Medical Device Daily Washington Editor

WASHINGTON — Max Baucus (D-Montana), ranking Democrat on the Senate Finance Committee, last week predicted that Michael Leavitt, President George Bush's nominee to take the reins as secretary of the Department of Health and Human Services, will be confirmed for that post.

“You've got the juice,“ he told Leavitt.

That comment came on Wednesday, the second day of hearings to consider Leavitt's confirmation. The previous day, the nominee appeared before the Health, Education, Labor and Pensions Committee (HELP).

Finance Committee Chairman Charles Grassley predicted a vote to confirm Leavitt early this week. If confirmed, Leavitt will head the largest department in the federal government. HHS encompasses 300 programs, has 66,000 employees and is budgeted for more than $550 billion.

While receiving a cordial show of support from both sides of the aisle, committee members pressed Leavitt on key “hot button“ issues, such as added Medicaid funding, operational issues at the FDA, the very tenuous funding to implement healthcare information technology and, specifically, the possibilities for creating a national electronic medical record system.

Leavitt, 53, former three-term governor of Utah and current administrator of the Environmental Protection Agency, told Finance Committee members that he believed Medicare was “inefficient“ and could serve the public if it were better managed.

Under repeated questioning, he would not rule out potential budget cuts for Medicaid, saying, “We can expand the number of people we serve with the available resources,“ Leavitt said.

“I believe Medicaid is a vital program,“ he added. “It is a remarkably important means by which we serve the poor in this country, but it is not meeting its potential to do good in the lives of the poor.“

On Tuesday, Leavitt had called Medicaid “flawed and inefficient — we can do better and expand access to medical insurance to more people by creating flexibility for our state partners and transforming the way we deliver it.“

At Wednesday's meeting, committee members focused on some of Leavitt's comments and indicated that limiting Medicaid spending may not be the best approach.

“I hope we don't see any proposals that go in that direction,“ said Sen. Olympia Snowe (R-Maine) “It would be a mistake to go down that road.“

Snowe said she would oppose any effort to “subject Medicaid to the financial uncertainties of block grants or formula changes.“ She also said the federal government should not force states to pay “the lion's share“ of Medicaid costs.

Baucus said Medicare and Medicaid have “come under fire in recent years, especially from this administration for being too costly, too tolerant of fraud and too inflexible.“

While acknowledging the growth in Medicare costs, Baucus contended that this is mostly the result of increased enrollment. “In fact, Medicaid growth is lower on a per-capita basis than both Medicare and private insurance,“ he said.

According to Sen. Jeff Bingaman (D-New Mexico), the per-capita costs of private health insurance have gone up by 12.6%, Medicare spending rose by 7.1%, and Medicaid has risen by just 4.5% in comparison.

“To me, that does not seem inefficient,“ Bingaman said, adding that the cause is a growing number of people in need, not mismanagement.

At the Tuesday hearing, senators urged Leavitt to appoint a permanent head for FDA. The agency has been without a commissioner since Mark McClellan, MD, moved over to serve as administrator of the Centers for Medicare & Medicaid Services last March. Acting Commissioner Lester Crawford has been in charge at FDA since then.

HELP Committee Chairman Judd Gregg (R-New Hampshire) called the FDA an “agency in crisis,“ and urged Leavitt to push for naming a permanent head by the end of the month.

Leavitt said he would do all he could to see that happen, but that it is ultimately up to the White House to make such a decision.

Edward Kennedy (D-Massachusetts), senior Democrat on the committee, called Leavitt “impressive,“ saying, “Everyone who knows him respects his intelligence, his high energy and his experience as a manager and problem-solver.“

Kennedy said that priorities for HHS include the need to move the healthcare system into “the modern age, using information technology“ and to improve the FDA's ability to detect and “respond promptly to warning signals on the effects of new drugs.“

It is “not right for that agency [FDA]“ to be without a permanent commissioner for so long, Kennedy said.

During a question-and-answer session on Wednesday, Sen. Ron Wyden (D-Oregon) highlighted the nominee's interest in healthcare information technology.

“David Brailer's office has largely been de-funding, losing the money they need,“ Wyden said. “I hope that will be a priority for us, to get support for that office and get it going. After all the talk from both parties, I hope the work can continue to get Dr. Brailer's office funded again.“

Brailer is national coordinator for health information technology. Nominated in May 2004, his office failed to receive funding in the 2005 budget act passed late last year. Originally slated for $100 million in funding, the final version of budget appropriations cut funding completely.

Leavitt agreed that patients would be “well served“ by increased investment in healthcare IT and electronic patient records.

“I had not been announced as a nominee very many days before I sought Dr. Brailer out,“ the nominee said. “I have read about his work. We must have that kind of technology and vision in healthcare.“

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