Shalala Says Medicare Reform ‘Not So Easy’

In an interview in today's New York Times, outgoing HHS Secretary Donna Shalala gave a "rueful laugh" while proposing "a little advice" to likely successor Wisconsin Gov. Tommy Thompson (R) -- Medicare reform "is not so easy." Although she admitted that turning Medicare into a largely private health care market "sounds great," she warned that the "devil is in the details." She said, "Do I think there are some different approaches that are worth taking a good hard look at? Yes. But I also want to know what the impact is, in very different areas. And I'm not as sure as everybody else is about managed care any longer. And I started out as their biggest fan." While Shalala predicted that President-elect Bush's administration would "overhaul" Medicare, she also "suggested" that Bush's campaign proposal -- providing seniors with a "fixed amount" to purchase coverage from traditional Medicare or a competing HMO -- has "real problems." She said, "You can't drive up the cost of fee-for-service as a way of shoving people into managed care and say that's fair competition. Because there are many places in the country and many individuals who need that fee-for-service option," adding, "Managed care has not yet demonstrated that it can handle very complex -- handicapped and disabled -- people, for example, and it's not every place." Still, Shalala said that she supports "organized care," but "it may be a different model of organized care than we have now" with additional "control and leadership" from doctors. She also noted that "turbulence" among Medicare HMOs has "turned off" seniors.

Asked about her "greatest regret" as HHS secretary, Shalala replied, "That we didn't put health care for low-income working families, and child care for them, in place before we did welfare reform. If we had done those things universally for all low-income workers, child care and health care, it would have been so much easier to do welfare reform. It would have reduced the unevenness in welfare reform." On the Clinton administration's "ambitious" but defeated universal health care plan, Shalala concluded that such a proposal would not become "politically viable" until "there's a coalition of American medicine and American business demanding it. Still, Shalala said, despite the "failed effort" to pass national health reform, she would leave office with a "clear sense of accomplishment," citing an "array" of initiatives such as immunization efforts and the CHIP program. "I like to say American children are healthier and wealthier as a result of the president's actions," she said. During her tenure, she noted that the Clinton administration "invested in the scientific infrastructure in this country in ways that will pay off for years to come," adding that both the NIH and CDC are "in the best shape they've been in years." Donning a "smile," she said, "I'm proudest of the things that my successors will take credit for," adding, "I've had a great time."