President-elect Barack Obama announced former South Dakota Senator Tom Daschle as his nomination for the next Secretary of the Department of Health and Human Services (HHS). Obama also announced that Daschle will serve as director of a newly created White House Office of Health Reform. As director, Daschle would be the “lead architect” of programs for expanding health coverage and controlling health care costs.

By way of background, after leaving the Senate, Daschle wrote a book entitled “Critical: What We Can Do About the Healthcare Crisis,” detailing his ideas for reforming the health care system. His most notable idea involves the creation of a Federal Health Board, similar in concept to the banking system's Federal Reserve Board. The Federal Health Board would be made up of a variety of experts nominated by the President and confirmed by the Senate, for 10-year terms. The board would decide on the scope of coverage for federal health programs and, according to Daschle, would reduce or deny payment for new drugs and devices that it finds are not as effective as currently available products. The Secretary-designate sees the board as a way to control health care costs and introduce efficiency in the delivery of health care services. The concept of a central board may be viewed negatively by drug and device manufacturers as the board effectively would be picking winners and losers among makers of drugs and medical devices. Critics further point out that the board could deny patients access to safe, effective treatments.

Daschle has also proposed the establishment of a federal health insurance plan that would compete with private plans. He believes that costs would be reduced and care would be improved if private insurers had to compete with a government plan. Others believe the government plan would have an unfair advantage and could cause private insurers to leave the market.