It’s a pleasure for me to be here, both from an intellectual standpoint but also a personal one. To see old friends and to renew acquaintances, and to reminisce about years that we spent together doing important things—I believe important things—is a very pleasant experience. I’m going to do even less than six minutes, Toni, so don’t worry. What I thought I would do, though, is respond to a few of the things that have been said and fill in a couple of gaps.
Two items that—well, first let me say I had the privilege, as she said in the introduction, to work on the White House staff, first for President Reagan and then for President Bush, and then was followed by Gail Wilensky on President Bush’s White House staff. Gail and I were doing the same kind of work that Ira Magaziner did before Ira made it famous. We were the folks slaving away on reforming the health care system for the country.
A couple of items that were important that haven’t drawn attention in this discussion already: one was the passage, in 1989, of Medicare physician payment reform, large-scale legislation putting in place a new way of paying doctors under the Medicare program based on a fee schedule that looked at what doctors did and tried to compare one doctor’s work to another in setting the prices across what the Medicare program pays for those services. An important feature of that legislation was the imposition, for the first time, of expenditure limits; that is, aggregate amounts that can be paid to individual doctors based on the number of units of service—number of procedures, number of visits, whatever that they might do—in order to avoid the fact of, if a doctor found that individual fees were limited in how much they were per unit of service, doing many more procedures, many more office visits, might increase their income nonetheless. Those limitations in aggregate expenditures were a very important step forward in limiting outlays from the Medicare program, but not a very satisfyingly elegant policy proposal, to be sure.
Two other things done in that legislation were the creation of a new federal agency to do outcomes research—research into the effectiveness of medical practice, as Dr. Sullivan mentioned in his comments—and the establishment of the Physician Payment Review Commission, which Dr. Wilensky now chairs, to advise the nation on these subjects going forward.
Another element of the Bush health policy during that period was continued emphasis on private health plans as an important growth area for Medicare’s beneficiaries, so that instead of relying on old-fashioned indemnity insurance designed in 1964 and ‘65, Medicare seniors can now access new forms of health care delivery, like HMOs and other kinds of managed health care plans. The explosive growth now being experienced by those plans, and important things were done during the Bush administration to promote the growth of private health plans in Medicare.