News & Events

Lack of Medicare Appointee Puzzles Congress

WASHINGTON — President Obama has made health care his top priority. He says the cost of Medicare and Medicaid is “the biggest threat” to the nation’s fiscal future. But to the puzzlement of Congress and health care experts around the country, Mr. Obama has not named anyone to lead the agency that runs the two giant programs.

The agency, the Centers for Medicare and Medicaid Services, is the largest buyer of health care in the United States. Its programs are at the heart of efforts to overhaul the health care system. If it had an administrator, that person would be working with Congress on legislation and could be preparing the agency for a new, expanded role.

“The vacancy stands out like a sore thumb,” said Dr. Denis A. Cortese, president of the Mayo Clinic, often cited by the White House as a health care model.

“In effect,” Dr. Cortese said, “Medicare is the nation’s largest insurance company. The president and Congress function as the board of directors.

“Under a strong administrator, it could take the lead in making major changes in the health care delivery system, so we’d get better outcomes and better service at lower cost.”

The agency provides health insurance to 98 million people, pays 1.2 billion claims a year and has an annual budget of more than $700 billion. It has a pervasive influence on medical care, regulating hospitals, doctors, health plans, laboratories and almost every other type of health care provider. When Medicare decides to cover a new treatment or adopts a new payment policy, private insurers often follow its lead.

Trying to remake the health care system without a Medicare administrator is like fighting a war without a general.

“You need a general,” said Senator John D. Rockefeller IV, Democrat of West Virginia and chairman of the health subcommittee of the Finance Committee. Of the job vacancy, Mr. Rockefeller said: “It’s a big problem. I can’t explain it.”

Administration officials said they were searching for someone with the right mix of managerial experience and clinical expertise.

“We’re working hard to find the best fit to steer C.M.S. during this critical period,” said Reid H. Cherlin, a White House spokesman. “We look forward to nominating an administrator soon.”

The agency has not had a regular Senate-confirmed administrator since October 2006, when Dr. Mark B. McClellan stepped down. Its chief operating officer, Charlene M. Frizzera, has been the acting administrator since January.

Mr. Cherlin said the agency was “running at 100 percent capacity” and continued to provide vital services.

But Dr. John C. Lewin, chief executive of the American College of Cardiology, said that, in the absence of an administrator, many decisions were being made by “a beleaguered bureaucracy.”

Since Mr. Obama took office, more than a half-dozen people have been seriously considered for the top job running Medicare and Medicaid. Some have been interviewed by White House officials, but the names sank from view as fast as they bubbled to the surface.

Among those who have been considered are Dr. Donald M. Berwick, president of the Institute for Healthcare Improvement, a nonprofit group in Cambridge, Mass.; Dr. Glenn D. Steele Jr., president of the Geisinger Health System, in Pennsylvania; and Dr. Nicholas J. Wolter, chief executive of the Billings Clinic in Montana.

Some insiders suggest that the president is waiting for Congress to finish work on health care legislation, so he could pluck an administrator from Capitol Hill — someone like Elizabeth J. Fowler, chief health counsel for the Senate Finance Committee, or Jack C. Ebeler, a top aide at the House Committee on Energy and Commerce.

“It’s an extremely important position,” said Senator Ron Wyden, Democrat of Oregon, “and it’s extremely important to have a talented person in that post for health reform.”

Senator Orrin G. Hatch of Utah, a senior Republican member of the Finance Committee, said the delay in naming a Medicare administrator was “of great concern.”

“Medicare is in real trouble,” Mr. Hatch said, noting that its hospital insurance trust fund was expected to run out of money in 2017.

The delay in choosing a health secretary, after former Senator Tom Daschle withdrew from consideration because of tax problems, may have delayed the selection of a Medicare administrator. Some candidates have been reluctant to sell financial holdings in the health care industry. Some apparently wanted more authority than they could have in an administration where health policy is directed from the White House.

Thomas S. Crane, a health lawyer who used to work at the Department of Health and Human Services, said the Medicare agency was “running on autopilot.” For example, he said, “officials are deferring decisions on serious policy questions involving Medicare fraud and abuse.”

To help finance coverage for the uninsured, Mr. Obama and Democrats in Congress propose to squeeze more than $400 billion in savings from Medicare over the next 10 years. They want doctors, hospitals and nursing homes to work together in teams, with Medicare payments eventually based on the quality of care.

They also contemplate huge changes in Medicaid, the program for low-income people, financed jointly by the federal government and the states.

All the major health care bills moving through Congress would use Medicaid as a vehicle for expanding coverage, adding perhaps 11 million people to the rolls, an increase of about 20 percent.

Vernon K. Smith, a former Medicaid director in Michigan who is now a consultant to many states, said the Centers for Medicare and Medicaid Services desperately needed an administrator to address “the future fiscal stability of the Medicaid program.”