After Health Care Passage, Obama Pushes to Get It Rolling

The president has tapped Pete Rouse, one of his closest White House advisers, to oversee what one insider described as an “elaborate implementation plan.” And he personally pressed Nancy-Ann DeParle, who directed the legislative effort and has long experience in the health sector, to shelve her plans to leave; she will instead manage construction of the machinery for extending coverage to about 30 million uninsured Americans while also moving toward the law’s long-run goal: cost containment.

Kathleen Sebelius, the secretary of health and human services and, before that, insurance commissioner and then governor of Kansas, has assumed a higher-profile role both within the administration and publicly.

Ms. Sebelius has begun work on the first of what will be numerous regulations for Medicare, Medicaid and private health care providers. Within her department, she has reorganized the Centers for Medicare and Medicaid Services to make room for an innovation center intended to test ways of reimbursing providers that could reduce spending while improving patient care.

The secretary can expand successful ideas nationwide without Congress’s permission.

Mr. Obama, whose legacy will be shaped less by the law’s passage than by how well it works, has begun marshaling what is “essentially the biggest transformation of government since World War II,” said David M. Cutler, a Harvard economist who was Mr. Obama’s chief campaign adviser on health policy.

The law’s main provisions, including those creating state insurance exchanges where uninsured Americans can shop for competitively priced policies, will not take effect until 2014 — two years after the next presidential election.

But Mr. Obama has urged advisers to consider moving sooner to set up an Independent Payment Advisory Board for controlling Medicare spending. Some administration officials, however, fear that creating the board much before 2014 could prematurely make it a target for attacks of the “death panel” sort, leaving it politically vulnerable before its powers to impose changes take effect.

The board was a top priority for Mr. Obama during the long legislative battle. He faced down Democratic leaders, who opposed delegating powers to an unelected board for the government’s popular health insurance programs.

Even some skeptics of the health insurance law say that the board, and the law more generally, could prove more effective at restraining spending than estimated by the nonpartisan Congressional Budget Office — if only because of the nation’s bleak fiscal future.

With the federal debt projected to rise to levels that many economists consider unsustainable, mainly due to growing health costs and an aging population, Congress might have little choice in coming years but to accede to unpopular limits on payments for doctors, hospitals and other health care providers of the kind that lawmakers have ignored in the past. The board would give them political cover to do so.

“I’m modestly optimistic because the fiscal environment which we will be in, in three or four years, will be so desperate that the Congress and the administration will be looking for any mechanism or device that can hold down the growth of spending,” said Robert Reischauer, an economist, health policy expert and former director of the Congressional Budget Office. “This act sets a foundation, I think, upon which effective cost controls can be built.”

The president will nominate the 15 members of the Independent Payment Advisory Board; Senate confirmation is required for the six-year terms at what are to be full-time jobs, for better bureaucratic clout. Each year that Medicare spending exceeds annual targets, as most analysts expect it will, the board must propose ways to reduce payments to care providers.

Unlike an existing Medicare commission whose recommendations Congress routinely disregards, the board could put its proposals into effect unless Congress modified or rejected them within 30 days. Even then, the president could veto a disapproval resolution; it would take a two-thirds vote of both houses of Congress to override the veto.

“It’s a very promising structure,” said Peter R. Orszag, Mr. Obama’s budget director. “But like anything else in life, it’s what you make of it. So whether it realizes its potential depends on how it’s implemented.”

The administration and Democratic lawmakers created a more muscular board in consultation with the Congressional Budget Office, which otherwise would not have “scored” it as producing many savings.

Because of Congress’s restrictions and the board’s delayed start-up, however, the board’s savings over the next decade would be a small fraction, $15.5 billion, of the law’s nearly $500 billion in total Medicare reductions projected through 2019. After 2014, the board can move to alter payments for doctors, but not for hospitals until 2019. It cannot change benefits and out-of-pocket costs for Medicare recipients.

Tom Daschle, the former Senate Democratic leader who was Mr. Obama’s first choice for health secretary, said the board should ultimately be expanded to deal not only with Medicare but also with health insurance generally. Otherwise, he said, doctors will shift their costs that Medicare does not fully reimburse to patients with private insurance, “which really exacerbates the problem.”

Mark B. McClellan, who headed the Centers for Medicare and Medicaid Services in the second Bush administration, said, “The board is going to be pretty constrained in what it can do.”

“A more promising avenue” for reducing costs, he said, is likely to be found in the law’s many pilot programs and the Medicare and Medicaid innovation center.

Mr. McClellan and other health economists hope that those experiments that prove successful ultimately replace Medicare’s fee-for-service system — which they say rewards doctors and hospitals for ordering multiple and often unnecessary procedures — with bundled payments that encourage each patient’s various caregivers to coordinate care for a fixed sum.

“You could get people into huge fights about which of those is the most important, and the short answer is, we just don’t know,” said Mr. Cutler of Harvard, who is optimistic about the law’s potential to “bend the cost curve,” as health economists say.

Gail R. Wilensky, who ran Medicare and Medicaid during the first Bush administration, said she was not optimistic.

“Just getting these pilots going is no small matter,” she said. “This is going to take a lot of leadership.” And the history of expanding pilot projects nationally, she added, “is pretty grim.”