Exit Interview: Donna Shalala

GWEN IFILL:

Donna Shalala came to the Department of Health and Human Services at the beginning of the Clinton administration, from academia: Eight years as President of Hunter College, and six as chancellor of the University of Wisconsin at Madison. And when President Clinton leaves office, she will return to academia; she becomes President of the University of Miami in June. Her years as Secretary of Health and Human Services have been eventful ones. Her watch included a major reform of the welfare system, a failed effort to overhaul the nation's health care system, and vigorous ongoing debate over the future of Social Security and Medicare. Donna Shalala joins us now. Welcome, Secretary Shalala.

DONNA SHALALA:

Thank you.

GWEN IFILL:

Next time I see you, it will be President Shalala.

DONNA SHALALA:

Exactly.

GWEN IFILL:

What in the eight years, your eight years in the administration– one of only three of you who actually lasted eight years– what do you… are you proudest of?

DONNA SHALALA:

American children are healthier and wealthier as a result of this administration — not just the economy, but what we've been able to do to strengthen families, get more families to work, but of course, extend health care to American children and to their parents, in many cases.

GWEN IFILL:

What do you regret the most not having gotten done?

DONNA SHALALA:

I think not getting health insurance for everyone; not making sure that every American that gets up and goes to work in the morning has good health insurance for themselves and for their families. It's still a big gap. There's still 40 million Americans who don't have health insurance, and we need to do something about that.

GWEN IFILL:

And more people are uninsured now than when Bill Clinton took office.

DONNA SHALALA:

That is true. But there's also no question that for the first time we're starting to gain on those numbers. Because of the children's health insurance program, 1.1 million of the 1.7 million who gained health insurance are children, and that means that when you do provide health insurance for those who don't have it, you really can begin to stop the slide.

GWEN IFILL:

When you came to this job, it was clear that you had a set of clearly articulated views about the world and about government's role in people's lives. Do you feel that you were able to get accomplished what you imagined you would be able to?

DONNA SHALALA:

For the most part. There's no question that I believed in the smaller government the way the President did, a more targeted government, being careful about what the federal government did. I had a commitment to the great scientific institutions, the Food and Drug Administration, the Centers for Disease Control, the NIH– institutions which have no substitutes at the state or the local level, that, in fact, protect our food and our drugs, help us to prevent infectious diseases, and have launched this golden age of biomedical research. The fact that those institutions are in better shape than they've ever been in our history is a very important legacy of this administration, and will pay off in years to come. I like to say that my successors will reap the rewards of these substantial investments in our scientific institutions.

GWEN IFILL:

Your successor, Tommy Thompson, made a reputation for himself on welfare reform, the one thing that I imagine you didn't think you would be presiding over in your eight years as Secretary. Was that a disappointment to you?

DONNA SHALALA:

Well, I think that welfare reform, we don't know the results of it, yet. We do know large numbers of Americans are no longer on welfare, and Tommy Thompson, of all of the Governors, understands that you have to invest on the front end, not simply to help people get their jobs, but to help them stay in their jobs, and he has been one of the Governors that has said we have to spend more money on health care and more money on child care to help people stay in their jobs.

GWEN IFILL:

Did that not happen in this case? Did things get flipped out of order?

DONNA SHALALA:

They did get a little flipped out of order. I would have preferred to put the health care and the childcare in place, and then do welfare reform. We did put earned income tax credit. We did put more health care in place afterwards, and certainly more childcare. This budget has a major increase, almost a billion dollars in childcare, a billion dollars in increase in the Head Start program. But one of the things we have to learn is if you want low income, working parents to stay in their jobs, to lift their families out of poverty, then we have to support them, and childcare and healthcare are critical to that support.

GWEN IFILL:

How about Medicare, also a far more complicated issue to take on than you first anticipated, I guess?

DONNA SHALALA:

It is more complicated, but the one thing that we did do is we managed it well. We reduced the waste and the fraud in the system. The Medicare system is managed at a lower overall cost than anything in the private sector. The overhead for Medicare, the administrative costs, are about 3%. We did stabilize the program. It's not growing as fast as it did before. But we could not solve the problem, because it required vast new amounts of money, of doubling the Medicare population. There's no question that Medicare is a better-managed program that has less fraud, and we've substantially reduced the waste in the program. The industry has changed, perhaps out of fear that we might put them in jail– and we've put a lot of people in jail– but more importantly, they have new accounting systems, and they're charging Medicare more accurately. But there's still a problem. We're going to double the elderly population. We need to put additional resources, the program has to get more competitive, we have to get better pricing for what we buy for our Medicare recipients, and we must get a pharmaceutical benefit for Medicare recipients. We cannot have a first-quality program unless you could afford to pay for your drugs.

GWEN IFILL:

In all these long looks we're taking back at the eight years of the Clinton administration, one of the things which comes up consistently is this idea that, perhaps, a year or so was lost because of scandals involving the White House. Are there things that you think you could have gotten done had the President or the White House not been preoccupied with other issues, which involved the President's own survival?

DONNA SHALALA:

First of all, the President didn't start working on the people's business during that period of time. If anything, we were just as energetic during that period, so I cannot say that honestly, that we missed something there. Some people have suggested that we could have done major Medicare reform. Doing major Medicare reform is hard. There has to be a consensus; we learned that in health care reform. There's a consensus… there's a problem, there's a consensus we need to double the population. There's certainly, among the experts, there's a consensus we need to price better. There's no consensus on the solution. We learned during health care reform that you have to have both. This is hard to do, and I'm not convinced that the President's difficulties stopped us from doing that.

GWEN IFILL:

Did you lay the groundwork for health care reform? Is this something that the next administration can follow through on? If you had another year, do you think you could make a difference on that?

DONNA SHALALA:

No question in my mind. If we had another two years, we would do Medicare reform. The surplus would help us to do that, but more importantly, we know a lot about what we need to do in terms of competitive pricing. We know a lot about how to put in place a pharmaceutical benefit for seniors, so… and the program is so much better managed than it was before, that I think we have the integrity and the skill now to do that. So they're in good shape to move into other kinds of reforms that need to be done.

GWEN IFILL:

You came to the cabinet with an outsider's idea of the things you could get done. Right now we're caught up in watching the John Ashcroft hearings. One of the questions raised about him is whether his personal beliefs will affect the things that he gets done as Attorney General. Do you feel that your personal beliefs, the things you believed in, affected, or were able to get you to affect the things that could get done at HHS?

DONNA SHALALA:

I don't think it was as much my personal beliefs. I obviously came with the same kind of commitment to the President. I was very clear about what the President was for, and even though he and I disagreed on some of the bills, on when we should sign them, we never disagreed on what should be in the package of social reforms that we thought ought to take place. So I think the answer is no. What I have learned is that the only way you take giant steps in this country is through bipartisan support, so every major agency of my Department now has strong bipartisan support. We did FDA reform with a bipartisan vote. We clearly did welfare reform with a bipartisan support, and all of the child care programs, the Head Start expansion, the reauthorization of the Older Americans Act, the changes we made in Medicare, including prevention benefits, the management changes, the fraud changes, all of these had very strong bipartisan support. The NIH is a perfect example. Not only does it have the intellectual leadership that it's needed for a very long time, but tremendous bipartisan support for the investments that brought it — we increased its budget by 50%. Bipartisan support is a reflection of the consensus of the American people that this is important for the federal government to do.

GWEN IFILL:

As the result of searching for bipartisan support, has that changed your mind about any fundamental issues that you brought to this job?

DONNA SHALALA:

Not really. I think that what I've learned is it's less important what the structure is than what the outcome is. But I'm less interested in what level of government performs the actual delivery of the service than I am whether, at the end of the day, you get quality health care, and quality child care, and you get a proper investment in the research infrastructure– for example, in the great research universities in this country– whether you've actually reduced the number of kids that are dying from infectious diseases, whether our food is safer. So I think that I've come out of this with less concern about the level of government, constantly searching for the appropriate role of the federal government, but very concerned about outcome. For instance, I'm less enthusiastic about expansion of insurance than I am about making sure kids actually get health care. I dedicated today the Arlington Pediatric Center, and that's essentially a health care home for kids in Arlington, Virginia. What does that mean? That means whether or not you have insurance, you have a place to go for your child. Most of those kids do have insurance; many of them don't have regular family doctors. So making sure people actually get good health care is more important, I think, in terms of what I've learned, than actually worrying about how it's paid for, and spending too much time worrying about the financing, as opposed to getting people the actual service.

GWEN IFILL:

Well, Secretary Shalala, thank you very much for joining us, and best of luck in all your new endeavors.

DONNA SHALALA:

Thank you.