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Glitz, Then Grit? Leavitt Unveils 'Cornerstone' Backers

By John Reichard, CQ HealthBeat Editor

May 9, 2007 -- Health and Human Services Secretary Michael O. Leavitt announced Wednesday that he has lined up many, if not most, U.S. health care purchasers to fulfill his vision of a highly competitive and much more efficient health care marketplace.

Leavitt was joined by top White House official Al Hubbard, who is the director of the National Economic Council and who warned that the alternative is a government takeover of the health care system. Flanked by 13 other officials representing business, labor, state government, and the nation's health insurance industry, Leavitt announced that the federal government, health plans representing 100 million Americans, and 97 of the nation's top 200 corporations have pledged their support for his "four cornerstones" of a health system overhaul.

Also signing on are Medicaid programs in 18 states and the District of Columbia, which collectively represent some 26 million enrollees, HHS said.

Leavitt's cornerstones aim to revamp the health care marketplace. His four-point plan would feature a wider adoption of health information technology, standardized methods to measure quality of care, pricing information on individual medical procedures to allow their cost to be compared "apples to apples," and payment incentives for providers to dispense higher quality care and for consumers to choose care that offers the best "value"—the best combination of lower cost and higher quality.

Rising health care costs can be tamed if consumers are armed with good data on the cost and quality of care and their own pocketbooks are affected by the choices they make among competing providers, he said.

Leavitt made the announcement at an event that had all the trappings of a public relations extravaganza, featuring a master of ceremonies, dramatic lighting, a stage full of some of the nation's top executives, and a placard proclaiming that the participants are "Building a Value-Driven Health Care System Together."

Showy aspects aside, the coalition is diverse and potentially powerful—if it can agree on the fine points of system overhaul and a timeline for action. Among those pledging support were business and insurance groups allied with the Bush administration on many issues, but also a significant force in the labor movement, the Service Employees International Union (SEIU). "We totally support what you are trying to do," SEIU President Andy Stern told Leavitt. "We think it's absolutely essential that consumers have an opportunity to get the information they need to make good choices. People desperately need to know" the outcomes of treatment obtained by competing providers, he said.

Hubbard said President Bush "believes very strongly we are close to a tipping point in this country," with the nation on the brink of either adopting a "disastrous" single-payer government-run system, or moving "to a more consumer-directed system."

Leavitt said the initiative is poised to make rapid progress but the specifics on how it might occur and how quickly are unclear.

However, The Leapfrog Group and other employer coalitions announced two new guides at Wednesday's event that are designed to help state Medicaid programs and state employee benefit managers with "step by step" instructions on how to adopt the four cornerstones. The groups released a guide specifically for employers in February.

The guides offer suggestions, but not mandates. For employers, they suggest options they can pick to pursue each of the four cornerstones and advise them to choose at least one.

Leavitt also said Wednesday that HHS is accepting applications for "chartered value exchanges," which will provide consumers with report cards on the cost and quality of care. He also said Medicare is considering the adoption of "value-based purchasing" of hospital care but didn't offer specifics.

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