Tuesday, July 26, 2005, 3:00 p.m. ET

Jon Gardner
(301) 347-3930



Health Affairs Marks Medicare, Medicaid Fortieth Anniversaries With Commentaries From Seven Former Administrators

Retrospective Examines Evolution Of The Programs, Challenges For The Future

BETHESDA, MD—As Medicare and Medicaid celebrate their fortieth anniversaries on July 30, Health Affairs today is publishing on its Web site a retrospective authored by former program administrators on the evolution and challenges faced by the programs.

The retrospective includes reflections by the very first administrator of the Health Care Financing Administration, Robert Derzon, who was called on by President Jimmy Carter to merge the management of Medicare and Medicaid into HCFA, through Tom Scully, who transformed the agency into the Centers for Medicare and Medicaid Services.

Some observations from the seven administrators:

Robert Derzon (1977–78): “HCFA’s creators underestimated the complexity of merging two very different national programs. Medicaid was designed to permit wide management latitude among the fifty states. It allowed variation in eligibility. Medicare was a uniform top-down cookbook with costless eligibility determinations. States could juggle the scope and duration of Medicaid’s benefit package.”

Leonard Schaeffer (1978–80): “It was my view that appropriate integration of Medicare and Medicaid could create regulatory and purchasing power with the potential to transform our health care economy. The most significant challenge to achieving this goal was to design a new organization and culture for HCFA that could leverage this power to better serve those who depended on these two programs.”

William Roper (1986-89): “Today the CMS has a broad agenda for improving the quality of care in Medicare, and efforts are beginning to focus on Medicaid quality as well. Maintaining this focus on quality will be even more important in the coming years, as Medicare and other large purchasers move toward adoption of performance-based payment systems. Measuring quality, performance, and value is an appropriate and prominent part of the public debate on these new payment approaches.”

Gail Wilensky (1992-93): “The CMS has a demonstration under way that rewards excellence for physicians who practice in large group practices. However, most physicians practice in small groups or in solo practices; therefore, reforming physician payment in ways that would improve their incentives will be more difficult.”

Bruce Vladeck (1993–97): “Medicare and Medicaid consume a significant part of overstrained state and federal budgets, serve as the lifeblood of the nation’s largest industry, and preoccupy ideologues across the political spectrum. But the bottom line is getting people the medical care they need and deserve. Inside the Beltway, people can lose sight of that basic goal. The administrator’s job is to make sure that neither he nor his agency ever does.”

Nancy-Ann DeParle (1997–2000): “I knew that to succeed I had to improve the agency’s relationship with Congress. So I tried to build personal ties—traveling to a hospital in Muskogee, Oklahoma, with Rep. Tom Coburn; sampling barbecue with home health agencies and Rep. Joe Barton in Colleyville, Texas; meeting with seniors at a lunch in honor of Sen. John Breaux in Baton Rouge, Louisiana—and found that many members were willing to meet me halfway.”

Thomas Scully (2001–03): “In 2001, HCFA was perceived by the provider world to be bureaucratic and unresponsive. I was determined to open the place up—to get staff to talk to their constituents (patients and providers). The staff was eager to change HCFA’s image and to communicate more openly. Changing the name to CMS was done to get a ‘fresh start’ in the perception of the outside world and to update the agency’s self-image.”

You can read the articles at http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.326/DC2.

View a Webcast from the Kaiser Network on "Medicare and Medicaid at 40" at http://www.kaisernetwork.org/health_cast/hcast_index.cfm?display=detail&hc=1479.


Health Affairs, published by Project HOPE, is the leading journal of health policy. Peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org. Health Affairs Web Exclusives are available free of charge to all Web site visitors for a two-week period following posting, after which they will revert to pay-per-view for nonsubscribers. The abstracts of all articles are free in perpetuity. Web Exclusives are supported in part by a grant from the Commonwealth Fund.


©2005 Project HOPE–The People-to-People Health Foundation, Inc.