Enter Tom Daschle

Tom Daschle's book, "Critical: What We Can Do About the Health-Care Crisis", forecasts the mindset of the incoming DHHS Secretary. Many of the ideas in the book frame what is likely to be Daschle's approach to President-Elect Obama's goal of reducing the number of uninsureds. There are three main points from the Daschle book that are key:

First, Tom Daschle is an activist. He wants to leverage government's growing role in health care spending (46%) to reshape the market. Especially in this downturn, with public support for the government to "do something", there is a ripe political climate for an activist agenda and Daschle knows it.

Second, Daschle has in mind the "machinery" for leveraging change. He proposes a National Health Board, which he likens to the Federal Reserve Board, with a role he defines as:

"[T]he Fed Health would ensure harmonization across public programs of health-care protocols, benefits, and transparency. Ultimately, the Fed Health would offer a public framework within which a private health-care system could operate more effectively and efficiently."

Lurking behind the "policy-speak" of that statement is a central idea that the Federal Health Board can leverage a 46% share of overall health expenditures to standardize terms and transactions in the market. Of course, even Daschle acknowledges that by itself, administrative savings from standardization is not enough, thus....

Rationing is needed to deliver both lower costs and better (and more fair) access. In his book, Daschle cites the role of the Britain's National Health system in enforcing rationale use of scarce health resources, with a particular focus on what he considers inefficient spending on technology and medications. In case his favorable citation of Britain's National Institute for Clinical Excellence (NICE) leaves any doubt, Daschle spells out specifically that the Federal Health Board would:

...[T]he Fed Health could set standards for quality and coverage, promoting best practices and identifying the trade-offs on services (emphasis added). It would use information on the comparative clinical and cost effectiveness of different treatment options to set standards for Federal programs."

Third, "trade-offs on services" is the key to Daschle's vision. If Daschle is going to deliver on the twin demands of lower cost and more care, either the Federal Health is going to have to say "no", or consumers are going to have to start making smarter choices on their own so that the market can drive out products, services and providers that do not deliver real value added. Daschle seems to have little confidence in consumers at this point; his focus is on having the NHB make the tough decisions.