Dr. Gail Wilensky, economist and former administrator of the Health Care Financing Administration: Exploring reform in a changing landscape

Mark Masselli: This is Conversations on Healthcare. I am Mark Masselli.

Margaret Flinter: And I am Margaret Flinter.

Mark Masselli: Margaret, it seems like the democrats have gotten a
second wind on Healthcare Reform after losing the senate seat in
Massachusetts last month. President Obama pledged to fight on his State
of the Union address last week. He even met with House Republicans in
attempt to break through the partition choke that has stalled his
legislative agenda.

Margaret Flinter: And that’s going to be really important, having the
President’s active engagement now and going forward is crucial to this
endgame passing Health Reform and there is still the issue of trust
between the House and the Senate. House democrats have been hesitant
to proceed without an explicit guarantee from the Senate that is going to
make the additional changes to the legislative language. In fact, last
week our guest House Majority Whip James Clyburn said that passing the
bill through the budget reconciliation procedure with just 51 votes really
was the best option. Congressman Clyburn later pointed to the tensions
between the House and Senate when he spoke out saying the Senate
thinks of itself as a House of Lords that happens to be out of touch with
the voters.

Mark Masselli: He did say that but since then there has been progress on
mending the di ! erences. Senator Arlen Specter made the case for
constructive way forward when he spoke to Pennsylvania Progressive
form over the weekend. He said I believe we ought to pass
comprehensive Healthcare Reform and we ought to do it now and there is
th
a way to do it. Specter said, I provided the 60 vote, we passed it in the
Senate, let the House accept it, simultaneously with the bill to make
certain changes through reconciliation and 50 votes in the Senate.

Margaret Flinter: Yeah those certain changes really created quite a bit of
controversy and Senator Specter went on to say that there will be no
disagreement about taking away the giveaway to Nebraska and Louisiana
and other inappropriate measures, but let’s move ahead and let’s move
ahead now.

Mark Masselli: And move ahead, we are in the coming week’s House
Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said they
hope to rally house democrats behind the Healthcare Bill passed by the

Senate. At the same time, they will try to persuade senate democrats to
approve a series of change to the legislation using the budget
reconciliation procedures.

Margaret Flinter: And there have also been some e ! orts by democrats
and republicans to come to some actual agreements even if it is just at
the initial discussion phase. Sunday morning on the talk-shows the
democrats portrayed the healthcare e ! ort as a valiant crusade that had
su ! ered a setback but was going to return to life. And the republicans
insisted that they want change too. House Majority Leader John Boehner
said “Nobody in Washington thinks our healthcare system is perfect and
certainly not Republicans.” The New York Times on Sunday went so far as
to say on a number of points Republicans and Democrats are actually
closer to agreement than many people realized. The article pointed to
areas of common agreement like ending annual and lifetime caps on
benefits and raising the cut-o ! age for dependent coverage.

Mark Masselli: Picking up on this theme that Republicans and Democrats
might not be that far apart on some critical issues. We wanted to give
our listeners some perspective and to hear from someone who has been a
leading thinker for many key republicans. Our guest today is Gail
Wilensky. Dr. Wilensky is a well-known healthcare economist who among
many other things has worked as a White House Policy Adviser in the first
Bush Administration and Health Adviser to John McCain’s bid for
President.

Margaret Flinter: And no matter what the story, you can hear all of our
shows on our website www.chcradio.com . You can now subscribe to
iTunes to get our show regularly downloaded or if you want to hang on to
our every word and read a transcript of one of our shows, come visit us at
www.chcradio.com .

Mark Masselli: And as always, if you have feedback, e-mail us at
[email protected] we would love to hear from you. Before we
speak with Dr. Wilensky, let’s check in with our producer Loren Bonner
with headline news.

Loren Bonner: I am Loren Bonner with this week’s headline news.
Democrats are still forging ahead with Healthcare Reform after recovering
from the initial anxiety of losing the Massachusetts Senate seat.
Although President Obama addressed jobs and the economy primarily in
his State of the Union address last week, he urged Congress not to give
up on passing a Healthcare Reform Bill.

President Obama: Here’s what I Congress though, don’t walk away from
reform, not now, not when we are so close. Let us find a way to come
together and finish the job for the American people.

Loren Bonner: In a gesture of bipartisanship, President Obama spoke to
House Republicans in a Town Hall Meeting in Baltimore last Friday. He
defended his Healthcare Reform e ! orts and pointed out that republicans
had painted him as a radical and has healthcare plan as Bolshevik plot on
America. Perhaps the biggest boost came on Monday when President
Obama outlined his 2011 budget while many other programs are
scheduled for cuts or having their funding frozen, healthcare did well by
comparison. Most of the $900 billion budget consists of two mandatory
programs, Medicare for the elderly and disabled and Medicaid for the
poor. The budget requests for 2011 would give states an additional $25
billion in Medicaid funding to help cover rising program costs. The
National Institutes of Health would receive a billion dollar increase next
year and community health centers popular with both Republicans and
Democrats would get a $290 million hike up. New funding in the 2011
Budget will also go to combat preventable and tropical diseases,
malnutrition and other conditions a ! ecting the world’s poor as part of a
strategy to broaden global healthcare. The new policy will retain HIV
AIDS as the administration’s top funding priority, but will use new
funding to reduce deaths from complications related to pregnancy or
child birth, poor nutrition and common treatable illnesses that kill
millions every year. This coincides with the news last Friday that The Bill
& Melinda Gates Foundation will donate money to research new vaccines
and bring them to the world’s poorest countries. At the Davos Forum in
Switzerland last week, the Microsoft founder and his philanthropist wife
said they will donate billions of dollars over the next decade.

Bill Gates: We are announcing that we will spend over $10 billion on
vaccines that will help invent new vaccines that will help get some new
vaccines out that will then help increase the coverage.

Loren Bonner: Gates said the commitment more than doubles the $4.5
billion the foundation has given to vaccine research over the years and
will be used to better focus on areas like immunization and child
mortality. The foundation estimates that 7.6 million children under the
age of 5 could be safe through the year 2019 as a result of the donation.

Today we are happy to have Dr. Gail Wilensky as a guest on our show.
Dr. Wilensky is a healthcare economist who served as a White House

Health Policy Advisor under President George H. W. Bush. From 1990 to
1992, she was the administrator of the Health Care Financing
Administration, now the Center for Medicare and Medicaid Services.
From 1997 to 2001 she chaired the Medicare Payment Advisory
Commission which advises Congress on payment and other issues
relating to Medicare. She later served as an advisor on health policy to
Senator John McCain during his run for president. Dr. Wilensky still
advises Republican members of Congress and she has given them a
strong voice in their healthcare strategy especially now that they have the
ability to change the game. She believes Healthcare Reform is necessary
with spending reaching unsustainable levels at 17% of our GDP and
growing to be exact. She says reform needs to be achieved by controlling
costs while at the same time improving care. Dr. Wilensky argues that
the current healthcare bills do not address slowing healthcare spending
and improving the value and quality for what we spend. Perhaps the
most worth noting is that she presents solutions, a step in the right
direction for Republicans who could not continue to simply oppose
President Obama’s policies. Her solutions are straightforward. In order
for better healthcare outcomes to be delivered, she believes that we need
to move away from the current reimbursement system. Dr. Wilensky
advocates for the expansion of the government’s investment in
comparative e ! ectiveness research, research that informs doctors on
what medical interventions and treatments work best for particular
conditions and situations. She says this will not only help physicians but
will also help us to spend smarter, for example, lowering copayments and
increasing reimbursements for procedures that have good clinical
outcomes.

Mark Masselli: This is Conversations on Healthcare. We are speaking
with Dr. Gail Wilensky, health care economist and senior fellow at project
HOPE. She was the administrator of Health Care Financing
Administration, now the Center for Medicare and Medicaid Services from
1990 to 1992 and chair woman of the Medicare Payment Advisory
Commission from 1997 to 2001. Dr. Wilensky, thank you for joining us
today.

Gail Wilensky: My pleasure to be with you.

Mark Masselli: You have been at the core of the debates on Healthcare
Reform, cost control and entitlement programs for years, you know
firsthand the challenges of Medicare and Medicaid for patients, providers,
and payers and you have seen the first Bush Administration, the Clinton
and now Obama Administration put forth significant reform proposals to

date without success. Do you think there is a chance of success now and
what form will it take?

Gail Wilensky: The challenges to reform our healthcare system have
become extremely obvious since the Massachusetts election, although
the challenges where there even before the election. We think we are
making good progress in terms of one of the three challenges in
Healthcare Reform extending coverage, although that has now had a
setback with the change in the composition in the Senate. None of the
bills took on the other two issues in reforming our healthcare system that
is slowing spending so that we can get to a sustainable spending growth
rate. And also improving the value for what we spend, improving clinical
outcomes and patient safety. It's not that they didn’t have any
components in there, they did particularly a lot of promising pilots, but it
was primarily focusing on expanding coverage and in this most shareable
form, the reform of the delivery system in a very light touch.

Margaret Flinter: Dr. Wilensky, I think one thing we would all agree, we
are not going to see in whatever happens is the public option even in
scale-back version of the current proposals. I think I have read that you
have commented that you don’t support the public option in part because
you think it would spell the death of the private insurance industry and
yet there are people who ask the question, is there a place for a private
health insurance industry, a for-profit insurance industry, can you make
the argument that it should survive on the basis of cost to competition or
quality or is it really like the banks, just too big in industry to let it fail?

Gail Wilensky: You have wrapped up the term private sector and for-
profit as though they were synonymous, they are not. The fact is in our
non-governmental programs, we have not-for-profit The Blues,
_______12:07, Mayo Clinic, _______ Integrated Delivery System, so more of
regular insurance systems like the various Blue’s plans and of course, we
also have for-profit. The reason I am against the public option is that I
believe it’s a traction just to be able to set reimbursement rates that are
below what would be sustainable and a non-governmental sector, where
you can just impose rates. And to impose Medicare reimbursement
would in fact destabilize insurance o ! ered elsewhere. We frequently talk
about the federal employees health plan as an attractive model where the
federal government pays a fixed share of insurance plans and people
choose what they want and they range from low cost plans, $5000 to
$6000 a year for a family plan to $15,000 or $14000 a year and more for
some of the high benefits of Blue Cross Blue Shield high option plans.
That to me indicates that we can have substantial choices, competition,

available in the private sector without stabilizing the private sector. For
some people of course moving entirely to a public plan option is fine. I
look at Medicare and while Medicare has done many things well in terms
of expanding access to seniors, it had even less success than the private
sector in terms of integrating delivery or coming up with innovative ways
to reimburse and that makes me concerned. I think we will lose a lot of
flexibility if we just move to a public plan.

Mark Masselli: Dr. Wilensky, let’s talk about something that seems to
confuse even policy wonks, never mind the average American
comparative e ! ectiveness research simply stated research that informs
doctors what medical interventions and treatment work best for particular
conditions, what works better in some situations and which ones have
proven to be ine ! ective or even harmful, do you think the country is
ready to embrace this as a part of health policy in decision making?

Gail Wilensky: I sure hope so. I am a big believer that among the
changes that need to occur, not the only change for sure, if they have
more information available about what works best or well for whom
under what circumstances, in terms of the di ! erent ways of treating a
medical condition, but there is not the kind of research people assume is
out there guiding decisions by physicians and helping to inform patients.
It’s not just to help physicians although that’s obviously a major reason
to do this, it’s to help consumers and patients understand the options,
it’s to learn how to spend smarter to be able to vary copayments and
reimbursement so that the procedures that have a high likelihood having
a good clinical outcome for that subgroup of the population has low
copayment and gets reimbursed well. And those things that are highly
uncertain, they ought not to have the same kind of favorable treatment.
It is to get better information and better incentives in place as a major
strategy to learn how to treat better and to spend smarter and we
desperately need how to do both.

Mark Masselli: We are speaking with Dr. Gail Wilensky, Health Economist
and Senior Fellow at Project HOPE. Dr. Wilensky, is someone who headed
the federal agency charge with overseeing Medicare, you understand this
program as well as anyone in United States you know how much of a
burden unmanaged chronic disease is for this program, one of the
biggest problems is the unmanaged or uninsured population coming into
Medicare. This year there was a brief flurry of excitement that we might
lower the Medicare enrollment age to 55, would this have been a good
place to start with Health Reform?

Gail Wilensky: We need to understand that Medicare has a major financial
problem in that it has made promises that are not funded and not
fundable under their current system as financing, a huge un-funded
liability, I think the number is something like 40 trillion or some other
numbers are so large, it's hard to get your head wrapped around that
number. We can stand how we bring people into insurance coverage. I
would be reluctant to open up Medicare as opposed to proceeding the
direction we were proceeding which is to subsidized insurance and let
people have access to subsidized insurance or employer’s sponsored
insurance and to expand coverage for people who are at the poverty line
and just a little above the poverty line, who do not now get picked up in
our public programs. There is no reason you can't start with particular
age groups just like in start with particular income groups. Given the
financial woes that the Medicare program faces, the idea of opening up
another ten-year block of the population just doesn’t make sense to me
unless we get our financial house in order first.

Margaret Flinter: And speaking of our financial house, Dr. Wilensky you
have mentioned that the current payment structure and particularly how
physicians are paid is really the bigger problem and not being adequately
addressed, should this have been a priority to control cost and what's the
alternative to the current payment structure?

Gail Wilensky: It's not only a priority to control cost, it's a priority to
reform the delivery system. It’s impossible to imagine having a better
more functional delivery system when we continue paying physicians as
we do now, which is under Medicare billing for more than 8000 individual
codes, no rewards to the physicians that provide good quality outcomes
practice medicine in a conservative way, no encouragement to work
together as teams to integrate the delivery of care. It was very upsetting
to me that it was just not a part of any of the healthcare reform plans, not
paying for the problem we have gotten ourselves into which is up to $250
billion over the next 10 years to fix the hole we have dug and even more
importantly not changing how we pay, if we are going to encourage
better integrated care, better clinical outcomes instead of just doing
more and more complex which is what we do now, we must move away
from the current reimbursement system, neither the House nor the
Senate bill did, although they have some interesting pilots that may or
may not have ever gotten into law.

Mark Masselli: You have noted that it would be foolish for the
administration to ignore polls that show voters, are now opposed to
Healthcare Reform. At the same time polls show doctors support

Healthcare Reform, at what point do our leaders need to move away from
the polls and make decisions based on what's morally right for the
country?

Gail Wilensky: Well the doctors as I saw some of the polling supported
those aspects that got them around the 20% reductions in fees that they
were facing, although neither the House nor the Senate bills had any
funding behind them got more complicated if you look at the other
aspects of healthcare. It's fine to say do the right thing and making sure
everybody in this country has coverage, is the right thing and we ought to
do it not only for economic reasons, but because it's the right thing. It is
a major problem for the individuals and the communities where they live
when numbers of people don’t have insurance coverage. But having said
that, it is only at your political peril that you ignore the will of the people
and they indicate in strong numbers that they don’t like what's being
considered now, they want an attention place in a di ! erent area, in this
case on the economy and on jobs. And at a plurality or majority level,
people are not supportive of the plans that are being considered.
President seems to take the position that it’s just a communication
problem. It's not at all clear to me, I think it is also reflective of the
increase in government that people have seen in the last year to year and
a half, as we have struggled to get her arms around the _______ 12:09
and keep us from getting into where is economic trouble. Government
involved in banks, government involved in GM and Chrysler, government
involved in an un-funded stimulus package, any one of which may have
been perfectly acceptable to the American population, but on a
accumulative basis, I think that what you were seeing in Massachusetts
and in the Town Hall meetings in summer should not be ignored, there
are distressed angry Americans out there and we shouldn’t ignore that.

Mark Masselli: Well we have been speaking with Dr. Gail Wilensky. Dr.
Wilensky, thank you for joining us today.

Gail Wilensky: My pleasure, thank you for having me.

Mark Masselli: Each week Conversations highlights a bright idea about
how to make wellness a part of our communities and everyday lives. This
week Bright Ideas features a system that’s helping save lives across the
country, Organ and Tissue Donor Registration through the Department of
Motor Vehicles. At most DMVs in the United States people applying for
renewing their driver’s license have the option to register themselves as
organ and tissue donors in the event of their death. Over 87 million
Americans are currently registered and well the donor label placed in the

license may be small, it certainly carries a lot of weight. A single organ
donor can save up to 8 lives while a tissue donor can aid nearly 50
others. Donor registration is increasing all across the United States, but
the California Department of Motor Vehicle is leading the pack. Last
week, it reached a record enrollment level of 6 million people, the highest
in the country. The California DMV success was made possible through
its partnership with Donate Life California, a non-profit state authorized
donor registry. Since the two began working together in 2005, organ
donation has saved over 900 lives and tissue donation has helped nearly
30,000 more California patients. Over 16% of California residents and
26% of license drivers have already registered and that percentage is
steadily rising. Organ donation plays an important role in community
wellness as a whole. More than 100,000 Americans are currently waiting
for organ transplants, a painful process that is arduous for both the
patient and their family and friends. Organ donation is only possible in
about 1% of deaths which means many people who need transplants
never received them. According to Dorrie Dils the Chief Clinical Executive
of the Ohio based organization Lifeline in 2008 300 residents donated
their organs after dying, but Ohio has 3000 who need transplants. Every
other day a patient dies waiting for a transplant. Dils believes many
registered donors see donations as a way to leave a legacy of generosity
and hope. She said most of us won't be able to do something in our
lifetime to save someone. Being able to save lives after death is really
honorable. Listeners who are interested in registering themselves as
donors or learning more about the process can visit organdonor.gov for
further information lead by the California Department of Motor Vehicles.
DMVs across the country are making it easier for Americans to make this
decision to donate life. Now that’s a bright idea.

Margaret Flinter: This is Conversations on Healthcare. I am Margaret
Flinter.

Mark Masselli: And I am Mark Masselli. Peace and Health.

Conversations on Healthcare broadcast from the campus of Wesleyan
University at WESU, streaming live at wesufm.org and brought to by the
Community Health Centre.