Bush Health secretary: Health care in 40-year transition; Arkansas innovative

Mike Leavitt served as President George W. Bush’s secretary of Health and Human Services and, before that, as Environmental Protection Agency administrator. He now chairs Leavitt Partners, a health care consulting firm.

Leavitt was in Little Rock Wednesday to speak to the Arkansas Health Insurance Marketplace board of directors. The Marketplace is the exchange through which health insurance policies are purchased by individuals as well as for recipients of the private option, the state program that purchases private insurance for lower income Arkansans.

Talk Business & Politics sat down with Leavitt to ask him about the future of health care (he’s optimistic), the role of Obamacare (flawed, he said, but it forced needed change), why Republicans didn’t reform health care first (he thinks they should have), and what he thinks of Arkansas’ health care programs (he’s impressed).

TB&P: Where’s health care going?

Mike Leavitt: It’s undergoing what I think has to be viewed as a 40-year transformation, and people aren’t thinking about it in the context of 40 years. They’re thinking of it in the terms of eight years or 10 years. It actually started in the ‘90s, in my view, and we’re about 25 years into a 40-year transition. …

There are some very clear trends. One is the, I think, widely held aspiration to have everyone have access to an affordable insurance policy. The second is that we have to pay for health care differently than we have been in the past. In the past, we’ve paid for it on what’s known as a fee-for-service system, and in the future, we’re going to begin paying for it more, or having it paid for by assessing the value of the services that are provided. … And we’re having a big discussion that’s lasted a decade or more now on the role of government, and it’s not just what government’s role should be. It’s also which government, whether it’s state government or the federal government. And I think that’s basically at the gist of the transition. So if I were to say 10 years where I think it comes out, I think it ends up with more people having insurance, having more insurance offered through public or government-related plans than there are now, that hospitals and doctors will be paid differently than they are now, and that consumers will have a bigger role.

TB&P: So how does Obamacare fit into all this – just part of the process, or was it some radical government takeover?

Leavitt: It was a significant development in that 40-year process. We’re not done. I think it basically will have played a disruptive role, and many of the things that are happening are unintended consequences of it. I think its primary benefit will be that it just forced some things to begin to change, and the marketplace will adapt to it. I think we’ll see a renewed discussion on health care in the next Congress. …

I will tell you that I’m optimistic about health care because I’m starting to see people do hard things, and that’s what health care has been absent. We haven’t been forcing people as consumers to make consumer decisions. We are now. We haven’t dealt with the matters related to responsibility with our own health. We’re starting to do that. We have not forced providers of health care to justify the value of what they provide. We’re starting to do that now. We’re a long ways from perfect, but there are some good things happening.

TB&P: So despite its flaws, are we better off that it happened?

Leavitt: Something needed to happen. I would have done it much differently, but the good thing is that things have started to change, and it forced some things to begin to change.

TB&P: Because of its own flaws, or just because of its own good parts, too?

Leavitt: Both. It’s just put things into activity. Things were in gridlock for so long. Everybody knew the problem existed, but they couldn’t seem to get any change done. Some of the things that happened in the Affordable Care Act have been very positive – for example, the change in the way we pay for it. Republicans and Democrats are in, frankly, wide agreement on that point. If you just look at the Affordable Care Act, and you listened to the debate, you’d assume there was no agreement. But there’s agreement on the fact that the fee-for-service system is a big part of the problem and that it needs to change. There’s agreement that health insurance ought to be something that everyone has access to. There’s not agreement on what the role of the government should be, and that’s why we’re continuing to have this conversation.

TB&P: Where it’s going, how would you change it if you could?

Leavitt: I’d have more done by the state governments and less done by the federal government. I’d use government to organize the system as opposed to operating the system, and that’s the basic rub that people have. But to be more explicit about it, I would accelerate as fast as we could the change in the way that health care is paid for. There’s some limits in how fast that can happen because people are having to get accustomed to the new systems. I would continue to move toward insurance exchanges like the one we’ll be discussing today. I think they’re the only logical solution to the individual and small group insurance market, and I think they got a very bad name because people equated them with the Affordable Care Act, and it became a political symbol as opposed to being viewed as a solution.

TB&P: Why didn’t Republicans try to move the process along before Obamacare?

Leavitt: Well, I am a Republican, but our party did not view health care, in my judgment, as being sufficiently important, and we chose to focus more on tax issues and national defense, and we failed to recognize that this was a problem that had ramifications on both of those. And I can’t defend it. We should have.

TB&P: What do you think about what Arkansas has done?

Leavitt: Arkansas has done a whole series of things that I think are innovative and interesting. I think the ability for Medicaid beneficiaries to receive coverage through the private market – really innovative, and I think it is something that the rest of the country can and should copy. I think that the use of the exchange as a means of being able to supply coverage to not just private sector people but also Medicaid beneficiaries – very important innovation. I think the fact that they’re developing in their exchange what is referred to as an aggregator, meaning you can receive payments on your insurance from several different sources and have it all aggregate to one payment, it’s a very important innovation. For a small state, Arkansas has in my assessment been quite innovative.