A Heart to Serve

by Bill Frist

  At the time Republicans had a narrow 51-49 majority over Senate Democrats. I also knew that in the previous congressional session, Democrats had been in the majority by the same margin (51–49), and they failed in their attempt to pass a prescription drug bill. Passing a bipartisan bill would be a challenge—and a test for the new Senate leadership.

  I deliberately chose not to use a budgetary loophole called reconciliation, which would limit the time allowed for Senate floor debate and lower the threshold required for passage to fifty votes. That would have been wrong, because substantive legislation that will ultimately affect every American should be bipartisan and not subject to limited debate and amendment. Reconciliation injects blatant partisanship into the process.

  Bill Thomas put together a strong bill in the House that had conservative backing from the House Republican caucus, in large part because he had significantly expanded consumer-oriented health savings accounts and included a central feature of the Breaux-Thomas approach that would require Medicare to compete directly over time with private-sector health plans. In the Senate we crafted—in accordance with long-standing Senate tradition—a much more bipartisan bill, reflecting both Republican and Democratic principles. Whereas the majority rules absolutely in the House, bills in the Senate require a sixty-vote supermajority to pass, which demands bipartisan cooperation. In the background throughout the debate was Senator Ted Kennedy, a superb legislator who had been committed to health-care reform for some forty years. (My first experience listening to Ted Kennedy on health-care issues was in his office in 1972, when he graciously took the time to speak to a handful of us college students interning in Washington for the summer.) Ted supported the Senate bill and voted for it when it passed the Senate. In the end, however, he did not vote for the final bill, largely because he felt we were not spending enough to subsidize employers, and he distrusted the competition we had injected into the final bill (a major step toward the original Breaux-Thomas plan crafted by Medicare Commission four years earlier).

  The Senate bill passed with bipartisan support, seventy-six to twenty-one.

  And now the hard part started—marrying the House and Senate versions of the legislation into a single bill to be voted on by both bodies. This process, too, had its share of controversy and drama. Congressman Bill Thomas chaired the Conference Committee, the joint House-Senate committee that fashions the final bill. Because I felt so strongly about the bill, I took the highly unusual step of putting myself on the bill-writing conference committee, a role that the elected leader doesn’t usually play.

  Thomas ruled with a heavy hand, and he excluded House Democrats from the active negotiations—not in itself a terribly unusual step since the House rules by strict majority control—but he also went further and eliminated my counterpart, the Democratic leader Tom Daschle, from a seat in the conference, arguing that Max Baucus, the vice chair of the Finance Committee that had written the bill, should represent the Senate Democrats at the table instead because Daschle did not support the bill in the first place. Not unexpectedly, this caused some hard feelings among the Senate Democrats. This exclusion understandably strained my relationship with Tom during consideration of the Medicare bill.

  We met several days a week for weeks in Chairman Thomas’s small hideaway office deep in the basement of the Capitol, a location chosen in part to minimize the chance of leaks to the press or to lobbyists. For the same reason, we all agreed not to carry even a single piece of paper out of the room. Over bowls of pistachio nuts and occasional Chinese or Mexican food brought into the crowded room, conference members Don Nickles, Jon Kyl, Chuck Grassley, Billy Tauzin, Mike Bilirakis, and Nancy Johnson, all Republicans, debated and negotiated with Max Baucus and John Breaux, both Senate Democrats committed to a balanced bill that would provide affordable drug coverage for seniors. Baucus was the lead Democrat negotiator, but Breaux played a pivotal role in both the design and ultimate passage of the bill on the Senate floor. Officials from the Bush administration attended each meeting, offering not only the president’s perspective on the bill but also their valuable knowledge of the detailed operational workings of the Medicare program.

  The conference was at times contentious, as much over personalities as substance. Disagreements between Thomas and the chairman of the Senate Finance Committee Chuck Grassley, were frequent, including Grassley’s staff temporarily boycotting meetings. And then there were occasions when Thomas made proposals that ignored weeks of careful negotiations. In the end I had to leave my position as just another member of the conference committee to assume my majority leader status; House Speaker Dennis Hastert and I, as leaders of our respective bodies, stepped in to personally negotiate the final settlement. Thomas was smart; this was all part of his strategic plan.

  I worked hard to pull the many outside voices together on this issue, going to meet with the leaders of the influential seniors’ group the American Association of Retired Persons (AARP), to seek their counsel and, I hoped, to secure their endorsement of the program. Republicans rarely successfully enlisted the support of the AARP, which almost always leaned to the left in Washington matters. It boasted more than thirty-five million seniors in its membership. I knew that without their support, the bill wouldn’t pass. It simply made sense to me to consult with the representatives for the people who would benefit from the bill’s passage. After many negotiations behind closed doors in my Capitol office, Speaker Hastert and I reached agreement with the leadership of AARP. That organization’s support and political muscle were critical not only to help pass the bill but also to make sure it would be broadly supported by the American people during implementation. My staff, under the able leadership of health policy advisor Dean Rosen, worked tirelessly to secure the political support of other organizations representing doctors, hospitals, patients, and others. This behind-the-scenes staff work was invaluable in getting this big bill over the finish line.

  Rank-and-file Republican congressmen and many conservative groups had major problems with the bill. Complaints ranged from fiscal conservatives outraged by the expansion of a new entitlement, to those concerned that the government was forbidden from directly negotiating for lower prices, to those concerned the plan would not pay to reimport cheaper drugs from abroad. The Heritage Foundation and the National Taxpayer Union were two of the loudest and most prominent critics.

  The passage of the final bill in the House and Senate was a compelling minidrama in itself. The House vote began late at night. I remember lying in bed, watching the vote on C-SPAN, until Karyn complained, “Bill, how can you come home and watch C-SPAN after spending all day on Capitol Hill? Turn out the lights and go to sleep!”

  I did—only to wake up two hours later. Burning with curiosity about the final result, I slipped into my office and turned on the TV there, and discovered that the House vote was still going on! The legislation negotiated in the House-Senate conference had moved to a more centrist bill than the original House version conservatives were backing. Speaker Hastert was holding the vote open…and open…and open, while he and Tom DeLay were encouraging, prodding, and even twisting a few arms to get the votes needed to pass the bill. Hastert had toiled on health care for years as leader of GOP House Health Care Task Force; he knew this legislation was a good bill and it was a personal priority for him.

  The bill did finally pass at 3:00 A.M., and for the next two days the headlines focused on how Denny Hastert had “abused” his privileges as House leader by strong-arming his colleagues into voting for the bill. Such is life in Washington.

  Two days later came the final vote on the Senate side—or rather, on a significant test vote in which we needed sixty votes to force cloture and thereby, in effect, assure passage of the final bill. The test vote occurred late in the afternoon. The senators submitted their votes one by one, and, as was the norm, I planned to cut off the voting after twenty minutes. Senator Kennedy had turned against the bill by this time, and he’d taken with him several Democrat votes.
Still, I hoped and believed that we would reach the critical sixty-vote threshold we needed.

  But as the twenty-minute cutoff time approached, I saw that we had just fifty-nine votes—and that two senators had not yet voted. Who were they? Why were they holding out? I had to find out. I walked up to the front desk where the parliamentarian sits and looked at the long white card where individual votes were recorded to see which names did not have either an aye or a nay checked. The two blank names belonged to Democratic Senator Ron Wyden—long committed to a centrist approach to health-care reform—and to Trent Lott.

  I looked around. Trent was in the back of the room, surrounded as usual by a small audience. The clock was ticking, and everyone’s attention was focused on him. Ron, holding out because Daschle and the Democratic leadership had urged their caucus to defeat the bill, was watching to see what Trent did—if Trent voted no, so would he, since the bill would fail in any case. For the moment, the future of the entire Medicare bill was in Trent’s hands.

  I wondered what Trent was thinking. Health-care issues had never been his cup of tea. He didn’t like the increased spending in the bill, estimated to be some $400 billion over five years. I knew Trent blamed me for his loss of the majority leader’s seat, as indicated by the jibes he’d directed toward me in public and private in the months since his fall. Would this be about payback?

  As the time to cut off voting approached, I hesitated about how I should act. I didn’t want to keep the vote open and incur the same criticism Hastert had received. But I also didn’t want to go over to Trent and beg for his vote. He knew what I needed, and what his colleagues needed, too. He knew what seniors deserved.

  Finally, with seconds to spare, Trent strolled toward the parliamentarian’s desk. He’d have to pass me to get there. As he did so, he leaned toward me, paused for a moment, and whispered just for my benefit, “This is the worst vote I have ever cast.” Then he stepped up to the parliamentarian and cast his vote.

  As Trent turned and stalked out of the chamber, the parliamentarian called his vote out loud: “Mr. Lott—yea!”

  Trent had voted for me—for the seniors—and for the good of the country. And that, to me, is Trent Lott. At the end of the day—in this case a long, suspenseful day—he proved himself the ultimate team player, even if he might not like every single player on the team.

  After this vote to overcome a filibuster, the vote on final Senate passage was close, but not nearly as close as in the House. The final bill passed 54–44.

  As soon as the bill passed it was lambasted by Democrats and the left for its limited coverage and alleged concessions to big health-care companies. The right was equally uneasy with the expansion of an entitlement, and budget hawks from both parties complained about the long-term impact on the federal budget. Even moderates were upset by the irregular process implemented in the House and Senate to accomplish passage.

  In the weeks following passage, the initial response was disappointing. The president’s Office of Management and Budget revealed that its estimated cost of the bill was $534 billion, 35 percent more than previous estimates. A few months later, the chief actuary of the Centers for Medicare & Medicaid Services (CMS) alleged that his office had projected much higher costs, but the CMS administrator Tom Scully had pressured him to keep these estimates from Congress. Several members of Congress said they would not have supported the bill had they known these cost estimates at the time. Due to these embarrassments, many initially saw the drug bill as more of a liability than an achievement in the upcoming 2004 election. The mainstream press reinforced the initial dissatisfaction with the legislation on grounds of process. And even the AARP ran TV ads stating how confusing the bill was for seniors.

  The new law made major changes to Medicare, the largest being the new prescription drug benefit for seniors to be administered entirely by private insurance plans. Congress mandated the drug benefit, including an annual premium, deductible, and varying coinsurance, including the infamous “doughnut hole” where at a certain level benefits ran out until catastrophic levels were reached. Why did we create the doughnut hole? We ran out of available money. Private insurers were paid based on a standard benefit, though they were given the flexibility to offer any plan they wanted that was actuarially equivalent. They also were required to offer minimum formularies—a preapproved list of prescription drugs. We made the private insurers the primary bearers of risk, a radical change in their Medicare role. Shifting risk from government to the private plans, we reasoned, would introduce incentives to lower cost and thus spending. This was revolutionary for an entitlement program.

  The government was forbidden from directly negotiating prices with drug companies. We knew this wouldn’t last more than a few years, but without this restriction it would be unlikely that any of the private insurers would come to the table to participate because government would always undercut them. In addition, we paid the private plans more than traditional fee-for-service—again, a provision that we knew would not be tolerated for long but that would allow them upfront resources to establish new systems necessary to adapt to the new markets of integrated care for seniors. I jokingly say we had to bribe the private sector to come to the table because of an inherent distrust of big government. But they came, and the results have surpassed anyone’s expectations in terms of improved quality of care and lower-than-expected costs.

  The law also made changes to the so-called “Hatch-Waxman” law to make it easier for cheaper generic drugs to reach seniors and required pharmacists to notify beneficiaries if there was a less expensive option. The plan relied on the power of private insurers to negotiate the best prices based on market mechanics.

  Despite the improvements it provided to traditional Medicare and the new health-care choices for seniors, many people panned the Medicare Act. Conservative talk show hosts, with whom I held much in common, adamantly opposed the prescription drug benefit, fretting aloud on radio and television that it was a giant step toward socialized medicine. This reflected either a less-than-accurate understanding of the features of the senior prescription program or an inadequate understanding of how socialized medicine works—or both. Republicans way too often cry “socialized medicine” in response to even reasonable health reform proposals.

  The most socialized system in the world exists right here in the United States. It is the Veterans Administration (VA) health-care system, which is available to all men and women who have served our country in the military. I spent ten years operating every week in the VA system. The current VA system far surpasses the private sector in systems management, the implementation of information technology, and adherence to evidence-based standards. It is the model for current plans to enhance information technology throughout our health-care system.

  Sadly, this has not always been the case. Indeed, when I was in medical training, the VA was regarded as an antiquated, rundown system where only average doctors (or worse) would want to practice. The lines were horribly long and the waiting rooms overcrowded. The contrast reflects to me the advantages and disadvantages of a purely socialized system. With a centralized, command-and-control, top-down structure and generous budgeting, quality and access and costs can all be maximized for the patient—in the case of the VA by a massive commitment to electronic medical records and information technology. But with poor leadership at the top or limited central budgets (as is frequently the case overseas, where a few bureaucrats in the central government are making all the rationing decisions), the system falls apart, quality diminishes, and patients are hurt. When central budgets decline, patient care and innovation suffer.

  Medicare, with or without prescription drugs for seniors, is not a socialized system, and the rhetoric to the contrary that comes from the mouths of uninformed politicians and talk show hosts—unfortunately Republicans much more often than Democrats, conservatives as well as liberals—is just flat-out wrong.

  The Medicare prescription drug bill significantly expanded private hea
lth plan options in Medicare and dramatically increased enrollment in these private plans, which integrated health-care delivery for seniors, a marked improvement over the traditional fragmented fee-for-service care. Reimbursement in Medicare is determined by federally set fees, but the care itself is delivered entirely through the private system in private and public hospitals, nonprofit and for-profit alike, all across America. Doctors and nurses are not employed by the government. Medicare has been wisely structured as a public-private partnership that is flexible, maximizes patients’ choices, and keeps administrative costs relatively low.

  Medicare Part D—the official name for the prescription drug program we added in 2003—was set up to maximize participation by the private sector. There is no government prescription drug plan. It is entirely administered by the private sector. It is competitive and prices are determined by the marketplace, not by government fiat. The private-sector firms compete against one another to get the lower prices for their patients. And this competition is working!

  And Part D, for the first time in Medicare, is “means tested,” in the sense that the very wealthy get fewer benefits (unless they pay for them), and the poor get more. The benefit was structured to lean heavily in the favor of the poor and near-poor. And for the first time it began asking seniors with higher incomes to pay higher premiums for their physician services as well. To me it seems inevitable that this policy will have to be adopted broadly in future Medicare reform efforts.

  The concept of prevention has historically been absent in Medicare. With the new law, for the first time a complete physical exam is provided by Medicare on entry to the program. And the inclusion of prescription drug benefits for seniors means expensive diseases can be averted. A pill to treat high blood pressure, available now through the new law, can prevent a heart attack or a stroke that would otherwise occur. The cost of the pill is a lot less than that of cardiac and stroke intensive care units. Maybe, just maybe, a large portion of the heart disease I operated on every day as a surgeon will be erased by the prevention we made possible for the first time in this new law.