Health Care Reform: Plan for Quick Action Dashed By Daschle Withdrawal

The Obama Administration's formula for making comprehensive health care reform work in 2009 was straightforward: have an experienced team in place in all of the relevant health and budget areas immediately; prepare a manageable piece of legislation for early in the first year; and rely on the political clout of the perfect political general to keep Congress focused and in line.

Tom Daschle's Feb. 3 withdrawal from the confirmation process to be HHS secretary because of tax questions throws that plan into disarray. It raises concerns that health reform will not get started in time to take advantage of the Obama election momentum or with enough time to get through before the next election cycle.

Without Daschle, the pendulum of control over health reform swings back to Capitol Hill and prominently to two figures: Senate Finance Chairman Max Baucus, D-Mont., and House Energy and Commerce Chairman Henry Waxman, D-Calif.

Baucus seems most determined to maintain the public promise for reform and his primacy in the effort. He issued a public letter to President Obama on Feb. 5 with Sen. Ted Kennedy, D-Mass., reiterating their commitment to undertake health care reform.

The Fate Of Daschle's Top Advisors

Without Daschle, the experienced team of enthused and motivated Daschle advisors placed throughout HHS and the White House suddenly looks like a headless creature.

The big question is whether the team can perform with a last-minute replacement. It will not be an easy job for someone to step in and take over a group that was built around long-term experience with Daschle.

Some of the new recruits, such as HHS deputy secretary Bill Corr, should be strong bets to be retained by the next appointee. Corr has his ties to Waxman and his previous experience in one of the top aide positions at HHS to recommend him to a new appointee (¹ (Also see "HHS Deputy Corr May Reignite FDA Tobacco Oversight; PhRMA Sees Upside" - Pink Sheet, 19 Jan, 2009.), p. 8).

Other key staff figures, such as Mark Childress (Daschle's chief of staff), may need to make adjustments in light of Daschle's departure. At least in the short term, however, the status of these top two Daschle figures is inverted. Corr is awaiting confirmation. Childress is the authority on duty, issuing memos and providing interim leadership to the department.

Other top staff advisors, such as Jeanne Lambrew, who is assigned to the White House Office of Health Care Reform (from which the former majority leader also withdrew), will be left without a patron. One potential scenario would have Lambrew assume the lead spot.

The disruption throughout the extensive Daschle network of reformers clearly changes the landscape for comprehensive reform. It also throws into limbo a number of appointees who have taken up still not well-defined positions.

One of these recent recruits, who is described as handling a number of key Medicare issues, has quipped that he does not know his title or pay rate. That type of temporary disorder cannot last long and is not a base for major undertakings.

Power Shift To Baucus And Waxman

Daschle's decision also leaves the Obama Administration without a former majority leader to be the field general to handle the preparation of legislation and shepherd it through Congress - a task for which Daschle was ideally suited.

While Daschle's withdrawal upsets months of preparation for health reform, there are other pieces of the puzzle still in place - although for a distinctly different type of comprehensive reform process.

On Capitol Hill, Senate Finance Chairman Baucus is chomping to retake control. He has been staking out his position during the past year (with 10 congressional hearings) and his race to get his "Call to Action" white paper on health reform out ahead of all other proposals, including the Congressional Budget Office's budget options, and ahead of the establishment of the Obama health team (² , p. 16).

Speaking to the Academy Health National Health Conference on the day of Daschle's withdrawal, Baucus was still talking up the alignment of the stars for health reform and his confidence that there is common ground for a compromise with key Republicans. Baucus was the compromise figure for working out Part D with the Republicans when he was in the minority.

The Senate Finance chairman pointedly stressed his view that health reform should build on the "current system - including both public and private coverage - and not undermine the employer-based system." He also restated his preference for "incremental steps" towards reform.

With Daschle out, the Baucus message has more resonance, potentially quashing the idea of a public plan alternative to Part D. Bills to establish a public plan alternative to Part D were introduced on Jan. 27 by Reps. Marion Berry, D-Ark., and Jan Schakowsky, D-Ill., in the House (H.R. 684) and by Sen. Richard Durbin, D-Ill., in the Senate (S. 330).

Waxman is clearly a force to keep health reform moving. In fact, some of the Daschle team trained in the health field with the California congressman.

Even before Daschle bowed out, there were rumblings within Washington that HHS was being packed with Waxman loyalists. That has been discussed as one of the issues behind the reluctance to select former Waxman aide and current Baltimore City Health Commissioner Josh Sharfstein to head FDA (³ , p. 3).

The very concern that Waxman may have too much influence within HHS suggests that he is well positioned to take over the leadership on health reform.

The Economists: Non-Traditional Reformers

But there is still a strong cadre of non-traditional reformers for the health care effort within the Obama Administration. They are economists who have begun to look at health reform as an inescapable feature of general economic recovery.

This group, including economists like Office of Management & Budget Director Peter Orszag, represent a force from outside the health policy world who will maintain pressure for reform. They will not have access issues at the White House now that Daschle is moving out of the West Wing office.

Orszag will have White House Chief of Staff Rahm Emanuel's brother working with his OMB health team. Ezekiel Emanuel, an oncologist/bioethicist and author of the recent book on health reform "Healthcare Guaranteed," is on leave from the National Institutes of Health to work on the health budget at OMB.

- Cole Werble ([email protected])