By Alex Wayne and Drew Armstrong, CQ Staff
DECEMBER 11, 2008 -- President-elect Barack Obama announced his health advisers Thursday, led by former Senate Majority Leader Tom Daschle as Health and Human Services secretary.
Daschle will be responsible both for directing the sprawling HHS department and for leading Obama's effort to overhaul the health care system to ensure near-universal insurance coverage for every American as director of a new White House Office of Health Reform.
HHS manages the two huge health entitlement programs, Medicare and Medicaid, as well as the Food and Drug Administration and sundry other health programs.
Daschle published a book this year on health care reform, titled Critical: What We Can Do About the Health-Care Crisis. His co-author, Jeanne M. Lambrew, a professor at the University of Texas at Austin and health policy expert at the Democratic-aligned Center for American Progress, will also join the administration as deputy director of the new White House office.
Obama described Daschle and Lambrew's book as "groundbreaking" and "filled with fresh ideas." Daschle, Obama said, "will be responsible not just for implementing our health care plan; he will also be lead architect of that plan."
Lambrew was a top health policy adviser to President Clinton during his second term. According to her biography at the Center for American Progress, she led Clinton's effort to draft and implement what is now called the State Children's Health Insurance Program, which covers more than 6 million children whose families are low-income, but not poor enough to qualify for Medicaid. A large expansion of the program, to cover 10 million children or more, has been a top priority for congressional Democrats and is expected to be one of the first pieces of legislation passed by the 111th Congress.
In 2007, Lambrew helped House Democrats write legislation that would have expanded SCHIP by $50 billion. The bill was opposed by the insurance industry because it would have drastically cut payments to insurers who participate in the Medicare Advantage program, in which private insurers provide benefits to seniors in place of the government.
Lambrew and Daschle will be advocating their positions on health care reform in a White House that will be filled with people considered experts on health care in their own right, such as Obama's top economic adviser, Lawrence Summers, and his director of the Office of Management and Budget, Peter R. Orszag.
"It's going to be a challenging environment in which to build consensus," said Dan Mendelson, president of Avalere Health, a health policy consulting firm. Mendelson preceded Lambrew as associate director for health at the Office of Management and Budget under Clinton and knows her well.
"She understands the White House environment, she understands details technically and analytically," he said. "She has the ability to monitor what's going on and shape it within the White House. Daschle's going to need that. Inevitably in the White House structure there's going to be people who have differing ideas on the best way forward on reform."
Goal: Affordable, Available Care
Daschle said he aims "to make health care in this country as affordable and available as it is innovative." He said that Obama's overhaul campaign would begin with an effort to encourage Americans to host health care policy discussions in their homes and report their opinions and ideas to the Obama administration through its Web site, Change.gov.
"This is going to be an open and transparent process," Obama said.
In his book, Daschle critically examined President Clinton's attempt to overhaul the health care system in 1993 and concluded that it failed in part because the process was unduly secretive.
Daschle is critical of much of the health-care industry in his book, including doctors, hospitals, insurance companies and drug companies, blaming them in large part for the spiraling costs of care. As a solution, he proposes expanding both Medicaid—to cover more poor people—and Medicare—to cover more older Americans, especially those needing long-term care, while also opening the Federal Employee Health Benefits Program, which manages health insurance for government employees and members of Congress, to all Americans.
Daschle has endorsed the idea of requiring all Americans to purchase health insurance, a proposal strongly supported by many Republicans and the insurance industry. Obama has said that he doesn't think an individual mandate to purchase insurance is necessary for health reform, but has also said he is willing to reconsider.
To control costs in the health care system, Daschle proposes in his book to create a new Federal Health Board, modeled on the Federal Reserve Board, that would have sweeping powers to study best practices in medicine and recommend which treatments and drugs should be covered by government health insurance programs. The idea is to insulate those highly controversial decisions from politics and health-care lobbyists.
Daschle's Connections
Daschle, a South Dakota Democrat, served eight years in the House (1979–87) and 18 years in the Senate (1987–2005), including stints as both minority and majority leader. He was defeated in 2004 by Republican John Thune, and has been a public policy adviser at the law and lobbying firm Alston & Bird and senior fellow at the Center for American Progress, whose founder, former Clinton White House chief of staff John D. Podesta, is heading up Obama's transition operation.
Daschle's work at Alston & Bird caused some controversy as his name began to be floated for the HHS position. He is a policy adviser for the firm, not a registered lobbyist. But the firm's clients include many health care companies, and it has lobbied Congress, HHS and the Centers for Medicare and Medicaid Services on their behalf.
Obama has said he will impose strict requirements on his political appointees to reduce the influence of special interests on the government. According to his Web site, "no political appointees ... will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years."
One government watchdog group, Public Citizen, has said that it seems impossible that Daschle could avoid violating that prohibition, given Alston & Bird's clients and lobbying activities. But Obama's aides have said Daschle will recuse himself from any work that presents a conflict of interest.
Daschle's appointment was roundly applauded by Democratic lawmakers.
"Exceptional challenges call for exceptional leaders, and Tom is an ideal choice to meet the urgent challenge of health reform," said Sen. Edward M. Kennedy, D-Mass., who chairs the Health, Education, Labor and Pensions Committee and is writing his own health care overhaul legislation.
Senate Finance Committee Chairman Max Baucus, D-Mont., whose committee will hold confirmation hearings on the appointments, praised Obama's picks.
"President-Elect Obama's creation of a White House Office of Health Reform is a strong affirmation that health reform is on the agenda for the Obama administration," Baucus said. "I've said that reforming America's broken health care system is my top priority for 2009 and this office only contributes to the momentum toward success."
In his book, Daschle suggested that the Senate might want to move health legislation through the budget reconciliation process, a fast-track route that bars filibusters in the Senate.
Republican health policy experts are skeptical of that idea, because it would impose fiscal constraints on the legislation that Obama and other Democrats may find too limiting. But Democratic aides at a news conference hosted by the Alliance for Health Reform, a nonprofit founded by Sen. John D. Rockefeller IV, W-Va., said Thursday that the idea is under consideration.
"My understanding at this point is that there's no decision to use it, and no decision not to use it," said John McDonough, an aide to Kennedy. "It is something to stay tuned for."