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Contact Us Spring 2001; Volume 2, Number 1
Features: Interviews
Interview with Nancy-Ann Min DeParle (Cont.)
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Also, a great deal of the job involves working with Congress, so that's I think an important skill, or at least, it's important that the person enjoy being involved in the legislative process. You also have to really be open to building a team in the agency. There are some incredibly smart and hardworking people, some of whom have been there for many years, others of whom are more recent, who are really just looking for leadership. And if the person develops a few focused priorities and asks people to achieve them, I think they'll have a good time because HCFA staff really will work hard to help them get there; that, at least, was my experience.

HCFA Reform
HHPR: Legislators and interest groups such as AdvaMed, which represents the medical device industry, have urged for the reform of HCFA. They often point to a report by the Lewin Group which came out in October and said that it takes between 5 and 15 years for technologies that have been found safe by the FDA to actually get approved by HCFA for coverage by Medicare. So do you see the reform of HCFA as necessary? And are there some ways to make the coverage process for Medicare smoother?
NMD: Yes, AdvaMed commissioned that report, and I'm sorry I did not get the chance to meet with the analysts who were working on the report, because it seemed to me that they should have the benefit of knowing the most recent developments and thinking within the agency [HCFA] with regard to approving new medical technologies. They did meet with some HCFA staff, but apparently they chose not to use the information that we gave them. So we, in fact, wrote a brief response to their report pointing out that they failed to take into account some of the changes we've made in the last few years to try to more quickly approve new medical technologies that can be beneficial to Medicare beneficiaries. There are two main points that we tried to make in response, that I think were particularly missing, that I think people need to understand about Medicare and it's role in approving new technologies.

First of all, the FDA and Medicare have quite different mandates and different roles. The FDA's role is to determine whether a new device or technology is "safe and effective" - theirs is sort of a baseline determination of whether it is safe for people to use and does what it's supposed to do. That is a different determination than whether something is legally covered by Medicare. For example, the FDA has determined that many prescription drugs are safe and effective, but, by law, they're not covered on an outpatient basis by Medicare. So there are technologies that are out there that the FDA would say meet their standards, but we are not authorized to cover them.

Similarly, there are technologies that the FDA would say are safe and effective, but that our clinical staff and the experts who advise them [the Medicare Coverage Advisory Committee] would say do not meet the Medicare law's standard of being "reasonable and necessary" for the treatment of a disease. Or they may say, "Legally we could cover this, but it is not something that is an appropriate thing for the population that we cover (i.e. people who are disabled and people who are over 65) or it's not as effective as some other things that we already cover." So maybe HCFA will cover it, but we won't pay the amount that the industry wants us to pay. That's where the arguments really get complicated. What the industry often would like is for the FDA to say something's safe and effective and for that to mean that Medicare automatically covers it. The problem is that we're responsible for making sure that the trust fund doesn't run out of money. We're like any other insurance plan; they also don't like it when insurance companies decide not to cover things or pay less than they believe is appopriate. They would like the private insurance market to just take the FDA's determination and say everything's covered. But you can't do that if you're responsible for making sure that people are getting services that are appropriate for them, and that are legally authorized to be covered.

So that's part of the issue, and the other issue I think is the payment level. They would like us to pay whatever they want, and the view of most insurance companies, including HCFA is that we want to pay a fair price and an adequate price, but maybe not necessarily the price that the industry would like. So one reason it takes a while sometimes is because HCFA may decide when we're going to cover something, but if you come to us and say, "I have a new technology and it's going to cost $4000," the agency won't necessarily accept that. HCFA looks at the data for where its been used and how much people have paid for it - other insurers or other hospitals or whatever - and then makes a decision about what is a fair amount to pay. That's another real bone of contention with the industry.

We made a lot of changes in the last two years to make the coverage process much faster and much more open, where now any citizen can petition, (and this is all on our internet site, for coverage of a new technology or an item, and within 90 days, we will make a decision. If its something that's obvious, then the staff can make the decision, but if its something that is not clear, we've established something called the Medicare Coverage Advisory Committee (MCAC), which has a number of panels covering various categories of items and services that Medicare covers. They look at the critical evidence and peer-reviewed literature and results, and they're experts in their field, such as Barbara McNeill, for example, who's an M.D. and chief of health policy research at Harvard Medical School. Those people are the appropriate ones to be looking at something and recommending whether Medicare should cover it, and if so, if Medicare should pay for every type of utilization or just for certain types.

In fact, I think, if anything, we have a process that's better than the private sector. But the industry would like it to be even faster and they'd certainly like us to pay more. What they need to understand is that Medicare's decisions are not the same as the FDA's decisions because there's a different lens through which we need to assess a new product. Secondly, they need to understand that Medicare must make sure that it's making a fair and adequate, but not excssive payment.

The PACE Program
HHPR: You know, we're publishing an article in this issue of the HHPR about the PACE program. Do you have any knowledge of the program or how successful it has been? It sounds like it's still pretty small at this point, so do you expect it to expand?
NMD: It is pretty small. The last time I looked at this was sometime last spring. We've been a little surprised, given the interest in the BBA in expanding the program, that there have not been more sites that have come forward to request the funding. The way it works is on a community basis, so the state works together with a community to identify places where there are groups of frail elderly, people who would otherwise qualify for a nursing home, which means they really are very sick. The point is to keep them out of a nursing home by using an array of services, which are not all traditional Medicare services and not all traditional medical or health services. And the results have been I think pretty good, and some of the sites show that it is a positive thing for beneficiaries. It's not cheap, by any means, but in some cases it does cost less certainly than some kinds of nursing home care. And the beneficiaries, I think most importantly, do like it because they aren't in a nursing home, they're able to stay in their community, and they're also getting a wider array of services.

What it takes is the various levels of government working together and then coming to HCFA. The BBA made it a lot easier to get approved as a case site. What happens is the money from the federal government for Medicare and from the states for Medicaid gets pooled together to pay for this set of services. In a sense, Medicare money is being used to pay for services it wouldn't usually pay for, but the idea is that the Medicare program also saves money because PACE enrollees are people who are most likely to be hospitalized and most likely to be using other Medicare services. So, yes, I think the program has worked well, and I would like to see it expanded even more. But it's one of those things that requires a lot of coordination and a lot of community commitment. In the places where that has been present, and the one I'm thinking of is On Lok, a site in San Francisco, in those places it has worked very well and there's been a community infrastructure and a real commitment to it. So, I don't necessarily see this as something that's gonna wind up in every community around the country, but it's certainly something that's been beneficial in the places where it has developed.

Nursing Home Quality
HHPR: Great. Well, we also have an article in this issue about the quality of nursing home care. Can you say a few words about nursing home quality?
NMD: I think there's good news and bad news. Since the law that was enacted in 1987 [Nursing Home Reform Act (NHRA)] and the regulations that the Clinton Administration put out in 1995, there have been improvements made in the quality of nursing home care. We know this from some of the clinical indicators that we have. For instance, there's a dramatically lower utilization of restraints, which was quite a prevalent process before the law was changed. There's a lower incidence of bed sores - the kinds of things that occur when people aren't getting adequate care.

Having said that, nutrition in nursing homes is not what it should be, and people's quality of life isn't what it should be. We've made some significant improvements in the last two years through an initiative that we started in the Clinton Administration in the summer of 1998. The General Accounting Office (GAO) has received our initiative and concluded that there have been some significant improvements but more needs to be done and we need a sustained focus. I hope and trust that the Bush Administration will continue this important work to improve the quality of care in our nation's nursing homes.

Health Policy Careers in Government
HHPR: Before we end, I want to ask you this last question because we have a lot of undergraduate and graduate students who are reading the journal, and I expect they would be interested to hear your thoughts on what it's like to work for the government. You worked both at the Office of Management and Budget (OMB) and later as the Administrator of HCFA, so if someone is interested in health policy and interested in going into the public sector, is there anywhere in particular in the government where you recommend they start out?
NMD: Well, I think the White House Office of Management and Budget is a terrific place to start out. Young people there, right out of graduate school, can get an incredible experience and incredible responsibility, and it's also a place where you really have to be able to do rigorous analysis and know the numbers and know the facts about whatever program you're responsible for. I've been in situations where I've gone to Capitol Hill to negotiate a Medicare bill and I've taken with me a 25 year-old person who is the expert on Part B of Medicare, and during the meeting, we all - the Speaker of the House and everyone else - will turn to that person and say, "Well, how much would it save if we did x?" or "What would the impact be?" So you get an opportunity very early in your career to become a real expert on a given issue. It's very hard work, but you get a lot of responsibility and a lot of exposure to public policy. I think that's a great place to start.

HCFA is also a great place to work. It would be slightly different, though, in that many of the entry-level jobs at HCFA would probably be more concentrated on what I describe as the operational aspects of Medicare as opposed to policy and numbers and analysis. But people at HCFA have the good fortune of coming to work every morning and knowing they have a chance to improve some of the (if not the) most significant social programs our country has ever enacted, programs that have helped hundreds of people to live healthier, more secure lives. You will be very lucky if part of your career includes such engaging and compelling work.

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Nancy-Ann Min DeParle, JD, MA served as Administrator of the Health Care Financing Administration and Associate Director for Health of the White House Office of Management and Budget in the Clinton Administration. She was a Fellow of Harvard's Institute of Politics in the Fall of 2000, and currently works as a consultant in Washington, D.C.
Spring 2001, Volume 2, Number 1
Table of Contents
Editor's Note
Features: Medicare Symposium
Features: Interviews
Features: Health Care for the Elderly
Health Highlights
In Focus

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