Kahn, About To Leave HIAA, Reflects On Health Care Industry

By

Charles “Chip” Kahn III, president of the Health Insurance Association of America, Washington, plans to leave HIAA June 17 and take over as president of the Federation of American Hospitals.

The federation has a national office on Pennsylvania Avenue, only six blocks away from HIAAs office on F Street, but it and HIAA are often light-years apart on health policy matters.

Kahn is best known for his work at HIAA. In 1993 and 1994, he was in charge of developing the famous “Harry and Louise” advertising campaign that turned the tide against the Clinton health care reform proposals.

Kahn returned to HIAA in 1998, when it faced stiff competition from the health maintenance organizations trade groups, and brought the big managed care companies back into the fold.

Kahn may have had even more influence from 1995 to 1998, when he was staff director of the House Ways and Means Committee Health Subcommittee.

While at the subcommittee, Kahn helped shape the Health Insurance Portability and Accountability Act of 1996. He also helped shape provisions in the Balanced Budget Act of 1997, enacted to save Medicare from insolvency.

Kahn now serves on the Competitive Pricing Advisory Committee, a board that advises the government on ways to use private-sector ideas to improve Medicare.

Kahn holds a bachelors degree from Johns Hopkins University and a masters degree in public health from Tulane University.

The following is an edited version of remarks Kahn made during a recent interview with National Underwriter.

NU: What about your time at HIAA makes you the proudest?

CK: One was that, with the help of a great staff and many CEOs, we were able in 1998 to bring back most of the companies that left in the early 1990s. Aetna, CIGNA, Horizon

The other area that has really made progress is our insurance education area. We are in many ways the best resource for information on managed care, health insurance and long-term care.

We also made real progress with the strange bedfellows movement, working with organizations we dont normally work with and the Robert Wood Johnson Foundation to raise the level of consciousness about the uninsured. There hasnt been any legislation enacted, but the issue is in play.

In the last year of the Clinton administration, HIAA was able to join with AARP and put together a bipartisan coalition that supported the deduction for long-term care premiums, as well as a tax credit for caregivers. We have a president now thats sympathetic. I remain optimistic that [enacting the deduction] is something we can achieve.

What about your time at HIAA makes you the least proud?

I think weve been successful at representing industry needs across a broad range of products. I think weve done a good job of balancing the advocacy needs of our members. But interests sometimes collide.

Why are you leaving HIAA for the Federation of American Hospitals?

It has terrific companies, and it plays an integral role in the delivery of health care. And, besides that, they gave me a good offer.

What would you like to accomplish at the federation?

At HIAA, I spent a lot of time seeing CEOs at their companies to find out what they thought. At the federation, I plan to do the same thing, visiting the companies, learning about their businesses. In a sense, thats how an agenda forms for a member advocacy organization.

But I hope Ill be able to keep up the work on the uninsured. For hospitals, thats a key issue. They bear the brunt of the problem.

What do you think about the future of the private health insurers?

I see the health insurance and health plan industry as being in a number of binds. The customer is the employer, but the consumers are the employees. Someone else is buying their insurance.

Theres a tug and a pull between the motivations and needs of the customers and the consumers.

The industry was successful at doing what the employers wanted and keeping coverage affordable. But now you have provider dissidence. The industry is in a real bind.

During my tenure here, I felt I never figured out how to get out of that bind.

This could lead to bad public policy that could increase medical costs.

What would you like the hospitals to understand about the health insurers?

At the end of the day, its in everyones interest to have affordable care. If the costs are too high, it just makes it impossible for the system.

Americans want a voluntary, free enterprise system. Right now, theres a lot of tension between the parties that make up this free enterprise system. We need to find ways to work together.

Do you think national health care proposals will make a comeback?

In 1993 and 1994, the American people made a strong statement that they did not want government-run health care. I think that underlying preference remains.

As costs rise, though, you do have to worry about whether the private system is sustainable.

But there is just no way the government could do it better. At least into the near term, Im bullish. I think were going to keep a private system.

Are HIAAs members thinking much about Medicare and the Medicare plus Choice health maintenance organization program?

Among private insurers that are still in Medicare plus Choice, theres a grave concern for its future.

For others, for now, what happens in Medicare is important only if things change.

I think over time, the industry has to be concerned about a system that is such a large part of the health care delivery market. Forty percent. Youve got to worry about the effects of that 40% on the providers.

Medicare appears to be moving away from managed care to control costs, toward price caps. How do you think that will affect Medicare?

I think it will be very difficult to sustain as a system over time.

My crystal ball is very fuzzy as to whether we know how to design a program where providers will able to provide affordable coverage. Providers cant sustain participation in the program.

Do you think the current Congress has much interest in Medicare reform?

The problem with Medicare for me right now is that its too politicized. Theres interest, theres a lot of discussion, theres a lot of smoke. But I dont know if theres a lot of interest in rolling up the sleeves and working on the future of Medicare.

Thats partly because a high percentage of seniors vote, and theyre concerned about change. Its easy to worry them politically because they dont like change.


Reproduced from National Underwriter Life & Health/Financial Services Edition, June 11, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


Copyright 2001 by The National Underwriter Company. All rights reserved. Contact Webmaster