posted by: maiapapaya | March 26, 2010 11:36 AM | Report abuse

"And what would you have added to the bill?

I was part of a bipartisan group of economists and other health-care experts that did a report on bending the curve. On that list, but not included in full in the bill, was reform of the medical liability system."
______________________

So Democrats absolutely want to protect all the loe life ambulance chassers out there even when the experts tell them it would "bend the curve"!

Guess it was a promise made to J Edwards & friends, their very special VP candidate who made his fortune that way...

Posted by: sally62 | March 26, 2010 11:36 AM | Report abuse

@Fletch_F_Fletch: companies were already reducing benefits for years and years. Nothing to do with the bill, everything to do with extremely high insurance premiums

Posted by: wimprange | March 26, 2010 11:49 AM | Report abuse

@sally62
Even the CBO didn't think it would bend the curve and it could have dangerous results as well since healthcare providers could get sloppy because they would not be held liable for what they did.

Posted by: wimprange | March 26, 2010 11:52 AM | Report abuse


when my husband worked for the Government we were offered a whole long list of plans we could choose from. this is what Congress and the President has and what will open up to private citizens. Try thinking for a change!!!!

Posted by: jgp38 | March 26, 2010 11:59 AM | Report abuse

@sally62
I love how it's unconstitutional for the federal gov't. to mandate everyone buy health insurance, but you're totally fine with the federal gov't. telling states how to deal with tort reform. Responsible states like California already have, and it's worked. The outcome? Consumers are screwed again, while insurance companies make more profits.

Posted by: maiapapaya | March 26, 2010 12:07 PM | Report abuse

Hahahaha - this is brilliant! A poster is going around the WP cite referencing an article by Henry Blodget (looking at you all over this place Fletch_F_Fletch) to prove the horrible effects of the new health care bill. Hahaha - this is the same Blodget that was fined $4 million and banned from the securities industry for life...seriously, does this work for anyone? How do you expect anyone to listen to you if you cite someone who is a fraud? It's so moronic it's brilliant?!?! Why don't you site an article about being faithful by Tiger Woods. LMFAO! Hahaha, thanks for the laughs, they keep getting bigger!

Posted by: tpokalsky | March 26, 2010 12:21 PM | Report abuse

As expected, the Obamacare scam will kill millions more jobs in the U.S.

AT&T said Friday that Obamacare will cost them $1 billion. Earlier this week, AK Steel, Caterpillar, Deere and Valero Energy also reported that Obamacare will raise their expenses:
http://dealbook.blogs.nytimes.com/2010/03/26/att-to-take-1-billion-charge-for-health-care/#comment-381085

All other U.S. businesses can anticipate the same problem. And as most of them were already hurting, many will have to close or move to FREER countries.

As a result, millions of people are going to be left not only without insurance but without jobs. And the few lucky enough to have a job will become poor after paying for everyone else.

That’s what happens in every commie country, as the country Obama and his comrades are trying to create in the U.S. with “help-the-poor” scams like Obamacare.

Let’s do what we can to have this abomination repealed before it completely destroys our country and our future.

Posted by: AntonioSosa | March 26, 2010 11:04 PM | Report abuse

At the time of this interview, McClellan was on the board of for-profit health-care company Extend Health, Inc. and a health care investment adviser at for-profit venture capital firm General Atlantic LLC. As such, both McClellan and the clients he represents may have significant financial interest in the topics discussed in the interview.

Posted by: rmgregory | March 27, 2010 2:54 PM | Report abuse

AntonioSosa don't get confused like fletch_f_fletch - read the whole story.

These companies are only reacting to the loss of SUBSIDIES paid by the government for prescription benefits given to retirees (put in place by GW Bush). Instead of getting 28% subsidy on the benefits they pay out, and being able to deduct the rest (72%), they will now be able to deduct 100% of the costs and will not get subsidies. The government will now be giving subsidies directly to retirees and the elderly for prescription benefits - which would you rather? The government giving money to corporations or elderly retirees? Corporate welfare or welfare for the elderly/retirees? Even more important - GW's subsidies were UNFUNDED which I'm sure you know now thanks to me and as a result increased deficits each year and as a result increased the debt. This contrasts with Obama's plan, that is 100% funded and actually DECREASES the deficit over time. None of this you knew - which is clear.

More concerning for me about your post, however, is your astounding misuse of the word communism (I'll very generously assume you mean socialism????). Please tell me you do know that America is full of socialist programs, don't you? (supported by Republicans and Democrats alike - programs like Unemployment Ins, SS, Disability, Medicare/aide, Govt worker retirement programs, food stamps, energy program, the list goes on and on and and...). GW Bush greatly expanded unemployment (a socialist program) at least once - were you out there calling him a commie? Of course not!! I beg you - please go and learn about what you are talking about. Pleeeaaassee.

Posted by: tpokalsky | March 27, 2010 3:58 PM | Report abuse

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