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Mark McClellan
12th Administrator of the Centers for Medicare and Medicaid Services
In office March 25, 2004 – October 14, 2006
President	George W. Bush
Preceded by	Dennis Smith (Acting)
Succeeded by	Leslie Norwalk (Acting)
18th Commissioner of Food and Drugs
In office November 14, 2002 – March 25, 2004
President	George W. Bush
Preceded by	Jane Henney
Succeeded by	Lester Crawford
Personal details
Born	(1963-06-26) June 26, 1963 (age 61) Austin, Texas, U.S.
Political party	Republican
Education	University of Texas, Austin (BA) Harvard University (MPA, MD) Massachusetts Institute of Technology (PhD)

Mark Barr McClellan (born June 26, 1963) is the director of the Robert J Margolis Center for Health Policy and the Margolis Professor of Business, Medicine and Health Policy at Duke University. Formerly, he was a senior fellow and director of the Health Care Innovation and Value Initiative at the Engelberg Center for Health Care Reform at The Brookings Institution, in Washington, D.C. McClellan served as commissioner of the United States Food and Drug Administration under President George W. Bush from 2002 through 2004, and subsequently as administrator of the Centers for Medicare and Medicaid Services from 2004 through 2006.

Education

After graduating from the University of Texas in 1985 majoring in English, Biology, and Plan II, he earned his M.D. degree from the Harvard–MIT Division of Health Sciences and Technology in 1992 and his Ph.D. in economics from MIT in 1993. He also earned a Master of Public Administration degree from Harvard Kennedy School in 1991. He completed his residency training in internal medicine at Brigham and Women's Hospital, and he is board-certified in internal medicine. McClellan's research studies have addressed measuring and improving the quality of health care, the economic and policy factors influencing medical treatment decisions and health outcomes, estimating the effects of medical treatments, technological change in health care and its consequences for health and medical expenditures, and the relationship between health and economic well-being. He has twice received the Arrow Award for Outstanding Research in Health Economics.

Career

In government

From 1998 to 1999, McClellan served as deputy assistant secretary of the Treasury for Economic Policy, where he supervised economic analysis and policy development on a wide range of domestic policy issues.

During 2001 and 2002, McClellan served in the White House. He was a member of the president's Council of Economic Advisers, where he advised on domestic economic issues. He also served during this time as a senior policy director for health care and related economic issues for the White House.

McClellan served as commissioner for the Food and Drug Administration (FDA) beginning November 14, 2002, becoming the first economist to hold that position. Originally from Austin, Texas, he is the brother of former White House Press Secretary Scott McClellan and the son of Texas comptroller Carole Keeton Strayhorn and attorney Barr McClellan.

He was administrator for the Centers for Medicare and Medicaid Services in the United States Department of Health and Human Services from 2004 to 2006. In this position, he was responsible for administering the Medicare and Medicaid programs, including Medicare Part D, the prescription drug benefit program engendered by the Medicare Prescription Drug, Improvement, and Modernization Act.

Following the resignation of Health & Human Services Secretary Tommy Thompson in 2004, McClellan was mentioned as a possible replacement, but President Bush ultimately nominated former Utah governor Mike Leavitt. On September 5, 2006, McClellan announced his resignation from his post in the department. He told The Associated Press he would be leaving the agency in about five weeks and would probably work for a think tank where he could write about improving health care in the United States.

In 2007, he was appointed as the chair of the Reagan-Udall Foundation, a public-private partnership between the U.S. Food and Drug Administration and industry.

In academia

Previously, McClellan was associate professor of economics at Stanford University, associate professor of medicine at the Stanford University School of Medicine, a practicing internist, and director of the Program on Health Outcomes Research at Stanford University. He was also a research associate of the National Bureau of Economic Research and a visiting scholar at the American Enterprise Institute. Additionally, he was a member of the National Cancer Policy Board of the National Academy of Sciences, associate editor of the Journal of Health Economics, and co-principal investigator of the Health and Retirement Study (HRS), a longitudinal study of the health and economic well-being of older Americans.

Publications

Hospital Reimbursement Incentives: An Empirical Analysis

Published in 1997 in the Journal of Economics and Management Strategy, McClellan's paper serves as a review and analysis of provider payment incentives resulting from the Medicare prospective payment system (PPS). Implemented in the 1980s, PPS was intended to incentivize hospitals to drive down costs by limiting the use of costly technologies that added little benefit. The hallmark of the program is the use of fixed payments via diagnosis-related groups (DRGs) in a prospective manner based on diagnosis at the time of admission. McClellan suggests that PPS may not optimally incentivize cost sharing among insurers and health providers due to the income effect by which hospitals may seek out particular diagnoses with higher reimbursement rates, akin to skimming in the insurance arena. Conversely, retrospective cost sharing allows for possible supply induced demand, minimizing the hospital's incentive to decrease resource utilization and costs in more complicated cases.

This paper presents an econometric model to summarize these reimbursement incentives, present information on cost sharing and generosity in the PPS model, and discuss the implications of these findings. McClellan points out repeatedly that the PPS has increasingly permitted more retrospective adjustments to the payments. This has been primarily driven through outliers and treatment-driven DRG's developed during the admission, rather than diagnosis-driven DRG's identified at the time of admission. Outlier payments allow for supplemental payments for unusually lengthy or expensive admissions and make up no more than 5% of all hospital admissions. The author considers the increase in case mix index, a measure of the intensity of care delivered, to have the most important influence on overall PPS payments. He adds that these retrospective adjustments may be hampering the program's effectiveness in implementing cost sharing. McClellan's model allows individual aspects of PPS to be evaluated for their contribution to cost sharing rates and reimbursement variance. He used linear regression to approximate how the cost sharing reimbursement is derived, using fixed and variable components. Lower costs equaled lower reimbursement; however, higher costs led to higher reimbursements only if the costs were driven by a procedure. This was most true for men aged 65 to 69 with surgery requiring ICU care and an increased length of stay. Generosity estimates indicate that virtually all hospitals do some cost sharing. Higher generosity is usually associated with greater retrospective limits on cost sharing. In the 1990s, high-tech hospitals saw more generous reimbursements and were more likely to survive, whereas for-profit hospitals were more likely to exit the market.

In summary, the Medicare "Prospective" Payment System has multiple retrospective factors that limited cost sharing in 1990. McClellan's review serves as a harbinger of current attempts to model a health care reimbursement program focused on pay for performance criteria such as penalties for readmissions and incentives for value-based purchasing. The Patient Protection and Affordable Care Act continues to drive home the message of cost sharing by reducing reimbursements in the Inpatient Prospective Payment System.

Role in Center for Reproductive Rights lawsuit

During McClellan's tenure as Commissioner of the Food and Drug Administration (FDA), the makers of Plan B emergency contraception applied for over-the-counter status.

In May 2004, FDA commissioner Steven Galson rejected over-the-counter status for Plan B. The Center for Reproductive Rights then filed a lawsuit, and deposed Dr John Jenkins, director of the FDA's Office of New Drugs. Jenkins alleges that he learned in early 2004 that McClellan, then Commissioner of the FDA, had decided against approval even before the staff could complete their analysis. "I think many of us were very concerned that there were policy or political issues that came to play in the decision," Jenkins stated. He later said he did not know if anyone outside FDA influenced the decision.

McClellan said in his deposition that he was not involved in the decision to reject the initial Plan B application for non-prescription sales; he left the FDA in February 2004 to head the agency that runs Medicare and Medicaid. He also said that he was never told by anyone higher up in the Bush administration what to do about the application, although he did say that he "briefed" two White House domestic-policy advisors. The litigation is ongoing; no finding has been made for either side.

References

1. "Mark B. McClellan | Brookings Institution". Archived from the original on 2014-03-28. Retrieved 2014-03-26.
2. Editorial (September 8, 2006). "Departure of a Pragmatist". The New York Times.
3. Elisabeth Bumiller (September 15, 2003). "White House Letter; A Spokesman Son, A Tell-All Dad, A Mum Mom". The New York Times.
4. Robert Pear (February 21, 2004). "Bush Chooses the F.D.A's Chief To Run Medicare And Medicaid". The New York Times.
5. Kolata, Gina (29 April 2003). "SCIENTIST AT WORK: MARK B. MCCLELLAN; F.D.A. Chief's Fast Start Earns Praise and Doubt". The New York Times. Retrieved 21 August 2019.
6. "Curriculum Vitae Mark B. McClellan" (PDF). NBER. May 2000. Retrieved 2008-05-30.
7. "Mark McClellan, MD PhD". georgewbush-whitehouse.archives.gov. Retrieved 2020-11-05.
8. FDA's economist in chief, Mark McClellan's views on healthcare make him popular with the drug industry, by Christopher Rowland, Boston Globe, January 18, 2004.
9. ^ McClellan, M. (1997). Hospital reimbursement incentives: An empirical analysis. Journal of Economics and Management Strategy, 6(1), 91-128.
10. "Evolution of DRGs (2010 update)". Journal of AHIMA. 1 March 2010. Retrieved 17 April 2018.
11. Folland, S., Goodman, A. C., & Stano, M. (2010). The economics of health and health care. (6th ed.). Upper Saddle River, NJ: Pearson Education.
12. Folland, S., Goodman, A. C., & Stano, M. (2010). The economics of health and health care. (6th ed.). Upper Saddle River, NJ: Pearson Education.
13. "outlier payments in healthcare". Healthmr.com. 5 September 2009. Retrieved 17 April 2018.
14. Ciliberto, F., & Lindrooth, R. (2007). Exit from the hospital industry. Economic Inquiry, 45(1), 71-81. doi: 10.1093/ei-cbl010
16. 7. Centers for Medicare and Medicaid Services, Department of Health and Human Services. (2012). Medicare program; hospital inpatient prospective payment systems for acute care hospitals and the long-term care hospital prospective payment system and fiscal year 2013 rates; hospitals' resident caps for graduate medical education payment purposes; quality reporting requirements for specific providers and for ambulatory surgery centers. Final rule. Federal Register, 77(170), 53257-53750.
17. ^ "Plan B decision made before data review - FDA staff". Reuters via MSNBC.com: 4 August 2006. Accessed 4 August 2006.
18. Julie Rovner (August 3, 2006). "Plan B Depositions Allege FDA Politically Motivated". NPR. Retrieved 2006-11-11.

Selected publications

• McClellan M, McNeil BJ, Newhouse JP (1994). "Does more intensive treatment of acute myocardial infarction in the elderly reduce mortality? Analysis using instrumental variables". JAMA. 272 (11): 859–66. doi:10.1001/jama.1994.03520110039026. PMID 8078163.
• Kessler D, McClellan M (1996). "Do doctors practice defensive medicine?" (PDF). Q J Econ. 111 (2): 353–390. doi:10.2307/2946682. JSTOR 2946682. S2CID 153535430.
• Newhouse JP, McClellan M (1998). "Econometrics in outcomes research: the use of instrumental variables". Annu Rev Public Health. 19: 17–34. doi:10.1146/annurev.publhealth.19.1.17. PMID 9611610.
• Kessler DP, McClellan MB (2000). "Is hospital competition socially wasteful?*" (PDF). Q J Econ. 115 (2): 577–615. doi:10.1162/003355300554863.
• Cutler DM, McClellan M, Newhouse JP (2000). "How does managed care do it?" (PDF). RAND J Econ. 31 (3): 526–48. CiteSeerX 10.1.1.1027.8349. JSTOR 2600999. PMID 11503704. Archived from the original (PDF) on 2011-04-17. Retrieved 2011-03-14.
• Cutler DM, McClellan M (2001). "Is technological change in medicine worth it?". Health Aff (Millwood). 20 (5): 11–29. doi:10.1377/hlthaff.20.5.11. PMID 11558696.
• Dranove D, Kessler D, McClellan M, Satterthwaite M (2003). "Is more information better? The effects of "report cards" on health care providers" (PDF). J Political Econ. 111 (3): 555–588. doi:10.1086/374180.
• Fisher ES, McClellan MB, Bertko J, Lieberman SM, Lee JJ, Lewis JL, Skinner JS (2009). "Fostering accountable health care: moving forward in Medicare". Health Aff (Millwood). 28 (2): w219–31. doi:10.1377/hlthaff.28.2.w219. PMC 2656392. PMID 19174383.
• McClellan M, McKethan AN, Lewis JL, Roski J, Fisher ES (2010). "A national strategy to put accountable care into practice" (PDF). Health Aff (Millwood). 29 (5): 982–990. doi:10.1377/hlthaff.2010.0194. PMID 20439895. Archived from the original (PDF) on 2011-07-19. Retrieved 2011-03-14.
• McClellan M, Benner J, Schilsky R, Epstein D, Woosley R, Friend S, Sidransky D, Geoghegan C, Kessler D (2011). "An accelerated pathway for targeted cancer therapies". Nat Rev Drug Discov. 10 (2): 79–80. doi:10.1038/nrd3360. PMID 21283090. S2CID 5315079.

External links

• Search PubMed for McClellan's publications
• FDA's economist in chief, Mark McClellan's views on healthcare make him popular with the drug industry, by Christopher Rowland, Boston Globe, January 18, 2004.
• Press Gaggle with Scott McClellan and Dr. Mark McClellan Aboard Air Force One
• The States Step In As Medicare Falters; Seniors Being Turned Away, Overcharged Under New Prescription Drug Program, by Ceci Connolly, Washington Post, Saturday, January 14, 2006.
• Troubles with Medicare Prescription Drug Program Archived 2012-11-09 at the Wayback Machine, PBS NewsHour with Jim Lehrer, January 16, 2006.
• Appearances on C-SPAN

v t e Food and Drug Administration of the United States
Divisions	Center for Biologics Evaluation and Research Center for Devices and Radiological Health Center for Drug Evaluation and Research Center for Food Safety and Applied Nutrition Center for Tobacco Products Center for Veterinary Medicine National Center for Toxicological Research Office of Criminal Investigations Office of Global Regulatory Operations and Policy
Major acts	Family Smoking Prevention and Tobacco Control Act Modernization Act of 1997 Federal Food, Drug, and Cosmetic Act Food Safety Modernization Act Prescription Drug User Fee Act Pure Food and Drug Act
Title 21 regulations and rules	Administrative law Title 21 of the Code of Federal Regulations (CFR) Federal journal Federal Register (FR) Federal law Title 21 of the United States Code (U.S.C.)
Commissioners	Harvey W. Wiley Carl L. Alsberg Charles A. Browne Walter G. Campbell Paul B. Dunbar Charles W. Crawford George P. Larrick James L. Goddard Herbert L. Ley Charles C. Edwards Alexander M. Schmidt Donald Kennedy Jere E. Goyan Arthur H. Hayes Jr. Frank E. Young David A. Kessler Jane E. Henney Mark McClellan Lester Crawford Andrew von Eschenbach Margaret Hamburg Robert Califf Scott Gottlieb Stephen Hahn Robert Califf
Society and culture	Criticism of the Food and Drug Administration FDA Most Wanted Fugitives History of the Food and Drug Administration Regulation of food and dietary supplements by the U.S. Food and Drug Administration
Commissioner of Food and Drugs

• 1963 births
• Brookings Institution people
• Commissioners of the Food and Drug Administration
• American health economists
• Harvard Kennedy School alumni
• Living people
• MIT School of Humanities, Arts, and Social Sciences alumni
• Medicare and Medicaid (United States)
• People from Austin, Texas
• Physicians of Brigham and Women's Hospital
• United States Council of Economic Advisers
• United States Department of Health and Human Services officials
• University of Texas at Austin College of Liberal Arts alumni
• George W. Bush administration personnel
• Members of the National Academy of Medicine
• Harvard Medical School alumni