Statement of U.S. Senator Ron Wyden
On the Nomination of Michael O. Leavitt
to be Secretary of Health and Human Services

January 19, 2005

Washington, DC – U.S. Senator Ron Wyden today entered the following statement into the record of the Senate Finance Committee hearing on the nomination of Michael O. Leavitt
to be Secretary of Health and Human Services:

“This may well be the most difficult time in history to tackle the job of Secretary of Health and Human Services. The challenges facing our health care system right now are enormous, and problems loom even larger for the future. David Walker, the Comptroller General of the Government Accountability Office has already said that anticipated increases in Medicare and Medicaid obligations are quote, ‘unsustainable for future generations of Americans.’

“Skippering the Department of Health and Human Services through the rocky waters of the next few years will be no small task. It will require a pro-active, even aggressive two-pronged commitment. First, it will take a commitment to tackling the problems that can be tackled today. Then, a commitment to starting now to create a viable health care system for tomorrow – one that works for all Americans.

“The outgoing Secretary of Health and Human Services recognized this, I believe. Secretary Thompson endorsed a proposal I’ll want to discuss with Mr. Leavitt in the days ahead: giving the Secretary of Health and Human Services bargaining power in the Medicare prescription drug program. Senator Snowe and I had a bill in the last Congress to do that and we will be introducing a revised version of that bill this Congress shortly. Our legislation, the Medicare Enhancement for Needed Drugs Act, or MEND, would give the Medicare the same kind of leverage that private sector purchasers have to negotiate for the best prices possible for prescription drugs. It seems to me that the Medicare program should have every weapon in the arsenal to keep costs down. Bargaining power - allowing the Secretary to leverage the power of millions of seniors in the market place – can be one of the most potent of those weapons.

“That’s the kind of common-sense solution that can be implemented today, with bipartisan support and a will to act. I also believe there must be a long-term, bottom-up strategy to truly ‘fix’ the American health care system. Senator Hatch and I wrote the ‘Health Care that Works for All Americans Act’ as a fresh, radical approach to make that happen. In about a month David Walker at the Government Accountability Office will name the members of a Citizens Working Group to spearhead the effort. The Secretary of Health and Human Services will be a part of that group. They’ll be charged with two things: first, to write a report to the American public about how their health care dollars are spent now. Second, to gather input from the American people, in town meetings and online about what our health care system should look like and what tough choices we’re willing to make together to get a system that works for everyone. When the Working Group, including the HHS Secretary, synthesizes the response of the American people and reports to Congress, Congress is required to hold hearings on the recommendations. This is a completely new approach to health care reform that breaks with the failed traditions of the past six decades. Secretary Thompson has been supportive of this effort and I hope that Mr. Leavitt will be a willing and active partner in this process this year.

“The Health Care that Works for All Americans Citizens’ Working Group will be one of many things on the HHS Secretary’s plate. From everything I have read in the press, one task envisioned for Mr. Leavitt’s tasks is to either chop Medicaid spending or turn the program into a block grant. In the same way that Senator Hatch and Senator Snowe and I have worked to find better bipartisan solutions to health policy issues, I hope Mr. Leavitt will find better bipartisan alternatives for Medicaid. It’s just the plain truth that simply capping or cutting spending in Medicaid or any health program tends to exacerbate the problems – it certainly doesn’t solve them.

“In the 1990’s efforts failed to end Medicaid’s current form of financing and replace it with block grants. Most critics of block granting believe that it would destroy Medicaid program. I know that Mr. Leavitt supported the idea and was reportedly influential in working out compromises that were beneficial to governors - such as securing more control over program design.

“My own state wants flexibility in Medicaid. One of our best efforts used flexibility to create the Oregon Health Plan, with its unique system of determining covered services and used savings to expand coverage. The Administration and most other states want flexibility in Medicaid as well. But as health care costs rise, flexibility cannot be allowed to become a euphemism for simply cutting the services to people in need.

“Reviews of the Utah Medicaid waiver under Mr. Leavitt were mixed. The Wall Street Journal described it as a ‘novel effort,’ saying that Mr. Leavitt ‘played Robin Hood, but with a twist, taking from the poor to help others who were poor.’ What seems to be lacking in much of the debate about the Utah waiver is information about its real impact on the health of Medicaid patients in that state. We do not know if the lack of hospital and specialty care and reported difficulties in accessing donated free care were harmful to folks’ health, or whose health may have suffered. This example calls for better evaluations of whether different state Medicaid plans really work for everyone they’re meant to serve.

“How we find funds for Medicaid services in every state, and how flexibility may help those funds stretch further, are legitimate issues for debate. But that debate must rest on a commitment to making sure the programs work for people in need of access and coverage. For my part, I do not believe block grants will help the financial situation states face in providing health care to the poor.

“I believe there must be better ideas for saving money and providing the basics of health care to everyone – without sacrificing people’s health to do it. Let me give you a couple of examples of the kind of innovation HHS should encourage.

“My state has pioneered the use of home- and community-based waivers to help the elderly receive cost-effective, quality care while staying out of expensive nursing homes. Home and community-based care is less expensive and is frequently a better solution for many individuals. So many states now have home- and community- based programs that it may be time to update Medicaid, to help states avoid the cumbersome waiver process in this case.

“Oregon has also pioneered the use of research on drug effectiveness to make sure the medicines that work are the ones being prescribed. I am proud to say that 13 states and two non-profits have collaborated to do this research at Oregon Health & Science University. This evidenced based tool is helping providers make cost-effective decisions, and better health-care decisions as well.

“These are just two examples of the kind of innovation needed to address of cost and quality of care. Innovation can come in small steps, and it certainly can come from the Secretary’s office. Secretary Thompson made prevention a central issue. He recognized that obesity and diabetes were harming Americans in epidemic proportions, saw the cost to the health care system, and started reaching out to help individuals make life-saving and money-saving changes. That good work should continue.

“I also believe Mr. Leavitt should focus on bringing our health care programs into the 21st century with information technology. Again, this is an issue with bipartisan support; Newt Gingrich also has made a point of advancing information technology as one of the ways to make health care more effective. I was disturbed by the lack of funding this year for HHS grants to improve the use of health information technology. I was even more disturbed when I learned that the Administration did not fight for this funding. To me, investing in health care technology is a way to purge our systems of duplications that contribute to medical errors and cost money.

“It’s time to look beyond the budget ax to assure access to health care for all. It’s time to look for bipartisan solutions to the problems we can tackle today, and to work together for tomorrow – building a health care system that works for all Americans. It is my hope that Mr. Leavitt will commit today to being Congress’ partner in both.”

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