LDI Health Policy Seminar Series

Secretary Donna E. Shalala

Summary Biosketch

On Nov. 23, 1999, U.S. Secretary of Health and Human Services Donna Shalala stood before a packed auditorium at the University of Pennsylvania and fielded a wide range of questions on some of the critical health policy challenges facing the nation in the next decade.

Many questions concerned the plight of the academic medical centers like the University of  Pennsylvania Health System, which posted a $198 million deficit for the last fiscal year.  Many experts attribute this deficit, in part, to decreasing Medicare and private insurance payments. Secretary Shalala said that the government was not responsible for the Heath System's current financial woes. “Penn's situation has to do with where it is and what its market looks like,” she said, noting that private and federal cost containment has strained academic center budgets. “We have built an excellent infrastructure, a lot of it with National Institutes of Health (NIH) monies. But we can't fix every local problem. Each institution is going to have to learn to survive individually,” she said.

She added that institutions could no longer shift costs between public and private payers. “Cost-shifting in managed care has been going on for a  long time. Academic centers were okay until Medicare stopped overpaying,” she said. “But what should the government response be? Should Medicare continue to overpay?

“You've got to see where I stand. We are about to double the number of people in Medicare,” she said. “The President gave me the charge to streamline costs. If there is a medical student listening to all this and wondering what the answer is, it isn’t simple.”

But she added that the government could  play a more active role in supporting academic medical centers. “One clear way of intervening is to make sure we pay properly for the additional cost of academic health centers.” 

Secretary Shalala–the longest-serving secretary of Health and Human Services in the department's 19-year history–fielded questions from David Asch, MD, Executive Director of LDI, and from the audience on a broad range of topics, ranging from the problem of 44 million uninsured Americans, to long-term care, to the future of managed care, to organ transplant regulations and the Indian Health Service.

She had no quick fixes to the problem of the uninsured. “We don't have the politics for universal health care insurance,” Secretary Shalala said. “And giving people a contribution so they can purchase health insurance doesn’t necessarily guarantee them quality health care.” She cited research indicating that government subsidies may not help low-income people buy health insurance. “I ask people all the time who have incomes under $25,000 what kinds of subsidies we would have to give them to get them to purchase health care,” she said. “And I have to tell you, it would almost have to be provided free.”

She urged the audience to move from the present focus on finance (how do we pay for care?) to one that considers quality (what do we want to pay for?).  “I don't think HMOs can survive in their present form, if all managed care is doing is cutting costs. I want to make sure we are moving to a system that recognizes the importance of science and health. All parts of the system will have to pay their fair share, but it will never work until we worry more about quality than finance.”

Responding to a question about financing long-term care, Secretary Shalala commented, “This administration does not have a long-term care policy.”  She said that the President’s proposals to provide a $1,000 tax credit to eligible families might help pay for some respite care, but was not meant to address the overall problem of paying for long-term care.

Donna E. Shalala
Secretary of Health and Human Services
Department of Health and Human Services

Donna Shalala is the longest serving Secretary of Health and Human Services in U.S. history. She joined the Clinton Administration in January 1993 to lead the federal government's principal agency for protecting the health of all Americans and providing essential human services. With a Fiscal Year 1999 budget of approximately $381 billion and nearly 58,000 employees, HHS administers a wide variety of programs including Medicare, Medicaid and federal welfare and children's programs. 

In Secretary Shalala's six years as Secretary, the Department has guided the welfare reform process; made health insurance available to an estimated 2.5 million children through the approval of 50 state and territory Children's Health Insurance Programs (CHIP); raised child immunization rates to the highest levels in history; led the fight against young peoples' use of tobacco; created national initiatives to fight breast cancer, racial and ethnic health disparities, and violence against women; and crusaded for better access and better medications to treat AIDS. 

Secretary Shalala has redefined the role of HHS Secretary, partnering with businesses and other private sector organizations to extend the Department's public health and education mission. She appeared in a "Milk Mustache" advertisement to help promote osteoporosis prevention and threw the first pitch (the full 60 feet, six inches) for the Baltimore Orioles' 1998 season after championing a campaign to break the link between smokeless tobacco and professional baseball. During her tenure, HHS launched the "Back to Sleep," "Girl Power!" and "Choose Your Cover" campaigns, working with corporations and advocacy organizations to improve the lives and health of babies, girls and young adults. 

Throughout her career, Secretary Shalala has been a scholar, teacher, and a public administrator. As Chancellor of the University of Wisconsin-Madison from 1987-1993, she was the first woman to head a Big Ten University and was named by Business Week as one of the five best managers in higher education. During her tenure at UW, she helped to raise over $400 million for the university's endowment and spearheaded a $225 million state-private partnerships program to renovate and add to the university's research facilities for its world class scientists. 

Prior to that, Secretary Shalala served as president of Hunter College for eight years, and as an Assistant Secretary at the Department of Housing and Urban Development during the Carter Administration. From 1975-1977, she served as Treasurer of New York City's Municipal Assistance Corporation, the organization that helped rescue the city from the brink of 
bankruptcy. An acknowledged scholar of state and local government and finance, Secretary Shalala earned her Ph.D. from the Maxwell School of Citizenship and Public Affairs at Syracuse University in 1970. She has also served as a Peace Corps volunteer in Iran. 

Secretary Shalala is one of the nation's foremost advocates for children and families, and has made improving the quality of life for America's children her highest priority. Before joining the Clinton Administration, Secretary Shalala served for more than a decade on the board of the Children's Defense Fund, succeeding Hillary Rodham Clinton as chair in 1992. As a member of the 1991 Committee for Economic Development, she contributed to bipartisan reports on the basic health, welfare, and educational needs of our youngest children. 

Secretary Shalala is also an avid athlete and sports fan. Like her mother, Edna, the national 80-year-old women's tennis champion, she plays a competitive game of tennis. In her spare time, she also reads, golfs, hikes and climbs mountains, among them the Himalayas. While growing up in Cleveland, Secretary Shalala played softball on a team coached by Yankees owner George Steinbrenner. Secretary Shalala was also the first season ticket holder for the WNBA's Washington Mystics. 

Secretary Shalala has more than two dozen honorary degrees and a host of other honors, including the 1992 National Public Service Award and the Glamour Magazine Woman of the Year Award in 1994. She has been elected to the National Academy of Education, the National Academy of Public Administration and the American Academy of Arts and Sciences. 

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