The Medical Banking Project is going to be collaborating with the Mayo Clinic Health Policy Center for a panel discussion about the idea of a Federal Health Board at the 2009 medical Banking Institute.

A news release with details can be viewed at: http://www.mbproject.org/mbtv/archive05/pr_11-2008_7mbi.html .

I have two main concerns with Mr. Daschle's proposal for a Federal Health Board.

First - is this a legislative punt? It seems that there are diverging views in Congress on all of the complicated health care issues of the day. This has prevented legislation from passing on medical malpractice, bio-similars, health information technology, comparative effectiveness, and the list goes on.

This gridlock is not necessarily a bad thing - it is in all of our best interests for a robust debate to be conducted, for legislators and constituents to have time to be educated on these issues, before policy is made. The question is, would this new Board be able to bypass the debate process, effectively taking the power (and thus the responsibility) away from Congress? Who would want that, other than people who are in a rush to enact policy before it has time to be vetted?

This notion that we must rush health care reform is puzzling. Politicians have trumpeted universal health care proposals in the US for about 100 years, and we have never been able to agree on one. Why would anyone think the best solution is to pick a proposal and cram it down the country's throat without careful consideration?

Second - who would be appointed to this board? Let's be realistic, is it going to be the Mark McClellans and Ken Thorpes and David Cutlers and other brilliant health care minds we hope? Or is it more likely to be a bunch of retired Senators, representatives from interests groups with little policy depth, and academics with no real-world health care experience? Are you comfortable with a group of that nature making these decisions with no legislative debate?

Senator Daschle's proposal for a Federal Health Board deserves careful consideration. (This is my opinion, and it does not necessarily reflect the views of MedPAC. The Commission has not considered the board proposal and has no plans to do so.) I am most interested in the Board's implications for how providers are paid. To achieve a high-performing health care system, we must reform provider payment to reward effective primary care, better care coordination, and better management of chronic illness. Although many people support these objectives in the abstract, their enthusiasm wanes when they realize the large redistribution of income among providers inherent in such payment reform, not to mention the likely changes in how care is organized. Twenty-five years ago, when I worked in the Reagan Administration, I would have said private health plans will lead the way to more sensible payment and delivery-system reform. Today, I am far less confident. Indeed, a surprising number of health plan executives and employer representatives have told me that they hope Medicare will lead the way to payment reform. Is Congress prepared to redistribute income among providers and regions? Does it even want to try? Is there a way to structure the Federal Health Board so that the Congress and the President retain their lead role in the allocation of Federal resources -- for example, how much we can afford to spend, who should be covered, what benefits should be included -- while the Board is given responsibility for setting payment methods and levels to achieve those goals? Perhaps the system could include annual Congressional review of a payment package developed by the Board, with an up or down vote on the entire package. Two last points: 1. Some have proposed a "MedPAC with teeth." I disagree. The MedPAC model has proven utility for an advisory body, but an entity with decision making authority must have some formal political accountability -- for example, full-time governors nominated by the President and confirmed by the Senate. As with the Federal Reserve, long terms could be used to provide some degree of political insulation. 2. Concerns that the Board would not be politically accountable are overblown. The Board would be created by legislation, not written into the Constitution. Legislation can always be amended if the Board performs poorly. Like the Federal Reserve, the Federal Health Board would need to strike a careful balance between independence on the details of policy with accountabilty to elected officials for results.

Tom Daschle’s Federal Health Board is one of the worst ideas to hit the health scene in a generation. When you read his book, and strip away all the window dressing of how the Board would examine clinical effectiveness, it quickly becomes clear what he really envisions.

He proposes a remote board of “experts,” modeled on the Federal Reserve Board. This Board, he writes, would be “insulated from politics. Congress and the White House would relinquish some of their health-policy decisions to it.” Shielded from public opinion and from representative government, it would have “teeth”, potentially deciding such things as premiums and appropriate services and “all federal programs would have to abide by [its ‘recommendations’]”. He also imagines that the Board would “link the tax exclusion for health insurance to insurance that complies with the Board’s recommendations.”

In other words, he wants a Board that really doesn’t have to listen to Americans, or even return White House calls. It would get to determine pretty much what health care we get and what we will be denied. Americans are not going to stand for that, and Mr Obama should reject it right now.

I lived for 30 years in Britain, where regulating access to treatments based on the decisions of faceless health bureaucrats is the norm. The British are known for their wry sense of humor – the acronym for the British board is the appropriately Orwellian “NICE”.

The Daschle Board might be better described as the Supreme Court of Health. And given the powers he imagines for it, selections to it will be about as free from politics as nominations for a Court Justice.

Sen. Daschle’s Federal Health Board would be modeled after Britain’s National Institute for Clinical Evidence (NICE). It doesn’t work there. It won’t work any better here.

Sen. Daschle is essentially saying, “I don’t know how to solve these problems; so let the experts decide.” Unfortunately, the “experts” don’t have any idea how to solve the problems either. The reason: on the patient side, all the difficult decisions involve value tradeoffs (which differ a lot from person to person) and on the provider side, efficiency is an economic concept, not an engineering one.

Take cancer care. For most cancers, conventional therapies (chemical and radiation) are not doing much more than buying a few more years of life. On the other hand, about 95% of children with cancer are in clinical trials using therapies that are by definition unproven. So let’s say the Health Board concludes that a few more years of life are not worth the cost, and that we shouldn’t spend a lot of money on unproven therapies for childhood cancer. Basically, the Health Board could close down the U.S. cancer care industry.

That’s not as farfetched as you might think. Many British cancer patients die prematurely because they do not have access to drugs routinely available in the U.S. and on the European continent. See Scott Gottlieb’s WSJ editorial on this very subject here http://www.john-goodman-blog.com/can-government-make-cost-effectiveness-decisions-in-health-care/

In a National Journal panel held during the Democratic National Convention this summer, Tom Daschle, who is likely to head the Department of Health and Human Services next year, talked about his ideas for health care reform. Here is a video clip from that panel.

Strong national leadership will be essential to establishing a high-performing U.S. health care system. The Federal Health Board that Senator Tom Daschle has proposed to fill this void has considerable merit and deserves serious consideration.

The proposal calls for a quasi-governmental organization with an independent board of governors appointed by the President and confirmed by the Senate. The board's expert members would therefore be insulated from political pressure, but accountable to elected officials and the American public—and capable of making the complex decisions inherent in health system reform.

While many details will need to be sorted out, under Senator Daschle's plan, such a board would set national health and quality goals. It would also be charged with creating rules for insurance plans offered though a national insurance exchange like a Federal Employees Health Benefits Program (FEHBP) that includes a public insurance option modeled on Medicare. It would recommend coverage of effective drugs and procedures to promote high-value medical care; align incentives to reward high-quality care and the best health outcomes; set quality standards and targets for improvement; make the health care system more transparent; encourage the adoption of health information technology; and direct resources to high priority, high pay-off investments. Its recommendations would apply to all federal programs—and could guide tax exclusion for private health insurance.

The Federal Health Board would not only provide much needed leadership from the federal government but also a mechanism for coordinating various reforms. Additionally, it would enable Medicare and other public health programs to nimbly test new payment policies that reward value and higher quality, as well as other innovations.

The challenge Senator Daschle will face if confirmed as Secretary of the Department of Health and Human Services (HHS) is to demonstrate how far he can take these ideas within the current departmental structure, and whether he can persuade the Congress to give the Executive Branch the flexibility needed to achieve its goals. But whether he acts through an independent board or a re-energized HHS, Senator Daschle is focused on what it takes to make affordable, quality health care accessible to all.