Mike Leavitt, Secretary of Health and Human Services


New Orleans, LA


April 25, 2006

Louisiana Health Legislators

Thank you, Governor, and may I say, Senators and Representatives, I've looked forward to coming.

I'd like to spend—if we could—maybe 10 or 15 minutes and I'd like to share a couple of ideas with you, and then I think there's been some time reserved where we could just talk.

I'm here to talk about what I think we have is a shared interest. Before we go too far on the list may I just acknowledge how important the subject is.

Anytime you're dealing with the healthcare of a person or people that you love it is an enormously important matter and it holds a special place in the hearts of everyone who has had a child who is sick or had a person in their life or themselves gone through that experience.

In that, in keeping, may I just suggest then I am fully aware, or at least as aware as I can be, of the complete devastation that was done to the healthcare facilities and infrastructure in this state.

I've had a chance on a number of occasions to visit them. I visited here during the disaster and since and I know what we're dealing with is nothing less than a medical system that was washed away and is going to have to be rebuilt.

I also want to acknowledge that speed is imperative here.

That there are lives that hang in the balance and that there is a need for action.

I also want to acknowledge in doing so that people are vulnerable during the period of time while we do this and it's imperative that we begin to move rapidly.

Ironically, I was in New Orleans about three days—or four days—before the storm. I was riding around with Dr. Kevin Stevens who was the head of the health department in New Orleans.

We were doing a different matter. We were here to talk about Medicare and its impact on the prescription drug lives of lots of people in this state and around the country.

But he began to inventory for me the nature of the system in New Orleans before the storm, and it was clear that it was not meeting his expectations, nor anyone else's and that in fact it was not a system that met what we'd like it to be. It was, in some respects, dysfunctional.

And so in many ways we're here to talk about how we can take what was a bad situation, made worse by the storm, and turn it into something that I believe we could all be very proud of and, frankly, make it a national model.

I'm here because, on a number of different occasions, I have now met with the entire medical community and when I talk about the medical community, I'm talking about representatives of the state, representatives of the... of New Orleans and the various parishes, the hospitals, the hospital association, the medical schools, the physicians, the nurses, healthcare advocates.

I've met with long-term care facilities, with the insurance companies. I've had a chance to meet with major employers, the community health centers.

I've met with churches, with the Veterans Administration—have been present in all of our conversations.

I've had a chance to meet with the leadership of the LRA (Louisiana Recovery Authority) and their health subcommittee and with members of the legislature.

I feel as though I've had conversations with lots of people.

Let me just summarize what I believe the conclusions we have reached in those conversations.

The first is that it would be wrong to build—to rebuild—the old system back… that we can use this as an opportunity to build a system that can become a national model.

The second conclusion would be that getting to a new system will not be without pain… that it'll be difficult. Every institution that's part of that system will have an institutional inclination to rebuild, and that the natural force of those institutions will lead us down a similar path that we were previously moving.

That the third conclusion would be that the process of finding what you want your system to be like clearly has to be locally led, but because of the complexity of what's in front of us, with all of the different interests—proprietary, nonprofit, hospitals, doctors, nurses, patients, businesses—all of them trying to find where they fit in this new environment that it would be helpful if the federal government played a significant role in being able to sort this out.

The most compelling reason that your colleagues in the medical community have made to me as to why we ought to do that are basically three:

The first is that the federal government currently pays about 70 percent of the healthcare in Louisiana, and particularly in New Orleans.

And secondly the Secretary of Health and Human Services has the authorities necessary to redesign a system in a way that would be unique.

And third, as Secretary I don't live here.

And that, in fact, that combination of the local control but with the Secretary holding authorities and money might in fact be the formula that could ultimately allow all of those competing interests to come together into a plan.

Now I've become extraordinarily interested in this. I believe the opportunity exists with this circumstance to create, not just a rebuilding of New Orleans and greater New Orleans health infrastructure, but to literally create the finest health system in the world.

Because I don't know of any other place in the world where this circumstance exists where we're essentially starting from scratch to build in a way that can meet the demands of the 21st century.

Every other community is dealing with legacy systems.

Now there are legacy systems, and legacy traditions, and legacy institutions here, but it does provide a unique starting place for the rebuilding of this system.

So I have concluded and have offered to the health community that I am prepared as Secretary of Health and Human Services to devote a substantial amount of my time personally and I am prepared to bring substantial resources from my department, but there are some conditions, and I want to talk with you candidly about them.

I have had occasion over time in my role as Governor and other public service roles to be involved in a large number of collaborative problem-solving experiences—large ones that involve multiple states, and multiple jurisdictions, and different financial interests.

I've made quite a study of this, and there are some conditions that I believe exist when large-scale collaborative problem-solving explorations work and when they don't.

Let me go through what I believe the conditions are that make for a successful collaboration:

The first is common pain. There has to be something that will bring all of the parties who would normally just compete to the table. Now there is clearly a lot of common pain here. We're all experiencing it. There's a good reason for all of us to be here solving problems.

The second condition is conveners of stature. There has to be a process where all of the significant authorities and all of the areas of responsibility that overlap here come together and say we're bringing a process together to find a solution and this, if you will, is the northbound train.

If you want to be part of the solution, you need to get on, with this—not with the solution, but with the process. If you aren't happy with the outcome, keep working. You have the right to leave, but you're there voluntarily.

What gives it its power is the fact that conveners of stature—now I'm talking about Governors and members of the state legislature and members of the congressional delegation and the leaders of the hospitals and the leaders of the medical associations—everyone needs to come together and convene a process that says this is the way we're going to design the system of the future.

The third thing that needs to be in place is a committed local leader—someone who is empowered by that group to—through the force of their personality—be able to keep it together when it otherwise might fall apart.

The fourth thing is a governance process—it needs to be formalized. There needs to be a way to reach conclusion. Now, no one knows any better about that than the legislature.

But because we're dealing here with parts of society that go well outside the scope of a legislature, this can't be necessarily a voting process, but it does need to be a means by which we actually can reach a conclusion, and it needs to be written.

The next point I would make is that it needs to have a critical mass of participants. If you've got one or two large players in a sector who say we're not going to be part of that process, it may not have the ability to move forward and the collaboration will fail.

So in order for us to have a collaboration that ultimately will reach a conclusion on how to design this system with the speed that needs to be undertaken we need to have a critical mass of the participants.

Next there needs to be principals of substance at the table. This can't be delegated from an office-holder or from a lead person to a second person or a third person. We need to have people at the table who can make decisions and move it forward.

The next point I would make is the system has to be entirely transparent. Everyone has to have some means of being able to affect this process.

If you're a citizen you need to be able to know what's happening. If you're a citizen and you have a point of view, it needs to be able to be made. It needs to be transparent.

And the last point I'll make is that it needs to operate with a common set of facts, a common set of assumptions.

If we get down to a problem of we're arguing about how big is New Orleans going to be, and two different visions lay out of how big it should be and the population we're planning from, we'll likely not succeed. So ultimately we have to come up with some way of being able to create a common set of assumptions.

And frankly the healthcare assumption ought to be the same assumptions that are being used for many other situations and I know that Don Powell and that effort have been working with the Louisiana Recovery Authority to establish just those assumptions.

So my point is, I see us bringing together an organization similar to what I have just described that can use common assumptions, that's got the support of the community, that in fact—that can be seen clearly as the northbound train.

Now, after meeting three or four times with that large medical community that I've spoken of, let me describe for you the plan that emerged—not the healthcare plan but the process.

The first is they concluded that the Louisiana Recovery Authority—the health subcommittee—should be the entity, that with some minor changes—that I assume are being negotiated right now, or have been—that group could constitute the place and factor into all the other parts of the community that are being rebuilt. Through that process a logical leader has or will emerge.

The third was to create an objective for this effort—to create a vehicle to bring transformation about in the healthcare system. And here's what we're thinking about:

I have authority, as Secretary of Health and Human Services, to create waivers under the Medicare and Medicaid laws of the United States that can create large-scale demonstrations that can custom-make a demonstration project for a geographic area.

So the thought here is that we'll begin to create a large demonstration model—or demonstration waiver—that could be issued to the state of Louisiana to begin redefining the way they—you choose to have your system developed.

Now the back-pressure that I talked about—the need to keep this together—would be whether or not the Secretary would be willing to sign that waiver because that would obviously be the key to a lot of the money that could come in to revitalize the system.

We also came up with a group of short-term deliverables that need to be done just to keep the system together. I'm happy to report to you that nearly all of those now have been completed.

We then agreed that we would negotiate a set of principles. We would have the LRA create a set of principles and the Department of Health and Human Services set up—develop a set of principles.

Both have accomplished that, and we have worked together now to negotiate to what I believe is a common set of principles that could guide our effort.

Once the principles have been into place, we would then need to come up with a governance document. The governance document has been developed or is in the final stages of its development and what we would then view as an important step would be for all of the conveners—that would mean leaders of the legislature, leaders of the Governor's office, leaders of the congressional office, leaders of HHS, leaders of the healthcare community, leaders of the hospital association, leaders of the insurance community, leaders of the nurses—to come together and to have what I call a flags-and-bagpipes meeting where we'll have enough ceremony and all walk up to the desk and sign our names not to a specific plan, but to a process, that we're all going to abide by, and that this is, in fact, going to be the northbound train, and that our effort is all aimed at creating this large-scale waiver that will design the healthcare system of the future in that region.

Now my job as Secretary of Health and Human Services will be to wait until that process has produced the waiver that matches the principles. If it matches the principles, I'll sign it. If it doesn't, I won't.

I'll be sort of the looming conscience, if you will, of the principles that have been laid out and agreed to.

Now this won't work if it doesn't have the support of all of the major players in the state and obviously the legislature is of primary importance and for that reason I'm here.

I've had a conversation with the Governor—she's reported on that—we're in agreement that this is a way to move forward.

I've met with the Mayor. He's indicated his support for this.

I've met with the members of your congressional delegation. They've indicated their willingness to support this.

I've met with the larger healthcare community that I described. They're not in a position to vote, but they have encouraged and asked that we continue forward and they're now meeting in the context of the Louisiana Recovery Authority to begin moving that forward.

I'm here today to present this idea to you, to get your reaction to it, to sense how you feel, and whether you'd like to participate. Without you it won't work. With you I think it can.

I must tell you that I see a healthcare system in the future that, in fact, can be the best in the world. I see a healthcare system that can begin to create a medical home for every resident of the greater New Orleans area, and ultimately, in Louisiana.

I see that in the form of community health centers that could dot the landscape of that area and provide a place where people can get wellness care, where they could begin to focus on prevention.

I see a healthcare system that can, in fact, begin to measure quality as the means by which we deliver healthcare. I see it being a healthcare system that emphasizes personal responsibility as well as institutional responsibility.

I see a healthcare system that can begin to prepare for emergencies as a part of their everyday business. I see a place where—a time—in New Orleans where you can walk into a community health center in your neighborhood and get basic treatment and have an electronic medical record so that if the day comes that you have to go to the hospital, when you show up there, they know who you are and what happened at the community health center and, likewise, if you're in the hospital—if you're at the clinic, they know what happened at the hospital.

That's the healthcare system—I believe—of greater New Orleans in the future. And it's an opportunity that has never presented itself—to my knowledge—to any community in the United States in our history, and it's one that we cannot allow to be lost, but it's going to require our best statesmanship.

If this is to occur, there undoubtedly will be proprietary interests that collide. There will be rice bowls that will be tipped over. There will be institutions that will no longer function the way they have.

There will be hospitals that don't get rebuilt in the same way that they would have. That's the price for what I believe—that we have to pay in order to achieve the healthcare system of the future in New Orleans.

Now with that, Mr. Chairman, I present myself just to hear your reactions and questions and I hope when we leave today that you'll have a clear picture of what we've been thinking about in the healthcare community and see if the legislature can be supportive of this approach.

Last revised: May 8, 2006