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Checking In With Joseph A. Califano, Jr.

President Barack Obama, in a speech yesterday to the American Medical Association in Chicago, urgently called for an overhaul of the nation’s costly and inefficient health care system. His speech held echoes of another one, delivered to the AMA on June 19, 1977, by Joseph A. Califano, Jr.

Califano, who at the time had been for six months the Secretary of Health, Education and Welfare in the Carter administration, delivered his own blunt message about the flaws in the nation’s health care system. He complained about the focus on acute care over prevention, a lack of incentives for cost-effectiveness and a crazy quilt of health insurance. Like Obama, he said the system was wasteful and too expensive. He railed against rising health care spending, which totaled $139 billion in 1976. Today, annual health care spending is about $2.4 trillion.

Bio: Joseph A. Califano, Jr.

Since 1992, Joseph A. Califano, Jr., has been the chairman of the National Center on Addiction and Substance Abuse at Columbia University in New York. But prior to that position, his career included a variety of posts in the public and private sector. Among his notable dates and assignments:

  • 1955: Enlisted in the Navy as an officer candidate and was commissioned as an ensign.
  • 1961: Special Assistant to the General Counsel of the Department of Defense.
  • 1962: Special Assistant to the Secretary of the Army; year later became General Counsel of the Army; and, in 1964, was named Special Assistant to the Secretary and Deputy Secretary of Defense.
  • 1965: Appointed Special Assistant to Lyndon B. Johnson, where he focused on domestic policy issues including health care and education.
  • 1977: Secretary of Health Education and Welfare.

Califano, who is chairman of the National Center on Addiction and Substance Abuse at Columbia University, talked to KHN reporter Jessica Marcy. “All the issues they’re grappling with today are the issues that were there in 1977, laid out there,” he said, adding that “there’s very little new under the health care sun.”

Q: What’s your reaction to the fact that so many of the problems you mentioned then remain the same – and indeed are more serious – than they were three decades ago?

A: Not much has changed, has it? One of the central reasons we continue to have exploding costs is the focus of the system on acute [care], on sick care, not on health care, not on health promotion and disease prevention. Think about the lists of ailments — the cigarette smoking, the alcohol, the obesity, the accidents — which were the four areas where you have tremendous opportunity to reduce costs. They’re still there. So, putting the profit into sick care rather than prevention and health promotion hasn’t changed. Doctors and health care providers will follow money the way a cat follows the smell of fish 

With respect to health insurance, the quilt is as crazy as it was 30 years ago. I still think we need competition. But, building in competition is very difficult… We still have a situation where you don’t pick your hospital, you don’t pick your specialist, you don’t pick the medicines you get, you don’t pick the tests you get. We rely on a physician to do that. How do we motivate that physician to do everything that’s necessary but nothing that’s not necessary? And there I think… the whole medical malpractice world, drives these doctors.

Q: Are you surprised at how much health care costs have risen?

A: I’m not surprised Believe me, if the focus is solely on access and we don’t move to health promotion and disease prevention, and incentives for physicians to provide health care, to talk to their patients, we will see a continuing explosion of health care costs and the projections of $1.2 trillion over 10 years to cover everybody will be twice that. In 1977, the motivating factor was that [health care] was costing so much… it was like 6 or 8 percent of the gross national product. We thought it might go up a couple [points]. Now it’s 12 percent. If I had said in a generation, we’ll be paying 12 or 13 percent on health care, people would have laughed. But, we are. And, even with the [projected] reductions, we’re headed for 18 percent.

Q: How would you characterize the reaction to your speech?

A: I don’t think anyone had ever talked about health care the way we did at [that] AMA convention. I think the whole medical profession was stunned… I think that speech was the first time anyone had really talked about health care as an industry, had really talked about all the inefficiencies in it. We were just really getting the early evidence of variations in care, the work that Dartmouth has now made a profession out of then we started to look at the system. I think [the current situation] is a commentary on our failure to deal with the reality of this system… [Policy makers] are still facing the very same problems.

Q: Do you think the perception of the urgency of health reform has changed?

A: We have a very charismatic president who is willing to really get out there and push for this, number one. Number two, we have in the Senate the [illness] of Sen. Kennedy, who will be an inspiration in terms of getting something done. I think, three, business understands that this is a killer cost and is prepared, to the extent that they can, to lay some of the cost off on the government… Here’s a big difference. When I was secretary, I brought in the heads of several corporations… I took them through the health care costs… over a lunch… It went in one ear and out the other. Now, it is on the radar screens of big business. They see how this issue of health care can really affect their profitability. They’ve got to do something about it. I think that’s a big change.

Q: Do you have any predictions about what reform will be like?

A: I think there will certainly be increased coverage for the working poor, but I would doubt that 50 million people will be swept in overnight. I’m willing to predict it will be expensive… [And] when the final bill is passed, whatever people say about what it’s going to cost over the next 10 years, it will be twice that cost. It doesn’t take a genius to do that [math], incidentally. All you have to do is look at what’s happened over the last 30 years, 40 years, with the rising costs and the predictions.

Q: What do you think about the political will to create such change now, as compared to when you gave the speech?

A: Oh, it’s much greater. It’s fair to say that this is one of those moments. I don’t think we’ve seen a time like this since 1965. It’s not just political will. It’s the decline in the economy that has made more people vulnerable, scared about not having health care coverage, about losing health care coverage.

Q: Is there any other specific advice you might have for legislators working on reform right now?

A: Maybe they should read that speech… and see how hard it is to change these things.