Stuart Altman

Professor of National Health Policy at The Heller School for Social Policy and Management at Brandeis University (since 1977)

(courtesy: Stuart Altman/Brandeis)

Why He Matters

An economist who researches federal health policy, septuagenarian Altman is a veteran of many of the major political battles over Medicare and health care of the past decades. He advised presidents Richard Nixon and Bill Clinton and helped create the health reform plan for then-candidate Barack Obama's campaign.

The Obama campaign sought out Altman because of the health-care plan he helped created for Sen. John F. Kerry's (D-Mass.) 2004 presidential campaign. The plan would have eased excessive health-care costs for businesses and used the extra money to reduce employee insurance premiums.

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Background

At a Glance

Career History: Obama Transition adviser (2008), Bipartisan Commission on the Future of Medicare (1997 to 1999); Chairman, Congress Prospective Payment Assessment Commission (ProPac) (1984 to 1996); Deputy director for health, President Richard Nixon's Cost-of-Living Council (1973 to 1974)
Birthday : N/A
Alma Mater: City College of New York, B.B.A.; University of California, Los Angeles, M.A.(Economics); University of California, Los Angeles, Ph.D. (Economics)

Office: Heller School, Brandeis University415 South StreetWaltham, MA 02454
Email
Web site

Path to Power

Altman got his B.B.A at City College New York, then his master's degree and doctoral degree in economics at the University of California, Los Angeles. He wrote his dissertation on unemployed married women in the labor force. He went on to teach at Brown University. There, his previous work on women in the workforce led him to a study of nurses, and ever since Altman has been studying the economics of health care.

From 1971 to 1976, Altman was the deputy assistant secretary for health policy in the Department of Health, Education and Welfare. He also served as the deputy director for health on President Richard Nixon's Cost-of-Living Council in 1973 and 1974. There, he worked on a program to try to reduce U.S. health-care costs. He also worked on the Health Planning Resources Development Act of 1974, which aimed to cut health-care costs by requiring health-care facilities to get approvals from state health planning agencies before beginning expensive projects such as building expansions or ordering new equipment. Furthermore, he helped draft the HMO Act of 1973, which offered federal funds to fuel the rise of HMOs as alternatives to private insurance. He helped develop a plan for Nixon that would have required employers to offer employee health insurance and would have created a federal health plan to offer insurance to anyone.

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In 1977, Altman joined the faculty of Brandeis University as the dean of The Heller School for Social Policy and Management. From 1990 through 1991, he was the interim president of Brandeis University.

From 1984 to 1996, Altman was the first chairman of the Congress Prospective Payment Assessment Commission (ProPac), an organization created by Congress to independently oversee Medicare's payment system, which reimburses doctors and hospitals based on pre-approved, fixed rates.

Altman worked on President-elect Bill Clinton's 1992 health- care transition team. But he declined to participate in the 1993 health-care reform effort led by Hillary Rodham Clinton. "It was too big, a total restructuring of our whole health system," he told the National Journal.

In 1997, Clinton nonetheless appointed him to the Bipartisan Commission on the Future of Medicare. The commission, which was charged with figuring out how to chart a sustainable financial future for the gigantic Medicare program, expired without being able to arrive at a unanimous conclusion in 1999. Altman was one of the dissenting voices, refusing to vote for the majority's proposal because it did not include subsidies for prescription drugs. Medicine and Health newsletter named him a 1999 Person of the Year for his "courageous stand."

From 2000 to 2004, Altman co-chaired the Massachusetts Health Care Task Force. In 2004, Altman helped design the health reform plan for Massachusetts Sen. John F. Kerry's presidential campaign. On the Kerry team, he worked with Heather Higginbottom, who later became an Obama campaign adviser.

In 2008, Higginbottom recruited Altman for the Obama campaign so he could resurrect part of the plan he developed for Kerry, a proposal to have the federal government reimburse employers for some catastrophic health-care costs and then require those employers' to use the savings to reduce workers' insurance premiums.

Altman founded and chairs a nonpartisan think tank called the Council on Health Care Economics and Policy at the Schneider Institute for Health Policy at Brandeis.

Altman is also involved in for-profit enterprises related to medicine. He is a director of Visicu Corp., which develops systems for hospital intensive care units, and a director of Aveta Corp., a managed-care company offering health-insurance plans in Puerto Rico and California. Since 2001, he has been a director of Lincare Holdings, which provides therapy services and equipment for home health care.

The Issues

Medicare

Altman's research and experience makes him something of an expert on Medicare. Bill Clinton appointed Altman to the Bipartisan Commission on the Future of Medicare in 1997. But the commission expired in a deadlock in 1999 when it proved more partisan than its name implied. "The problem was the Republicans' unwillingness to devote more revenue to shoring up Medicare and their resistance to a broad new benefit to pay for prescription drugs," The New York Times reported two years later when the Medicare issues reared its head again.

Altman had voted against the Republican majority's proposal because it did not include a prescription drug subsidy. "I couldn't support a Medicare program for the 21st century that didn't have some coverage for prescription drugs," Dr. Altman explained to the University of Pennsylvania's Leonard David Institute of Health Economics.

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The Obama Health Plan

In 2004, Altman worked on Sen. Kerry's presidential campaign health plan. In one piece of the plan, the government would reimburse employers for some catastrophic health-care costs, and the savings would be passed on to their employees as a reduction in health insurance premiums.

Obama policy strategist Heather Higginbottom worked with Altman on the Kerry campaign, and the Obama campaign sought out Altman and his idea. The National Journal said of Altman's contribution, "It has become a major selling point of Obama's health care plan, and it marks one of the few distinctions between his proposal and Hillary Clinton's."

Obama made health-care refor a top priority during his forst year inoffic. But after more than a year of legislative wrangling, the plan that passed the House and Senate was far from Obama's campaign health-reform plan.

The $940 billion bill required most Americans to carry health insurance and required that insurance companies cover them, regardless of pre-existing conditions. It established a national insurance exchange allowing Americans to compare and purchase insurance plans. To pay for reforms, the bill increased taxes on well-off Medicare recipients and taxed premium insurance plans. By the end of the bill's 10-year roll-out, 32 million uninsured Americans would have health coverage and the deficit will be $138 billion lower, the Congressional Budget Office estimated.

Universal Health Care and Reducing Health-Care Costs

After years of failed attempts to enact universal health care, Altman devised "Altman's law," which he summarized before a 2007 Congressional panel: "Almost every American and advocacy group supports some form of Universal Health Insurance - But if it's not their preferred version; their second best alternative is to maintain the status quo."

After Obama's election, Altman looked back to Clinton administration's mistakes in 1993 and 1994, saying, "The Clinton plan failed because it was a complex program with tight governmental controls that took over one year to come to Congress," he said. "It alienated powerful insurers and enjoyed only lukewarm support of the physician and hospital communities." Many of the same criticisms could be applied to the Obama plan, which lurched through the legislative process in about thirteen months while vilifying insurers and failing to win support from most doctors.

But Altman believed the time was right for Obama's health-care reform plans to succeed. "There's no question that we're in the cycle very similar to what happened in the later part of the 1980s," he told NPR's All Things Considered. "You can just see it heating up."

Mandates

Altman spoke out in favor of a 2006 law requiring Massachusetts citizens to obtain health insurance or face fines, saying the plan's success comes because it is built upon existing health insurance structures "rather than disrupting the private insurance system."

During the 2008 Democratic presidential primaries, Altman said he preferred Barack Obama's health plan to the one advanced by rival Sen. Hillary Rodham Clinton's, the National Journal reported. "One difference he supports is Obama's wait-and-see approach to mandating that everyone have health insurance," the Journal said.

In the end, though, Obama included a mandate that all Americans carry insurance, mostly because it helped bring insurers on board with an agreement that they insure everyone, regardless of pre-existing conditions.

A New Payment Model?

Altman told an industry blog he'd like to see a major overhaul of the current health-care model. "We need to change the structure of our health-care delivery system to emphasize more integrated delivery systems," he said.

Altman envisioned a health-care system that pays doctors based on results instead of procedures, "But to make this happen we need to eliminate our traditional fee-for-service model of paying for care and put in place more bundled payments that pay for achievable outcomes, not just for providing a service," he said.

The Network

Altman has advised major political figures, including Richard Nixon, Bill Clinton, John F. Kerry and now President Barack Obama.

Altman's Council on Health Care Economics and Policy counts two Obama advisers among its members, Dr. David Blumenthal, who is now Obama's National Coordinator for Health Information Technology, and Harvard economist David Cutler. Gail Wilensky, who advised Obama's 2008 opponent Sen. John McCain(R-Ariz.), is also a member.

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Campaign Contributions

Altman has supported many Democratic candidates. He gave $1,500 to former Vice President Al Gore's 2000 presidential campaign, according to the Center for Responsive Politics. He gave $2,000 to Kerry's 2004 campaign, and $1,500 to Barack Obama's 2008 campaign. In 2004, he also gave $5,000 to the DNC Service Corp, better known as the Democratic National Committee.

In 2007, he gave $1,250 to Colorado Democrat Sen. Ken Salazar, who is Obama's Interior secretary.

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Additional Resources