Kathleen Sebelius, Healthcare Reform and the Budget

Today, according to the Associated Press and Washington Post, President Obama will announce Kathleen Sebelius as his nominee for Secretary of Health and Human Services. She has a once in a lifetime opportunity to execute healthcare reform - a popular President, a sense of urgency, and enough resources to get the job done. What are these resources?

You'll find the Office of Management and Budget FY2010 Budget Overview Document online The full FY2010 Budget is expected to be released this Spring.

Highlights from the Healthcare portion of the overview document include:

* A reserve fund of more than $630 billion over 10 years to finance fundamental reform of our health care system, funded half by new revenue and half by savings proposals that promote efficiency and accountability, align incentives for quality, and encourage shared responsibility. Examples of new revenue include a proposal that individuals earning more than $85,000 pay higher premiums for their Medicare drug coverage starting in 2011. Examples of savings include a revision of payments to insurers that provide Medicare Advantage plans. Those payments have been on average 14% higher than what the government typically spends per beneficiary. Under the budget proposal, insurers would be required to competitively bid to offer plans beginning in 2012, which the administration believes would lower per-patient outlays.

* The Budget expands research comparing the effectiveness of medical treatments. Building on the unprecedented $1.1 billion included in the Recovery Act for comparative effectiveness research, the Administration will continue efforts to produce state-of-the-science information on what medical treatments work best for a given condition.

* The Budget includes language to "Strengthen Program Integrity," noting that reducing fraud, waste, and abuse is an important part of restraining spending growth and providing health care quality service delivery to beneficiaries. The Budget proposes to dedicate additional resources that will initially be targeted to improving oversight and program integrity activities for the Medicare Prescription Drug Program (Part D), Medicare Advantage, and the Medicaid Program.

* The Budget includes over $6 billion within the National Institutes of Health (NIH) to support cancer research. This funding is central to the President's sustained, multi-year plan to double cancer research. These resources will be committed strategically to have the greatest impact on developing innovative diagnostics, treatments and cures for cancer. This initiative will build upon the unprecedented $10 billion provided in the Recovery Act, which will support new NIH research in 2009 and 2010.

* The Budget includes $330 million to address the shortage of health care providers in certain areas. The Budget's new resources will sustain the expansion of the health care workforce funded in the Recovery Act.

*The Budget includes continued efforts to accelerate the adoption of Health Information Technology, building on funding provided in the Recovery Act.

The combination of a reserve fund to accelerate transformation/additional coverage, comparative effectiveness data, enhanced operations, a strong NIH, and appropriate numbers of primary care physicians is a powerful array of resources.

As with any change process, she'll encounter resistance from some stakeholders and will be distracted by the tyranny of the urgent (naming a new head of the FDA to help address the recent peanut butter salmonella contamination problem, a perceived failure of our food safety systems). However, I am confident that government, payers, providers, and patients all recognize that our current healthcare system provides low quality/high cost (poor value) care which reduces our ability to compete in world markets. The FY2010 budget summary reflects a serious amount of resources and a commitment to change that is likely to move us forward.

Best of luck Kathleen and welcome to Washington!