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Health-Care Overhaul 2010

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Bush Official Sees Peril in Health Plan

Michael Leavitt, former secretary of health and human services, strongly criticized the president's health-care reform proposals.
Michael Leavitt, former secretary of health and human services, strongly criticized the president's health-care reform proposals. (By Susan Walsh -- Associated Press)
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By David S. Hilzenrath
Washington Post Staff Writer
Friday, July 24, 2009

The man who helped oversee Medicare in the last administration describes the nation's biggest government-run health plan as a fiscal disaster, and he says reform proposals that would build on it are a prescription for failure.

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The federal program for the elderly and disabled provides uncoordinated care, it is indifferent to quality, and "every incentive in the system is to provide more care, not better care," Michael O. Leavitt, who served as secretary of health and human services under President George W. Bush, said in an interview yesterday.

Leavitt argued vehemently against a centerpiece of reform proposals by President Obama and key Democrats in Congress, saying that offering Americans the choice of a public health plan would lead to "essentially a bankrupt system."

"Continuing to build the existing system is the equivalent of trying to solve obesity by prescribing a perpetual regimen of double calories," Leavitt said.

Obama has argued that a public option would provide needed competition for private insurers, making them more accountable to consumers. Polls show public support for the concept.

Leavitt spent four years at the helm of HHS. Before that, he served as administrator of the Environmental Protection Agency and governor of Utah. He was also an insurance executive earlier in his career. Now, he's building businesses to advise and invest in health-care companies and he's working with a Blue Cross insurer on payment issues, he said.

He also leads a weekly conference call with Republican lawmakers and think tank representatives, he said. He wouldn't identify the participants. He spoke by phone while traveling in California.

Part of Medicare's trouble rests with Congress, Leavitt said. The legislative branch can't be counted on to rein in the program or to stay the course on proposed restraints on Medicare reimbursements to health-care providers, he said. Those cuts are supposed to help pay for health-care reform, making it possible to extend coverage to the uninsured without increasing the federal budget deficit.

In recent years, planned reductions in Medicare payments to doctors were repeatedly deferred, because Congress prevented them from taking effect, Leavitt said. Similarly, Congress authorized competitive bidding for medical equipment -- and then bowed to pressure from industry, putting a stop to the initiative just as it was being implemented, he said.

"[I]n a system that's run by the government, lobbyists and various commercial interests, including doctors, hospitals, nurses, medical equipment dealers and every other part of the system, use the political process to restrict the capacity for change," Leavitt said.

Under a public plan, private insurers would wither, but they wouldn't go away, he said. They would be transformed into claims processors for the government.

"The federal government does not have the capacity. They do not have buildings full of claims processors," he said, noting that Medicare and Medicaid, the public program for the poor, are largely administered by private insurers under contract to the government.

"So this notion that somehow we're going to have the government managing a public plan is a misnomer," he said.

Could Medicare's traditional fee-for-service system become more efficient, as policymakers propose? "I suppose it's possible, but if they follow the pattern of all other government-run plans, they won't."


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