Medical Device Daily Washington Writer

WASHINGTON — The single most important thing the U.S. can do to put the nation back on a sustainable long-term fiscal course is to slow the growth rate of healthcare costs, said Peter Orszag, director of the Office of Management and Budget.

"Healthcare is the key to our fiscal future," Orszag declared earlier this week at the opening of the White House Fiscal Responsibility Summit.

President Barack Obama convened the summit, which involved about 130 invited leaders from Congress, communities, businesses, academia and the financial and labor sectors, to have a frank discussion about the long-term fiscal problems facing the U.S.

Speaking at the summit's opening, the president said he plans to cut in half the $1.3 trillion deficit he inherited by the end of his first term.

"This will not be easy and will require us to make difficult decisions and face challenges we have long neglected," Obama said. "We cannot simply spend as we please and defer the consequences to the next budget, the next administration or the next generation."

The president noted that in 2008, the U.S. paid $250 billion in interest on its debt, which is about one in every 10 taxpayer dollars.

If the nation confronts the current economic crisis without also confronting the deficits that caused it, "we risk sinking into another crisis down the road," Obama asserted.

The president said that not only is he committed to having each federal agency's budget scoured "line-by-line' to root out waste and inefficiency and eliminating programs that do not work, but he also declared that he would reinstate the pay-as-you-go, or pay-go, rule followed by the Clinton administration, which resulted in a $236 billion surplus by 2000.

"In recent years, we have strayed from this rule and the results speak for themselves," Obama said.

Just last week, leaders from the drug industry predicted that the president likely would set aside his pledge to follow pay-go to give the economic stimulus plan time to work.

But Obama said that the federal government should be bound by the same rules followed by many American families of "not spending what you don't have."

Under his fiscal responsibility plan, the president said the U.S. would be forced to make tough choices over the coming years to rein in costs, including controlling healthcare spending, which he said is "the single most pressing fiscal challenge we face, by far."

The path to fiscal responsibility "must run directly through healthcare," said Orszag, who led the summit's healthcare breakout session with co-moderator Melody Barnes, director of the White House Domestic Policy Council.

Improving the efficiencies of the health system to get better results for less money is "not just or even primarily" a budget issue, he said, but it would also provide direct help to struggling families, "since healthcare costs are reducing workers' take-home pay to a degree that is both underappreciated and unnecessarily large."

Orszag noted that for many states, healthcare is increasingly crowding out other priorities, such as higher education, which in turn is leading to higher tuition and painful cutbacks at state universities.

"All of this is why the president has said time and again that he is committed to reforming the health system this year," he said.

Over the medium to long term, the U.S. is on an "unsustainable" fiscal course, Orszag said. To be responsible, we must begin the process of fiscal reform now."

Omnibus bill boosts FDA budget

Democrats have unveiled a $410 billion spending bill for fiscal 2009, which included $2 billion for the FDA, a $335 million increase from 2008, to help the agency improve the safety of domestic and imported food and medical products. The bill also calls for $972 million for food safety and inspection.

In addition, the 2009 discretionary spending bill includes $30.3 billion for the National Institutes of Health (NIH) – a $938 million increase over last year – for research into diseases such as Alzheimer's, cancer and diabetes, and $6.6 billion for public health programs administered by the Centers for Disease Control and Prevention (CDC; Atlanta), which is an increase of $239 million over last year for the agency.

The NIH also will be receiving $10 billion in the economic stimulus bill, enacted last week.

The $410 billion discretionary spending bill "works in harmony with the economic recovery package, making investments that address the country's immediate needs while investing in our long term economic strength," said Dave Obey (D-Wisconsin), chairman of the House Appropriations Committee.

N.D. Rural Health Expert Takes HRSA Helm

While top positions remain unfilled by permanent leaders at the Department of Health and Human Services, FDA, CDC, NIH and the new Office of Health Reform, the White House last week announced that Mary Wakefield, director of the Center for Rural Health at the University of North Dakota (Grand Forks), will take the helm at the Health Resources and Services Administration.

Wakefield, a nurse, has expertise in rural healthcare, quality and patient safety, Medicare payment policy, workforce issues and public policy. She previously served as director of the Center for Health Policy, Research, and Ethics at George Mason University in Virginia and also served as the chief of staff for Sen. Kent Conrad (D-North Dakota) from January 1993 to 1996 and as legislative assistant and chief of staff to former Sen. Quentin Burdick (D-North Dakota).

Wakefield also served as chairwoman of the Institute of Medicine's Committee on Health Care Quality for Rural America.

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