Interview with Secretary Sebelius

Interview with Secretary Sebelius

By Meet the Press - March 7, 2010

But first, the final push for healthcare reform. And joining us live here this morning, the secretary of Health and Human Services, Kathleen Sebelius.

Welcome back to MEET THE PRESS.

SEC'Y KATHLEEN SEBELIUS: Thank you. Nice to be here.

MR. GREGORY: Endgame time, the president talked about it in his remarks this week. This is what he said.

(Videotape, Wednesday)

PRES. OBAMA: Every idea has been put on the table. Every argument has been made. Everything there is to say about health care has been said, and just about everybody has said it.

(End videotape)

MR. GREGORY: He said it with a smile, but he's making a serious point. This is really the end of the line for the debate. And here are two facts: Most people who have health insurance like what they have, and a majority of Americans oppose this president's version of healthcare reform. So how, realistically, do you get this done?

SEC'Y SEBELIUS: Well, I think, David, what we're hearing from people across America is that even people who have insurance are terrified about what's going on in the marketplace. They're opening their statements, they're seeing these incredible rate increases, if they're not protected by a large employer, going on across the country. We just got a Goldman Sachs analyst who said that the market competition is decreasing in this country, that in the individual market, in the small group market where small employers are absolutely caught, they have no choice; and they are getting increasingly frustrated. So I think we know what doing nothing looks like, and it looks pretty scary. Fifteen thousand people a day lose their insurance, and some of those folks are being actually priced out of the marketplace.

MR. GREGORY: But, and that's usually the basis for the president saying the American people don't want us to wait. But where is the evidence of that? Certainly, we can all talk to people who don't like their situation, who are worried or are going through very difficult times. But, again, a fact is that a majority of Americans, after everybody has said everything, as the president said, don't support this administration's version of reform.

SEC'Y SEBELIUS: Well, I think if you say, "Do you want," you know, "some massive bill," that people are a little unclear about what's in it given the amount of misinformation. They say, you know, "We don't know. We're, we're unsure." You say, "Do you want rules to change for insurance companies? Do you want them to have to compete in the marketplace? Do you want some oversight? Do you want some consumer protection?" They say absolutely yes. "Do you want a different marketplace where people can have some choice and competition just like the members of Congress have?" Absolutely yes.

You know, I had a meeting last week with five of the largest insurance company CEOs, and we talked to them about what in the world is going on, how in the world does somebody like Ms. Canfield, who the president cited, who's paying $6,000 in premiums, she's paid $4,000 out of pocket, her premiums went up 25 percent last year. The company, on her behalf--she's put $10,000 of her own money on the table. The company paid out about $900 in bills, and she just got a rate increase of 40 percent. How in the world does that work? How does that math work? And, frankly, we didn't get very good answers from the insurance companies.

MR. GREGORY: And you're pushing for more answers, for more transparency.

SEC'Y SEBELIUS: You bet. You bet.

MR. GREGORY: Well, what do you hope to achieve out of that?

SEC'Y SEBELIUS: Well, I think at the very least, the American public has to understand what is going on. What are the justifications for rate increases which are so far ahead of medical trends? How much are the companies collecting in overhead profits? How much are they paying their CEOs? And how much are they actually paying in medical trends? The insurance execs said to me, you know, "It's all about costs, and we're just sort of passing along costs." But that's not what their profit statements say. When profits go up 50 percent from '09 to--I mean, '08 to '09, when they file $12.7 billion worth of profits and then turn around and say, "We need 40 percent rate increases," 60 percent in Illinois, we need at least to shine a bright light until we pass health reform and change the rules.

MR. GREGORY: Let me bring you back to the here and now. I've spoken recently to a top ally of the president on healthcare reform who thinks there's about a 40 percent chance, ultimately, of getting this done. Where do you put the odds?

SEC'Y SEBELIUS: I think we'll have the votes to pass comprehensive health reform. A bill has passed the House with a majority, a bipartisan majority. A bill has passed the Senate with a supermajority. That's never been done before. What we're talking about, as the president said, is finishing the job. And the urgency, the timetable is not about some congressional time clock, it's about what's happening across this country to Americans.

MR. GREGORY: Well, but...

SEC'Y SEBELIUS: It's about the squeeze.

MR. GREGORY: ...but this, this is Washington; it is about a time clock for Congress. You have set deadlines before and they have slipped. Is a new deadline, the Easter recess, if it's not done by that point, will the president return to it?

SEC'Y SEBELIUS: I think that we have to act on behalf of the American people. I hear from folks all over this country. I talked to a dad in Chicago whose son, 11-year-old, healthy, bright, came--coming back from a soccer tournament, but born with a heart defect. He had an operation at a month old, an operation when he was three. This father, who is self-employed, runs a small consulting company, is paying $30,000 a year in health insurance premiums and doesn't know what happens next, needs some control over his own health security, over his family's security.

MR. GREGORY: Understood, point taken. My question is does this have to be accomplished by March 18th, by the, by the Easter recess if it's going to get done?

SEC'Y SEBELIUS: I think the president has called for an up or down vote. I'm confident that we'll have that up or down vote, and I'm...

MR. GREGORY: You won't set a deadline, though?

SEC'Y SEBELIUS: I, I have not set a deadline. That's really up to the leadership of Congress.

MR. GREGORY: But if it's not passed by the April break, is it realistic that it ever comes back?

SEC'Y SEBELIUS: Well, I think it's realistic because the American people are desperate for something to happen.

MR. GREGORY: So the president would come back to it if it doesn't get done by the break?

SEC'Y SEBELIUS: David, I think what's going on around the country argues for a...

MR. GREGORY: But I'm just trying to pin you down. I think this is an important point about when it gets done,


MR. GREGORY: ...because the legislative calendar does influence policy.

SEC'Y SEBELIUS: Well--right. But the time clock is not about, again, a congressional ticktock. What Americans want is something to be done, that's what I hear. You know, as a former governor, governors work on a very specific timetable, they have to pass budgets, the legislature goes out of, out of session. We've got to get things moving because there's an urgency about what's happening in people's lives. And we're at the final chapter here.


SEC'Y SEBELIUS: We need an up or down vote.

MR. GREGORY: Final stab--yes, no or maybe? Do you get passage by the Easter break?

SEC'Y SEBELIUS: I think we'll have the votes when the leadership decides it's time to call for the vote, and I think health reform'll pass.

MR. GREGORY: The issue of what's at stake here, it's very interesting, the president talked about that. The New York Post reported this on Friday--I'll put it up on the screen. "President Obama pushed wavering House members to OK health-care legislation for his own political standing and for theirs. ... `To maintain a strong presidency, we need to pass the bill,' Obama told liberals, according to" one Arizona representative who attended the meeting. This is very interesting, "to maintain a strong presidency." Elaborate on that.

SEC'Y SEBELIUS: Well, again, I think the president has laid out comprehensive health reform as a primary agenda item not because he doesn't have good health choices or because it's easy politically, but because he feels it's fundamental to fixing the economy and it's fundamental in terms of jobs, small...

MR. GREGORY: It's fundamental to having "a strong presidency" is what he's reported to have said.

SEC'Y SEBELIUS: Well, I wasn't in that room. What I can tell you what--is what he's said...

MR. GREGORY: But you work with him closely. Are the stakes that high? Is his agenda in peril if he doesn't get this? Is that what's at stake?

SEC'Y SEBELIUS: Well, I think what's in peril is health security for millions of Americans. What's in peril is the fact that small business owners currently are having to choose between hiring another worker or two or having health insurance. They're losing employees to folks down the street who have bargaining power. We have folks absolutely caught in jobs that they hate. They are terrified about leaving their position. We are--actually have a handicap in the economy because we haven't fixed this massive health insurance system, and we've got to tackle that. And I think that's what the president understands.

MR. GREGORY: Deadlines have come and gone. This has gone on longer than the president wanted or expected. Ground has been lost. What mistakes did the administration make in laying out the strategy to get healthcare reform?

SEC'Y SEBELIUS: Well, I think the president, from the outset, was very hopeful that we would have a broad bipartisan coalition. It's why I think months were spent in the United States Senate with six senators in a room--three Republicans and three Democrats. Lots of good Republican ideas are in the bill--help for small business, tax credits, selling insurance across state lines, aggressively going after fraud and abuse. Unfortunately, those good ideas still haven't produced Republican votes. But the president wants to take the best ideas from Republicans and Democrats. He will continue to do that, and he hopes, at the end of the day, we'll have some Republican votes along the way.

MR. GREGORY: But what missteps did the administration make?

SEC'Y SEBELIUS: Well, I think that there's no question that having, you know, an issue like this on the table is complicated, it's difficult. And sometimes, I think people got lost in the, in the weeds, if you will. There's a lot of technical issues here. When people understand what's in a bill--a new insurance marketplace giving small business owners and individuals the same choices that members of Congress have, new rules for insurance companies--and, David, this is a fundamental difference between Republicans and Democrats, they really don't believe that insurance companies should have more consumer protections, more oversights, that it should change the rules. And I think, at the end of the day, that may be the dividing line where Republicans will not vote for a bill that cracks down on insurance company abuses, changes the practices that people are...

MR. GREGORY: You have--you had unified opposition from Republicans. Did you also have a breakdown in the president's and the administration's communication to the American people about what the goal was and how you get there?

SEC'Y SEBELIUS: Well, I think that there--when you have anything that's this comprehensive, there are always strategies along the way that focus on things. And we spent way too much time and energy talking about what's not in the bill, trying to tamp down some of the, you know, wild rumors, wild accusations. And I think now we've circled back to saying to people the bill is pretty simple at the end of the day, more focus on wellness and prevention, better choices for folks. The same choices that members of Congress have in their own health plan should be given to the people who pay those bills, should be given to the American taxpayers, and change the rules for insurance companies, lower the deficit, not only short-term $100 billion, but long-term over $1 trillion. This is something that changes those cost estimates, at the end of the day, that really are handicapping the country's economy from moving ahead.

MR. GREGORY: In any rollout of a big sweeping policy proposal like this, you set goals you set priorities. When you were last on the program in the summer, the first thing we talked about was the president's number one priority, and he laid it out last June.

(Videotape, June 23, 2009)

PRES. OBAMA: What I've said is, our top priority has to be to control costs. ... And I've said very clearly, if any bill arrives from Congress that is not controlling costs, that's not a bill I can support. It's going to have to control costs.

(End videotape)

MR. GREGORY: And yet Democrats I've talked to, Republicans for sure, outside experts have said, frankly, this bill fails to adequately control costs. Warren Buffett, billionaire investor, somebody that the president said he would listen to, spoke about the fact that it fails to really tackle costs adequately in the healthcare system. He spoke on CNBC this week Listen to this.

(Videotape, Monday)

MR. WARREN BUFFETT: And I would say that one way or another we're going to attack costs, costs, costs. Just like they talk about jobs, jobs, jobs in the...(unintelligible). It's costs, costs, costs on this side. That's a tough job. ... I would try to get a unified effort, say, "This is a national emergency to do something about this. We need the Republicans, we need the Democrats. We're going to cut off all the kinds of things like the 800,000 special people in Florida, or the `Cornhusker kickback,' as they called it, or `the Louisiana Purchase.' We're going, we're going to get rid of the nonsense. We're just going to focus on costs, and we're not going to dream up 2,000 pages of other things."

(End videotape)

MR. GREGORY: Why not focus at this point with the outcome uncertain and say, you know, "We're just going to do a bill that focuses on reducing costs, and then we'll come back to the idea of expanding access at a, at a point later on when it's more politically feasible"?

SEC'Y SEBELIUS: Well I think we definitely learned a lesson from what happened in Massachusetts from the bill that former Governor Romney signed into law, where they pushed access, but didn't deal with costs at the same time. And so it's why the president has been insistent from the outset that this deal with costs. Every cost-cutting idea that every health economist has brought to the table is in this bill. Massive changes in the delivery system, ways to discourage the kind of Cadillac insurance plans being offered into the future, a fairness in terms of who's paying for healthcare costs, less spending in the Medicare system for things that we know don't add to people's health outcomes but were oversubsidizing insurance companies, really aggressively going after fraud and abuse, which is why the president directed the attorney general and me to, you know, put together strike task forces. Additional ideas are in there. Every idea is on the table.

MR. GREGORY: But you, but you don't, you don't deal with tort reform, which the president has talked about more recently.

SEC'Y SEBELIUS: Actually, we do deal with tort reform. That's just not true. He moved ahead on tort reform early on, directing me to...

MR. GREGORY: Pilot programs is what you supported.

SEC'Y SEBELIUS: ...pull money out. Well, but states are in various stages.


SEC'Y SEBELIUS: And many states, like my own state of Kansas, have already passed full tort reform; others haven't at all. This is really a state-level situation...

MR. GREGORY: But whether it comes to...

SEC'Y SEBELIUS: ...where we want to see the best ideas that work.

MR. GREGORY: ...malpractice reform, whether is comes to...

SEC'Y SEBELIUS: Which is in the bill.

MR. GREGORY: ...subsidizing volume, whether it comes to, you know, salaries for doctors and so forth, do you really assert--you disagree with Warren Buffett that this adequately bends the cost curve?

SEC'Y SEBELIUS: Well, according to the nonpartisan accounting Congressional Budget Office, they say we get a--over $100 billion in deficit saving the first 10 years, and that ramps up as you look in the outer years to $1 trillion. I think that's real cost-cutting. I think that's real change in the deficit over time.

MR. GREGORY: But where are the cultural changes to how expensive end-of-life care is, or how many tests are ordered by doctors, or the administrative costs, be them in hospitals or insurance companies?

SEC'Y SEBELIUS: That's, that's all in there. It's all in there. There's a huge amount of administrative simplification. Getting to that 30 cents of every dollar that's not paid, paying benefits but currently has docs filling out a gazillion forms, and has insurance companies providing billing over and over again. We've got huge delivery system changes so that you no longer would pay hospitals if--one out of every five patients gets re-admitted in 30 days. You pay for bundled care, which is a coordination between docs and hospitals. Pay for medical homes, follow-up care. We know that not only are those good for patients, but they're hugely cost effective. They're in the best healthcare systems in America, and that's the direction this bill goes. And it pays for health and wellness for the first time, preventive care.

MR. GREGORY: But it--but even--but, Secretary Sebelius, even experts, people who run the Cleveland Clinic, or the Mayo Clinic, who have really been on the vanguard of reducing costs...


MR. GREGORY: ...they say there's only the potential for some of these things to pay off in terms of you getting away from subsidizing volume. So how can you assert with such certainty that this bill measures up to the president's goal of bending that cost curve, of bringing healthcare costs down?

SEC'Y SEBELIUS: Well, one of the things that we do, again, is change the insurance rules on the private sector. That will lower costs for families, lower costs for businesses. Everybody says that just having a new insurance marketplace, getting rid of the cherry-picking, allowing insurance companies to go back and forth, not only streamlines administrative costs, but lowers costs overall. And we run two of the major public health systems, changing the way Medicare pays for medical care, that we pay for quality and not any longer by the number of tests that you do, will help also drive the private market. We've got every strategy, every idea that health economists that experts say works is in this bill, including a lot of measures, David, which the Congressional Budget Office doesn't count for. They say maybe health IT, you know, the use of electronic health records pays off. We know it does. It's in the system, they don't get credit for that. We know that investing in health and wellness works. If you have fewer diabetics in 10 years, if you have fewer people who smoke, if you have fewer overweight and obese Americans, that's going to lower health costs. No credit is given to that. So we get, right now, $1 trillion over two decades in health savings without even giving credit to a number of the programs that work.

MR. GREGORY: I want to, I want to go to just a couple of more issues. One has to do with how this gets paid for, and that is tax, an excise tax on these so-called "gold-plated" or "Cadillac" plans. But in the Senate bill, that's been put off until 2018. And the reasonable question comes up, which is, do you really think a future Congress, which will be under a lot of pressure not to raise $1 trillion worth of taxes, is going to withstand that pressure? Or are you going to be left where, you know, because this Congress won't raise the tax now, they're going to put it off till 2018, so you're going to have all this spending and not get any of the savings until 2018? Isn't that unrealistic?

SEC'Y SEBELIUS: Well, I think two things happen right away with the way this is designed. First of all, it puts insurance companies, who pay the tax ultimately, on notice that this is coming, and they can begin to change the kind of policies that are in the marketplace. What we want to do is change insurance company behavior which hasn't been very strategic in terms of cutting costs. And, in fact, as the Goldman analyst said, "They are driving up costs. They have a market strategy that they're willing to dump customers and continue to raise costs." So changing their behavior, putting them on notice that this is coming. If a future Congress decided that this wasn't a good idea, the way the rules work, they have to come up with billions of dollars in, in substitute payment. This is subject to the PAYGO bill. They don't just get to cancel it and, and march down the road. So I think it, it is a good balance between getting a very effective cost strategy as part of this legislation and putting people on notice so that their policies don't change overnight. This isn't imposed overnight, but they know it's coming, and we've got to change the structure.

MR. GREGORY: The issue of abortion is one that has 12 Democrats who voted yes for the bill in the House previously saying that they're going to vote no now. Leading that charge is Bart Stupak. He's from Michigan, an anti-abortion congressman who doesn't want any federal money paying for abortion. And this is what he said about the current status of the bill.

(Videotape, Wednesday)

REP. BART STUPAK (D-MI): the Senate bill--and that's where they're telling us the vehicle we're using--in the Senate bill, it says you must offer insurance policies that will be paid for by the federal government that covers abortion. You must do so. Also in that same language, if you come in the Senate version, in the OPM, Office of Personnel Management, policies they'll be putting forth, you must pay--every enrollee must pay $1 per month into a fund to help fund abortions. It's very clear.

(End videotape)

MR. GREGORY: Will you make the fix that he's talking about so that there's no federal money paying for abortions?

SEC'Y SEBELIUS: Well, there is no federal money paying for abortions, and that's just not my statement, it is what, you know, a legal analyst who has looked at the Senate bill, it's what the fact checkers who, who look at the statements say. I don't think there's any disagreement, and Bart Stupak and--Congressman Stupak and the president want health reform. He has been a strong member of Energy and Commerce. He's worked on health reform issues over the years, and, and he supports the president's notion about this. Congressman Stupak and the president agree that there should be no federal funding for abortion. And I think, at the end of the day, they...

MR. GREGORY: But they don't--yeah, but they don't agree about how you're getting this. So what, what needs to be done to take him--he used to be a yes vote, he's now a no vote. How does he become a yes vote again?

SEC'Y SEBELIUS: Well, I think people will continue to talk to him. I think that, that there is no question in my mind...

MR. GREGORY: Just to try to persuade him that he's wrong?

SEC'Y SEBELIUS: Well, I think, I think there's no question that the Senate bill does not provide any federal funding for abortion. But in--at the end of the day, I think that we'll get to the point that there's agreement that there's no federal funding on abortion.

MR. GREGORY: So he's just misinformed?

SEC'Y SEBELIUS: Well, I think he's misinformed about what the Senate language actually does. But he wants comprehensive health reform. I know that he has this principled issue. The president said from the outset this is about health reform, it is not about abortion. We don't want to change the status quo. There are very clear rules that apply across the board on federal funding for abortion coverage, and that's what we'll have at the end of the day.

MR. GREGORY: All right, we will leave it there. Secretary Sebelius, thank you very much as always.

SEC'Y SEBELIUS: Thank you.


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