Health reform's central flaw: Too much power in one office

By Michael O. Leavitt
Friday, February 18, 2011

Shortly after being appointed to the Cabinet in 2003, I sought the advice of one of my predecessors. He cautioned me to be prudent in exercising the considerable regulatory power Congress had granted these offices, noting: "The place has more power than a good person needs or a bad person ought to have."

This conversation came to mind when I saw an analysis of the expanded powers of the secretary of health and human services under last year's health-reform law. It took a 5-foot-by-10-foot chart, as compiled by the Center for Health Transformation, to list the new powers for this office and all the bureaucrats that report to the secretary. Although my successor argued on this page last week that the Affordable Care Act empowers states, the new powers of the office are symptomatic of a vast expansion of federal control that, in many cases, usurps state authority and limits private-sector autonomy, innovation and profitability.

It puts more power than is prudent in the hands of one person, and it is not an answer to our national health-care crisis.

The rapid and relentless rise in health expenditures as a percentage of gross domestic product is well known. Health-care expenditures have grown from 4 percent of our economy when I was born to more than 16 percent of the economy when my first grandchild was born, and they are still climbing. Not only will these expanding costs jeopardize our economic future, they also will prevent us from properly investing in education, infrastructure, technology, defense and other vital interests.

So how do we reverse this destructive path? It is not by expanding an unelected administrative bureaucracy and granting unprecedented powers to a single person. But that is exactly what the health-reform law does.

Examples of that astounding power include tooth-level surveillance. That's right. Section 4102 of the health-reform law says, "The secretary shall develop oral healthcare components that shall include tooth-level surveillance." It defines tooth-level surveillance as a clinical examination in which an examiner looks at each dental surface, on each tooth in the mouth.

This determination is better done by a dentist.

There's more: The health-reform law dictates that the secretary shall determine how drugs are dispensed at long-term care facilities, shall identify categories and classes of drugs that are of clinical concern and shall be permitted to use comparative-effectiveness research to determine coverage and reimbursements. The 2,700-page law has nearly 2,000 of these "the secretary shall" statements.

If I may, as a former HHS secretary, offer a suggestion to the current secretary, it would be this: Use these expanded discretionary powers to grant states and the private sector more flexibility and more autonomy. Competition, innovation and new models of providing care and expanding coverage are the only ways we will reverse the dangerous course of future health spending. That simply cannot be done from Washington.

There are numerous places where more state flexibility should be granted, such as providing control in how states design health insurance exchanges. States should have substantially more flexibility than is currently being discussed. Insurance exchanges have significant potential to enliven competition, expand access and create accountability, but the law empowers the secretary to write the rules for how states will create and administer their exchanges. This could be done in a top-down, heavy-handed approach, or the secretary could give the utmost flexibility to states to create exchanges that best meet residents' needs and reflect their values. Let states innovate to create value.

Medicaid is another area ripe for state innovation. The federal government should give states their share of the federal health-care subsidies, outline basic standards and then let states design the best care for their residents. The health-care challenges differ by state, from the prevalence of certain diseases to the availability of care. States, not the federal government, are best positioned to understand their markets and residents and to create the proper public-private nexus to deliver the best coverage and care options.

I am among the growing legion of Americans who know that if the federal government's expanded powers are not scaled back, the United States' viability as a global economic leader and our ability to invest in other vital public services will be dramatically compromised.

The United States became the most powerful and prosperous nation in the history of the world not through central planning and bureaucracy but because our Founders chose a different course: freedom, limited government, state and local leadership, and private-sector innovation. That formula will work in health care, and absent the repeal or overturning of last year's law, it starts with the delegation of powers to states.

The writer was secretary of health and human services in the George W. Bush administration.

© 2011 The Washington Post Company