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I N T E R V I E W
T H O M P S O N & I G L E H A R T
10 May 2005
Yielding The Bully Pulpit:
A Conversation With
Tommy Thompson
The former secretary of health and human services offers
an assessment of achievements during his tenure and
some advice to his successor.
By John K. Iglehart
ABSTRACT:
In January 2005 Tommy Thompson relinquished the post of secretary of the U.S. Department of Human Services (HHS). Known as being an outspoken defender of his principles throughout his tenure at HHS, Thompson continues that tone in an interview conducted shortly after he left Washington. Topics covered include ways to curb Medicare spending; devote greater attention to preventive health and proper incentives for technology; improve the vaccine infrastructure of the United States and the world; and continue to infuse U.S. foreign policy with what Thompson has termed “medical diplomacy,” in an effort to counter the messages of America’s enemies.
John Iglehart: The growth in entitlement programs that are administered by the Department of Health and Human Services [HHS], as you well know, have been rapid for many years, under both Democrats and Republicans. Do you have any hope that these very large programs can or should be held in check as the baby-boom population approaches the traditional retirement age of sixty-five?
Tommy Thompson: John, they can be. But we have to make some structural changes in the medical system, which I’ve been trying to do here. I would like to expound upon that a little bit in regard to what needs to be done. First off, on the entitlement programs—on Medicare and Medicaid—we’ve got to get the medical schools in America to start teaching doctors about preventive health care. We’re never going to solve this problem by tinkering around the edges. We have to get into preventive health, big time. That’s where the big money’s going to be saved. We have a society based upon curative medicine, in which we wait until people get sick and then we start treating them. Our reimbursement formulas are based upon treating the sick, not on preventing people from getting sick in the first place. We’re going to have to enhance our vaccine programs to get into preventive health. It’s money well spent. It will save money in the long run.
Second, I fought very hard to get “induction” physical exams [those conducted when a person gains Medicare eligibility] covered by Medicare, and I’m only sorry that I wasn’t able to get more attention paid to this. Once we find out how sick people are, then we can start treating them.
Third is disease management. Here we’re going to save big dollars. It started in Medicare, but we’ve also got to do it in Medicaid—for poor families and their children.
You only have to look at the cost drivers: 1.5 trillion dollars in total expenditures for medical care [in 2004]. Seventy-five percent of this is for chronic illnesses. Seven out of ten people die from chronic illnesses—a good share of which could be prevented by changing lifestyles (eating, exercising, not smoking). These are the things that the New England Journal of Medicine is going to have to write about. This is what the Congress has got to be fixated on. And this is what this administration has got to be addressing. Make America healthier, and you start bringing down the costs, so they will not continue to escalate.
The second big driver of medical costs is technology. The medical sector is the last bastion of individuals and groups that have not undertaken new technology to make their sector more efficient and profitable and less driven by costs. Addressing technology means that we’re going to improve the quality of care, because too many mistakes have been made because of the lack of new technology. We will make the system more efficient, and we will bring down the cost by 15–23 percent.
The Market For Vaccines
Iglehart: Let me follow up on a couple of those points. In the context of the U.S. flu vaccine crisis, which has seemingly passed for the moment, a lot of uncertainty remains about the future in terms of availability and the willingness of manufacturers to remain in this business. Here’s my question: Development experts have proposed the idea of creating guaranteed markets for vaccines, as a means of stimulating private research and, hopefully, new products. Is this a step you would favor in getting manufacturers to become more serious players in the vaccine business?
Thompson: It’s just not that simple, John. What we have to do first is to put federal dollars into the budget, which I tried two years ago, to convert from the egg-based vaccine culture to cell culture—a new concept. This change would mean that we could ramp up faster and make flu vaccines better and more dependable than we can with the egg culture, an archaic way of producing flu vaccine that’s more than a century old. To achieve this transformation, we have to put a stimulus and a subsidy in for companies to convert from egg culture to cell culture.
Iglehart: In that context, you said that you tried to increase the budget two years ago for this purpose. Were you successful?
Thompson: I got a small portion of what I asked for: I requested $125 million and I got $40 million—about a third.
Iglehart: Was this request in the Executive Branch?
Thompson: Congress.
Iglehart: Congress. So this would be an appropriation?
Thompson: Yes. So this is the first thing, and there are companies out there that are willing to do it. Second, we have to have a ready supply, like we do in Project Bioshield [a federal program to increase readiness for and response to a bioterrorist attack]. Vaccines are not that profitable. Wyeth got out of the vaccine business because they lost, I think, $33–$35 million the last year they produced flu vaccine. As it turns out, we had an excess of flu vaccine this year [in 2004–05], because people thought it was in short supply and somebody sicker than them should get it.
I think that companies should be responsible for making a certain amount—say, seventy-five million doses. Above that, up to 100 million, the government needs to commit to being the purchaser of last resort, in case the company can’t sell everything it makes. This keeps much of the burden on the companies for the push to sell their vaccine products, but the federal government shares the task as well. This gets both parties involved. The companies have an obvious motivation to sell what they make. For the government, if they don’t put the pressure on to get people vaccinated, they’re going to have to pay for the oversupply and eventually throw it away—which doesn’t make any sense at all. So that’s how I would do it: I wouldn’t guarantee the purchase of one to seventy-five million doses, I would guarantee the purchase of seventy-five million to a hundred million doses.
Iglehart: Are there enough manufacturers in the marketplace?
Thompson: No, but I have talked to some, and several are coming back. MedImmune wants to go into the cell-culture business. Glaxo is thinking about coming back into it big time. Chiron wants to continue. And, of course, Aventis wants to expand. There are four manufacturers, right now, and a couple of biotechs have also contacted me, whose names escape me right now, that are interested in going into cell culture, with some help from the federal government.
The March Of Technology
Iglehart: Let me go back to your point on medical technology. A Washington Post columnist wrote recently that the biggest economic news during one week in February was an indication by the Centers for Medicare and Medicaid Services [CMS] that it would expand the clinical indications for the use of an implantable cardiac defibrillator [ICD] to prevent sudden death from cardiac causes. Depending on how many ICDs were implanted in cardiac patients, the ballpark estimates place the cost to taxpayers at $3–$15 billion. As you look forward, how do you envision that Medicare will accommodate the cost of effective new technologies, such as the ICD, without breaking the bank? And I would raise as possibilities tying reimbursement more closely, through cost-effectiveness modes, to the effectiveness of a technology. How do you see that happening in the future, Tommy, to try to accommodate the promising new technologies with finite resources?
Thompson: We deal with it, going back to what I said originally, by focusing on prevention. Most of these heart defibrillators and heart monitors and stents are needed because people have not taken care of themselves. If we’re going to reduce the costs, we’re going to have to get into prevention, big time. This means that we’re going to have to get the Medicare reimbursement formulas based upon preventive medicine, not curative medicine. It’s a tough sell, and it’s hard to quantify. But that’s where the emphasis has got to be.
Second, we’ve got to be able to stimulate technology. That’s what has made America so much better and healthier than other countries—our technology. Obviously, we’ve got to be able to reimburse for technology, but we’ve got to do it in a smart way, and that’s going to require doctors to put the emphasis on prevention. Many people who are getting these technologies have not taken care of themselves, and doctors have waited too long to start treating them. In the long run, the emphasis has got to be placed upon prevention, to keep from breaking the bank. Technology is good. We’ve got to stimulate technology in the marketplace, because it’s going to continue to propel America forward. We just have to learn to reimburse it.
Spotlight On Prevention
Iglehart: You have wielded the bully pulpit here probably more aggressively, particularly on prevention, than any of your predecessors.
Thompson: On prevention, technology, international aid—I’ve had several causes.
Iglehart: Indeed. But, on prevention, specifically, as we move forward and as society ages, do you anticipate that individual responsibility is going to play a more formidable role in this equation?
Thompson: I don’t know if it’s formidable. But it’s certainly the right value systems, and the right thing to emphasize. We can’t control health care costs in America without doing this.
Where are the dollars going? One out of nine health care dollars goes for diabetes right now. Eighteen million Americans have type II diabetes, and forty-two million more are pre-diabetic. Unless you change that—which cost $135 billion in direct and indirect costs during 2004—over the next five years, forty-two million more Americans are going to become diabetic. The system can’t control that, no matter what new technology you have—it’s up to the individual to take care of his or her own health. So we have to address this. I sometimes feel like a lone wolf out there, but I’m telling you, I’ve got the correct message. It’s the right thing for America. If all of these people who are now pre-diabetic become diabetic, it will break the system, unless we get to them: We have to get their nutrition set right, get their medicines set right, get them tested, and get them exercising. If we do, the expected cost goes down 60 percent, because the incidence will go down by 60 percent.
Conflicts In The Administration
Iglehart: During your four years as the steward of HHS, you had something of a running battle with the Office of Management and Budget [OMB] and at times the White House staff itself. How would you characterize this conflict? Was it mostly over the department and how it should allocate its resources, and how much resources should it have, or were there other substantive issues involved?
Thompson: I think that that is overblown. I don’t think that there was a running fight between us and OMB and the White House staff. I think I articulated and vociferously stated my case on what needed to be done at HHS. This was not always accepted by OMB or the White House staff. I think that was a mistake on their part, because we had great ideas over here. We could have helped achieve health system reforms faster and better if we had been listened to more. But that’s what you have in a free government—a clashing of ideas. Sometimes ideas are accepted, and sometimes they aren’t. Once they’re turned down, since the president is the one whose name is on the ballot, we have to support him.
Iglehart: So it comes with the territory.
Thompson: Yes, it does.
Global Health Threats
Iglehart: Let me ask you about a comment you made at your last news conference, in relation to your expressed concerns about the food supply and terrorists. Did that come out of a context of your belief that there simply were not adequate resources being put toward protecting the food supply?
Thompson: John, first, let me tell you that a reporter asked me what was wrong. I said that my primary concern was a flu pandemic. I am more concerned about the possibility of H5N1 virus—which is the avian flu right now in China—turning out to be a pandemic flu, which could harm the entire world. I know that the department is paying attention to this concern, but I don’t think that the rest of the world is, and I also don’t think that the country as a whole recognizes the possibilities of a pandemic flu, like that which took place in 1918.
Iglehart: What is the department recognizing, in your view, that other countries are at least not recognizing as strongly or are ignoring?
Thompson: There should be an initiative like Project Bioshield, where we develop vaccines faster, and better; this includes a complete transformation of the vaccine industry from egg culture to cell culture. The World Health Organization has got to put a stronger emphasis on this particular aspect of global health. The numbers of what could happen are staggering, if the avian flu [H5N1] would start to mutate and start being transmitted easily from human to human—which is entirely possible, and which concerns me greatly.
Iglehart: Tommy, today, in Asia, is there human-to-human transmission of avian flu?
Thompson: Not yet. In two cases—one in Vietnam, and I’m not sure where the other one was—a child gave the flu to another member of the family, or a couple of members of the family. But it hasn’t happened in a widespread fashion yet.
Iglehart: Let’s return to the issue of food safety, if we might.
Thompson: I’ve been talking about food safety for a long time, John. In fact, I made the same concerns known when I testified in front of Congress three years ago, right after 9-11. In fact, I did it before 9-11. Nobody listened to me before 9-11. After 9-11 we were able to get a bill passed—Title III of the Bioterrorism Act of 2002—which was drafted in this department and pushed by me. For the first time, the FDA [U.S. Food and Drug Administration] has the ability to receive notices from people who are going to ship food into the United States—we never had that before. The first time a company ships food into the United States, it must register. We’ve never had that before, either. Also for the first time, we have the power to stop companies and suspend the shipments into this country if we see some adulteration or other concerns. Those are some awesome powers that the FDA did not have pre 9-11. We now have them, based upon the law that we drafted here and passed. And that is a very good thing.
Second, regarding imported food, we’ve gone from 12,000 inspections to 90,000 inspections this year, which is almost a 700 percent improvement. But at the same time as we’ve increased the inspections, the number of shipments coming into the United States has also increased. So, we’ve only gone up to inspecting about 3 or 4 percent of the food coming into the United States. That concerns me. However, we have been able to double the number of employees from 750 to 1,500 inspectors. We only had 750 inspectors to inspect more than 56,000 places that are under our authority. It’s very time consuming with very little manpower.
We’ve also improved the technology used in these inspections. This has been helpful at the borders and at the airports. But we still have a long way to go on technology and manpower, and that is what my clarion call is to Congress. The U.S Department of Agriculture has 20 percent of the responsibility but 80 percent of the dollars to use for inspections. We have 80 percent of the responsibility and only 20 percent of the inspectors. So the balance is out of whack for the FDA. That agency has been starved by Congress for a long time. We’re finally now getting some reasonable allotments into the FDA for food inspections.
The reason I made the statement is that after pandemic flu, I am very concerned about food safety, even though we’ve made tremendous improvements in the past three years. I want to be sure that the White House and Congress receive this clarion call from me.
Examining The FDA
Iglehart: The FDA has had more than its share of troubles in recent times. Perhaps the reason is inadequate resources. I would be interested in your opinion about that agency, and what your prescription is for strengthening it.
Thompson: Thank you for the question. First off, the Food and Drug Administration is, with all its bad press, still revered by the American public. Even at the height of the Vioxx and Celebrex and Aleve situations, 73 percent of the American public still believe that the FDA is doing a good or excellent job. That’s better than anybody else in public life. They definitely got some bad press over Vioxx and Celebrex and Aleve. Let me talk to you about that for a moment. I’m so happy that you asked me the question, because nobody ever asks me about this.
Here’s what happened. The FDA said to use these medicines only in this amount for this period of time. If you use them in the amount recommended by FDA, for the period of time recommended by the FDA, as specified on the label, there will be no consequences. However, things went wrong when the medicines were given to a group of individuals who were age seventy or older, in higher doses than recommended by the FDA, for a longer period of time. Now, who’s wrong here? If you follow what the FDA has directed to be placed on the label, nothing bad happens. Help me with this picture. The FDA did its due diligence and came back with a report making its recommendations. Those recommendations were sound. And yet it gets criticized because some scientists at HHS did a study that found harmful effects in older populations using more than the recommended dosages. Some of these scientists are from the NIH [National Institutes of Health], and they have the right to do that study. The FDA made the correct recommendation, but this part of the story didn’t make the headlines.
The FDA can be improved—everything can be improved. I’m a strong believer in government reform, John—that every division in the federal government can be made stronger and better. As far as the FDA goes, I think we’ve got to split the group of scientists who do the approval of the original product from those who manage the postapproval processes. Those who do the postapproval processes should report directly to the FDA commissioner and not to somebody else who’s scientifically based within the division. That will make a huge improvement. I recommended this to the White House, to Les Crawford [FDA deputy commissioner], and to incoming secretary Mike Leavitt.
Iglehart: In that separation, do you believe that postmarketing drug surveillance needs to be strengthened?
Thompson: Yes, I believe that it does.
Medicare And Medicaid
Iglehart: Let’s switch our focus to Medicaid. You wrestled with it as Wisconsin’s governor for many years and have obviously been close to it as HHS secretary. What’s your vision now for the future of Medicaid? Must its future growth be substantially trimmed? And, if so, how would you envision that happening? I mentioned several scenarios. Optional benefits trimmed. Eligibility tightened. The matching formula changed. What’s your vision for Medicaid in the future?
Thompson: My vision for Medicaid is like that for Medicare. The Medicare law is a very good law. The more you look at the Medicare drug law that we passed, you’re going to hark back to what Tommy Thompson said: This is a very good law. For the first time, it’s doing what is necessary: modernizing, covering physical exams before benefits begin, managing diseases, allowing for discretion for the CMS and the HHS secretary to try new techniques as demonstration programs. And it’s going to provide for prescription drugs. These modernizations of Medicare were badly needed, and they are going to prove that Medicare has evolved and can be even better in the future. Wait and see.
Medicaid has the same old structure that Medicare had. It’s based upon things that are no longer true in medicine. So to control Medicaid costs, we have to split Medicaid into those who require acute health care and those who require institutional and long-term care. Medicaid has combined both of those. So there’s no stimulus—no incentives—to improve the care systems. For acute care, we’ve got to allow complete flexibility to the state governors, to maximize each state’s approach; this should allow for improved access, demonstrations, and more optional services. On the long-term care side, we must increase the incentives to keep people in their own homes instead of going into institutionalized care. This will allow Medicaid to be more streamlined and more efficient, and it’s also going to cost less. The big future expense is long-term care.
Iglehart: Have there been Medicaid demonstrations in relation to home care, to date?
Thompson: Yes.
Iglehart: Has success been documented there?
Thompson: Yes, yes. Our own state of Wisconsin started the COPs program [Community
Options Programs, enabling disabled people to maintain independence and live at home]. That was the first one, and I expanded it when I became governor.
Iglehart: Can you envision the day when the federal government assumes responsibility for long-term care, in relation to Medicaid?
Thompson: That was a Reagan idea, back in the 1980s. Reagan made an offer to the states. He said, Let’s split Medicaid; let’s have the federal government take over long-term care, and you states handle acute care. I was an incoming governor at that time, and I said, Let’s take it. That would have been the smartest thing the states ever did. We lost that option, I think because it came from Reagan, and states had this feeling that it must be something devious or underhanded that he was trying to offload on the states. I remember this well; I was a freshman governor giving a speech to the National Governors Association, feeling somewhat intimidated because I was so new on the job. But I said that we should take it and run with it. It would have been the smartest move the states made.
The second big mistake the states made is when two years ago I offered them the option to modernize Medicaid. I had OMB support to do it. This would have been a smart move by the states, too, but they turned it down.
Iglehart: Are they going to get a third great offer?
Thompson: No.
Changing Attitudes Toward Federalism
Iglehart: Has your view changed, in terms of federalism, from when you were governor to today?
Thompson: Yes.
Iglehart: How has your attitude changed?
Thompson: It has changed for the better in one area and changed for the worse in another. Regarding the change for the better, I am much more impressed with the caliber of people at the federal level. I think we have giants working here, and I would say that the vast majority of federal employees are absolutely outstanding, hard-working individuals, committed to their programs, to doing what is right for the taxpayers, and to the federal government. I did not expect to see that caliber of people at the federal level—that dedication and that passion.
The bad side is, I knew that the federal government moved slowly, but I never realized just how slowly. That is a huge problem area for the future, because the bureaucracy, Congress, and the partisanship in this city are such that it takes too long to get changes made in a fast-moving society like ours. This is evidenced by the fact that it took twelve years to pass a Medicare bill covering prescription drugs. You just can’t move quickly in a federal bureaucracy like you can at the state level. So in that way, I’m more skeptical of the potential for progress.
Expanding The Notion Of Medical Diplomacy
Iglehart: You’ve expressed a strong interest in formulating a U.S. foreign policy that meshes much more closely with what you have referred to as “medical diplomacy.” Translated into real terms, what actions might this lead to, in your estimation?
Thompson: What I really would like to see happen is for medical diplomacy to be made an integral part of our foreign service and our defense policy. I really believe that America has the best chance to beat the war on terror and defeat the terrorists by enhancing our medical and humanitarian commitments to Muslim countries that are generating the terrorists.
I have seen it firsthand in Afghanistan and Africa and India and Pakistan. In Afghanistan I was involved with remodeling a hospital in Kabul, where women and children have been treated like chattel for years; they now have a hospital that will minister to their needs. It has been well received. I have seen it among children in the slums of New Delhi, where I distributed polio vaccine and saw mothers and children clutching at us and thanking us for being Americans and being generous. I felt the same way in Pakistan, when I did the same thing with polio. I have seen the same thing in the villages of Botswana and Mozambique and South Africa, where we’ve distributed antiretroviral drugs to people who respond so favorably and so gratefully to the work of Americans. This is where we’re going to be able to do so much more.
When I travel abroad, I meet with ministers of health and with people in these poor villages, and all they really want is potable water, good health care, and good education for their children. I see many dedicated parents who have so much hope and belief. When we are able to provide these things to people who know that they come from the United States, it destroys all of the stereotypical fantasies that people have about the United States, and it tears at the rhetoric of the terrorists to such an extent that you can build up legions of support among women and children all over these countries. This is what I believe is necessary.
I look at the fact that we just have stopped producing the Comanche helicopter, after spending $8 billion—what great humanitarian services we could have done in this department, internationally, under the rubric of medical diplomacy, with that money. We could have built wells and clinics and hospitals, all over Afghanistan, and Iraq, in the Sudan, and so on. America could export this huge medical technology that you and I have talked about, this great medical talent, and do something really good for the world that is going to work against the efforts and rhetoric of the terrorists.
Advice For Secretary Leavitt
Iglehart: OK, just one more question. Do you have any advice for your successor?
Thompson: My advice to my successor is very positive. Mike Leavitt is a wonderful person. He’s an individual for whom I have great admiration. I would strongly urge him, if he wanted my advice, to run this department as an integrated whole, which I’ve tried to do, instead of a federation, and to put the emphasis on prevention and technology, which I am fairly confident he’s going to continue to do.
Iglehart: Within that context, the categorical grant structure on the discretionary side of the department—is that something that you viewed as an obstacle to making progress, or not the best use of the money? Would you collapse categories, if you were still the czar?
Thompson: I would collapse some and expand others. I don’t think it’s set up in the best and most efficient way possible. We’ve tried to make improvements, and we’ve made several. Like I said before, everything can be improved. Nothing should be retained as status quo.
As far as grants are concerned, you need to use a better technology. We started e-grants, and we are now getting most of our grants on the Web pages, so people can apply easily. I think we have to be able to respond faster, and I think we have to look at not the same old individuals getting the same grants year after year. This has been something of a byproduct of this department—that the same people get the same grants over and over. I would like to shake it up and give more grants to more people and to more groups than we have reached in the past.
Tommy Thompson stepped down in January 2005 as secretary of the Department of Health and Human Services; he is now president of Logistics Health Inc., a partner at Akin Gump, and a senior adviser at Deloitte and Touche USA LLP. John Iglehart is the founding editor of Health Affairs.
DOI:
10.1377/hlthaff.w5.225
©2005 Project HOPE–The People-to-People Health
Foundation, Inc.
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