Ten Questions for Michael Leavitt

1. Would you immediately and completely divest your substantial financial interests in companies directly affected by decisions you would make as head of HHS? If so, how?

According to a financial disclosure report filed in 2003, Michael Leavitt revealed his holdings of various investments in pharmaceutical companies – including Johnson & Johnson and Merck & Co., which is currently embroiled in fallout from its drug Vioxx – and medical equipment makers. Additionally, Leavitt maintains an investment worth $5 million to $25 million in Leavitt Group Enterprises – the 27th largest insurance broker in the U.S. – where he used to serve as chief operating officer. Upon confirmation as secretary of health and human services, his predecessor Tommy Thompson "was forced to sell his stock in drugmakers" and it is expected that Leavitt will be made to do the same. However, Leavitt's potential conflicts of interests run far deeper than Thompson's. Federal law prohibits personal and substantial participation in decisions that could directly affect not only the executive branch employee's finances but his family's financial interests as well. Leavitt's brother, Dane Leavitt, continues to be the president and CEO of the family insurance firm, which underwrites personal and property liability lines of insurance including but not limited to Medicare supplemental plans (Medigap policies) and medical malpractice insurance plans – two health areas that would be directly affected by Leavitt if he were confirmed as secretary of HHS.

Sources: Medical liability reform, Medicare in Leavitt's proposed HHS agenda | Leavitt must answer questions on conflict of interests: The Salt Lake Tribune, 12/16/04 | Leavitt Group Enterprises | Leavitt's investments run deep: The Salt Lake Tribune, 12/14/04 | Breakdown of major investments held by Mike Leavitt: KUTV – Utah News, 12/14/04

2. As governor of Utah, you cut health care for the poorest Medicaid beneficiaries to pay for inadequate health benefits for others. If confirmed, would you continue to advocate restricting doctor visits, prescription drugs and other health services for the most vulnerable?

As governor of Utah, Mike Leavitt sponsored a controversial Medicaid waiver program, which the Bush administration has touted as a way for states to deal with budget shortfalls. But the waiver program is far from an adequate solution to the problem: it works by siphoning benefits from the poorest beneficiaries to pay for an extension of a "narrow benefit package" (for instance, Utah's program doesn't include hospital coverage) to some adults not previously eligible for Medicaid. Families USA Director Ron Pollack said the program was "like robbing Peter and Paul to pay Phil…It will result in many thousands of low-income people being placed at risk of losing their Medicaid lifeline."

Sources: Leavitt's Medicare waiver program | Robbing Peter to pay Paul

3. As a governor, you adamantly opposed federal government spending cuts that left states footing the bill. Do you oppose Bush administration proposals to cut federal Medicaid funding?

Bush administration officials have indicated the cuts to Medicaid this year "might be accomplished through a cap on federal spending," forcing states to adjust by raising state taxes or lowering benefits. In 1997, then-Governor of Utah Mike Leavitt vocally opposed such a move. At the time, Leavitt told Congress, "states strongly oppose federal spending caps on Medicaid…because they would force states to pick up extra costs." During another interview, he was quoted as saying he believed it was "critically important the level of Medicaid savings not be set arbitrarily to fill a hole in a deficit-reduction package." Concerns about the federal government squeezing state budgets is even more relevant today as the AP reports that "state budgets face a projected shortfall of nearly $40 billion going into 2005, [however the administration has] proposed slashing state grants by 3.3 percent." As usual, the first victims of such drastic monetary cuts would be children and the poor.

Sources: Bush: Cut Medicaid by capping federal spending | Cuts in state grants have adverse affects on children and poor | Leavitt's statements to Congress regarding federal spending cuts: Deseret Morning News, 3/13/97

4. Did you support the White House's decision in 2004 to take money allotted for children's health insurance programs away from states and return it to the U.S. Treasury?

On Sept. 30, 2004, the deadline for Congress to act on preserving $1.1 billion in federal funds for the State Children's Health Insurance Program (SCHIP) – the program which focuses on insuring the kids of the working poor – was allowed to expire. The money was taken away from the states and returned to the U.S. Treasury. Apparently unmoved by recent Census data citing a dramatic increase in the number of children living in poverty or indifferent to the fact that 750,000 more children could have been insured if the states were given more time, the White House did not take the simple step of asking requesting that Congress extend the time states had to use the funds in the 2005 budget. Over the objections of the National Governors Association and a bipartisan coalition of lawmakers, the administration decided not to ask for the extension. And according to the watchdog group Families USA, the White House actually "opposes bipartisan legislation that would give the states additional time to use the funds," and conservatives in Congress refused to schedule it for a vote.

Sources: Money taken from states, returned to U.S. Treasury | White House opposes giving states more time to use funds | Dramatic increase in children in poverty

5. Would you support legislation to ensure that no low-income Medicare beneficiary loses drug benefits next year as a result of the implementation of the Medicare law?

When he was governor of Utah, Leavitt must have certainly been faced with the challenges and harms that can occur if major transitions in health benefits are not handled carefully; unquestionably, the implementation of the Medicare drug benefit program in 2006 is susceptible to such pitfalls. Of the many concerns about the proposed Medicare law, one that looms large is that "a review of the statute and proposed regulations demonstrate that approximately half of America's [current] Medicare beneficiaries are at risk of being worse off" when the law comes into effect. Among those most at risk are the "dual eligibles" – 6.4 million low-income people who are eligible for both Medicare and Medicaid but are currently receiving their drug coverage through Medicaid. However, when the Medicare drug benefit program begins on Jan. 1, 2006, Medicaid will no longer be allowed to provide any drug coverage for these Medicare beneficiaries. Many experts worry that this group, largely comprised of low-income seniors and the disabled, "will fall through the cracks" as it is unlikely they will have the time or the knowledge to go through the steps needed to switch their drug coverage over to a Medicare plan. Even if they do, the new drug coverage that the "dual eligibles" receive will likely come with far fewer benefits than they had under Medicaid coverage.

Sources: "Dual Eligibles" likely to slip through the cracks | Fifty Concerns about the Medicare Law

6. Would you support legislation to eliminate Medicare overpayments to private plans?

The proposed Medicare law includes a windfall of $46 billion in extra payments to HMOs and other private insurers. Though a relatively small share of Medicare beneficiaries are enrolled in such private plans, they still manage to be paid more than what it would cost to provide coverage through traditional Medicare. As is, private insurance plans were paid an average of 103 percent of what it would have cost traditional Medicare to care for their enrollees; the new Medicare law may increase those overpayments to 125 percent or more. Through higher part B premiums, all Medicare beneficiaries are forced to bear the burden of these excessive costs – including those citizens living in rural areas, despite the fact that most private plans refuse to offer coverage to these same citizens. In the interest of promoting fiscal integrity and protecting Medicare beneficiaries from unnecessary costs, a fiscally and ethically responsible secretary of health and human services would lead the fight in eliminating these gratuitous Medicare payments to private plans.

Sources: New Medicare Law Shows Bias towards Private Plans: 1, 2; Rural Citizens Bear Financial Burdens of Private Plans

7. Would you support legislation that would enable the secretary of HHS to negotiate lower prescription drug prices for seniors and other Medicare beneficiaries?

Medicare covers more than 40 million seniors and disabled Americans who are projected to consume $1.8 trillion worth of prescription drugs over the next decade. Pharmaceutical companies, like other industries, grant discounts in exchange for volume and market share. Medicare could get the best prices on prescription drugs by leveraging its group purchasing power – just as Canada, other nations and other large private and public payers in the United States do. But the Medicare reform law signed by President Bush at the end of 2003 specifically prohibits such negotiations by the secretary of health and human services. As a result, taxpayers and Medicare beneficiaries will be forced to spend much more for drugs than they should. Drug companies and their trade associations "deployed nearly 700 lobbyists" to kill legislation that would allow Medicare to negotiate lower drug prices. And it worked. Current HHS Secretary Tommy Thompson – who personally lobbied in favor of the industry-friendly bill during the controversial final vote in the House of Representatives – recently stated that he "would like to have had the opportunity to negotiate" with drug makers on prices. Eighty percent of Americans agree that the law should be changed "to allow the federal government to use its buying power to negotiate with drug companies to try to get a lower price for prescription drugs for people on Medicare."

Sources: Medicare program background | Medicare forbidden from negotiating | 700 lobbyists | Thompson quote | Public opinion on negotiating authority

8. President Bush has said that if importing drugs from Canada is safe, "they're coming." A Bush administration task force recently concluded that commercial drug imports, especially from Canada, are safe. If you are confirmed, are they coming?

In "key finding" # 2, the task force authors concede that "some means of drug importation (e.g., traveling to Canada for certain brand name drugs available in both countries) may be relatively safe." The task force claims that we shouldn't allow it anyway because, if re-importation were legal, the drug industry would have to reduce spending on research and development by $1.1 billion each year, resulting in "between four to eighteen fewer new drugs being introduced per decade." (This is based on the assumption that it costs about $1.3 billion to bring a new drug to market.) Here is what the task force doesn't tell you: In 2002, Fortune 500 drug companies pocketed $35.9 billion in profits. Astoundingly, "the combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses put together ($33.7 billion)." If the drug industry decides to pare back its profits by just 3 percent, Americans could have access to cheaper drugs with no impact on drug innovation.

Sources: Bush promises, "If they're safe, they're coming" | Bush task force report | Bush argued against drug re-importation | Personal importation explained | $35.9B in drug industry profits | Drug industry profits exceed profits of the rest of Fortune 500

9. Would you support the Senate's investigation into the administration's promotion of abstinence-only programs that have recently been revealed as disseminating "false and misleading information about reproductive health"?

The Bush administration is pouring hundreds of millions of taxpayer dollars into programs – billed as abstinence-only "education" – that "teach adolescents false and misleading information about reproductive health." Yet a December 2004 study released by Rep. Henry Waxman (D-CA) found that 11 of the 13 most commonly used abstinence-only programs contain errors. For example, one popular curriculum teaches students that touching another person's genitals "can result in pregnancy." Several other of the abstinence-only programs advance a political agenda which criminalizes abortion, grossly underestimate how effective condoms can be in preventing the spread of disease during heterosexual sex, and reinforce decades-old gender stereotypes that are demeaning to women. Moreover, these abstinence-only programs have proven ineffective in reducing teenage sexual activity and increase risky sexual behavior among teenagers. Nevertheless, President Bush – apparently more concerned about promoting right-wing ideology than accuracy or effectiveness – has pushed for significant funding increases for such programs, requesting $270 million for 2005. In December, Senate Majority Leader Bill Frist (R-TN) – himself a medical doctor – called for a review of the programs, but the administration has yet to respond.

Sources: Abstinence-Only Programs Spread Propaganda and Falsities | Frist states abstinence-only programs "need review": "This Week," 12/05/04

10. During your tenure as governor, a federal court ruled that Utah "had violated the constitutional rights of every child in custody," but it took the state a decade to comply with the ruling. What would you do to ensure that child welfare programs that fall under your purview as secretary of health and human services adhere to a higher standard than Utah's Division of Child and Family Services did during your tenure as governor?

There is only one way to describe the condition of Utah's Division of Child and Family Services during Leavitt's tenure as governor: reprehensible. From 1993-1996, ten children who were under DCFS care died. Ultimately, the case came to head when the National Center for Youth Law in Oakland, Calif., filed a class-action lawsuit "on behalf of 17 children who had been horribly abused and neglected in Utah's foster care system." The court eventually ruled that "the state had violated the constitutional rights of every child in custody." Though Leavitt's supporters defend him by saying that he had simply been unfortunate enough to inherit the quagmire, the near decade-long period that it took for the state to fall in line with the court settlement – which demanded an overhaul of foster care and an increase in training and case oversight – fell squarely during Leavitt's time as governor. The state's child protection service continues to be monitored to this day.

Sources: Controversy surrounds Utah's Division of Child and Family Services: The Daily Herald, | Leavitt lets DCFS problem fester: The Salt Lake Tribune, 12/14/04 | More Background on Utah's DCFS: Deseret Morning News, 10/26/96; The Charleston Gazette, 12/27/04