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Checking In With… Nancy-Ann DeParle: A Health Reform Bill “By Thanksgiving”

As the White House health care czar, Nancy-Ann DeParle couldn’t have a bigger challenge: cajoling various Democratic factions–not to mention some influential Republicans–to agree to a massive overhaul of the sprawling U.S. health care system, which makes up some 17% of the economy. But in an interview with KFF Health News Senior Correspondent Julie Appleby, the new head of the White House Office of Health Reform showed characteristic bravado, saying she hasn’t given “a moment’s thought” to fashioning a fallback position in case Congress rejects the sweeping Obama view.

That’s typical of the 52-year-old Ohio native and former Rhodes scholar who grew up in Tennessee. In Washington, she ended up in the top spot at the Health Care Financing Administration, now called the Centers for Medicare and Medicaid Services. DeParle was legendary, as HCFA administrator, for having good relations with Congress. She was even able to charm former Republican Rep. Bill Thomas of California, a key lawmaker on health care who was known for sometimes being irascible.

Appleby spoke with DeParle last week.

Q: President Barack Obama is encouraging Congress to move ahead with health reform, but is holding himself somewhat above the fray. Some senators, including Chris Dodd, have said they want the White House more involved. At what point will he become more engaged in trying to use his popularity and authority to get a bill passed?

A: He has been doing that. A couple of weeks ago, he had a meeting with House chairs and Speaker (Nancy) Pelosi and Majority Leader (Steny) Hoyer. He held a meeting with a number of leading health care industry stakeholders, where they pledged to do their part to reduce health care costs over the next 10 years. He had a meeting with executives and CEOs about prevention and wellness and the things we can do there to lower health care costs. His voice is definitely being heard in this debate. They’re hearing from him strongly that this is health care reform that will lower costs and cover all Americans and protect peoples’ choice of doctors and plans. (That it) cannot wait, will not wait and must not wait another year. It will happen in the next few weeks.

Q: If a more ambitious proposal can’t be had, would the president accept a scaled-back package that set up some health exchanges, expanded Medicaid and reduced the number of uninsured by, say, half?

A: I don’t think there’s any reason even to be thinking about that. I haven’t given it a moment’s thought. I’m working on a daily basis with three committees in the House and two in the Senate. They’re all very much on a track to do exactly what the president has asked them to do and to mark up bills that are very similar to the plan he articulated during the campaign.

Q: Congress is batting around cost-control measures as part of this discussion but also is considering a number of other ways to pay for health reform, including tax increases. Do you think the president would sign a health reform bill if paying for it relied mainly on new taxes?

A: No.

Q: So what is he looking for?

A: I haven’t had that discussion with him. We proposed in our budget a $634 billion reserve fund, which was divided about equally between Medicare and Medicaid savings proposals and some new revenues. We’ve been working with Congress to identify other sources of Medicare and Medicaid savings and other sources of revenue. Again, I don’t believe a bill like the one you described will be presented to the president. I believe the bill will be fully financed, evenly divided between savings in Medicare and Medicaid and some other sources of revenue, such as the ones he’s identified.

Q: One of the ways to pay for health reform is taxing the health benefits workers now receive from their employers tax-free. Labor unions are supportive of health reform, but opposed to changing the health benefit tax exclusion. If taxing benefits is part of the proposal that comes out of Congress, is there anything you could say to labor unions that would get their support for that?

A: It’s way too early (to talk about that as) the financing discussion has only just begun. In the Senate Finance Committee they had a walk-through of a number of different proposals. I’d bet there’s a hundred different things on the table there. Modification to the tax treatment of employer-sponsored benefits is just one of the hundred options that were on the table. The president made it clear during the campaign that he has serious concerns about taxing health benefits. He’s deeply skeptical of any reform that taxes benefits because he believes that health reform should build on the existing employer-based health care system.

Q: What specific elements are needed in a health reform bill to persuade both Republicans and Democrats to support it?

A: It’s been really heartwarming to see support for the president’s principles. Every single office I go in (on Capitol Hill), whether Republican or Democrat, they’re talking about the struggles that American families and businesses are having in affording health care and the need to do something to lower costs and get everyone covered. Honestly, that’s what people need to see, that the bill provides affordable, quality health care coverage and lowers costs for all Americans. I’m really optimistic that we’re going to have Republican support for this plan. The president would love to have bipartisan support and he’s working to get that.

Q: Industry groups are supposed to come back to you with plans on how they promise to slow the growth of health spending by $2 trillion over 10 years. Are you still expecting to hear from them June 1 with some proposals?

A: I am. They were to update me in early June. They’re working very hard. They’ve hired some outside consultants to help them work through this and facilitate the process.

Q: How confident are you that the proposals they present will be scorable by the Congressional Budget Office or in some way measurable and quantifiable?

A: I know they will be measurable and quantifiable and will provide tangible benefits to families and people struggling to afford health care. I believe some will be able to be scored by CBO.

Q: Business groups were among the main opponents of health reform 15 years ago. Where do the employer groups stand today?

A: In a very different place. I just got off the phone with a CEO of a Fortune 50 company who told me he was working to get his trade association to support an individual responsibility requirement and an employer responsibility requirement and we just have to get this done. That’s been repeated over and over again. I’ve been meeting with the Business Council, the Chamber of Commerce, the Business Roundtable. At every one of those settings, there isn’t agreement on every aspect of this but (there is) a broad agreement that we need to address these problems now.

In fact, the Business Council, which is a group of CEOs of leading companies, did a poll they released a couple weeks ago. (They asked) ‘Do the benefits (of health reform) outweigh the risks?’ And, by a large percentage, the CEOs said yes. That’s definitely what I’m hearing.

Q: Single-payer advocates say they are angry that their views are not part of the debate. Are you trying to win them over?

A: I do think their views are part of the debate. I’ve been out to a number of the White House forums on health reform that we had (around the country). There were single-payer advocates in the audience asking questions, debating, talking to others. I do think their views are being heard. How do I hope to win them over? They heard for two years from our president the reasons why he believes it’s best to build on our current employer-based system. That’s the focus of our efforts right now and I think they know that. But I welcome their input and their thinking about this. They’ve been very helpful.

Q: Do you think a health reform bill will reach President Obama’s desk by Oct. 15? By Christmas? Or when?

A: I think by Thanksgiving.