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Statement of
Thomas Scully
Nominee for Administrator of the Health Care Financing Administration
Department of Health and Human Services
Before the
Committee on Finance
United States Senate
May 16, 2001
Chairman Grassley, Senator Baucus and other distinguished
Committee Members, it is an honor to appear before you today
as President Bush's nominee to be the Administrator of the
Health Care Financing Administration (HCFA) at the Department
of Health and Human Services. HCFA has the largest budget
of any federal agency or Department. And running Medicare,
Medicaid, and the State Children's Health Insurance Program
effectively, is one of the central functions of the federal
government -- delivering health care services to more than
70 million seniors, the disabled, and other needy citizens.
I am proud the President decided that I was best suited
for this duty, and should you concur, I assure you that
I will not let you down.
HCFA is not the most popular agency in the government,
nor should it be. With a budget of almost $400 billion,
you have to say "no" to a lot of people, including
an occasional Senator or Representative, if you want to
keep the annual rate of health inflation under control.
When I was last in the government, Medicare and Medicaid
were both growing at annual rates of almost 15 percent a
year, which was -- and still is -- unsustainable. The economy
cannot stomach a return to those days nor, I suspect, can
Congress. So, by design, HCFA --which means me -- will probably
again fail to win public popularity awards during my tenure.
However, we can and we will do far better in working with
Congress, beneficiaries, and the physicians, providers,
and insurers who serve as HCFA's partners in delivering
care and providing coverage. That is my commitment to you
as Administrator.
One of my top priorities will be greatly enhanced education
for beneficiaries, physicians, and providers. I hope to
expand our educational efforts to seniors on a number of
fronts to further improve their understanding of their options
and opportunities under the Medicare program. I will also
push the agency to be far more aggressive in its work with
physicians, nurses, hospitals, nursing homes, home health
agencies, dialysis facilities, and every other provider
partner to explain what we are doing in our regulatory efforts.
Likewise, I will quickly push to develop a more direct and
accountable relationship between HCFA's Medicaid staff and
the States they partner with in the Medicaid program. As
I mentioned, I do not expect everyone to always like our
decisions, but everyone has a right to expect clear, prompt,
and thoughtful answers from HCFA.
I have worked with HCFA throughout my career in the Office
of Management and Budget (OMB), on the White House staff,
and in the private sector. I believe that HCFA is stocked
with an exceptionally smart and talented staff. In fact,
my regulatory experience with HCFA over the last 15 years
has generally been good. However, I have some understanding
of the maze that is the HCFA process. This is a skill most
taxpayers, seniors, doctors, nurses, and other providers
-- not to mention Governors and Members of Congress -- do
not have, and probably do not want to have. My first goal
is to fix this process, to untangle the web, and to clarify
the regulatory mystery that HCFA has become to many of its
constituents.
My other primary interest in taking on this job is legislative
and I look forward to working with Congress on reforming
Medicare. In my most recent years in government service,
during the "first" Bush Administration, I worked
on a number of very successful bipartisan legislative projects
-- most involving the Senate Finance Committee. From physician
payment reform in 1989 to child care and the Earned Income
Tax Credit (EITC) restructuring in 1990 to Medicaid Disproportionate
Share Hospital (DSH) reform and hospital capital reform
in 1991 and 1992, a number of significant and important
programmatic improvements were made. Enough improvements
to make me believe that you really can make a difference
in public service.
On the other hand, working for the last 15 years on health
care issues, both inside and outside of government, has
occasionally made me feel like I am watching the movie "Groundhog
Day." Every day I get up and the issues are the same
as they were a decade ago. For example, I spent the first
half of 1989 trying to "save" the Medicare Catastrophic
Coverage Act, which was primarily a Medicare prescription
drug and catastrophic benefit. Today, twelve years later,
we are only now beginning to refocus on that issue. Medicare
reform, as well as Medicaid DSH, and upper payment limit
reforms were enormous issues in 1991 and 1992. Little has
changed today and, arguably, the situation may be even worse.
In addition, we still have over 40 million uninsured, with
little national consensus about how we should address the
problem.
Clearly, there is a tremendous amount of work to do for
anyone, in either party, with a strong interest in fixing
health care in America -- both at HCFA and in our nation's
health insurance and delivery mechanisms. I enjoy public
service, and I am determined to make a difference. I have
tremendous respect for the Finance Committee and I have
been fortunate enough to make good friends on both sides
of the aisle during my many years in Washington. If confirmed,
I sincerely hope to work with each of you on this Committee
and with the Congress over the next four years to make HCFA
work better, but more importantly, to significantly improve
our health care system.
Again, thank you for your consideration of my nomination,
and for the honor of appearing before you today.
