On Tuesday, former HHS Secretary Mike Leavitt debated former Senator (and former Obama nominee for the top HHS post) Tom Daschle on health care reform at The National Press Club (articles summarizing the event here and here, video of portions of the event here , and an interesting blog post here).

The pair began by touching on areas of agreement in health care reform. They agreed that all Americans should have access to affordable health insurance, and that the current trend of rapid cost increases in health care is unsustainable. They also agreed that investments in health information technology and reforming the payment system to promote “value over volume” were necessary.

But the discussion quickly turned to areas of disagreement on how to achieve these goals. Leavitt argued that “real reform will require strong government action, but the action needs to focus on organizing, not owning, the system.” “The fundamental question is who in our society will make the difficult decisions regarding our health care? The government won’t make the decisions and cuts that will keep costs under control. Instead, the answer is that we need to create informed consumers that are able to make these difficult decisions themselves.”

Daschle agreed that “congress can’t manage health care,” but put forward several existing agencies as models for government management of the health care system, including the Federal Reserve Board and the FAA. “These agencies resolve difficult and complex questions outside of Congress,” he said.

When discussing how to pay for health care reform, Daschle cited tax increases, cuts in federal programs like Medicare and TRICARE (health benefits for military personnel and their families), and modernization (including preventive care, health information technology, and “even some medical malpractice reform”). He even suggested reforming the current tax treatment of health insurance (which gives unlimited tax breaks only for those who get health insurance at the place of work).

But Leavitt questioned whether Congress would have the stomach to take on health care costs. “They are saying, ‘Let’s deal with access today, and then deal with costs later.’ But how will adding $1.3 trillion in health care reform while expanding Medicaid and driving people from private to public health insurance reduce costs? Where are the pay-for’s in this plan?”

Disagreement also arose over the issue of creating a public plan. Daschle favored a public plan, saying, “The question is, are we designing a system for insurance companies or a system for the American people? If the latter, a public plan is best. The public plan offers greater choice. Opponents of the public plan are worried that too many people will choose it over their private plan.” Citing a Lewin Group report estimating that 120 million Americans would lose their existing private health insurance under a public plan, Leavitt said a public plan would merely “expand a troublesome entitlement” and is a “Trojan horse being used by ‘Medicare-for-all’ proponents.”

When asked about the prospects of a health care reform bill making it through Congress by the end of 2009, the former officials also disagreed, with Daschle being more skeptical that any reform bill would pass: “Like during the debate over the Clinton health plan in the 1990s, people are saying that something will pass,” he said. “But nothing passed. I think there is only a 50-50 chance that something will pass [this year],”  he said.

Leavitt said “the political imperative is too great” at this point for nothing to pass, noting that President Obama and many in Congress had gone out on a limb promising health care reform to their constituents this year.

“There are three possibilities as I see it,” Leavitt said. “One I call the ‘Big Bang With Details.’ This is a big reform plan that has all the details spelled out in the legislation. I don’t think that will happen. The second is the ‘Big Bang, No Details.’ This is a 30-40 page bill that is essentially titles and chapter headings. It defines an overall direction, but delegates all the hard decisions to HHS or some other bureaucracy. This is especially troublesome because we have no clue what it will become or how to score it. It would likely be several years before we even knew what it was.”

“The third possibility is an incremental approach,” Leavitt said. “I think this is the most likely scenario. This approach focuses on areas of agreement. It would likely be a sizeable Medicaid expansion, another expansion of SCHIP, some comparative effectiveness, some health information technology, and so on. Afterwards both sides would argue over what they had really passed.”

Congress will likely debate health care reform bills in June and July, with top Democrats calling for legislation to be passed before Congress breaks for the August recess. If reform is important, President Obama and Members of Congress from both parties should come together and embrace a strategy that bridges these differences.