Executive Editor

Charles Kolb since 1997 has been president of the Committee for Economic Development (CED), with offices in New York City and Washington, D.C. CED describes itself as an independent, non-partisan organization of 250 business and education leaders that have joined the organization to support its economic and social policy research, including changes in the nation's healthcare system, and it seeks implementation of its recommendations by the public and private sectors.

Kolb began his career practicing law in Washington and then held federal government positions from 1983 to 1990 — assistant general counsel, Office of Management and Budget (1983-1986); deputy general counsel for regulations and legislation, U.S. Department of Education (1986-1988); and deputy under secretary for Planning, Budget and Evaluation, U.S. Department of Education (1988-1990). From 1990 to 1992 he was deputy assistant to the president for domestic policy

Recently, the CED issued two lengthy reports containing analysis of U.S. healthcare and making policy recommendations for driving changes in the system to reduce cost, improve outcomes.

The first, "Quality, Affordable Health Care For All: Beyond The Employer-based Health-insurance System," proposes the development of a "Health Fed," a sort of healthcare Federal Reserve to oversee a broad system of private insurance based on the establishment of "exchanges" that would provide competive insurance offerings and companies, with emphasis on the structuring and selection of insurance plans that fit the specific needs and ability to pay for individuals and families.

In February, the organization issued a report titled "Harnessing Openness to Transform American Health Care," with recommendations based on much broader use of electronic/digital technologies for sharing healthcare data and encouraging a greater corporate emphasis on more open alternatives to the patent-centered control of information.

Biomedical Business & Technology discussed with Kolb the CED's work, its strategies, and its ideas concerning how to improve healthcare in the U.S.

Q. What were some of the key experiences in your personal or professional background that brought you to your position with the Committee for Economic Development?

A. Two experiences are relevant to how I came to CED. I spent a number of years in the public sector, in the government, working on public policy issues. I worked in the office of management and budget, Department of Education and the White House ... dealing with a whole host of policy issues .... I also worked in the first Bush administration as deputy assistant to the president for domestic policy

Then I was four and one-half years at United Way during the scandal cleanup period. From 1991 into 1992, that great organization had a scandal involving some of its former leaders. I came in as a general counsel with Elaine Chow, labor secretary, to clean up that mess.

So public policy and management are a good fit for me.

Q. What do you see as the primary role of the CED?

A. The CED's niche is as a disinterested public policy voice to the country's economic growth and development, including issues such as education, campaign finance, healthcare, trade and globalization, corporate governance, regulatory reform, legal reform and global poverty. We were founded in 1942, and one of our early projects just after the World War II led to the creation of the Marshall Plan. Throughout our history, we've had the experience of bringing business leaders together around policy issues that don't always relate to bottom line interests, but they have been sufficiently far-sighted so that they have an impact on the future.

Q. What methods does the CED use for impacting larger policy issues?

A. We don't lobby, we are totally driven by our trustees. They decide the issues that we take up and become engaged in our development process, working with business roundtables or chambers of commerce.

We do work with these groups from time to time, but have a very different approach, a very different procedure.

Q. How are your approaches different from lobbying?

A. You can educate without lobbying. For example, in what we're trying to do in early education and healthcare, we get together a growing number of business leaders that will be vocal on these topics, business leaders that are interested in front-end education in pre-K for an educated workforce, or no child left behind [emphasizing] the front end of the process. We also devote so much time and effort to remediation.

Q. What has been your approach to the issue of healthcare coverage in this country?

A. We thought [at first] that the employer sponsored system that we've lived with from pretty much the end of World War II was salvagable, that you could build on the existing structure. But that's not likely.

The trend is in the opposite direction, more employers getting out of healthcare, a cost trend that is upward and not at a sustainable rate. And more business leaders have come out as advocates for reform.

We have 250 people on our board. The reason it so large, they become engaged in what we do, and we have a variety of strategies. We met [recently] with senators and staff, we have business leaders who participate in conferences, participate in [various coalitions]. We use our network and are continually expanding our network. We have had fairly significant breakthroughs, campaign finance was one.

We became the leading business voice for reforming that system. We hope to have a similar effect in healthcare, but it's a complicated area. A reform of that magnitude is not going to be easy.

Q. CED recently issued a statement on the need for what the organization termed as "openness" in healthcare. In a nutshell, how do you see greater openness improving the current system?

A. I would say very simply, that technology can be harnessed to drive structural reform, whether you're talking about the way research is conducted, the way data are handled — particularly privacy and security — and the interaction between patients and medical staff. There are ways in which the healthcare system can be much more effective, much more efficient, more productive by becoming more open to better use of technology.

We make this point in the report, "Harnessing Openness," and we also make it as a section in our broader study on healthcare reform, late last year. It makes the point that the healthcare system has not taken advantage of the revolution in information tech that has occurred in the last 15 years.

If it does, it will be more efficient in terms of the care it delivers, and it will cut costs.

Q. Openness is a concept unlikely to be embraced by hospitals not wanting to publicize medical errors, or med-tech and drug companies not wanting to be open about proprietary information. How does the CED's concept of openness address these concerns?

A. Ultimately, the medical establishment is going to be driven to this. And the insurance industry is going to face serious problems when it comes to costs. Several pressure points in the system, for public-held entities, shareholder pressure for private, non-profit hospitals won't be immune. The whole system is going to have to figure out a way to be more efficient.

Companies that make drugs and medical devices are probably [going to do this] faster than others, because they're in highly competitive environments. If their leaders take a look at the world as it's evolving. It's a no brainer in my view — absolutely a no brainer.

Q. What would be the best pace to start in bringing about more healthcare openness?

A. Right now, I'm learning by testing out the medical system [myself] by dealing with a kidney stone — and I go from one doctor, a generalist, to a specialist. There should be no reason why those two doctors cannot communicate electronically and share all the files, all the tests results electronically but that doesn't happen yet.

A generalist is the right place to start, then referral to a specialist, and in between, in this case, the hospital, that did the test, those entities should be linked electronically and it would save everyone time — save time in the transfer of records, the accurate review of records, in communication between all the players.

The party that's not there is the insurance companies, the third-party payer. Having all of these transactions handled electronically ... . every time you go into a doctor's office and instead of filling out a piece of paper that has to filed somewhere, and photocopied — it's all handled electronically, and sorted in a readily accessible database that saves everybody a whole lot of time.

Think about the communications revolution over the last 20 years. It has made it simpler cheaper and faster to to communicate ... with email and other ways to communicate to share, to store data. Healthcare has not taken advantage of that. I take a prescription into pharmacist, I have to tell them what's on it because they can't read it. Thousands of patients are harmed by exactly that problem.

Q. The CED has also issued a statement offering alternatives to employer-based health insurance, and rejecting the idea of a governmental, single-payer system. What do you see as the disadvantages of such a governmental system?

A. Most American medicine, including Medicare, is run on a fee-for-service model, and that model is inherently inflationary, because all of the incentives are to maximize the number of visits. If you have a structure that's set up that way you're going to see cost escalation that is not sustainable.

If you look at how the system is structured, and the economic incentive abided by, it's no surprise that on a fee-for-service model, the ability to achieve significant cost savings is undermined by the very nature in which the medical services are delivered, the fee-for-service model.

Q. Your healthcare recommendations also propose the establishment of a "Health-Fed" as an organization that would oversee the healthcare system. What's the idea behind this?

A. The Health Fed comes in as a regulatory body to make sure you have a level playing field. It would make sure that [insurance] inclusion decisions get made in a professional, as opposed to a political manner. The concept is to take the politics out of some of these very important healthcare coverage and delivery questions.

We thank that the model has been set by the Federal Reserve banks — marketed-oriented and incentive-based. Look at the earmark debacle in Washington and see what happens, congress starting to fiddle with its own procedures. You could have exactly that type of political intrusion that could undermine the healthcare system.

Q. What type of things would the Health Fed do?

A. It would make sure, for example, if you're going to have organizations operating across state boundaries, that people are being handled fairly, not being discriminated against, and that meaningful decisions are being handled in a way that is fair, not intruded on. This is too important to be handled in an adhoc fasion.

Q. One of the issues in the current debate is whether health insurance coverage should be mandated. What's CED's position on this?

A. I think the serious goal needs to be universal coverage, but in any system there will be people who don't get coverage, for a variety of reasons.

But the mandate to have [health] insurance is important because of the issue of risk pools [and the need to have large numbers of people in the risk pool]. You get more rational results if people have to participate.

Q. About rising healthcare costs. Is the villain new technologies?

A. First of all, I think that in this country, we probably have the greatest reseach capacity of any country in the world. That's a good thing and something that I hope will be encouraged — breakthrough medical devices, breakthrough pharmaceuticals, breakthrough practice modalities. We don't want to lose any of that.

The challenge will be determining how some extremely expensive practices, techologies or drugs are handled under the cirumstnaces.

But that's not the main issue facing our healthcare system, if you look at how most of the healthcare dollars are spent, something like 80% treating five or six chronic disease, the result of conscious lifestyle decisions, what you eat, smoke exercise, right there.

None of us can alter how we're born, but we do have a lot of control over the causes for many of those main chronic disease, so what we say in our earlier report is that we need to have a much better emphasis in this country on prevention.

We see the breakthroughs and the wonderful things that come about in hospitals and universities and pharmas. That's all wonderful, but wouldn't you rather avoid becoming diabetic, to have to go through all the treatment?

Q. A lot of that is human nature. How do you go about altering human behavior?

A. We launched a campaign against smoking which has had a significant effect on reducing smoking in this country. I think that public leadership, such as on smoking campaigns and anti-drug campaigns make a difference. And I'm convinced a similar type of campaign around lifestyle changes. Just look at the fact that we're facing this epidemic of obesity.

We'll get there, costs will drive us there, competition will drive us there, and ultimately patient demand.