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PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collertion/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4787
FolderlD:
Folder Title:
Polling Data
Stack:
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Position:
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1
�IRROR
TIMES MIRROR
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PHOTOCOPY
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TIMES MIRROR
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NEWS
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FOR RELEASE: THURSD
As Year Ends ^ .
CLINTON SUCCESSES REPAIR IMAGE
re/? FURTHER INrO^MATju!;
CO^r.a:
Andrew Kohut. Direaor
Robert C. Toth, Senior Aiiociiv.^
Carol Bowman, Research DIKCIOI
Times Mirror Center for The P'-vpS202/293-3126
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PHOTOCOPY
PRESERVATION
�12 -17,'93
12:013
TIMES MIRROR
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Public Interest and Awareness of the News
CLiiiTOi-i HEALTH GAKE PLAN
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TIMES MIRROR
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PHOTOCOPY
PRESERVATION
CLINTON SHAKES NON-ACHIEVE'R IMAGE
As his first year in office cciiies !0 a c!v":i O^i Clhuon ha; sfgnifieanth- repaired his
persona! image. Although his appruva! relingi i-.ave sa ia reaeli the 50% mark, Americans
have a vastly improved impression ^1' fl-.e PrvA-it-rX<> -Anlky to accomplish his goals than they
had earlier in the year,
The latest nationwide Tiffii'S fJlhrn Ctr,Mr survf:> found 63^ thinking of Bill Clinton as
someone who can get things done, while oniy JT^^do not. In August, these, figures were
reversed: 54% of poll participanis i.houglu hf ecu!':! so/ get things done, and only 36% saw him
as an achiever. Similar^ the percentage of .Am-H/n:;* who w i cite a Clinton achievement <
w
a/i unprompted basis increased fron^ 46% in AugC:A to 60% in the Times Mirror telephone poll
of 1479 adults conducted this past sveekend.
The public's new view of 3;il Ciinton as an "acbievsr" no doubt reflects the substantial
attention paid to his "win" on N A P T A , to the passage of the Bt&dy Bill and some public
acknowledgement that economic conditio:-.? ars improvhig. Time* Ndinor's News Interest index
found 39% paying close attention to NAFTA, (up front 21% in October), and 37% following
the passage of the Brady Bi!! very elot-eiy. Health care refcrm wss the only "Washington story"
to attract more public atteniion (4i>%).
The current poll also finds much more -suppon for NAFTA, now that it has passed, and
(more backing for the President's ovsrail eoouovnic approach and for his health care reform
proposals than was evident a month ago, wh-n pubiic confidence in Clinton was shaken by
Administration difficulties in Somalia and Haiti.
Trends in economic aUltudes are mutch n'.oie ambivalsni tlian public recognition that
things are beginning to go Bill Clinton's way in W^hington. On the positive side, steadily
fewer Americans cite economic issues (31 'i) when asked to mime the nation's most important
problems than did so in previous Times Min-.x surveys: 47% in September, 53% in June, and
76% in January 1992. In contrns:, mentionr. of c-ime hav; ilssn increasingly, to 25% in. the
current poll, from 35% in Sepfernhsr, 7% *.•; Jnnc -xnd 3% in January 1992.
Correspondingly, when people are asked about the most iriiportaiu problems in their
own lives, fewer mentions were made of the pspect of unemploynumt or the recession than
in polls taken in 1992. N-jvcriheie-.s p.nanci:^ prcbtems continue to dominate the lives of
individual Americans. Not having enough mor.sy to make ends meet was the problem cited
most frequently (by 27%); fuiSy f 3 % eonvpisined of an economic or financial difficulty. In
contrast, just 6% singled out c:vr^. or the ftm
crime as the most important problem in their
lives.
Even more negatively, thure is i;tt;e i;;cic^ion that the public feels any financial relief
as the year ends. Participant; in Time;': !vi:rro:"s survey rat^d the it own financial condition
• about the way respondents have in muionwuk uur/eys over the past two years: 5% said
excellent, while 34% said sood. However, most people in this poll, as in previous surveys, made
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negative evaluations: 45% said they were in only
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shape, and 15% considered themselves
in poor financial condition.
The public also has not gotten the news that a-recovcry is underlay. Most Americans
judge the economy about the way they did ai tnc beginning of the year. In last weekend's
polling, 37% thought the economy was recovering, which about matched the 34% who thought
thai way in January. Most surveyed chough! the economy was either stil! in recession (27%),
or believed that we are in a depression (29%).
It's Still the Ccanomy
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.u. •.. «^.M -V..•.-. •! tnai AmnUf > r n ! j f . i i r f fif hfia'iTh care reform
and rising concern abcut crime, th.e public still wants the President to give economic problems
higher priority than other issues. Improving the jnb situation was cited as the issue to which
the President should give tap priomy by 2S% of iorvey respoudents. Reducing the budget
deficit was named next most often (by 22%), foiiowed by reducing crime (20%), reforming
health care (14%) and icforming the welfare system ( ! ! % } .
Attaching a greater priority to improving the job situation was most evident among
Clinton's core support groups: Non-whites, people earning under $50,000 annually. Democrats
and younger people. (See Table on p.!i). Republica/is gave relatively higher priority to
reducing crime and to trimming trie budget defkii. Perot voters give top priority to improving
jobs and reducing the deficit. Crime was given greater priority than health care reform by every
major demographic and political group analysed, including health conscious older Americans.
NAFTA, Brady Bill, CUnton Achisvsments
The President's image has improved over the past six. months in a number of ways.
Most importantly, a majority ot the' public when asked can cite a Clinton achievement.
Mentions of the health ca're reiorm proposals (51%), NAFTA (19%) and the Brady Bill (8%)
were most often recorded in Times Mirror's blest poll. In August, fewer respondents were able
to name any Clinton accomplishment: only 10% menno-ed his economic plan, 7% health care
reform and 6% gays in the military.
In personal terms, the public ovenvheVmmg.'.v continues to think that Bill Clin.. .-, is
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image, the public gives Climon improved mnrks for orgiimzation: 59% think he is well
organized, compared to the 47% who describci htm that way In August.
Although a 56% majority describes i t : P-esident as someone who is trustworthy, many
Americans still think of CKnton as someone who breaks his promises. Forty-two percent had
that view of him in the c-urvem poll, but this ;s an improvement over August when 53%
regarded him as a promise breaker.
More positively, most Americans coi.tinue to set Clinn.n as a political middle of die
PHOTOCOPY
PRESERVATION
-.1
•1
warm and friendly (87%) and well infotned (09%). Reflecting his more positive "csn do'
loader (49%), rather than as a iibersl ("'%).
1
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12:08
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TIMES MIRROR
i l 006/021 J3
^PHOTOCOPY
WSERVATJOW
Hittav'sAHh
Positive reviews cf Hii'&ry CliiUofi's job performance run well ahead of evaluations
made of the President. Mrs. Clinton received z 62% approval rating for her handling of her
duties as first Lady, and an a'most equally hiidi approval score for handling her duties as an
advisor to the President. Ki'lury Clinton's isting in both respects were about 10 percentage
points higher among women than among men. Women under 30 years of age were especially
positive about Mrs. Clinton, with seven in ten expressing approval.
APPROVAL OF WE WAY hHQ IS HAKQLMi HER DUTIES AS:
first Ludy
Pres. Adviser
%
%
Men
57
54
Women
61
63
18-29
76
70
(N=729)
(N=750)
1996 ????
Hillary's popularity and Bill Clinton's repaired image notwithstanding, most Americans
(38%) haven't made up their minds about i9$6. Only 28% of the American public is prepared
to say that it would iikc to see Bill Clinton re-elected. Almost as many (22%) choose a
nameiess Republican, while i2% s»ml Lucy wOmd like to see an uidepeiideiii candidate elected.
Perhaps more hnportatif than tiie absolute, numbers is the pattern of replies when
analyzed by past vote. Around half of Ciinton voters (57%) said chey would like to see him
re-elected, and about as many Bush voters (5.3%) opted for a nameless Republican. However,
only one in four Perot voters (25%) said they would like to see an independent candidate elected
in 1996, raising questions about the viability oi" the "Perot bloc".
Democrats Dominate Domestic issues
From health care to handguns, the American public: has more confidence in the
Democratic party than the Republican patty to deal with domestic issues. By margins of more
than 20 percentage points, the public thinks the Deniocratic party- would do a better job of
protecting the environment (46% to 22%), and reforming health care (47% to 25%,) than would
the GOP. Smaller pluralities give the nod to the Democratic party on issues where there has
been either party parity or a GOP sdvantsge. Times Mirror's respondents preferred the
Democrats for reducing crime by a 35% to 29% margin and for reducing the budget deficit by
a thin 36% to 31%, Wider pluralities had more confidence in the Democrats for reforming the
welfare system (40% to 30%) and on gun ccnirol (42% to 32%).
On intemationa! issues tne public eontir.ues to have significantly more confidence in
the GOP. By a margin of 49% to 73%, reipondents said they thought the Republican party
would do a better job of making wise decisions shout foreign policy and a 45% to 26%
plurality had more confidence in the GOP :o make wise decisions about defense policies.
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The public coniinuei lo 5iipp-->v; Ciinto.Vs lita'.Jh car. reform plan and it remains almost
as attentive to news about the- plan as when ii 'va*. annuii:icec) !a$r Ssptember. But Americans
are less infoimad about sosne •:-tH:ic! fac:-.'.!: ss|y.;cii of his pcoposai now, three months later,
and their opinicn: tin kev ii^iios c.:!;o m-. trw ••••jices nf oritici of the rcfonn than its
proponents.
In tandem with th* risir in ih? P.-e-;iij-jn;'s a^p.-ov-il rating, support for health care reform
rose to 49% this monih. This 'vus up from *!% ;;' October when most cf Clinton's policy
initiatives dropped in public ostewn, folU'-vving foreign policy reversals in Somalia and Haiti.
But the level is stil! below the peak support o!* 5"% it enjoyed immediately after he unveiled
the plan in a dramatic speech to Congress.
The reasons given by respondsnu for ar.tJ a^ainsr the plan in the curreni poll minor
those given in September. Su^portci-s focut overA-heJmsngiy on security and universal access
(42% now, 43% in September) and the need to d:angc a sysiem which is not working (20%,
22%, respectively). A small change is thr.f sligliiiy nmn supporters now fee! the plan will save
money (14%, 8% in Sepiember). Opponctm sell: inainiy believe the reform plan either won't
save or will cost money (13%, 17%). Opponents also complain somewhat more about
government involvement in medicine now (14-%, from 8%).
The public is every bit us attentive to health care [eform as before. Of 10 major news
stories, this story was followed very closely by tha largest number of lespondents (45%), slightly
more than followed the fires in Southerr, Caiiicnua (44% nationwide, 57% in the West), and
considerably more than foiiowed sevevnJ "setisaticna!" Uwns involving sex and pop stars.
(Attentiveness rankings are discussed bcle.w.)
But respondents showed no grearcr o.o:if(de:it:i: in knowing how their own health care
•would change under Clinton's plan. The same proportion, 47%, said they understood the
impact very well or fairly well (I i % , 36%, respectively) as in September (13%. 34%). And the
public was significantly less tonvtedgeabie *boti.' provislcis of die plan tlian previously.
Fewer people knew that it would pio-iJe caivwsa! coverage — 54% this month «s.
64% in September ••- even though this is arguably the plan's most important feature. This drop
in knowledge about the plan was most prcnonnced among older Americans (both those over ..
50 years old, 51% from 6.5%, and ihost! 30 io 49 y.Virs old, 61% from 71%), as well as among
the poorer, least educated, nsn-white segments of the populace.
Similarly, fewer knew; that the p!;r. wculd in fact gtt.'iranica coverage for worksrs if
they lose or quit their jobs -- 44% vs. 54% in Scptembw. And somewhal fewer knew that the
Republicans had offered a specific allentatJv.- io tht Climcn plan: 20% vs. 24%, with an
increase in the number of "don': know/ refb-ted" responses to 63% from 53%.
Less Choice, less Proiectiou Scon
In three questions asking for opinion or: •, -".rious provisions of the Clinton plan, a similar
erosion of pro-reform sentiment hsi o-onrn-c Vost striking, a majority of the public now
believe there will be less freedom to choose a doctor (54% vs. 45% in September), and
significantly fewer believe; they will have the ^ame arnounl. of freedom (32% now, down from
PHOTOCOPY
PRESERVATIOM
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12:10
© 2 0 2 293 2569
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!2l00S/021
42% in September). Demogrsphioaiiy, :he 310:^0, less Hkely io fee-! they could pick their own
physician were men, the better eiiucaietf, tr-;; snost alYlyent, Republicans and Perot voters.
But the public also fears they v/H! be ies£ well protected from the cost of major illness
(28% now vs. 23% in September), and wii; p-Ay more for routine rnedicai care (36% vs. 32%).
This backsliding occurred on opimons toward iispects cf the reform proposal that will be
crucial in determining ultirmne support for i!, as wali as those that are under most attack in
advertisements by its opponents.
Finally, the public has less confidence that Clinton will get his plan chrough Congress:
55% now say successful, 32% unsyecessfu! vs. 59% and 25%, respectively, in September. But
it fell by a large margin thai Democrat-* can d j a better job of reforming health care than
Republicans, 47% vs. 25%.
The News Interest Index
Health care reform was only onu of several Washington policy issues that received a
significant level of public attentioi;. Also cor-pamg for notice with news about California fires
was passage of the North A-merican Free Trade Agreement (39% followed this news very
closely, up from 21% in October and September), enactment of the Brady Bill to control
handgun purchases (37%), and reports on the condition of the U.S. economy (35%).
As with health care reform, there was no lessening of public interest in the economy.
But the high level of attenltven^s lo "NAFTA did net carry over to Clinton's summit meeting
in Seattle with Asian leaders on economic
trade issues: only 7% paid very close attention
to it.
In comparison, toe Bobbin case in V-rgi-nia in which a wife cut off her husband's penis
was followed very closely by 25% of respondents, the stories about sexual abuses by Catholic
priests by 18%, and news about Michael Jackson.'s personal problems by !5%.
Catholics were more anentive to the priests story, (27% followed very closely, vs. 17%
of Protestants and 14% of Jews). MOM. attentive to Michael Jackson's problems were
respondents under 30 years eld. The Bobbut story was more tompelling to women under 30
years of age (32%) than to older women (24%) or to men of any age (23%)
A whopping 57% of the public said ..hv. r^ws which received too much coverage was
Michael Jackson. Second was the Bobbitts'' penis case, at 28%. Ranked third for getting 100
much coverage was Bosnia, at 7%.
PHOTOCOPY
PRESERVATSON
�' • .
12/17/93
12:11
•
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••
121009,'021
TIMES MIRROR
© 2 0 2 29.3"23i5fi
PERCENT FOLLOWING EACH
NEWS STORY "VERY CLOSELY"
i,i,n i f "
Admin, 's
Health Care
Reform
Proposals
Total
Poanrte
•• ' r - • - -
J
Fires
in
Suuths/n
California
Pazs&ije
Oi
NAFTA
Passagii
of the
Srddy SHi
About
Condition
of the U.S.
Economy
45
44
38
37
35
(1479)
46
44
40
47
45
'J x!
37
38
38
34
[733)
1741)
45
28
45
43
46
44
4G
40
27
36
42
47
36
26
31
£1253)
(79)
(141)
34
47
50
3S
35
54
40
42
32
35
44
29
40
40
(343)
(618)
(499)
55
49
39
40
41
40
47
43
52
44
34
2'i
37
3S
37
42
46
39
32
23
(105)
!390)
(519)
(160)
44
4S
43
46
••0
36
43
57
J V
3o
33
42
34
37
33
34
39
i23oi
(408)
(534)
(242)
A
46
40
44
34
4!
32
39
32
37
(439)
(4S7)
(473)
Sex
Male
Female
Race
White
'Hispanic
Black
Age
Under 3 0
30-49
50 +
Education
College Grad.
Other College
High School Graci
< H. S. Grad.
Region
East
Midwest
South
West
4-2
Party ID
Republican
Democrat
Independent
4fS
46
44
'V
V
J-4
37
Question; Now I will read a tht 'J scms stories wwsd by news wari&.'ifins this past month. As I read
each Hem, tBii m? if you hnppHmd in foiio* iids news story •.•er/ closely, fairly clossly, no
closely, nr not at all closely.
•The designation, Mspanic, is yn/e-Sairjd cc rh* whhs-fct.scfc cateQoni^'.i'.vi
CONTINUED...
PHOTOCOPY
PRESERVATIOM
�12-17 93
12:11
© 2 0 2 293 2569
TIMES MIRROR
i l 010'021
PERCENT FOLLOWING EACH
NEWS STORY "VERY CLOSELY"
Case of
Virginia
Woman
Mutilating
Sexual
Abuses
Husband
Priests
By
Catholic
Civii
VJar in
Bosnia
Michael
Jackson's
Personal
Seattle
Summit
Problems
Meeting
25
15
7
(1479)
14
22
16
14
13
16
a
6
(738!
(741)
1 7
23
21
15
14
15
12
24
33
6
14
9
(1253)
(791
(141!
.2 9
23
24
1 2
11
13
1 7
19
12
16
6
7
8
(343)
1613)
(499)
17
20
30
29
1 s
20
23
\b
15
13
1:3
1 1
10
15
25
9
6
3
6
(405)
(390)
(519)
(160)
27
19
30
21
25
'l 7
16
12
If,
13
13
3
19
1 2
15
14
7
->
6
9
(295)
(408!
(534)
(242)
25
Female
1 s
23
27
35
Sex
Male
18
23
26
Total
IS
20
\ 7
16
I'l
12
17
14
6
6
7
!439)
!487)
(473)
Race
White
•Hispanic
Black
Ago
Under 3 0
30-49
50 +
ia
Education
College Grad.
Other College
High School Grad
< H. S. Grad.
! a
Region
East
Midwest
South
West
1
Party ID
Republican
Democrat
Independent
Question:
26
22
ie
Now i will read a lis: of some ,paries ?f>v/ ed by .news organiiatioos this past month. 1
each item, teli nia // yoi happe ?£<?' ft) fr/fci •i this news srer.' very closely fairly closely.
closely, or not al sll closely.
'The designatior., his panic, is. onrsiated to th« v/hite-'clack catsgonzatir.n
PHOTOCOPY
PRESERVATION
�1217/93
12:12
© 2 0 2 293 2569
TIMES MIRROR
121011/021
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PRESERVATION
�12/17/93
12:1.3
©202 293 2560
'X
@j 012/021
TIMES MIRROR
PERCENT BELIEVING CLINTON HEALTH CARE PLAN
GUARANTEES COVERAGE FOR ALL
Sent.
AU
Dec
1933
Covered
Ail .
1993
Not
All
DK
Total
64
54
21
25=100
Sex
Male
Female
63
64
54
54
23
19
23=100
27=100
65
56
36
43
20
2 4 - 1 CO
33=100
Race
White
Non-white
24
.
•
,)
il
'h
' '}
Age
46
71
65
Under 30
30-49
50+
Education
College Grad.
Some College
High School Grad,
< H.S. grad.
46
Gi
51
24
16
30=100
21-100
26=100
i
i
1
1'i
b'i
61
5ft
05
•59
49
42
18
22
23
20
16-100
19=100
28=100
38-100
66
31
57
14
1G
22
22
23
16=100
17-100
21=100
33=100
Family Income
S50.000+
$30,000-549,999
$20,00Q~$29,999
< $20,000
'!
;,
72
e
&
GG
55
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il
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Region
East
Midwest
South
West
61
67
65
53
60
53
46
56
19
20
23
21
21-100
22=100
31=100
23=100
Party ID
Republican
Democrat
Independent
63
67
52
52
57
54
26
22=100
17
22
26=100
24-100
• ".
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1992 Vote
Bush
Clinton
Perot
67
70
67
54
60
56
27
18
25
19=100
22-100
19=100
;
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Health
Insurance
Private
HMO
Medicare
• Medicaid
None
55
67
63
57
52
•56
62
46
45
46
20
20
25
29
21
24=100
18=100
29=100
26-100
33-100
PHOTOCOPY
••RESERVATION
15
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�12/17/93
12:13
© 2 0 2 293 2369
r»
/J// Covered
Political Vocalization
Regular Listener
To Talk Radio
Contacted Washington
In Past 12 Months
Both
Neither
Ouestioo:
©013'021
TIMES MIRROR
•*
m
nn i
Not All
All
DK
73
62
22
16=100
74
75
5&
65
71
50
21
17
20
16=100
12=100
30-100
•
Does the Clinton health core refonn plan guarzpm haaltk insurance coverage to all
Americans or doQsn't it go that far?
RESERVATION
�12/17/93
12:14
© 2 0 2 293 2569
TIMES MIRROR
® 014.'021
FREEDOM TO CHOOSE DOCTOR
UNDER CLINTON HEALTH CARE PLAN
Sept. 1993
Dec. 1993
% Saying
As Much
Less Freedom
45
Uss
54
As Now
DK
32
14=100
31
34
10=100
17=100
Sex
Male
Female
46
44
59
49
Race
White
Non-white
45
41
56 ,
39
30
48
14=100
13=100
Age
Under 30
30-49
50+
52
46
40
57
5:-:
36
32
30
12=100
11-100
18=100
Education
College Grad.
Some College
High School Grad.
< H.S. grad.
48
46
44
40
57
60
5344
34
28
36
30
9=100
12=100
11=100
26=100
Family Income
550,000+
$30,aOO-$49,S99
$20,000-$29,999
< $20,000
49
45
48
43
* \
57
53
45
2i5
24
33
35
>-•_ * /\r\
9=100
14^100
16=100
Region
East
Midwest
South
West
42
42
49
45
54
57
53
50
35
32
31
34
11 =--100
11=100
16*100
16=100
Party ID
Republican
Democrat
Independent
55
36
47
69
44
53
21
41
35
10=100
15=100
12=100
1992 Vote
Bush
Clinton
Perot
62
32
44
73
41
66
19
46
26
3=100
13=100
8-100
Health Insurance
Private
HMO
Medicare
Medicaid
None
47
37
41
40
59
53
46
50
51
29
41
f.o
32
13^100
13-100
19=100
18=100
16*100
•
a
1
PRESERVATION
-
�:
" W . ; ;f'/
12/17.93
12:14
'
'
© 2 0 2 293 2309
Sept. 1593
% Saying
Less Freedom
Political Vocalization
Regular Listener
To Talk Radio
Contacted Washington
in Past 12 Months
Both
Neither
^013 ('21
TIMES MIRROR
Due. 1993
As Much
L&ss As .Vow
DK
46
53
33
9=100
51
50
43
•62.
30
29
33
7=100
6=100
17=100
65
50
Question: Una* the Clinton plan, do f-a think you
i/octor as you now have?
.
as .vuch or less Mom to choose your
PHOTOCOPY
PRESERVATJOfM
15
�12.-17/93
12:15
© 2 0 2 293 2569
TIMES MIRROR
©016/021'
B S D O T O E WO SAID T E W R F L O I G N F A " E Y Q " A R Y C O E Y
AE N HS H
H Y EE O L W N A T V R " R F I L " L S L :
Q.I6 H w do you feel about. N F A the free trade agreement between the U ,
o
AT,
S
Mexico and Canada, do you favor or oppose this treaty?
Sept
.93
19
Early
Sept
19
53
5?
Favor
4
2
46
33
Oppose
3
7
42
15
Don't know/Refused 21
(SKIP T Q 1 or Q.25)
O .8
100
10
0
(N=1I12)
(^306)
' 12
10
0
;N=921)
M NX Q E T O S AE AOT A D F E E T I S E . . .
Y ET U S I N R BU
IFRN SU
0.20 l-rom what you have heard or read, d you favor or oppose the Clinton
o
• Administration's health care reform proposals?
Oct • Sept
1993 1993
41 5
3
49 Favor
32 Oppose
3
7
2
5
19 Not sure (SKIP TU Q.21}
22 22
100
10 10
0
0
PHOTOCOPY
PRESERVATION
34
�... _
...... . _,. . ,
12/17, '9.3
12:1;
..^... ^
1
© 2 0 2 2.93 2569
, f
T
• :.''w,'';. jrjr;.r . .r ..~
|
TIMES MIRROR
©017'021
Q 2 A W y do you feel that way?
.0
h
B S : R S O D N S WO F V R H A T C R R F R P O O
A E E P N E T H A O E L H A E EOM R P i
Sept
1993
42 Security-Universal Access
43
20 Need change/Systerc not work.ino,
14 Saving will cut. costs.'Costs too high
22
8
'j
,i
1
8 Clinton trying hard/Gooci intentions
4 Will benefit elderly
6
3 Will benefit me/Don't have insurance
3 •Will benefit poor/Horce 1 ess/Uneinpleyed
4
2 Keep up with other countries
3
2 Control insurance companies
*
3 Other
9 Don't know/Refused
9
•j.i
c
•
•
• '..•'•i
PHOTOCOPY
PRESERVATION
�12/17/93
12:16
© 2 0 2 293 2589
TIMES MIRROR
Q 2 a con't . . .
.0
B S : R S O D N S WO O P S H i L H C R .
A E E P N E T H P O E ' A T AF
KFR-EO!}
P.PSL
POOAS
Sept
1993
uh
16 Savings-Won't save money/Cost, too m c -
1
?
9 It won't work/Not feasible/Realistic
12
5 Burden on small businesses to p . ,
a/
q
8 Responsibi1ity-Have to pay for others
*
Increased qove'T^nz involvement
;
3 Taxes will go up to pay tor i.
7 Clinton riot paying attention to details
7 Quality-Standards m y go d w
a
on
9 Choice-Won't get to choose
W n t benefit middle class/Working people 4
o'
1
Detrimental to the economy/Costs jobs
4
4 It's socialized n^ed'cine/Socialise
1 Won't benefit the elderly
Government shouldn't run .it/Government
12 incompetent
h
7 Security/People w o need i t won't get. i t
e
oe
4 Will cost m money/I'll pay m r o
4 W n 't benefit personally
3 Simplicity
2 Shou'd be run by private sector
1 Other
15
8 Don't know/Refused
36
PHOTOCOPY
PRESERVATIOM
.VV*"
1
�12-17/93
Q.21
12:16
© 2 0 2 293 2569
TIMES MIRROR
©019/021
How well do vou unciersraiid. tri.? w . you-" own isflUh care would chanae
nv
under trie Clinton plan? (RtAD CliOICES 1-4)
Seot
1993
11.
Very Well
13
36
Fairly Well
34
28
Not Too Well
97
i.
•'
•3
'
-•1
18
Not At Al1 Weii
7 Don't know/Re fused
100
: 1
7
0
iTo
Generally, do you think Bill CUntor wi11 be successful or unsuccessful
•uja
in getting his health ca^e refonv o • c r m ensctad by Congress?
Sept
1993
55 Successful
• •'}:
• 'ii
. |
59
32
•h
25
Unsuccessful
13 Don't know/Refused
100
16
100
Do you happen to know, whether orfiot there is a specie Republican
plan for health care reform?
Sept
1993
20
Yes. there is a plan
17 N plan
o
63 Don't knew/Refused
100
i f:.';
1
iU ..'
M
•
"
'
�12 • 1 T • 93
12:17
©020/021
TIMES MIRROR
© 2 0 2 293 2569
r.
A F W H R O E T O S A O T T E CLINTON - Ai-; . . .
E OE U S I N B U H
Q.t4
From wiiflt you h > e hatrc or rsad.
<v
you ?c your tiirm ;y pay more tor
-c
routine medical cere under the CH-'ton .plan than you do row. wi 11 you
pay less than you do now. or abouc si rndcn as you do now?
:l
1
Soot
1993
36 More
32
10 Less
'/s
12
I
uh
38 As M c
A
16 Don't know/Refused
100
.."Si
l!it
From what you have heard or- reao does the incon plan protect you and
your -ainily tron; payinc r.he cosr J' aTO:or11 Innss better than you are
now protected, not as wel 1 a? yo;: rrr.-? now protected or about as we! 1 as
.
you are now protected?
• Seot
im
U
Better
17
28
Nor as well
23
43 Aoout as Well
45
15
m
To
o
0.26
Don't know/Refund
'i"i
T
Do you happen i o ^r-ow. r-r^.; -'r t'Moton h-a'tri :;oro for:n plan
.
guarantee "health ir.^t'r:?^ ra-^v-^ TO ai: -•in-r''dan^ r- doesn't the
plan go ohat far?
•ir-ivi;
S-
S
;
';V,f
Ver, - ousrani.ee'i
21
I
No
;
-"
25 Don't kr'Ow'^ei'used
TOO
iv
luCi
38
PRESERVATION
�r. r V
'-••••,iir
19
No
37 Don't. knovv/r:HH..^c
IOD
•. .- < *
'
' O v O • It" "OiK : _
J 'U
i-i . . {t.NTfr. Ati. HA1
oo i f 'c
iO TO
100
PHOTOCOPY
PRESERVATION
�Job worries persist, poll
Respondents
say Clinton
can do better
By Richard Benedetto
USA TODAY
Americans say crime is the
No. 1 problem facing the country today, but economic worries persist, a new poll finds.
The Battleground Survey, a
bipartisan poll by the Tarrance
Group and Mellman-LazarusLake, finds that while crime is
a high priority, voters want
President Clinton to put most
of his energy into creating jobs.
It's a sign the economic recovery still isn't being felt by
many across the country
The Dec. 6-8 poll also finds
Clinton ending the year with
his rating; on the upswing But
only 38% say he's done enough
to deserve re-election.
"The voters are still not willing to give incumbents the benefit of a doubt," says Democratic pollster Celinda Lake.
But Clinton would win in
matchups with GOP prospects
Jack Kemp and Bob Dole and
independent Ross Perot, if voting were today, the poll says.
Nonetheless, he shows little
ability to get beyond the 43% of
the vote he got in 1992.
" I t indicates a lack of
strength for an incumbent
president," says GOP pollster
Ed Goeas of the Tarrance
Group.
Crime tops cftizfttf tohc&n
Crime is the USA's btagest probtem, accortfiogtopsop* fMppanu to a potrt
Battleground 94 bipartisan poll
-
top
Crime
Economy
Jobs
Unemployment
Druge
7%
7%
md trint Cllntwtfi topttUM|ilWnMntstn
Proposing health reform (
NAFTA
Budget package
Brady bill
Stimulating economy
] 22%
And b n u thiy're most rtlwppiHiitad
Iw couldn't gst dons In Tint yBflf
Healthreformf
Deficit
reduction
Lower taxes
I 6%
Creating jobs
j""8%
Gays In military
|
~\ 11%
110%
Create (obs
Reduce deflcft
Handle foreign trade
Improve health care
Improve education
Fight drugs, crime
Hold line on taxes
Cut waste
Reform welfare
Cause change
Manage foreign affairs
Clinton
Dole
Perot
123%
J17%
15%
13%
JlOTfc
OOP in
Congress
32%
38%
49%
21%
28%
34%
4S%
30%
30%
23%
52%
Clinton
Kemp
Perot
142%
3
18%
J3i%
4T%
Source: N«rttorw»td» poll o» 1 000 adulls by phone on
Dec. 6-8 Margin o( error 3.2 peiceritetfe point*.
By Marty Baumann, USA TODAY
Yet, major victories on the
North American Free Trade
Agreement and the Brady gun
control bill have Clinton's approval at 57%, his highest score
since hitting 58% his first week
in office. His low. 37% in June.
"Voters have shown remark-
able volatility in their perceptions of Clinton . . . There is no
substitute for focused success,"
says Lake.
Most — 55% — also see Clinton as a new kind of Democrat,
while 57% view Republicans in
Congress as playing politics in
Imagewtse. however. Republicans edge Democrats In
favotabillty.
As Clinton heads toward his
second year, it's clear voters
are going to be looking over his
shoulder for results.
Voters say his top first-year ^
accomplishment was propos-.
ing reform of the health-care system. But they say his biggest
failure was not getting a health
program passed quickly.
They also don't feel the president has done enough to reduce the deficit, lower taxes
and create Jobs.
On the crime front, 72% say
it's more important to reform
the criminal justice system and
force criminals to serve full
sentences than it is put more
police on the streets.
And 64% prefer anti-crime
and drug education programs
for children over more police
and tougher sentences.
Congress' overall approval
remains in the doldrums at
24%, but voters give their own
member of Congress 51% approval. Yet, like Clinton, only
38% say their member of Congress deserves re-election.
Other poll finding:
• Support for Ross Perot is
dwindling, but he remains a
key political player.
• Voter anger and cynicism
is alive and well; 57% say special interests and lobbyists control Washington.
• Erosion of family values
and personal responsibility are ;
seen as the biggest problems "
facing the middle class.
•• »
52%
49%
33%
02%
48%
39%
34%
42%
49%
89%
31%
If presidenlial eieclion won today, CMon wtns
n a n U I I I I W I Bnu BUIIIKsUallun 10 TOCOS On
Jobs ( ~
Crime
Deficit
Health care
Waste (govt.) \ ~
Ctottn
tion.' myt Gcem.
opposing the president The
GOP gets little credit for helping Clinton pass NAFTA, a disappointment for Republicans.
"The future for Republicans
in Congress in 1994 lies much
more in their ability to play a
strong role as the loyal opposi-
m |
cc
LU |
CD |
•5 |
LU
< I
>
UJ 1
Q
>
Q
Q
LU
O
<
3
1
�Washington Wire
A Special Weekly Report From
The Wall Street Journal's
Capital Bureau K \
UNIVERSAL COVERAGE is a strong
selling point for Clinton's health plan.
The Journal/NBC poll found that Americans favor his proposal over a less costly but
nonuniversal plan such as Rep. Cooper's by
69^ to 20%. Overall. Clinton s plan is favored
by 4 % and opposed by 32%. But 3 % say
7
6
lawmakers should make major changes before passing it. compared with 3 % who say
5
it needs little or no change and 1% who
5
say it shouldn't be passed at all.
The AMA grows defensive amid mounting criticism about its retreat from supporting employer mandates, which are backed
by 6 % in the poll. The AMA says in a letter
5
to Clinton that it merely wants to consider
other financing approaches. Meanwhile,
single-payer proponents gleefully tout a new
C O analysis concluding that a governmentB
run system could save as much as $ 9
22
billion by 2003.
The Democratic National Committee
considers showing an interactive video
promoting the Clinton plan at 60 to 90
shopping malls around the country.
THE WALL STREET JOLTLVAL FRIDAY. DECEMBER 17 1993
�if**
•
A12
WASHINGTON EDITION / LOS ANGELES TIMES
THURSDAY, DECEMBER 9, 1993
NATION
In Shift, Most See President as Effective, Survey Finds
By THOMAS B. ROSENSTIEL
TIMES STAFF WRITER
W
ASHINGTON—A survey released today reinforces the message that Americans have a
markedly better impression of Bill Clinton's presidency as the year comes to a close than they did
even three months ago.
After the Administration's victories on the North
American Free Trade Agreement and the passage of
the Brady gun control bill, as well as some public
acknowledgment of an improving economy, 63% of
Americans now view Clinton as a President who can
get things done, while only 27% do not, according to
the survey by the Times Mirror Center for People
and the Press.
In August, by comparison, only 36% of Americans
considered Clinton effective, compared with 54%
who did not.
The Times Mirror survey, based on interviews
with 1,479 adults from Dec. 2 to 5, has a margin of
error of plus or minus 3 percenUge points. The
Times Mirror Center is owned by Times Mirror Co.,
which publishes the Los Angeles Times. The Times
Mirror poll and a national poll by The Times released
Wednesday were conducted separately.
C
linton's improved sUnding seems tied directly to
his recent legislative victories, more than to any
improvements in the economy, the poll found.
A growing 39% of Americans said that they had
paid very close attention to the coverage of the
North American Free Trade Agreement, which will
end most trade barriers among Canada, Mexico and
the United States, up from 21% in October. And 37%
said that they paid close attention to passage of the
gun control legislation, which would mandate a
five-day waiting period for handgun purchases.
Simflarly, a majority of Americans now can
attribute a specific achievement to Clinton. Twentyone percent mentioned health care; 19%, the trade
agreement; 8 %, the Brady bill.
Health care is an issue that continues to help the
President significantly, despite some press accounts
to the contrary.
Forty-five percent of respondents said that they
are paying very close attention to the debate over
the Clinton health care plan. Support for the plan
itself is also rising. The survey found an approval
rate of 49%, up from 41% in October, and just
slightly less than the 53% after Clinton's September
speech to a joint session of Congress.
The key factors cited by those who support the
plan are that it would ensure health security and
universal access (42% now, 43% in September) and
that it would change a health care system that does
not work (20% now, 21% in September).
Opponents, who primarily based their objections
on their belief that the plan will not save money, also
are somewhat more worried now about government
involvement (18%, up from 8% in September).
Fewer people (54%) feel Clinton's health care
plan will provide universal coverage now than did in
September (64%). Similarly, fewer people know
that the plan would guarantee coverage for workers
who lose their jobs (44% now, 54% in September).
And somewhat fewer knew the Republicans had
offered a specific alternative to Clinton's plan, 30%
compared with 24% two months ago.
In one of the more striking findings, a majority of
the public now believes that Clinton's plan will
restrict physician choice, 54% now, 45% in September.
The survey also suggests that, if the economy
continues to improve, Clinton could enjoy a further
boost. His approval rating is rising now despite
Americans' ambivalent feelings about whether the
economy is improving.
The number of Americans who cite the economy
as among the country's most important problems, for
example, has dropped to 33%—down from 47% in
September, 53% in June and 76% in January, 1992.
Conversely, only 37% of Americans think the
economy is recovering now, virtually unchanged
from January, when the figure was 34%.
optional trim: The survey also found that 56%
think the country remains either in a recession or
depression. (One possible reason for the difference
between these results and those in a separate Los
Angeles Times Poll might be because the Times Poll
asked more specifically whether respondents viewed
the recession as mild, moderate or severe. The Times
Mirror survey did not.)
The Times Mirror survey also asked Americans
whether they approved of the President's job
performance—a question some pollsters believe is
too general to have any real meaning, and it was
moving in specific meaning, and it was moving in
Clinton's favor.
Overall, according to the poll, 48% of Americans
approve of Clinton's handling of his job—up from
44% in October—while 36% do not. Sixteen percent
were undecided. (Those numbers are also similar to
the separate Times Poll, which found Americans
approve of Clinton's performance by a margin of
55% to 35%. A much smaller 10% were undecided.)
On the personal side, the public continues to view
Clinton as warm and friendly (87%) and well
informed (69%).
And in concert with his improving image for
effectiveness, people consider him well-organized
(59 % compared with 47 % in August).
Fifty-six percent see him as trustworthy, according to the poll. And, while 42% still think of him as
someone who will break his promises, that figure is
down from 53% in August.
The survey contained good news for First Lady
Hillary Rodham Clinton, too. She received an
approval rating of 62% for her handling of her tasks
as First Lady, and an almost equally high approval
' rating for handling her job as an official adviser to
imilarly, the number of Americans who rate their the president. In both respects, Hillary Clinton's
own personal financial situation as excellent or ' ratings are about 10 percentage points higher among
good is unchanged since January, about 37%. And women than among men, and they are highest of all
among women under the age of 30 (76% as First
the number who rate it as fair or poor is also
Lady and 70% as a presidential adviser).
unchanged, about 62%.
S
SURVEY: Optimism Noted
Presidential Perspective
Continued from A l
Clinton's advisers believe that
President Clinton rates above Reagan and below Bush in a comparison of approval
ratings taken of other presidents at the same point in their first terms.
42%, Clinton has gained strength
among centrists, conservatives and
welfare reform and job training.
But Americans remain uncertain
�Washington Wire
A Special Weekly Report From
The Wall Street Journal's
Capital Bureau h \
KCONOMIC OPTIMISM leaps upward, a
Wall Sireet Journal/NBC News poll finds.
Forty-three percent of Americans now
expect the economy to improve in the next v>
months, more than twice the level in October. The results Tepresent the first time in
a long while that Americans have expressed
truly positive feelings" about the future,
say the pollsters who conducted the new
survey. Democrat Peter Hart and Republican Robert Teeter.
Two in three Americans say thev will
spend at least as much on holiday shopping
this year as they did last; \W7r expect to
spend more. Economic forecasts for the
fourth quarter IJTOW increasingly rosy as
retail sales surfje; low mortKage rates drive
a housing boomlet. increasing furniture
sales. Unless employment slumps, 'spending growth will continue in the new year, if
at a somewhat slower pace," says Paul
McCulley of UBS Securities in New York.
Some mlministmtion economists primlelii predkt the mmomy might grow
by ns miith ns 4'.'-; next year.
i•
ih
I
t.
I'"
f
r
4
CLINTON'S ACHIEVEMENTS get good
marks, hut the GOP will counterattack.
Eight in 10 say passage of the Brady law
and Family Leave Act are steps tn the right
direction; 55% feel
the same about his
THE WALL
economic program
and
feel that way
STREET
about Nafta. Even on
JOURNAL/
the sticky issue of
homosexuals in the
NBC NEWS
military. 50% say his
POLL
policy is. a positive
step, while 40% believe it is a move in the wrong direction.
Republicans think Clinton's economic
plan fares well only because people believe it
will cut the deficit deeply and quickly. But
the GOP plans to pound away at the theme
that higher taxes aren't really stanching
the red ink. In the poll, a 41% plurality thinks
Clinton's economic policies will harm them
personally; only 22% expect to benefit.
UNIVERSAL COVERAGE is a strong
selling point for Clinton's health plan.
The Journal/NBC poll found that Americans favor his proposal over a less costly but
nonuniversal plan such as Rep. Cooper's by
69% to 20%. Overall. Clinton's plan is favored
by 47% and opposed by 32%. But 36% say
lawmakers should make major changes before passing it, compared with 35% who say
it needs little or no change and 1 % who
5
say it shouldn't be passed at all.
,
The AMA grows defensive amid mounting criticism about its retreat from supporting employer mandates, which are backed
by 65% in the poll. The AMA says in a letter
to Clinton that it merely wants to consider
other financing approaches. Meanwhile,
single-payer proponents gleefully tout a new
CBO analysis concluding that a governmentrun system could save as much as S292
billion by 2003.
77te Democratic Xational Committee
considers showing an intrractiie video
promoting the Clinton plan at 60 to SO
shopping malls around the country.
A CRIME CRACKDOWN is demanded by
Americans. Crime has zoomed to the top of
the list of national concerns: Three out of
four say the Brady handgun law "is good,
but more gun-control laws" are needed,
while only 12% believe the law goes too far.
Strong majorities favor mandatory life sentences for violent three-lime offenders and
putting 100.000 more cops on the sireet.
AS PEROT F ADES, 1'.!% now think he is
just out to hurt Clinton, up from only 3% at
the beginning of the year. A rising share.
23%, think he is seeking public attention for
himself. Perot closes in on his promise to
visit all 50 states; he is at 49 now.
SETTING SUN? By 47% to 44%, Americans now think the U.S. is more economically powerful than Japan - a stark change
from 1991, when two-thirds believed Japan
was more powerful. With Nafta and GATT
largely resolved, the administration's trade
focus shifts back to Tokyo. Negotiators have
made little headway so far but expect
progress before Japanese Prime Minister j
Hosokawa meets Clinton in February.
THE UNION LABEL isn't what it used lo
be. By 48% to 34%. poll respondents believe
labor unions hurt rather than help the cause
of working Americans. By a similar margin.
Americans believe unions hurt the country
as a whole.
DOES IT OR DOESN'T IT have the j
bomb? Only North Korea knows for sure.
;
Some U.S. officials grouse that the CIA's I
conclusion that Pyongyang probably has at I
least one nuclear weapon overstated ihe j
case, giving the Koreans undeserved extra i
leverage. The U.N.'s Boutros Ghali will try •
to break the stalemate with a Christmas Day ,
visit to Pyongyang.
I
The Journal/NBC poll shows that 31'* ,
regard the Korean situation as the most
important foreign-policy issue; 21% in th*
poll, conducted earlier this week, cited Rus-1
sian instability. Eighty-seven percent favor
improving relations with North Korea if it
allows inspections and promises not to build
nuclear weapons.
Americans are closely dicided on
whether to send more troops to the ,
region, but strongly oppose a militant
strike against the North.
1
MINOR MEMOS: Public disapproval -rf
Congress, now 56%. has only fallen below
60% in two Journal/NBC polls this year - .
both taken when Congress wasn't in session.
. . . At 56%. Clinton's job-approval rating u
actually higher than that of Ronald Reaitan
at the end of his first year in office.
- R I C H jAitosixivsio
�DEC
17
'93
12:52
FROM GREENBERG RESEARCH
TO 4 5 5 6 4 8 5
DEC-lS-'Sa 17S39
LflZPRLB INC
TEL NDJ 1202625K5 'l
PHGE.012^0;
— —
1
(
11
And —
36.
Do you think that your Mator of Cottgru* hta perforrt«d hia or h«r
job
•nough to d«i«rv« r«r-«l««tion, er do you thinX i t ' s t l m to
eiv« a naw Msten a ehanc47
D«i*rv«» r»-«leotioa
U 6 W D P N S ON O P K W (PMX)
MU/EED
POBT
Oiv* n«w parson « ehanc« . . .
38%
21%
41%
How, thinking about the •eenoaic problwM facing th* United stataa —
37A.
who do you thinX is oor* s*spon«ihl« for our currant oeononic problem* —
(»OTm) — 1) th« Dasoerats, ot 3) tha topuhlicana?
Dasoerata
Kapublicana
B T («m)
OH
NtXtHtK (ONK)
CW80M (Dim)
37B.
, . . .
27%
41%
20%
4%
8%
Who do you think ia aora reapofitibla for our currant aconomle problama —
(toxasi) — 1) Bill Clinton and tha Daaoerata, or 2) tha Xepublican
pelieiaa of thaftaagan/Buahyaara?
Clinton/Dmoorat* . . . . . . .
fttpublidan/ftttgan/BuBh . . . .
B T <BMt)
OH
H1ITHM (BHIt)
U S M <on)
MO
16%
61%
9%
7%
6%
Thinfcing again about Pvaaidant Clinton —
38.
what do you think is tht sost ioportant goal that prasident Clinton
aecoatplishod this yaar? I . ie... (KIM X X T AM> fcOXMX) —
.S
xr AU. OK Mot! rtiM ouas, v m ASXt i f you had to ehooto ju«t QAC,
which do you think wat Clinton's biggost accomplishaant?
Passing tha budgat which providas stimulus to tha aconeny • •
Craating a national servic* progrsm to provida collage
loans for people who do 3 years of national service . . . .
passing the Brady Bill to provide a S day waiting period
for a handgun purchase
Passing the Paoily and Medical Leave Act to provide
unpaid laav* for parents of a newborn child
Passing a budget which reduces the federal deficit
Proposing a national health car* reform package
Fasaing the North haarican free trad* AgraeMht
MX/NOW T A ONI (MR)
HN
OTTSTOS (SMX)
11%
6%
13%
6%
14%
22%
15%
4%
10%
�DEC 17
______
'93 12:52
FROM GREENBERG RESEARCH
TO 4566455
Dec-15-'93 17!ASS lurrtLLnHN i_nm«Ub INL
itu r*ji laodotaain
nua
PAGE.013/01
•
12
hni —
39. What *£• you moit dLMppeinted about that Bill Clinton did not gat done
his first yaar in offies? (DO VOt UAD LIST - JVSt KXCMtO)
Abortion Rights Protoetlon . . . .
AID* funding increased/end AIDS
Bosnia problM solvod
cwpaign finance refora
civil Rights protection
Criae reduced/drugs off streets
OC stttohood
Deficit
fteduMd
Zconesw going again/end rtceasion
Idueatlon idproved/r^fonwd . . .
free trade/CATT/Oruouay round . .
9ays in Military alloiMd/openly
Oridlock ended/break gridlock . .
govemBent waste/bureaucracy cut .
cuns controlled/banned
Haitian problem soiv«l/r«£ugeaa
Health care reform paased/avallabla
to all/lo«*r costs
jobs ereated
Middle class tax cut
Somalia problem/troops hone . . .
Twees lowered/cut
v«t*rtat Issue*
welfsr* refora
Orban asalttance/iid to cities . .
OTHER BPSCm
.
And
40.
2%
1%
•
1%
*
2%
•
10%
4%
2%
1%
S%
«
2%
1%
•
11%
5%
1%
1%
6
%
*
1%
*
12%
DO you think of Bill Clinton as a typical Democrat or do you think cf
him as a different brand of Democrat?
Typicil Democrat
Different brand of Democrat
O S R (OMR)
ROB
...
36%
55%
9%
Bow, thinking spscificaliy about the Democratic party —
41.
DO you think of the pemooratie party n w as the same old party as in the
o
past or i s i t changing?
Bame old party
28%
Different brand
67%
tntSORB (OMR)
5%
N w thinking about the Republieans in Congreea —
o,
42,
Are the RepabUeana in Congress trying to make positive changes in
Bill Clinton't projcsali, or « * they Just playing politics?
Positive change
Playing politics
BOTH (BMR)
NZXTHZR (OMR)
TOSORB (BUR)
27%
57%
7
%
1
%
8
%
�Hea/th Care Reform Features Fade
The public continues to support Clinton's health care reform plan and it remains almost
as attentive to news about the plan as when it was announced last September. But Americans
are less informed about some crucial factual aspects of his proposal now, three months later,
and their opinions on key issues echo more the voices of critics of the reform than its
proponents.
In tandem with the rise in the President's approval rating, support for health care reform
rose to 49% this month. This was up from 41% in October when most of Clinton's policy
initiatives dropped in public esteem, following foreign policy reversals in Somalia and Haiti.
But the level is still below the peak support of 53% it enjoyed immediately after he unveiled
the plan in a dramatic speech to Congress.
The reasons given by respondents for and against the plan in the current poll mirror
those given in September. Supporters focus overwhelmingly on security and universal access
(42% now, 43% in September) and the need to change a system which is not working (20%,
22%, respectively). A small change is that slightly more supporters now feel the plan will save
money (14%, 8% in September). Opponents still mainly believe the reform plan either won't
save or will cost money (18%, 17%). Opponents also complain somewhat more about
government involvement in medicine now (14%, from 8%).
The public is every bit as attentive to health care reform as before. Of 10 major news
stories, this story was followed very closely by the largest number of respondents (45%), slightly
more than followed the fires in Southern California (44% nationwide, 57% in the West), and
considerably more than followed several "sensational" items involving sex and pop stars.
(Attentiveness rankings are discussed below.)
But respondents showed no greater confidence in knowing how their own health care
would change under Clinton's plan. The same proportion, 47%, said they understood the
impact very well or fairly well (11%, 36%, respectively) as in September (13%, 34%). And the
public was significantly less knowledgeable about provisions of the plan than previously.
Fewer people knew that it would provide universal coverage - 54% this month vs.
64% in September -- even though this is arguably the plan's most important feature. This drop
in knowledge about the plan was most pronounced among older Americans (both those over
50 years old, 51% from 65%, and those 30 to 49 years old, 61% from 71%), as well as among
the poorer, least educated, non-white segments of the populace.
Similarly, fewer knew that the plan would in fact guarantee coverage for workers if
they lose or quit their jobs -- 44% vs. 54% in September. And somewhat fewer knew that the
Republicans had offered a specific alternative to the Clinton plan: 20% vs. 24%, with an
increase in the number of "don't know/ refused" responses to 63% from 53%.
Less Choice. Less Protection Sean
In three questions asking for opinion on various provisions of the Clinton plan, a similar
erosion of pro-reform sentiment lias occurred. Most striking, a majority of the public now
believe there will be less freedom to choose a doctor (54% vs. 45% in September), and
significantly fewer believe they will have the same amount of freedom (32% now, down from
�12.'17.'93
12:10
©202 293 2369
TIMES MIRROR
ami*. u2l
42% in September). Demographically, the groups less likely to feel they could pick their own
physician were men, the better educated, the most affluent, Republicans and Perot voters.
But the public also fears they will be less well protected from the cost of major illness
(28% now vs. 23% in September), and will pay more for routine medical care (36% vs. 32%).
This backsliding occurred on opinions toward aspects of the reform proposal that will be
crucial in determining ultimate support for it, as well as those that are under most attack in
advertisements by its opponents.
Finally, the public has less confidence that Clinton will get his plan through Congress:
55% now say successful, 32% unsuccessful vs. 59% and 25%, respectively, in September. But
it felt by a large margin that Democrats can do a better job of reforming health care than
Republicans, 47% vs. 25%.
The News Interest Index
Health care reform was only one of several Washington policy issues that received a
significant level of public attention. Also competing for notice with news about California fires
was passage of the North American Free Trade Agreement (39% followed this news very
closely, up from 21% in October and September), enactment of the Brady Bill to control
handgun purchases (37%), and reports on the condition of the U.S. economy (35%).
As with health care reform, there was no lessening of public interest in the economy.
But the high level of attentiveness to NAFTA did not carry over to Clinton's summit meeting
in Seattle with Asian leaders on economic and trade issues; only 7% paid very close attention
to it.
In comparison, the Bobbitt case in Virginia in which a wife cut off her husband's penis
was followed very closely by 25% of respondents, the stories about sexual abuses by Catholic
priests by 18%, and news about Michael Jackson's personal problems by 15%.
Catholics were more attentive to the priests story, (27% followed very closely, vs. 17%
of Protestants and 14% of Jews). Most attentive to Michael Jackson's problems were
respondents under 30 years old. The Bobbitt story was more compelling to women under 30
years of age (32%) than to older women (24%) or to men of any age (23%)
A whopping 57% of the public said the news which received too much coverage was
Michael Jackson. Second was the Bobbitts' penis case, at 28%. Ranked third for getting too
much coverage was Bosnia, at 7%.
�DEC
17 ' 9 3 1 1 : 5 6
FROM GREENBERG RESEARCH
DEC 17 ' 9 3 0 9 : 3 9
FROM 202 232 8134
TO 4 5 6 6 4 8 5
TO 5447020
PAGE.002/018
POGE.002/017
THE DECEMBER 1993 WALL STREET JOURNALIHBG NEWS POLL
Thefollowing]X>II restte arefroma survey conducted by the polling organizations
of Peter D. Hart and fijcbert Teeter for NBC News and The Wall Street Journal
between Decomber r and 14, 1993. The survey was conducted by telephone
among 1,002 adults across the country.
The sample for this poll was drawn In the following manner; 263 geographic
points were r&ndomfy elected proportionate to the population of each region and.
within region, the size pf place. Individuals were selected in accordance with a
probability sample defign that gives all telephone numbers (both listed and
unlisted) an equal cha-jce to be included. One adult. 18 years or over, from each
household wsis inclufled, selected by a systematic procedure to provide a balance
of respondents by sex
The ckjta's margin of error is plus or minus 3.2 percentage points at the
95% confidence level. That is, chances are about 19 in 20 that if all households
with telephones in the continental United States had been surveyed with the same
questionnaire, the results would not deviate from the pollfindingsby more than 3.2
percentage points. Sa nple tolerances for subgroups are larger. Minimal weights
have been applied to ;tge and income.
The cfcrta reporo jd here are the property of NBC News and The Wall Street
Journal, who must be Icredrted whenever these results are cited.
�DEC
17 ' 9 3 1 1 : 5 7
FROM GREENBERG RESEARCH
DEC 17 '93 B9S39
FROM 202 232 8134
PAGE.003/018
Pfiffi.003/017
TO 45SS4B5
TO 5447020
Dflcember 1993-paga ^
TTw WW'feverJft/ma/NBC Newt P M
o
Interviews: 1002 ResoomtarrtS
Dates; pecembef 11*14.1993
HART-TEET5R
1724 Connecticut AysriUQ, NW
wastiington, DC 200(X
(202)234-5570
48 Mala
52 Female
15]
FINAL
Study #4044
NBCN0we/W8J
December 1993
i.
Are you currently registwae to vote in the precinct or ateetion district where you now live. < hwtnt you
x
had a chanc* to regfeBer j et?
Isglstered
Jot registered
Mot sure
79
20
1
[15]
All ir aU, do you think thir gs In the nation am generally headed in tte right direction, or do you feel that
things are off en we wro-jg track?
12^
Right direction
Wrong track
MiXOd (VOL)
Not sure
ss
^
i*
7
10/93 §32 Z£2 §£3 4^
27
S4
14
5
33
49
iz
6
27
55
13
5
27
56
10
7
37
44
1
1
8
322 1^ 32^ s^2 m.
43
35
1
1
1
1
47
27
14
12
45
32
1
1
12
13 34 [16]
71 48
9 13
5 5
�DEC 17 '93 11:57 FROM GREENBERG RESEARCH
TO 456G4S5
PAGE.004/018
77» Wa// Stre«t J«y/na//NBC N«w« Poll
I'm going toroadyou the names of several public figums I'd Dke you to rate your fesllngs toward each
one as otner very posttr/ij; somewha positive, neutral, Mmewhat negative, or very negative. If you don't
know the narre, ptease tat say so.
Don't
Know
jvery
BUiCHnton
December 1983
November 1993
October 1993
September 1993
July 1993
June 1993
April 1993
MlTCh 1993
Januvy 1993
December 1992
May iSfle
Hillwy Rodhtro Clinton
December 1993 . . . .
October 19S3
September 1993 . . ..
July 19S3
June 1983
April 1993
March 1993
January 1993
December 1992
A! Gore
December 1993
November 1993
October 1933
September 1993
March 1993
January 1903
December 1992
Rose Perot
December 1993
Ncwmtwr 1993
October 1993
September 1993
July 1993
June 1983
April 1993
March 1993
January 199S
December 1692
Somewhat
Positive
Neu-
SB!
Somewhat
Negative
Very
Meqative
Name/
Not Sure
22
33
15
15
14
1
24
16
30
30
14
18
14
16
16
2
1
18
15
32
31
15
17
17
16
19
17
16
25
28
27
17
13
26
i 33
30
31
15
18
16
2$
8
34
18
24
24
2$
27
22
28
26
30
17
17
11
14
21
19
13
18
18
18
20
! 20
15
20
23
16
14
7
10
9
3
23
14
7
17
19
17
2
12
17
19
2
4
12
11
14
12
3
5
6
10
12
9
12
26
26
27
29
30
21
8
8
21
26
25
8
11
18
21
14
29
31
13
13
13
12
10
11
f
1
1
1
3
5
Zl
25
28
2
3
l
17
28
30
26
22
25
24
14
12
5
2
6
5
19
28
23
9
32
30
22
12
8
9
23
21
6
21
10
9
6
9
7
16
19
24
30
4
17
21
20
27
4
12
13
16
17
19
24
24
25
27
25
26
25
24
27
22
19
17
16
16
20
16
17
15
n
16
16
13
31
26
22
25
13
16
18
n
24
27
3
3
4
4
3
4
4
11
11
[171
14
16
5
118]
�DEC
TO 4 5 6 6 4 8 5
TO 5447020
17 ' 9 3 1 1 : 5 8
FROM GREENBERG RESEARCH
DEC 17 ' 93 09:39
FROM 202 232 8134
PAGE.005/018
•ecemb«< 1993-page 3
4a.
m geoeraJ, dc you 8ppf»* or disapprove of the job Bill Owm is doing as praalttent?
12/93
S€
33
11
Approve . .
Disapprove
Not sure.
47
43
10
SO
39
11
7^
45
45
10
£93
41
50
9
4£»
52
34
14
2£2
67
26
17
1/33
51
16
33
[21]
(FORM A ONLY:)
^Dcv^flen*** approv* or disapprove of the job Bi» Clintonfedoing in handling the economy?
4b.
12/93
48
39
13
Approve ..
Disapprove
Not sure.
1083
40
50
10
333
42
48
10
EM
40
51
9
£33
33
56
11
4/93
45
40
15
m
52
28
20
12
21
(FORM A ONLY:)
m geneitf, do you apprc^e or dieappiove of the job BID CHnton is doing in handling our foreign policy?
4C-
!
Approve
Dfaapprove
Not«w»
i•
1233
4 6
«©
1 5
10/93
33
58
9
222
47
34
19
im
G
O
36
14
#93
38
43
19
4/93
47
30
23
47
22
31
123]
1
SdL^* m^janeil, do you apprcvt- or disapprove ct the job Congress is doing?
12®
Approve
Dtoppnsve
Notsure
'• •
i- •
im mmmm
m* mr mr im*
3 0
56
I
4
29
60
11
24 27 27 27
65 60 61 56
11 13 12 17
15
78
7
26
62
12
28
63
9
22 124]
69
9
*AsKed only of registered voters
2 ° ™ ^ i S S a ahft* to the nei etectionforpresident, if Bill CHnton runs lor reelection 89 the Democratic
candidate, wJI you drfn my vote for Clinton in that etection. probaby voteforClinton, proiwWy vote for
Definftety vote for Clinton
Probably votetorCCntcip
Deflntely vote for the P jpubKcan candidate
Depends (VOL) . .
Nekher (VOL) . . .
Rose Perc* (VOQ
Not sure
18
18
24
19
14
16
2
1
6
\m
11
25
20
19
14
2
2
7
[25]
�DEC
17 ' 9 3 1 1 : 5 8
FROM GREENBERG RESEARCH
DEC 17 '93 09:40
FROM 202 232 8134
PAGE.008/018
TO 4 5 S S 4 8 5
TO WrtfcM
M-fcjfc.HWb/Uir
December 1993-pag9 4
m V W $Vmt JournfLlHBG Ntw PH
W
o
4f
4
How vrould y«)y ra» the cwerill pertamwnoe and accomplishments of this year ! COhfiress-is this
Congress or* of the bes., nbove average, average, below average, or one of me worst?
]2P3
One of the best.
Above average ,
Average
Below average
One of the worst
Notsu-e
•ASKBC:
1
9
G6
21
10
4
4/92*
1
4
33
36
24
2
1
5
45
32
14
3
10/90*
1
7
39
32
19
2
[26]
only of r«itr.ered voters,
Now \ would like to ask you to njo* baok at 1983 and ahead to 1M4.
Sa.
Compared to other years jcto you think 1983 was one of the best yeare for the United States, above
avenge, abojt average, bitow average, or one of the worst years for the united States?
Above averace
Not sure - '
12/93
1
12
43
32
10
2
12/92
2
9
28
39
21
1
\mv
3
11
30
39
16
1
• Aaked only of regietered voters
Sb
And comperod to other -ears, do you think 1993 was one ef the best years for vou peraonallv. above
average, about average,'bfHow average, or one of the woret yeareforyou pereonalV?
Oreo: the beet year*
Abcve average
Abeut average
Below average
Ore bf the worst years
Nt* wre
sc.
8
22
40
20
13
psi
Compared to 1998, do yov think 199* will be better, the same, or worseforthe country?
W be better
W
Wl be the ewpe
Wll be woret,
Not sure . . .
12/93
48
29
18
5
12/92
60
26
9
5
[29]
�DEC 17 '93 11:59
PAGE.007/018
PGGE.007/017
TO 4566485
TO 5447B20
FROM GREENBERG RESEARCH
December i993-.page 5
6a
Now, Pd l*e to read you a tat of economic issues. As ofrightnow, which one do you feel is the most
important economic imwifacing the country?
982
?.
25
11
7
y
10/93
S
43
3
26
12
6
4
2
1
1
Irfflafion
Unemployment
6
40
imereet rates
The fedwrei budget ttofioit . .
Federal taxes
The U S . trade deficit
All equally Import an: (VOg
None is imponant (VOL) . .
6/83 4^3
6
4
40
44
2
2
28
28
11
9
7
8
4
5
*
1
1
m
8
8
40
2
26
11
8
4
37
2
31
10
6
4
1
1
m
7
44
2
28
7
8
3
1
im
7
44
2
28
S
8
5
1
•
!
i
6b.
9/91
11 [30]
37
3
21
7
8
10
3
During the p£st year, do ycu think the national economy has gotten better, gotten worse, or stayed about
the same?
12«B
Has gotten worse
Has stayed about the same .
Not sure
ii
to
i
2/92
6
73
20
1
12/81*
3
74
9/D1*
8
57
22
33
1
6/91* 12/90* §£90* 7/90*
11
3
6
11
84
37
73
57
3S
51
23
35
1
2
1
2
•Asked only efregisteredvoters
6c.
12/92 5#2
6
7
46
46
3
2
24
22
5
5
10
8
5
8
•
1
2
1/90*
12
29
57
2
8/89*
18
23
57
2
[31]
During the atat year. do you think the national economy win get better, get worse, or stay about the same?
< 1233 10/83 9/33 7/93 Sffi 4/93 3/93 1/93 12/92 S/92 9/91
Will get better
Win get worse
Win stay about the s£tne
Notsure
, 43
;.. 19
:., 34
!.. 4
21
23
20
23
33 39 50
53
32
31 [32]
27
50
2
24
81
2
29
48
3
27
47
3
21
44
2
9
39
2
10
36
2
20
46
3
24
40
5
15
43
3
(FORM B ONLY:)
«d.
When it com** to econcijic power, which country te in a stronger posltion-the U.S. or Japan?
T > U.S....
T»
Jaf>an
4 bout equal (jt/Og
N ot ewe,,
•Asked only cf registered voters.
I
1222
ffii*
47
44
3
26
m*
20
66
3
6
6
73
3
4
[33]
�DEC 17 '93 11:59 FROM GREENBERG RESEARCH
OeeembGf id93-pftgad
The Wall Street JoumalWBC News PaD
7a.
PAGE.008/018
TO 4566485
Do you oxptc: to spend rnci». about the same, or lees on major purchases in the next year than you have
in the past yair?
12S3
28
87
34
1
Bcpeet to spend morti
Expect to spend aboil the same
Expect to spend less
Notsure
wz m m* m*
28
45
24
3
28
35
36
2
25
40
34
22
38
39
1 1
[34]
' Asked cnty of regis ar 3d voters.
(FORM A ONLY:)
7b.
Do you plan to spend mofE money on holiday shopping this year than you did last year, less money, or
about the same amount? ;
11/3016
Plan to spend more noney . . . . . . .
Plan to spend lees m^ney
. , . - , 34
Plan to spend about ihe same arrtourrt . 51
-
12/92
16
29
54
1
12/91*
9
47
43
1
10/91*
6
47
46
1
10/97*
12SP*
10
46
44
-
16
28
SS
1
11
30
58
1
135]
+Asked in NBC News survey.
*Asked only of regW'ired voters.
I
i
(BOTH FORMS:)
j
Now Fd Wee to ask you aeverai questtonsabout Bill Clinton'sfirstyear In office.
8a.
Which one ol the following statements comes closer to your view?
Statement & BiS CDntcr has tried to tackle too many of the country's serious problems.
OR
i
Statement B: Bit Clintor ^tas taken on therightamount of the country's serious problems.
Statement A/Tried .o tackle too much
Statement B/Tak( n onrightamount .
NeitrerlVOU ..;
No: sure
i
12/93
52
40
5
3
10/93
61
32
5
2
[36]
(FORM B ONLY:)
8b.
Compared ic other pres ents in theirfirstyear in office, do you think Bill Clinton has accomplished a lot,
an overage £ mount, or lues than an average amount?
Aocomplishec a lot
Accompfish* c an average amount
Accomplishi c less than an average amount
<
Not sure
32
44
22
2
[37]
�DEC
17 ' 9 3 1 2 : 0 0
FROM GREENBERG RESEARCH
DEC i ? '93 09:40
FROM 202 232 B134
77w Wall Str—t JMOTU/NBC
TO 4 5 6 6 4 8 5
TO 5447020
PAGE.009/018
PAGE.009/017
December ISSS-pageT
Pol!
(FORM B OMiY;}
8c.
And. thinking tack on Hilar/ Clinton'sflretyear asfirstlady, do you think she has accomplished a lot an
average amount, or less ; l p an average amount compared to otherflretladles?
Accomptished a ot
Accomplished a*j average amount
Accomplished lt*s than an averaga amount
Noisure
50
2+
11
38
I !
6
(BOTH FORMS:)
_
9b.
Which one of the foBowtr a statements do you think is more correct?
Bill Cliniqn has changed Wwhinc^on
Washing jjgn h a changed Bin Clinton . . . .
some of both (VOL)
Neither (VOL)
Not suae
9e.
32
47
9
5
?
m
Which of the foilowing ptipple or institutions do you think is the biggest obstacle to changing poiitics-asusual In Washington?
CongrasS
Special ireerest groups
The news media
The feoswl bureaucracy
Preside''I Clinton
Not atrc
143]
23
32
17
15
6
7
(FORM B ONLY:)
10a.
Ptease tell roj which on* ot the foHowIng statements comes closest to your point of view on Bill Clinton's
priorttles as president.
gTATEMEWIVA; Bill CfcTton is spending too muchtimeand attention on foreign affairs and not paying
enough attirtion to dotr^stic goats.
OR
1
STATEMENT B; Bin CKi^on is spending too much time and attention on domestic goals and not paying
enough attertion to forei^r affairs
OR
STATEMENT C: B I Clir|ton has attained the right balance between foreign affairs and domestic goals.
U
Statement A/Toe much foreidr/not enough domestic
Statement B/Toc much doT^ciie/not enough foreign
Statement CWgit balance ;
None ot the above CVOlJ j
Not sure
1
1233
36
17
39
4
4
10^
47
14
33
NA
6
7
30
58
NA
5
[44]
1 on
•Statements we<e phrased H the future tanse, "Bill CUnton wis spend too much time and attention <
foreign afters end not pay enough attention to the domert'e goals*. •BUI CTtnton will spend too much time
and attention on me domes* goals and win not pay enough aoenfion to foreign afteit*', "Bill Clinton will
reach the right talanoe betvUn foreign alWn and domeaio goale."
�DEC
17 ' 9 3 1 2 : 0 0
FROM GREENBERG RESEARCH
DEC 17 '93 09:40
FROP! 202 232 8134
PAGE.010/018
TO 4 5 6 6 4 8 5
n-tocoiet'iaj. r
December 1893-page 8
The mu S m f JourmlUBC N * * f ol»
F
S S ™ S 2 u ! n gokiotoraad > aevertf M tha. were passed in 1993. For each one i read, please tell me if
you think mistewis a stftfj n therigWdlfedlon or a step in the wrong direction.
w
Step In RlgW
Direction
Step in Wrong
gjrection
Nasure
NAFTA, the Morn Arrstlcan Free trade
Agreement w«h Canada and M«»Jpa
53
33
14
The Brady Bl. which requires a iMr«HJay waiting
period to aBow a bac<ground c ^ : * before
purehaslng a handgun
81
16
m
President Clinton's economic proaam to
reduce the deflcit by raising sorr^ taxes and
cutting spending
55
37
147]
The Family Leave Ac; which retires
employere to allow workers to ta<jB an unpaid
leave to deal with sic<rte» in th<f family or the
birth of echBO
i
79
16
[48]
Pnwdent awton's policy altowiri gays and
lesbians to serve in tie mffitaiy s$ ong as they
do not tevoal their hcmosaxualits'
50
40
IOC
10
I45J
[49]
Which a a oi the following ffr issues do you think needs the greatest attertion from the federal
government ti the preee^ lime?
A) impfON-ing public oducatton
occnomy .
B) Imprtnlngtheeccr
O Combating street crime and violence
D) ContreiBing the spfiad O weapons of mass destruction ..
f
E) Deaana wfth the unfair trade practices of foreign countrtes
F) Refomiing the hetath care 9ys«em
Alt ecuaty (voq L
None of these (VOL)
Not sure
[
18
16
31
4
4
13
13
1
19*
/2
15
46
7
NA
4
12
13
1
-
[50]
*ln Janutry 1983 sui\jey choice D read 'Protecting the environmenr and was selected by
3 percert of resporcentm.
�DEC
1? ' 9 3 12:01
FROM GREENBERG RESEARCH
DEC 1? '93 09:41
FROM 302 232 8134
TO 4 5 6 S 4 8 5
TO 5447020
Deoember 1999-pege B
77* Wall S t n * JourmlNBC News; Poll
11a.
PAGE.011/018
PRGE.011/017
Now, i would liko to read you a list of quaWes. For each quality, I would like you to tell me how you
would rate Bfl OWon ir -im area using a scale from 1 to 5, on which a'S- means you would give him a
very good rating, a T m-ins you would give film a very poor rating, and a
means you would give him
a mixedratinti.You can use any number between 1 and 6, depending on how you feel.
Very
'ery
»oor
;
Not
Sure
Mixed
4
5
<
43
23
12
'
1
17
46
16
5
j
1
5
7
34
29
22
"
3
4
12
44
29
9
;
2
29
12
2
1
2
Deoember 1883
8
13
October 1993
15
{FORM A-F1RST FOUR ITEMS ONLY:)
Achieving ids goal*
January 1998
Wortir^ with Congress
December 1993
151]
[52]
October 1993
4
12
41
June 1998
12
16
45
18
S
4
Januaiy 1993
2
5
31
32
24
6
10
11
23
29
25
2
[Ml
16
17
35
22
8
2
[54]
16
20
37
17
9
1
16
26
43
11
3
i
1
m
16
15
40
16
e
1
5
[56]
21
18
34
18
7
i
2
157]
12
14
38
24
11
i
3
[58]
24
20
28
18
8
;
2
159]
Developing new id<!4S
December 1983
j.
Daaling with the etonorey
!
Deoember 1993
October 1993
(FORM B-NEXT R / E fTEMS <iiLY:)
Combating street crtme and violence
Deoember 1983
Standing up to spoefcl interes t
December 1993
Comrolttng government spend r^j
December 1993
Dealng with an (ntsmattonai < Isle
:
December 1983
Looking out fur ttn; middie cfciju
Decemberisss
(BOTH FORMS:)
.
.«
i lb.
What effect do you think the economic pofldes of President Clinton will have on you personaliy-witl they
help you, hut you, or dofyou think President Clinton's economic policies will not have any effect on you
peraonaly?
j
h
Will helpkou personally
wni hur ^ag personally
Wifl not (lave any effect
Not sura
22
41
31
6
[60]
�DEC 17 '93 12:01
FROM GREENBERG RESEARCH
TO 456B485
TO 5447B20
PAGE.012/018
PAGE.012/017
The WaHStTHtJourmlNBO Ham FOO
11c.
December 1993-paee 10
If cute are made in the M edicare and Medicaid programs, should the money that is saved be used to
reduce the fe<ferai budge: deficit, or should the money be used to help pay for the coat of national health
care?
Reduce the f aperal budget deficit
Help pay for cost of national health care . . .
Do not favcil Ivtedtears/MedtaaJd cuts (VOg
Not sure .. !
12a.
21
70
5
4
DO you think that labor u -jbns are helping or hurting the cause of working Americans?
Helping woricing Americana
Hurting w: r <n Americans
1ig
Somec ^oth (VOL)
Notaumi.
12b.
34
48
9
9
I
[63]
34
47
9
10
If Ross Perot runs for pn^ldent In 1996, what are the chances that you wilt support him-wfll you definitely
support ROSE Perot, prolably support him. consider supporting him, or is there no chance at all that you
win support P:oss Perot? I
Deflnitil/ support Ross Perot
ProbcJ if/ support Ross Perot
Consicer supporting Roes Perot
NO cn moe at aR of supporting Ross Perot
Net sure
13b.
[62]
Do you think thai labor Lrjions are helping or hutting the country as a whole?
Helping the country to n whole
Hurting t:» country as a whole
Some both (VOL)
Notsur^
13a.
[611
6
7
27
[64]
57
3
Compared tc one year a^ci, would you say your attitude towards Ross Perot is more positive, more
negative, or whout the stujne?
More positive towards Floss Perot
More negative towards Roes Perot
A o t jre same
bu
Not -dun .
9
41
48
1
[65]
�PAGE.013/018
PflGE. 013^17
TO 456B4B5
DEC 17 '93 12:02 FROM GREENBERG RESEARCH
December I993~page i i
77M Waff Sfrvaf Joumai/NBC N«wt Pon
13c.
WWch one ot the fofiowirg statements comee c»oeest to yOuf opinion about why Ross Perot is back in the
news?
i
12fi3 #93
:
Ross Perot is trying to unite his supporters to influence government policy
20
492
1/93
27
38
44
35
29
Ross Perot is laying the greundw«U to run for president in 1996
36
44
Ross Pera is seeWne public aflei^iontorhimself
23
14
16
id
Ross Perot is trying to damage Bijl Qinton
12
8
4
186]
3
1
None of these {VOU
\
1
1
2
Afl of these (VOL)
j
5
4
1
N t sure
o
I
3
2
4
13d.
I would like to read you fame criticisms that have been made ol Ross Perot Please tell me which of
these criticisms, if any. yob considertobe true of Ross Perot. (ACCEPT MULTIPLE RESPONSES.)
Ross Perot doetth't really know what he's talking about
6
1671
Ros!> Perot is mt nii out for himself
15
>
Ro8!» Perot nevn proposes real solutions
31
Roeis Perot is nuj stable and
reDable
24
None of these (VOL)
All of these C ^ )
10
Net sura
14a.
2i
5
J
Recently, Congress passed the Brady Bill, which requires that a person buying a handgun wait five days
while law enf orcement aw horfties perform a background check, Which one of the foDowfng srataments
acme closer to your point O vfew concerning the Brady law?
f
Statement A: The Brad:' law is good, and wifl be enough to make a difference in reducing crime.
Statement B. The Brad/ law is good, but more gun control laws will be needed to reduce crime.
Statement C: The Brad/j law goes too far in restricting Americans' freedom to own handguns.
I
Statement Mivr is good, wll oe enough
Statement BA*v Is good, but mora needed
Statement C/liw goes too far
Notsure...
9
74
12
s
[68]
�DEC 17 '9312:03
PAGE.014/018
h-Hjb.yi4/017
TO 4 5 6 6 4 8 5
FROM GREENBERG RESEARCH
7>» Wtdl 5 m t ^Mm»/NBC Newt Poll
December I9a3-page 12
(FORM A ONLY;)
14b.
Now 1 would like to read ypu some actions that have been proposed as ways to combat vioient crime.
For each one, please teJ rpa if you think it will make a major difference in reducing violent crime, a minor
differftnca, or no difference at all against violent crime.
NO
Major
i
Requiring an handcun owners ip be licensed
Raising taxes on atnmunttion . J
Oi^tawing afl handrjuns
i
Making some drugs legal . .:
Mandating Gfe sentences withe i|t parole for criminals
convicted of three violent felcr.lfs Placing one hundnid thousanc imore police officers on
the streets throughjut the U.S j
BuDding more prisons
i
EHffWnee
3a
Minor
Difference
35
Difference
At All
28
Not
Sure
i
24
33
40
3
[70]
36
25
37
3
Fi]
21
27
43
9
[72]
75
17
5
3
[73]
57
35
6
2
[74]
46
32
19
3
[75]
(BOTH FORM*)
j
Now, some quasOans about he* th care.
15a
From what yw have hesijj or read, do you favor or oppose President Clinton's health care program?
Favor
Oppa;e
Need to Know m p e (voq
eq
Not sure . . . .
12£3
47
32
15
6
10/93
47
37
12
4
9/22/93*
51
18
17
14
[77]
•Asked in NBC Nt ws survey.
(FORM A ONLY:)
15b.
Do you think BID Olnton'tj wealth care plan should be passed by Congress pretty much as is, should
Congress rrcifce major cripnges to President Clinton's plan, or should Congress not pass the plan at all?
i
President Clinton's plan! should be passed as is
Congress s hould mako jmajor changes to President Clinton's plan
Congreea should not pat* plan at afl
Congress should maKp minor changes to Preskjem Clinton's plan (VOL)
Notsure
|
15c
24
36
15
11
u
[78]
Which of the following d; you eee as Ihe most important health care issue at the present time?
The egg of health care . ,
I
People who are net covered fc]nsurance
The quaitty of heath care
All equally (voq
None of these (VOg...
Not sure
12/93
43
33
13
9
1
1
10/93
42
35
14
7
1
1
9/83
42
41
10
5
1
1
3/93
48
35
8
8
.
1
[79]
�DEC
17 ' 3 3 1 2 : 0 3
FROM GREENBERG RESEARCH
DEC 17 '93 09-'42
FROM 282 232 8134
TO 4 5 6 6 4 8 5
TO 5447820
PAGE.015/013
PRQE.015/0XV
Th* Watt Sreer Jourmmc News Poll
December 1983-page 13
i S ™ HilJaSsoma *pec«e p-pvtebns A M Oirtoo heatfi ewe reform plan. For eacn one. please tell me if
you favor or oppose that ^peoific provision of the plan.
Favor
Provision
Oppose
Provision
Not
Syjg
Requiring al bualnesaas to pay 1 leas* eighty peroent of medbai coverage
1
for meir omptoyees and giving «r tan Amis some gowwnert funds to
subsidteeiWiooversige
65
29
6
Having the govamrnsra cover ntwae under age 65, wataad of their prevloua
employer as b nowrtiecase
43
47
10
Providing exactly the same comrshenaJve bereWs package for weiyone
65
29
6
imposing overall limts on how mt ch the United States spends on health care
51
37
12
Charging afl Amariciins the sarre ^or heath oars, regardless of factors like
their age and where they Bve
52
42
6
Quaranteeftg covenige for aU A-rwhcans regardtess of health or emplcymert
status
78
17
5
I
i s e * " WhSf^ the following thrw *>proaeh«s do you thirK wouJd be the best way to provideteatmcovereg*
for all Americans?
Proposal A: A system ir Uich insuanoe companies would continue to provide health Insurance
covwags.w^ some goN-wnmert regulation to keep costs under control, and in which all employers would
be required n provide h<»ith insurance for their workers.
PmooaalB: A system in iwttch the government would provide coverage to a Americans, and would
D
celtact al insurance prenjums and pay al health care costs, without the involvement of employers or
tnauranoe connpanies.
PrapgsaC: A system in which oonsumere and businesses would join buy'hg pods to get a batter deal
SrSSt^L^nce^inagovemrr^
0© no government pnea controls and no guarartees that all Americans woukJ have health coverage.
Proposal Mnsuranoe ^-mpanies and employere provide coverage . . . .
Proposal tVQovemrmf provides cowsrage
Proposal <^Consunw:s and businesses join pools
None (VOQ
43
28
19
186]
4
j
6
Not sure
i
!
(BOTH FORMS:)
_
1«,
Which one of the foltowir g heafth oare plans woUd you favor more?
PLANA- A oongresston ii plan that Is less expensive than the Ciinton plan because it relies on
competitive liuykig of iftsjjrance. but which might leave more than ten million Amorteans without coverage.
OR
PLAN B: PiaekJent Or»Ts health care plan, which may cost more man the congressional plan, which
provides more beneflts itpd cost controls, and guarantees coverage for every Amenean
Plan A; ess axperejVu congressional plan
Pfen B/von coma-rfienrtve COrton plan
NeJthw (VOQ
Not sure
20
69
6
5
187]
�DEC
17 ' 9 3 1 2 : 0 4
FROM GREENBERG RESEARCH
DEC 17 '93 09542
FROM 202 232 B134
TO 4 5 S S 4 8 5
TD 5447020
The Will Strvef Jeuim fHBC Nwrc; Foil
PAGE.016/018
RAGE.016/^17
Decembar 1993-page 14
Now, soma quMttora about noDtelesaness.
(FORM A ONLY:)
j
15g.
is tha problem of hom*l*sjsness moretfwrwponaWBty of local comrnunWes, or more of a national
pmbtom thai ahould be c^Jt with b/the fadaral gcvammen?
Loaal cormnunltieB ..
42
45
d
2
2
Federa bovemment .
Somf jcf both (VOL)
NeltfMr(VOU
Not ai re
[88]
(FORM A ONLY:)
I5h.
in your own corrvnunity, i; homelessness lass of a problem, more of a problem, or about the same degree
of a probtem compared tr i vhat it was fVe years ago?
More (jf a problem
Lass ol a problem
Aboui the same
No;
35
79
39
7
fejre
[89]
(BOTH FORMS:)
Now, some questions about for^gn policy,
18a.
Which one of thefollowingdo you think ie the most serious foreign policy issue facing the United States
today? {ROT ATE ORDER RECORD RESPONSE UNDER Q.16a BELOW.)
Q.18a
Most
Serioug
0.16b
Second
Most
Serious
The war between Bosnia £(^1 Serbia
14
14
Instabiay in Ffcissia and tha other countries that were
part of the Soviet Union.
21
19
The refusal of -feftrs miiBery to give power back to the
demooratlcafy eiooed go^'irnment
4
North Korea's Jeveiopmerrij of a nuclear weapon . . .
31
21
The peace agraement bet^on Israel and the Arabs .
13
18
CONTINUE
l»1]
7
All equaty (VOL)....
8
None of these (VOL)
2
Not sure
7
3
NA
17
No most serious probten <<3.1Sa)
SKIP TO
Q.16&
(ASK ONLY OF RESPONDENTS I WHO CHOOSE A HIGHEST PRIORJTY IN a 15a.)
1«>
And which of these tssusb is the second moet asrtous poltey Issue? (READ UST AGAIN, EXCLUDINQ
ANSWER a VEN IN a *
RECORD UNDER COLUMN a i « b . ABOVE.)
�DEC
17 ' 9 3 1 2 : 0 4
FROM GREENBERG RESEARCH
DEC 17 '93 09:42
FJWfl 202 232 8134
TO 4 5 6 S 4 8 5
TD 5447020
Tto WaflSlMtJouma/Haa News Pell
PAGE.0 17/018
December 1993-pegs is
(ASK Everrowc:)
iSc.
If North Koree does not aUow its nuclear production facilities to be inspected, to confirm whether it is
building a nuclear bomb, please tei) me whether you would fever or oppose the following actions. (READ
ITEM& START FROM lljie BOTTOM ON EVERY OTHER INTERVIEW.)
Favor
Action
Oppose NOt
Acteai Sure
45
6
[82]
33
60
7
m
87
Launching a m t y strike to destrey North Korea's ability to build a bomb
Mm
49
10
3
I»4]
Improving diplomatic ind trade relUons with North Korea If It guarantees not to
I6d.
Do you think that by the yjear 2000 a country will or win not use nuclear weapons to attack its enemy?
Yes, wffl i^e nuclear weapons ..
No, wi) not use nuclear weapons.
Notaurtj
17*
11
Thinking abojt U.S. relatons withforeigncountries, w t which of the followingfivecountries or regions do
W
you think ow rewonship wU be most important over the next five years? (READ UST. START FROM
t
THB BOTTOM ON EVERY OTHER INTERVIEW. ACCEPT ONE ANSWER ONLY.)
China.
Japan • i
Latin AmcncS
Russia er < other former Soviet notions
}
The Midde East
Not $urt:
17b.
PS]
36
54
P6]
23
16
8
20
23
8
1
Which one o the foflowi;tg statements comes closertoyour point of view on our reiattansnip with China?
Statement A: We shouki maintain good trade relations with China, despite disagreements we might have
with its hijrc,n rights paries.
OR
IB: We shouki demand that China Improvetehumanrightspolicies if China wants to continue
to enjoy Its current trade status with the United States.
Statement A, maintain good trade relations
Statement ^demand improved humanrigltspoDcles
29 197J
65
Neither (Jog
Notsure]
18a.
z
4
i
aeneraBy spwking, do :»bu consider yourself computer literate and comfortable using a computer, or are
you not realty comfbrtafclS using a computer?
Computerfitejrdteand comfbrUdWe using a computer.
Uot reaUy cctmfortable using a computer
Noisure..'
55
43
2
�Dac«m£*M993~peg* 16
The Wan Stroet Joumil/U&C Nevs Poll
19a.
In potties to jay, do you ganaraily consider yourself to be very liberal, somewTWt liberal, moderate,
somwnat onservattve, <my conservallve, or do you think your views cannot really be described in those
terms?
1
liberal
Somewfiat conservative
Very a *
Views :^nnot be described in those terms
Not s ^ n i . , .
6
20
26
23
10
13
3
[104]
Regardless <* how yoo ray be registBred, how would you describe your overall point of view in terms of
the political parties? WoWd you say you are mostly Dsmocrafe, leaning Democratic, completely
independent leaning Republican, or mostly Republican?
20.
MostwiDemoewtc
24
1140]
Leant:* Democfatfc
9
conif^sty Independent
22
leanfeig Republican
12
MosttvlRepubllcan
19
Notiure
11
Rtfiaed
3
Are you, or Is any mem^- of this household, a member of a labor union?
13
7
79
1
Respondent Is jnlon member
Otlwr person irj household is union member
l*5n-union household
loot sure . .
21a,
P091
Now I'd Hke to find out <ibout your currant health care coverage situation. Are you preeentty covered or
not covered by health ,n trance? (IF 'COVERED,' ASK:) And is everyone in your immediate family living
with you also covered byhealth insurance?
Covered By Health msm inee
Respondent and eveiyei t In Immediate family
Respondent but not eviyone in family
Respondent but not s u * about tamlty
I M Covered By Health Uiaurtnce
Not Sure/Ri3fitaed . . . •
[111]
80
7
CONTINUE
—TT
1
SKIP
(ASK ONLY OF RESPONDENTS VWO ARE CURRENTLY COVERED BY HEALTH INSURANCE IN 0.218.)
21 b.
Which one cf me folowi'te statements beet desctibes how your health insurance is paid for?
Y01 or a famliy nember pays the full cost
You or a family nember pays part, and an employer pays part
An smptoyerpjifs the full «wt
The govemmeti pays through Medicare or Metiteaid
Cimhination (tOQ
Nstsure
Not cavered/no sure if covered (Q.21 a)
14
42
14
10
6
1
13
[112]
(ASK ONLY OF RESPONDENTS; WHO ARE CURRENTLY COVERED BY HEALTH INSURANCE IN Q£1a.)
21 c
Is your healtn insuranoe 1 > ovided by an HMO, that is, a health maintenance organization?
i
ProvtcSd by an HMO
Not provided by an HMO
Not iwm
Not Hovered/not sure if covered (Q.21 a.) .
27
51
9
13
[113]
* * TOTAL PfiGE.082 * *
810/810"aObd
£8f99Sfr
01
�DEC 1? '93 12 MG
FROM GREENBERG RESEARCH
..^^J^^lL
TO 45GG485
BATTLEGROUND '94
T H TJUUUUTCI QJtOTJP
MSLLXMI, LXIWlUS, LAXZ
M>1,000 inttrvUwH
S«c«mb*t
1993
Hollo, X'a
•
of Th« ttsthtizm Oroup, a national aurvay
r«»aa*eh titn\ w«'ra calling long diatanc* to talk to p»opl« acroa» the
nation today about public leadeei and Laauta taoing ua a l l .
x.
At* you r«giftar*«J to vote in your ttata?
yy.'W^ f M t is there someone else at hone who ia rtgisteced
L ^
to vote?
( I F •ns«, TEEM ASKl WAt Z SF1AK WXZS XXM/HUt?)
Tee (cemxxux)
R ( a U C A D XBBMZXATS)
O tOO N
N w thinking tot a m m n about things in this country —
o,
o et
1.
*
O you feel things in this country ar* going in the right direction, or
o
do you feel things have gotten off on tb* wrong track?
Right direction/strongly . . .
Xigtit direction/somawhat . . .
fF cttolo! iiju«7-ag<» And
UHSOM (MX) .
do you £**1 strongly or
Wrong traek/eomewhat
eomawhae strongly about that?
Wrong track/strongly
IWDICATM LXSS T A 1%
HN
9
*
221
131
19%
35%
�DEC
17 ' 9 3 1 2 : 4 7
FROM GREENBERG .RESEARCH
TO ^ 5 6 6 4 8 5
PAGE.003/017
S t i l l thinking about thinga in tha country —
2.
What do you think is the nwnbar one problaa facing this part ot
the country today? (DO xox MAD u i r a s v i , JUST axcORD)
*ot« to Interviewer 1
After cowpletion of
interview, double cheek
this qaestlon for
proper coding. Try to
fit •Others' into a
pra-oxiating category.
IF
gpgeine
GHOTCE MAPB IM omtsTioii
Abortion
1
%
Agrieultujra/faraing/ranching
*
A»»
1
%
Auto insurance . . . . . . . .
*
Child care
Clinton (9reeident i i i l )
...
2%
Congress
*
cost of living . . . . . . . .
•
Criae
26%
Deficit
n
Drugs
6
%
Econoay
9
%
education
3%
rnvironment
1
%
roreign affaire
1
1
Qcvtrnnent aptndlng
1
%
Growth/ovardevelopnent
.... *
Cuna
1
%
Health ear* (cost/
quality of)
5%
Health insurance (soet/
lack of)
1
%
Hooeless/poverty
2%
Housing (costs/lack of) . . . .
*
iBBigrstion
1
%
Inflation
Jobs
7
%
Lose of Industry
•
Xilitary spending
*
Xoval/religioua concerns . . .
5%
Politieians/incuabents . . . . 2%
Pollution
•
Property taxes
*
Racism
•
ftoada/hiohways . . . . . . . .
•
Senior citisena
*
Taxes
2%
Tax increases
1
%
Trade . . . . .
.
Vnenploynent
7
%
Wages .
*
Welfare (reform) . . . . . . .
1
%
watar (shortage/quality) . . .
•
OTBIR
6
%
O S m (fO 4)
MO
4
%
a. T e
mw
ACT,
3. And, whit* political party — (XOTAZg) — 1} the Aepublican, or
2) the Oewocratic — do you trust mora to deal with thie particular
problem?
Republican party
3 it
Democratic party
33%
B f H SQUAb (8MB)
OT
NSXTOM (Dim)
UNStmt (DM)
DEC 15 *93 16=19
MELLMPN LfiZPRUS INC
4
%
2%
3
9
%
nanr cm-?
�1
t
8
r
,
I
d
o f
M v , r
PAGE.004/017
TO 4 5 6 6 4 8 5
DEC 17 '93 12:47 FROM GREENBERG RESEARCH
*s<iQ r a n
1
S S I ? "SU ? 4!!!
S**"
* ^ A ' W w l t who hav, been
mentioned In the new. recently, tev each one, plea.e tell m whether you
m
hav« heard of that person and i f eo, whether you have « favo «bla or an
unfavorabl. impraaalon of that per ton. if you do not recognizo the name,
juet say eo«
WtfT
MgqWllr TBBOM' Mould that be a strongly (favorable/
unfavorable) iispreseion or just a seoewhat (favorable/unfavorable) &
inpresaion?
c
rAVORABLg
(RO!EXTS muss)
4.
S.
Hillary Clinton
6.
Al Oore
7.
sins am*.
B i l l Clinton
Bob sola
UHVAVORABLK
Smw^t Straff
IH
.23.\21).
1
Ui
NEVER
. 5%
*
9%
21
M
O
*
•
Jack Xaop
9.
Colin Powell
10.
1(1
HI
13%
2%
-12L
8.
.5.
1V
331
J51
UI
17%
51
12%
241
HI
28%
21%
noe* Perot
«^
ai
141
_114_
221
241
11%
1%
26*
101
lit
171 .
i3l
?1
28%
32%
13. Warren Christopher
UI
fl
14. The Republican party
?31
121
15. The Democratic party
-2SS-
,,1
1?
11. Janet Reno
S
(*WCI-MO )
12. Les Aspin ("ASS-PXH')
31%
(XNS ROtATXOk)
• m. 30%
14%
1%
;»
—
�DEC
17
'93
12:48
FROM GREENBERG RESEARCH
TO 4 5 6 8 4 8 5
PAGE.005/017
N w I would I U M to r«»d you * l i s t of iiiuss thtt toow peoolo .»v .
o
important for Pro.id.nt ciinton and th. Xdmini.tSitioTtriSi!.
S the
n.ar futurt. P I M M t . U n which OQI ii.ua you think is S a t
m
important for bim to focu. on, (WAD W© S0TAT1 xSiuM)
^
.
(WAD M »
18SUM)
IF CHQICT MAPI. Affit
wAieA i*«u. tfo you tAi«* i , n w mo.c important?
M
Cl**
HOST
1)
Holding down tax..
2)
croating job.
3)
4)
Cueing th. budgrt dafisit
Making hMlth ear. a-railabi. to i i
MMricana
5)
Mdueing cria.
6)
iMforaing th. wslfara syatws
_ 4
%
7)
cutting wasta in govamoont
IQ%
8)
Handling foroign affair.
9)
COMHTTOTIOM/BQUALLy (ZtttX)
10)
WiOHK (BKR)
Q17A
HSXT MOST
9 %
9 %
a%
a
i6%
-±*>__
A
m
1%
6
^ly
l s %
1 1
|
-S2.
n
6 t
^
NOW 1 would l i k . to road you a liat of iaau.a that torn. p ^ p i . *y e
important for Provident CUnton and th. Administration tofocus on in the
ne.r futur.. Pi.... toll »• which aM U.u. you think 1.
S
important for him to focui on. (RZAD MD lOTATS ISSUES)
CTQICI M^g.ftftKt"Anrf vAieh rfo
8
y 0 u
i
t
M
x
Q15B
HOST
t
a r
a Q S t
Q17B
NEXT M S
OT
IMPORTXHT
1)
Holding down taxes
2)
Croating Jobs
3)
Reducing th. budget deficit
4>
Setting health ear. coats und.r control
5)
Reducing criA*
fi) Reforming the welfare system
7)
Handling foreign affairs
9)
10)
COJtllNATlON/SWALL* (WW)
O S R S (Dmt)
NUJ
231
14%
IS*
171
3%
Cutting wast* in government
8)
9%
14%
_11%
. I'*
15%
9%
?%
2
%
7 ,
%
•
4%
2%
�DEC
17 ' 9 3 1 2 : 4 9 FROM GREENBERG RESEARCH
TO 4 5 6 6 4 8 5
T y r - I S - ' g r 17:33 IDJMELLMPN LflZRRUS INC
TEL ND: 12026250371
PAGE.006/017
8228 PBS
-
Now, thinking about your p«r»on*l financial aituation for a aoaont —
IS.
W ara intoroatod in how poopl* aro getting along financially these
o
daya. Would you say that you (and your family living there) are better
off or worm off than you were a year ago?
Batter off
Worse off . . . . . . . . . . .
A O T THE S M (Mft)
BO
AS
ensure (PH*)
.
3%
2
26%
39%
11
SfflftgML IWff)
And —
19.
Looking ahoad, do you think that a year from n w you and your family will
o
Oa better off financially, worse off* or juet about the same?
tetter off .
warao off
About the same
U S R (DMt)
HUB
271
19%
49%
6
%
And ~
20.
when you think about America's economy today, do you think we »re in a
recovery, stagnating, in a recession* or in a depression?
Recovery
Stagnating
Recession
Doprataion
ONSOM (OMR)
37%
35%
16%
7
%
5%
N w thinking about the problems facing this country today —
o,
21-
which of the following Issues do you think is the biggest problem facing
the middle class today? ( J A LXBT AND IOSAXZ)
RBD
1) Government does net work for the middle class and only represents
•pecial interests,
3} Family values ere declining and no one values responsibility anymore,
i) Familiee cannot make enda meet with rising health care costs and
prieea, even with two people working,
4) Children are not getting t good education and have little economic
futura, OF
5) Crime i s on the rise in our neighborhoods and families ara not safe?
iy ALL ou MQIHI THAWftWKrwwBH. XXT-. Government/specla 1 interests
If you had to chooee only one answer, Family values . . . . . . . . .
which problssi concerns you the most? Cannot make ends meet . . . . .
Children/education
Crime . . . . . . . . . . . . .
ALL EQUAL/SZVERAL (DNX) . . . .
M M OF THZSB (DRR)
OS
UMWIU (OMR)
14%
28%
16%
12%
17%
12%
1%
1%
�DEC 17 '93 12:49 FROM GREENBERG RESEARCH
TO 4566485
PAGE.007/017
s t i l l thinking MMut you and your family —
33.
Do you and your family ft«l moro seeura, l f « 5ecura oy .bout the same aa
«l
you did tag Vflgt sqO? (If MOM O USt SSCDHS, ASXt la that m ! S S M /
R
uh
leea) eeeura'or a little («or./l ) gBcur^r
™ "
m
n
l m o r e /
tti
More secure/much
Mora aacure/littla
ONSUMS (DMX)
X O T T B SAKE (tttnt)
BO U
Loaa secure/little . . . . . .
XAaa eecura/nuch
6 %
io%
2\
3 a %
24%
26%
s t i l l thinking about thia issue —
23.
I a going to read you a liat of reasons that p m people in thia part of
m
oe
tho country have given for why their faaiiiea mightVeel less secure
• flf* ^ f * * * * "*
2M ot tha following bothers you and your
family tho most? (MAD Lift A D XOXAtt)
M
'
1
-
t
1 1
1 r h i c h
Y
fear of rising crime . . . . . . . . . .
rear of losing a job
rear of not earning enough to make ends
Pear of losing health care coverage . . .
Tear, of values daeiining
Tear of children not getting a good
education
ALL/COMBINATION (DHR)
ONStms (DMA)
/
28%
11%
17%
9%
13%
n*
a*
2%
�DEC
17
'93
12:50
FROM GREENBERG RESEARCH
TO 4 5 6 6 4 8 5
DEC-IS-'93 17:36
IDiMELLMAN LAZflRUS INC
TEL NQ: 12026250371
1
PAGE.008/017
P08
tt228
How. turning to tho i»»u» of criaw « Afl you (My or may not know, thoeo htfl
boon * groat doal of dabato in Congraao rocontly about tha boat way to deal
with the oriata problem in thia country.
24.
Which of tha'following do you think ia more important in trying to
atem tb* riaing crime problem facing our country — (R0SAX2) —
1) Putting more police on the etroot and giving law enforcgmont
oore roeeurcee to fight crime, Qfi
2)
Reforming tha criminal juetic* eyatam to make euro that
convictod crlmlnala are truly puniehad and required to eerve
their full aentoneea.
More police
Reform judicial ayatem
BOTH
15%
72\
twta, (mai)
7%
H X H O (DWl)
BTT
4*
2%
usstrax <wni)
s t i l l tbtnking about the ienue of crime —
JSA.
Soma nooole aav
that the beat way to gat control of crime ie to
toughen sentences and put mora police on tha street.
other people aav that tha best way to get control of crime is to
prevent children from getting involved in crime in
the flrat place, by providing after school programs as
an alternative to gangs and with anti-drug education
efforts.
Which viewpoint comae
Toughen sentences/more police .
28%
closer to your own?
After echool/drug aducation . .
64%
UNSUM < i >
om
8%
S t i l l thinking about the issue of crime —
25B.
Soma people eay
that the boat way to gat control of crime is to
toughan aantancaa and put mora police on tha s t r e e t .
othar people sav
that tha beat way to get control of criaa ia to
provide aconomic opportunity by creating jobs and
investing in education and training.
Which viewpoint comes
closer to your own?
Toughen aanteneaa/more police
Economic opportunity
U S R (DHR)
NUE
.
41%
S5%
7%
Thinking ahead to tho presidential electiona thtt will b« held in
Novaober 1996 —
26.
I f tha alaction for Preaidaat were being held today, and you had to
make a choice, would you b* voting for
(SOTATS) —
(1) tha Republican candidate, or
(2) tha Damocrat candidate?
Republican
I F Tnmaciaipe. XSKi And
Uan Republican
which party* candidate do
UHPECIDHD (Dint)
you lean toward at thia time?
INDEPENDENT (DMA)
taan Democrat
Damocrat
29%
7%
20%
7%
6%
31%
�DEC 17 ' 9 3 1 2 : 5 0
FROM GREENBERG RESEARCH
TO 45SG485
• —DEC-JS-'93 17:37 IDiMELLMAN LAZARUS INC
TEL NO: 12026250371
S^inbJrSJJ 2 ? *
27.
U c t i o n
•
"
PAGE . 0 0 9 / 0 17
8238 P09
C ^ " " that will b. h.ld in
I f th« •laction for V,S. Cong f t were being neld today, and voa
<l) the Republican eendidate, or
(2) tha Damocrat candidate — in your dietrict?
1
3
IT • W B W » B P - 3 5 » A«d
which party'a candidate do
you lean toward et thia tiM?
JlJfJipIblicin* !
f
UMMCIDS
J
D
S
?
J
mKS^'Ew," [ [ ] ] ' \ '
Lean Daaiocrat
D
««»«»*
J
!
s
!
33%
Npw, thinking about Praaidant Clinton for a moment ~
2 8 <
frbti
fSSuinV?
d l
"
p p r o v e
o f
t h
B i l 1
*
do you atrongiy or aomawhat
(approvo/diaapprova,?
c l
^ o n ia handling hi,
3
(StT
DU^r^Le^it*
Diaapprova/atrongly
^
^
2%
1
And —
29.
4
8 1 1 1 c U n
6 R
«JES S ? *
?
?*• Performed his job as Jreeidant w,U
enough to deserve re-election, or do you thiAk it'e time to oive a
enoi
new person a chance?
»
person a chance?
Daeervev re-election
OKSORB/DSPItJDS O O P N N (DNR)
N POET
«
pmraon a chance . . .
e
a
371
25%
37%
o i v
S t i l l thinking about the election for Preaidant —
30.
if tha alaction were hald today, and you had to make « choica. would
JSiS'hS? ** **
" *"
mat^rSio raj
*ae
UNSURI (DNR)
;
1
1
C l i n t 0 n
?
i d w t
n o
N o
And —
2 6 k
lU
61%
(X0ZA2* QOmiONS 31-32)
31A. If tlw election for President ware held today, and you had to maka
?oS «"(l«j£*J? ~
9 »««W*t;. wSuld ySu p « b 2 5
(1) Jack Koap, tha Republican, or
(2) Bill Clinton, the Bamocret?
I f •vxQKlUa*, ftffff, And
Kemp/definitely . .
0
l
0 f
tSSfSSSS**
a muMtm, m
<
f o l l 0 w i n
I,
e
n
y
*
u
*
n Rrap
.::::::::
is
»
SSSftSKX •:::::: ia
�DEC
17 ' 9 3 1 2 : 5 1
FROM GREENBERG RESEARCH
TO 45S6485
DEC-lS-'Sa 17:38 IDsMELLMRN LflZflRUS INC
TEL fCl! 12026250371
PAGE 0 10/017
«228 P10
9
Mid —
31B. If th* •lection for preeident were held today, end you had to make
a choice, for which of tha following candidates would you probably
vote — (XOftJ&S) —(1) Bob Dole, tha Republican, or
(2) B i l l Clinton, tha Democrat?
i f 'ymiCIPWZjUg*
Dole/definitely
which candidate do you lean
Doio/probably
.toward alightly?
Lean Dole
17 afllfll MMi MK'
„
Would you fty that you ara
DlfDICIDBD (DNR)
dafinitalv going to vote
for him/ or probably going
Lean Clinton
to vote for him?
Clinton/probably
And —
Clinton/definitely
32A. If the election for President were held today, and you had to make a
choice, for which of tha following candidates would you probably vote
—
20%
16%
3%
11%
2%
14%
34%
(ItOTASB)
rl) Bob Dole, the Republican,
(2) B i l l Clinton, tha Democrat, or
(3) Ross Perot, Independent?
i r »qiffiBe«ttD», ABK: And
which candidate do you lean
toward alightly?
Cole/definiteiy
oole/probably
Lean Dole
23%
10%
2%
IT «9Iffl m J Z j W *
Would you say that you are
flafinltaW going to vote
for him, or nrobablv going
to vote for him?
Clinton/definitely
Clinton/probably
Lean Clinton
30%
10%
2%
Perot/definitely
Perot/probably
Lean Perot
8%
6
%
2%
OTHER (DNR)
UNDECIDED <DN»)
7%
�DEC
17 '93 12:51
FROM GREENBERG RESEARCH
PAGE 01 1/017
TO 45GG485
Rei^H f l l
10
And «
32B.
If th* •lection for President wore held today, end you had to aake &
choice, for which of the following eandldatee would you probably vote
citockXK)
(IJ Jack Kemp, the Republican,
(23 B i l l Clinton, the Democrat, or
(3) Roas Perot, independent?
IT 'WimiCIPBBJL-Agt And
which candidate do you lean
toward alightly?
tr g l 9 i a KMilZMS'
Would you aay that you are
daffoltalv going to vote
for him, or probably going
to vote for him?
Kemp/definitely
Ramp/probably
Lean K m
ep
,
Clinton/definitely
Clinton/probably
Loan Clinton
16%
, . .
81
4%
33%
14%
1%
Parot/dafinitaly
Perot/probably
Lean Perot
»%
7%
1%
OTKIR (DNR)
UNDECIDED (DNR)
1%
8%
Now, thinking apecifically about the U.S. congress for a moment —
33.
Do you approve or disapprove of tha way the U.S. Congress is handling
ita job of dealing with important issueo facing tha country?
ASRt
Would you aay you strongly
or somewhat (approve/
disapprove)?
CBOICT IODK.
Approva/strongly
Approve/.omawhat
UNsURS (DNR)
Disapprove/somewhat . . . . . .
Disapprove/atrongly . . . . . .
4%
20%
10%
25%
40%
And —
34.
Do you approve or disapprove of tha way that XSJIE U.S. Congressman or
Coagresaweaan i s handling their job?
IT CTMCT MMlt W
Would you aay you strongly
or aomewhat (approve/
diaapprova)?
Approve/atrongiy
Approve/somewhat
U S R (DNR)
NU1
Disapprove/aomawhat
Disapprove/atrongly
17%
34%
16%
15%
18%
Now, thinking apecifically about tha U.S. Congress for a moment
35.
some people say i t is tima to send a meaaage to Washington that tha
American people ar* unhappy with the way things ara being run by
voting Mftlms avery single incumbent up for re-elect ton in 1994.
Do you agree or disagree?
Tr CBQIffli TntHi MR'
And do you feel strongly
about that?
Agrea/itrongly
Agree •
D S R (DNR)
NQB
Disagree
Disagree/strongly
24%
17%
7%
23%
30%
�DEC 17 ' 9 3 1 2 : 5 3 FROM GREENBERG RESEARCH
TO 4 5 S S 4 8 5
_ _ _ _ _ _ DEC-IS-'93 17:40 ID:MELLMflN LflZflRUS INC
7H_ NO: 12026230371
PAGE.014/017
«22B P14 .
13
And —
43.
D you think that tho Ropublicana hav« a plan to roform our national
o
haalth ear* syatw or not?
yaa/Hav* plan
N / o plan
oM
UNSBM (DNR)
And —
44. W o do you think i f nora fincera about moving tha country forward —
h
(ROTATl) — 1) Bill Clinton and tha Daaoerata in Congraaa, or
2) tha Rapublicana in Congraaa?
ciinton/Daatocrata
Rapublicana
.....
BOW (DWl)
NIZTKSR (DNR)
OHSURI (DNR)
35%
46%
19%
50%
24%
9
%
8%
8%
N w thinking about tha fadaral govarnaant in ganaral ~
o,
45. WhichfiMof tha following do you think really controls tha fadaral
government in Washington? (RBAD AND ROSAZB)
tha Praaidant
Tha Democrats in Congress . . . .
The Republicans in Conoreaa . . .
Lobbyists and special interests .
C M X A X N (DNR)
O3HTO
N N O THESE (DNR)
OE P
UNSURE (DNR)
6
%
16%
5%
57%
7%
2%
7
%
�DEC 17 '93 12:53
FROM GREENBERG RESEARCH
PAGE.015/017
TO 4566485
Hti^a r i D
—•
14
now x would I l k * to tf*td you « l i s t of iisuoa ^hat aosw poopla from thia part
of tha country hava a«ld ara Important for govammant to deal with. Please
t a l l ma, for each one, whether you have mora confidence in — (ROXAXB) ~
(1) tha Democratic party, or (2) tha Rapubllean party ~ to deal with this
iaaua. <UAD X,Zt7 MD ROXXXR)
NSZTHER
46.
DDIOCRAX RXFOBLXCM BOTH /NO
PRRTT
tSMt
PITT,
U&m
(DNR) (DNR) (SUR)
Protecting the middle class
<PRONPZI DO TOO 9*ttnt ~
i) « n aMooaanc PARTT, OR 3)
m RBrBSLZOUf PARTT — CM DO
A UTTRR JQi C THIf USUI?)
m
-li
47.
Creating Jobs
48.
Reducing th* deficit
49.
Handling foreign trade lasuae
50.
Improving tha haalth cara system
51.
Reaping America prosperous
$3,
improving aducation
53.
Fighting crime and drugs
54.
Holding the line en taxas
55.
Cutting government waste
56.
Reforming welfare
57.
Bringing about change
J£l-
SB.
Dealing with foreign affairs
-241.
-ILL
-ii
^i
_4i
_9%
JUL
-Si
-fii
MIL
_5i
-Ui.
m
-Si
_A
2
_li
12%
-ifiJL
(IND ROTATION)
-21
lii
^21
_5i
an
-51
-221.
12%
10%
121 -Si
20%
_2i
_si
.SSL
-21
5%
_ai
_ai
9%
�DEC 1? '93 12:54
FROM GREENBERG RESEARCH
DEC-15-'93 17:41
IDifELLMAN LAZPRUS INC
TO 45SG485
P A G E . 0 1 S / 0 1?
TEL ND!laUKOMJi'i
15
H w I would lik* to ra*d you • Hat of I M U M that tona p^plo from thia
o
part of tho country hava «ald ara important for govarnaant to daal with.
?leaaa t a l l oa, for oaeh on*, whether you hava mere confidence in
— (XOZftXl) — (1) Praaidant Bill Clinton, or (2) tha Republican* in Congree*
~ to deal with thia iaaua. (RUB USX MO ROXRTI)
59.
BXLb
GOP UT
BOTH
(pLIMTOM_ CQWffl^BB
tSSib.
(JWR)
Protecting tha middle claea
(PROMPTt SO TOO ZinOt —
1) BILL UXMXm, OR 2)
RHfOBLZCMS W COWORISB —
CM DO X BITTER JOB OH T U B XStUV?) .,481,
«
JUU-
NEITHXR
/NO
(DNR)
-2i
-21
Handling foreign trada ia*ua*
63.
Improving th* haalth cara ayatem
64.
Improving education
righting crim* and drugs
_221_
67.
Holding the U n a on taxes
Jii-
68.
Cutting govarnmant wasta
Reforming welfare
jiil_
70.
Bringing about change
Dealing with foreign affairs
-21
-ai
Ji
MX.
ifll
lii
_21
jLSi-
_ai
ia
-fii
J3X.
71,
-1
§
Jli.
69.
-21
-121-
66.
Jl
Keeping America proaparoua
65,
Jl
Reducing th* deficit
63.
_il
Creating job*
61.
-&i
.21
60.
-»i-
JUL
-42i.
J61L.
-211.
5%
-30%
(MD ROTAXIO*)
»1-
17\
6%
_ i i ifli
-&i
-51
-Ii
-fii
Jl
_41 _ f l l
�DEC 17 '93__12:55 FROM GREENBERG RESEARCH
TO 45GS485
PAGE.B17/B17
1ft
Nov, Z Mould Ilka to r«*d you a liat of iaauaa that tha govarnmant la dealing
with. Tor aach one, plaaaa tall ma -whathar you think tha Oetaocrata ara doing
an exceilent, good, fair, or poor job of handling that iaaua. (ACAD AND ROTATE)
r
foelfc fisS^L *
72A.
L T
p Q O
UttSURE
T 'PTF)
Creating joba
{toxxargt DO TOD m m m
DMOCMXS ARB D Z O AN BXCRXXSKT,
OX
O O , 7RIR Ot P O JOB OF
OD
OR
BAHMJltt SXXB XBBDB?)
- l i i l l 421
73A. Reducing tha deficit
74A' Promoting better paying jobs
75A. Promoting trada
76A. Dealing with taxea
_41
_21 i i i 121 I S ! _ 1
&
Ifli
2£i i i i
_11 221 ifli
Ifil
_2l
-21
121 111 4 i i
J i
Row, x would like to raad you a l i s t of iaauaa that tha govarnmant ie dealing
with. For each one, please tell me whathar you think th* Republicans are doing
an excellent, good, fair, er poor job of handling that issue. (READ A D ROTATE)
M
USR
NUS
Ixslt Sag4_ .His lass. iSSEl
72B.
Creating joba
(PROMPT! D TOO Z X T TBB
O
EOC
RSFUBLXOUfB AR* DOXM AN BXCBLLDW,
O O , FAIR OX P O JOB O
OD
OR
P
RANDLINO TBXB XSBUlf)
1% l i l 42% 34%
8%
738.
Reducing tha deficit
U i -21 221 £31 «2i
74B.
Promoting batter paying Joba
-11 121 321 i i i J l
75B.
Promoting trada
_41 m
341 15%
76B.
Dealing with taxea
J l JU
121 i l l J l
Hi
Now, just a f*w final quaetion* for statiatical purpoaaa only
77. Which of tha candidates did you vote for ia tha last praaldantial
alaction? (SO NOt READ, JUBT RXCORD)
Clinton
Bush
Perot
OTRBR (8PBCZPY)
ui n
s i
o—
44%
331
16%
S
�l,JJ(,iu.*^.i«i.!.J„.i
A12
WASHINGTON EDITION / LOS ANGELES TIMES
THURSDAY, DECEMBER 9, 1993
\ A I I () \
In Shift, Most See President as Effective, Survey Finds
end most trade barriers among Canada. Mexico and
the United Stales, up from 21% in October. And 37%
said that they paid close attention to passage of the
ASHINGTON—A survey released today reingun control legislation, which would mandate a
forces the message that Americans have a
five-day waiting period for handgun purchases.
markedly better impression of Bill Clinton's presiSimilarly, a majority of Americans now can
dency as the year comes to a close than they did
attribute a specific achievement to Clinton. Twentyeven three months ago.
one percent mentioned health care; 19%, the trade
After the Administration's victories on the North agreement; 8%, the Brady bill.
American Free Trade Agreement and the passage of
Health care is an issue that continues to help the
the Brady gun control bill, as well as some public
President significantly, despite some press accounts
acknowledgment of an improving economy, 63% of to the contrary.
Americans now view Clinton as a President who can
Forty-five percent of respondents said that they
get things done, while only 27% do not, according to are paying very close attention to the debate over
the survey by the Times Mirror Center for People
the Clinton health care plan. Support for the plan
and the Press.
itself is also rising. The survey found an approval
rate of 49%, up from 41% in October, and just
In August, by comparison, only 36% of Americans
slightly less than the 53% after Clinton's September
considered Clinton effective, compared with 54%
^speech to a joint session of Congress.
who did not.
The key factors cited by those who support the
The Times Mirror survey, based on interviews
with 1.479 adults from Dec. 2 to 5. has a margin of plan are that it would ensure health security and
universal access (42% now, 43% in September) and
error of plus or minus 3 percentage points. The
that it would change a health care system that does
Times Mirror Center is owned by Times Mirror Co.,
not work (20% now, 21% in September)
^
which publishes the Los Angeles Times. The Times
Opponents, who primarily based their objections
Mirror poll and a national poll by The Times released
on their belief that the plan will not save money, also
Wednesday were conducted separately.
are somewhat more worried now about government
linton's improved standing seems tied directly to involvement (18%, up from 8% in September).
Fewer people (54%) feel Clinton's health care
his recent legislative victories, more than to any
plan will provide universal coverage now than did in
Improvements in the economy, the poll found.
September (64%). Similarly, fewer people know
A growing 39% of Americans said that they had
paid very close attention to the coverage of the that the plan would guarantee coverage for workers
who lose their jobs (44% now, 54% in September).
North American Free Trade Agreement, which will
By THOMAS B. ROSENSTIEL
TIMES STAFF WKITER
W
J
C
And somewhat fewer knew the Republicans had
The Times Mirror survey also asked Americans
offered a specific alternative to Clinton's plan, 20%
whether they approved of the President's job
compared with 24% two months ago.
performance—a question some pollsters believe is
In one of the more striking findings, a majority of too general to have any real meaning, and i l was
the public now believes that Clinton's plan will
moving in specific meaning, and it was moving in
restrict physician choice, 54% now. 45% in SeptemClinton's favor.
ber.
Overall, according to the poll, 48% of Americans
The survey also suggests that, if the economy
approve of Clinton's handling of his job—up from
continues to improve. Clinton could enjoy a further 44% in October—while 36% do not. Sixteen percent
boost. His approval rating is rising now despite
were undecided. (Those numbers are also similar to
Americans' ambivalent feelings about whether the
the separate Times Poll, which found Americans
economy is improving.
approve of Clinton's performance by a margin of
55% to 35%. A much smaller 10% were undecided.)
The number of Americans who cite the economy
as among the country's most important problems, for
On the personal side, the public continues to view
example, has dropped to 33%—down from 47% in
Clinton as warm and friendly (87%) and well
September. 53% in June and 76% in January, 1992.
informed (69%).
Conversely, only 37% of Americans think the
And in concert with his improving image for
economy is recovering now, virtually unchanged
effectiveness, people consider him well-organized
from January, when the figure was 34%.
(59% compared with 47% in August).
optional trim: The survey also found that 56%
Fifty-six percent see him as trustworthy, accordthink the country remains either in a recession or
ing to the poll. And. while 42% still think of him as
depression. (One possible reason for the difference
someone who will break his promises, that figure is
between these results and those in a separate Los
down from 53% in August.
Angeles Times Poll might be because the Times Poll
The survey contained good news for First Lady
asked more specifically whether respondents viewed Hillary Rodham Clinton, too. She received an
the recession as mild, moderate or severe. The Times approval rating of 62% for her handling of her tasks
Mirror survey did not.)
as First Lady, and an almost equally high approval
rating for handling her job as an official adviser to
imilarly, the number of Americans who rate their the president. In both respects. Hillary Clinton's
own personal financial situation as excellent or ratings are about 10 percentage points higher among
good is unchanged since January, about 37%. And women than among men, and they are highest of all
among women under the age of 30 (76% as First
the number who rate it as fair or poor is also
Lady and 70% as a presidential adviser).
unchanged, about 62%.
S
SURVEY: Optimism Noted
Presidential Perspective
Continued from A l
Clinton"? advisors believe thai
President Clinton rates above Reagan and below Bush in a comparison of approval
ratings taken of other presidents at the same point in their first terms.
12%. C l i n t o n has gained s t r e n g t h
aninns.' ' V n m ^ i ! = . r o n s e r v n ! r..
w e l f a r e r e f o r m and job t r a i n i n g
rninrun i i n r e m m
�AID Vnw-Mm. DF/FMBFR ] 3. \wi
Jm. ^ V HN
>I
More in U.S.
Lack Health D
Coverage
GROWING NUMBER OF UNINSURED
uring the period 1989-92. the percentage of Americans
younger than 65 with private health coverage declined, and
the percentage who are uninsured or dependent on public
insurance increased.
Study Cites Pressure
On Small Businesses
By Dana Priest
Wi^Mftoa PTM Sud ffnirr
More than 2 million Americans
joined the ranks of the medically
uninsured last year, the largest
jump in more than a decade, according to a national study released yesterday.
At the same time, the percentage
of working people who received
health insurance from their employers dipped to its lowest point since
the early 1980s as thousands of the
nation's smallest businesses found
tht cost of insurance out of reach,
officials of the Employee Benefit
•r;g r«s may not add to 100 wtcntteckrt*{NOP* mfy TO:*** cortnft from moitt«nOft -A.ft*
Research Institute said.
SOURCE' Emoiovw Benefit Roea^n inimutt
"A jump of this magnitude is surprising," said William Custer, research director at the nonpartisan
research group that compiles the firm with fewer than 100 employ- 18About 27 percent of those aged
to 29 did not have uuunac*.
annual survey from Census Bureau ees.
The decrease in the number of while 16 percent of those aged JO
data. "It adds a lot of pressure to
insurance was to 54 had none. Another 13 penaM
the politics of health care reform." working people withan increase in of people aged 55 to 64 (2.7 nultaol
Nearly 38.5 million Americans somewhat offset by
Americans covered
inaunace. Many
under age 65—roughly 17 percent the number of and other publicly had nobe ronsidf red earlyat tha*
by Medicaid
would
reonM
of the noneWerly U.S. population— funded programs for the poor.
who would qualify for govern mM
did not have health insurance in
While the survey did not
1992. In the past four years, more firms why they did not offer ask paid health care under a conuatm
emthan 4 million Americans have lost ployees coverage, it is widely be- sial provision of the Clinton pin.
About 25 percent ot District n »
coverage.
lieved that the smallest compaThe problem of the uninsured is nies—those with the least market idents had no inwrance while 14
one of the major forces driving the clout to bargain for low prices or to percent of MaryUnders and 17 pamovement for reform of the health slave off large annual premium in- tent of Virginians had no covenfk.
care system. Since the issue made creases—often drop coverage Local health officiala have CM*
its way into the national political when costs threaten their bottom higher uninsuredfiguresrecenthr.
The states with the largest conspotlight, first during the upset vic- Ime.
centration of the uninsured wer*
tory of Sen. Harris Wofford (D-Pa.)
Custer said that as the recession Nevada (27 percent). Oklahoma <»
ui a 1991 special election and then ends, new, small businesses "are
percent), Louisiana (26 perceaU
in the 1992 presidential campaign, less likely to offer insurance."
and Texas (26 percent). The towm*
the problem has worsened.
"The impression the average per- uninsured rates were in Ha wia (•
Despite nationwide, cost-dnven son has is that we're talking about
changes in the health industry—a welfare mothers," said Ron J. An- percent) and Connecticut (10 parrecord 45 million consumers are derson, president of Parkland Me- cent). Hawaii ia the only state that
being treated this year in prepaid morial Hospital, a public teaching requires employers to pay part 4
health maintenance organization hospital in Dallas and the facility employees' health coverage.
Researchers from the Hamrt
(HMO-type
corporauons—the that treated President John F. Kennumber of uninsured Americans nedy when he was shot. "But the School of Public Health, the (
continues to grow at a quickening majority of our patients are working Bureau and private research |
pace.
people. Some work several jobs or say that studies ot the number of
e
Employees of small firms were in small businesses. W have seen a uninsured are actually "snapahou*
particularly vulnerable. According marked increase in the number of of the number without coveng* «
to the Employee Benefit Research persons who never thought they a given moment They say that tha
percenUge of Americans who lack
Institute's analysis. 42 percent of would use a public hospital."
the 2.2 million additional people
According to the institute, about insurance at some point during tha
without insurance last year were 9.8 million children were without year is more than a third higher sa
members of families in which the medical coverage last year, workers lose their jobs or switch
head-of-household worked for a 400,000 more than the year before. employers.
u
WEDINKOVI.DtctMro IS.
U i T»SHIVOTON POST
�InterOffice Memo
To:
War Room Staff
From:
Kim Bollo
Date:
January 5, 1994
Subject:
Recent Polls
^
This memo is to draw your attention to two polls published in the January 10
issue oi Business Week. The first was conducted by the Employee Benefits
Research Institute and the Gallup Organization:
•
20% of Americans have a family member or have themselves passed up
a job opportunity or stayed in a job solely to hang onto health benefits.
•
11% of Americans indicated that they or a family member had been
denied health insurance because of a medical condition.
•
75% of Americans regarded guaranteed health insurance more important
than having unlimited choice of physicians.
On average, Americans are willing to pay $227 a year in added taxes for that
guarantee and $169 a year to guarantee that all Americans have health
coverage.
The second poll, less positive, questioned executives about the prospects for
the '94 economy and different issues affecting their companies. Conducted by
Louis Harris & Associates Inc. for Business Week, they asked Americans the
following questions and received these responses:
Do you think President Clinton's health care plan would
1) be better for your company than the system we
have now?
Yes 15%, No 75%
2) help your company control health care costs?
Yes 19%, No 74%
3) Discourage your company from hiring new
employees?
Yes 32%, No 61%
4) Act as a net drag on the U.S. economy?
Yes 81%, No 14%.
We are following up on the second poll and should have more information
soon if you are interested.
�Cost and Access: Consensus
Quickly Splintersv
i
By ADAM CLYMER
Specul to The New York Times
WASHINGTON, April 12 — "Too
high premiums and not enough health
care." That was how a clerk in Fargo,
N.D.. answered last month when
asked what was the nation's biggest
health care problem.
Her reply was a singular moment
of clarity in the current debate.
In contrast, the arguments on Capitol Hill have concentrated on detail,
process and politics, frequently cast
in incomprehensible jargon as legislators and lobbyists compare hard-toexplain parts of President Clinton's
plan with elements of competing proposals that no one, except perhaps
their sponsors, understands.
The clangor has left the public confused and, recent polls show, perhaps
even less knowledgeable than it was a
few months ago.
The problems Congress is trying to
solve are often drowned out in the din.
But the main points are as the Fargo
clerk identified them: cost and coverage.
Except among some very conservative Republicans, there is a consensus that major gaps exist in the
present system and that costs have
produced a crisis. And as Congress
returned today from its Easter recess, there is widespread agreement
with the message that Hillary Rodham Clinton carries everywhere
these days: "Maintaining the status
quo cannot be an acceptable alternative."
Agreeing on problems is a first step
toward fixing them. But what comes
next is a giant step, because a solution to one problem can make the
next one worse.
The politicians' reluctance to tell
constituents that there is no free
lunch is reciprocated; the public has
not descended on Capitol Hill to say
what it wants to sacrifice.
identifying the Problem
For the Fargo clerk, who would
give only her first name, and hundreds of others interviewed in a recent New York Times Poll, the connection between cost and coverage is
clear: cost means the higher and
higher insurance premiums they
have to pay.
But it is a different side to the cost
problem that is forcing Congress to
grapple with this vast, complicated
issue: health care has become the
monster that eats Federal budgets,
forcing up deficits and starving other
initiatives.
Coverage is largely a function of
insurance. About 38 million Americans have no health insurance. After
years of steadily increasing private
insurance coverage, in the late 80's
more Americans started losing insurance than were signing up. Rising
costs were the main reason. Millions
of other Americans found themselves
with only bare-bones coverage. People without insurance do get medical
care, but it is worse than the insured
receive, although many uninsured
are young and healthy.
Beyond these two biggest problems
are a swarm of other issues, each
crucial to someone. There have to be
more medical personnel in rural
areas if the promise of health insurance is to mean more than possession
of a plastic card. But there also may
be a need to produce fewer specialists.
Doctors think that if change is coming this must be the moment to
change the malpractice lawsuit
system. The elderly argue say now is
the time to provide prescription drug
coverage under Medicare, and at
least a start on benefits for long term
care.
The difficulty is that all these issues, especially in combination, lead
some lawmakers to despair and ask if
it would not be enough to deal with
just a few of the issues, the ones
people agree on, like restraining the
most grating practices of the insurance industry.
But the dominant view is the one
offered recently by John Rother, legislative director of the American Association of Retired Persons. "You
can't solve only one or two without
making the others worse."
The Basics of Care
A periodic report on
hraltlt
issues
national
Federal health spending for care
for the elderly under Medicare and
for the very poor under Medicaid
went to $200 billion in 1992 from $128
billion in 1988. That is a smaller rate
of increase than in group policy costs
and was accomplished partly by medical providers' shifting costs onto patients for whom the Government does
not pay. Nonetheless, it is still much
more than the Government can manage in an era when it is beginning to
take the Federal deficit seriously.
States are no better off. The National Association of State Budget OffiCosts
cers contends that states' spending
for their share of Medicaid went up 22
percent in 1991 and 33 percent in 1992.
Steven D. Gold, director of the Center
for the Study of the States at the State
University of New York at Albany,
About 14 percent of the United argues that those figures are exagStates' gross domestic product is gerated and that the real increase is
spent on health care. That is a great- around 17 percent in each year, but
er share than any other country that even so, Medicaid is the fastestspends, and it could reach 19 percent growing component of state budgets.
or 20 percent by the end of the centuIn 1994, Mr. Gold said, the 50'States
ry
together "are spending more for
To most people, the issue of cost is Medicaid than for higher education."
more personal: soaring bills. Many
Why are costs going up?
employers never tell workers how
Dick Davidson, president of the
much the company pays on their be- American Hospital Association, arhalf, but benefits have been cut back gues that the answer is this: "We pay
and employees' payments have been for medical care on a piecework basteadily increasing. The Health In- sis. There's an incentive for more
surance Association of America says medical encounters."
the cost of family coverage under an
Dr. Philip R. Lee, Assistant Secreaverage group insurance plan went to tary for Health in the Department of
$436 a month .in 1992 from $235 in Health and Human Services, says a
1988, an average annual increase of surplus of specialists causes more
17 percent.
spending than necessary.
In medicine, an excess supply of
A Formidable Deficit
• services does not drive prices down;
For people who have to buy individ- instead, it seems to drive demand up.
ual insurance, the increase has been "When a physician goes into praceven steeper, "20 percent or a little tice," Dr. Lee said, "you generate
bit more than that" a year, says Cecil more costs, ordering lab tests, doing
Bykerk, chief actuary for the nation's X-rays, in some cases doing promajor individual insurer, Mutual of cedures."
Omaha. Their premiums are vastly
higher, too, because high administralive costs and a lack of bargaining
power mean that only about $55 out of
Access to Care
every $100 in premiums goes to pay
claims. In large group plans, as much
as $90 may go to claims, meaning the
insurance company charges less for
the same benefits.
Those difficulties might not have
seized the attention of Congress and
Health insurance is not the same as
the Administration if the Governappropriate care, but it is the first
ment did not face sharply rising bills,
step. The 38-million figure used by
too.
President Clinton for the number of
uninsured is just a momentary snapshot, because people go on and off
insurance rolls, especially as they get
jobs or lose them. Diane Rowland,
senior vice president of the Kaiser
Family Foundation and a leading student of health statistics, says she
believes that about 50 million Americans lack insurance at one time or
another in the course of a year.
Conservative Republicans often argue that too much is made of the
number of uninsured people, because
Medicaid is available to the poor, or
at least the very poor. And that belief
exists, says Mr. Davidson, the hospital association president, because
hospitals have boasted they treat
anyone who comes in, regardless of
Rising Rates
Across the Board
How to Help
The Uninsured
a.
Q
oo
2:
>
•
Q
W
o"
n
m
S
o
Ui
Z
Ui
X
�whether they can pay for it. While the
boast is accurate for life-threatening
circumstances like emergency appendectomies, Mr. Davidson says, it
is not for postponable treatments like
hip replacements.
Indeed, a book on the problem.
"Falling Through the Safety Net." to
be published next month by the Johns
Hopkins University Press, concludes
that being uninsured "has a substantial effect on the amount, location and
even quality of care received."
The authors, Joel S. Weissman. who
teaches health policy at the Harvard
Medical School, and Dr. Arnold M.
Epstein, a domestic policy adviser at
the White House, say the insured have
less primary care and less preventive
care. "People who lack insurance delay care," they write, "and there is
evidence to suggest that they come
into the hospital more severely ill.
They may also be hospitalized more
frequently for conditions that could
have been treated on an ambulatory
basis."
In addition, the authors say, "there
is also emerging evidence that the
quality of their care may be compromised."
Mr. Bykerk, the Mutual of Omaha
actuary, says that only 1 percent to 2
percent of the public is "uninsurable," meaning that they have "such
a bad health condition that under
today's conditions a typical insurance
company would not insure them under any circumstances."
But many millions more have
health conditions that either mean
much higher rates or exclude that a
particular problem from insurance
coverage. People usually have to be
insured anew when they change jobs,
and many fear that they will not be
approved. If a person loses his job, his
insurance is usually lost. too. Small
companies that provide insurance
can find that one worker's sick child
can cause their rates to soar or for
them to be told that unless that worker is excluded, the insurance will not
be renewed.
Doctors and hospitals alike contend
that antitrust laws scare them out of
getting together and agreeing on;
ways to eliminate expensive duplica-:
lions. (Mr. Davidson says that as far
as hospitals are concerned, the Clinton Administration is easing the antitrust tear by spelling out the rules in
advance.)
Only organizations representing
ihe elderly have made an issue out of
prescription drug coverage. Still,
there seems to be widespread agreement that a change in medicine since
Medicare was enacted in 1965 away
from hospitalization and towards
greater use of prescription drugs supports the demand for adding a prescription drug benefit to Medicare
now, though the expense is scary.
While the elderly annually spend
about three times as much on prescription drugs as do other Americans, nearly two-fifths of them have
no insurance to cover it. So Mr.
Rother and his group's members,
who vote heavily, see coverage as the
bottom line.
The result is a worried nation. Thirty percent of the public, in the Times
poll last month, said they were " v e r y
concerned" that in the next five years
they would lose their insurance.
Insurance companies today, unlike
the Blue Cross agencies lhat really
" I f you don't have coverage for
began hospitalization insurance in
prescription drugs for my people,"
the 1930's, look for good risks and
Mr. Rother said, " i t ' s like not having
charge people differently. Even the
health care."
Other Issues
Health Insurance Association of
Then there are other, widely acAmerica does not defend these pracknowledged problems in the health
tices and would be willing to see them
care system, ones that affect its spirit
barred, so long as the rates of good
and that none of the overhaul proposrisks could be raised to pay for cover-, als seem-to'cornbat. One is~paper- >
age of poor risks.
w o r k ^ E i g h t y : t \ v o -percent^ of j t h e
Though there is wide agreement
A less clearly defined issue is mal.adulis^tKthat#TTmes poll ^said t h e r e ; ^ .
that controlling costs and broadening
practice litigation. Doctors and most < w a s ^ ^ W - t e w 6 r k - i n - h e a l i h
access are the goals of overhauling
Republicans regard it as a very seri- ({care today. /
health care, the list of serious probous burden, not only because some
A—relat'ed" problem is the tone of
lems does not stop there.
plairaiffs win immense verdicts but
modern medicine for its practitionOne problem is the question of
also because the threat of being sued
ers. The steadily growing private ef- ;
whether the United States has the
forces wasteful habits on doctors who
forts to cut costs require continual ;
right number, in the right mix, of
overtreat in self-defense. In some
checking with insurance companies, ;
primary care doctors, specialists,
fields, particularly obstetrics, soar
and doctors do not like it, saying it :
nurses and physician assistants.
ing insurance rates have driven docdenies them the dignity they expected
There is a consensus that the nation
tors out of business.
when thev picked their profession.
produces
too
many
specialists, I
As Dr. James S. Todd, executive ;
though there is also fierce disagreeCounterpressures, from lawyers'
vice president of the A.M.A., said, :
ment on how to slow the increase.
organizations and genuine skeptics
"They have to call 1-800-CONTROL ;
Linda Aiken, a professor of nursing ; about the medical industry's commitbefore thev can do anything."
I
ment to policing its own quality, have i
and sociology at the University of
stalled past efforts to change the laws
Pennsylvania, argues that the nation
on malpractice. That skepticism perought to be using twice its current
sists. " I ' d like to see the A.M.A. re-i
total of 35,000 nurse practitioners and
duce their fees in return for malpracought to ease the restrictions many
tice reform, " said Mr. Rother, who
states place on what those practitionhas often battled the American Mediers can do, such as prescribing drugs..
cal Association on behalf of retired
The nurse practitioners do provide
people.
basic care both in places where there
are no doctors and in place of more
expensive physicians in health maintenance organizations and other
forms of collaborative medical practice.
SNAPSHOT
But there is also a widespread
sense that more personnel alone will
not solve the problem of access, either in rural areas or urban slums.
Dr. Lee, the assistant secretary, says
The number of uninsured
Average monthly premium
that in the slums in particular it is
to insure one family, under a
Americans, m millions.
far-fetched to expect many doctors to
conventional plan.
open up practices because "the environment is just too difficult." But he
$284 i
MXmlBton
says the problems are least severe in
•89
areas served by networks like the one
established by Montefiore Hospital in
$319 1
"0
9
the South Bronx. Similarly, a rural
network of clinics, nurses, hospitals
•91
and^doctors has minimized the per$351
sonnel shortages in the open spaces of
the Dakotas.
$438
"92
Few health care problems evoke
such widespread complaint as insurance practices. Insurance companies
No 1993 figures available.
have an endless variety of rates and
Sources' Em tovee Benefits Research institute i-teaun insurance Association o' America
policies.
Cutting Specialists,
And Lawsuits, Too
:
f
Care: Less Available, More Costly
Tlie NPW Y U I k T i m o
THE NEW
YORK TIMES, WEDNESDAY,
APRIL 13, 1994
�ic-harrispoll
'POLL S O S SMALL DECLINE
HW
IN PRESIDENT'S JOB RATING
By HUMPHREY TAYLOR=
Gannett News Service=
WASHINGTON President Clinton's job-approval r a t i n g has dipped a b i t i n
the l a t e s t H a r r i s P o l l .
The p o l l shows t h a t 48 percent of those surveyed approve o f the job
Clinton i s doing, w h i l e 51 percent don't.
I n February, the H a r r i s P o l l showed 50 percent approved of the president's
work and 48 percent gave him a thumbs-down.
The new r e s u l t s stem from a p o l l of 1,255 adults t h a t was conducted A p r i l
4-7. I t has a margin of plus.or minus three percentage p o i n t s .
When respondents i n the p o l l were asked t o name t h e i r top two p r i o r i t i e s
f o r the government t o address, health-care reform topped the l i s t a t 41
percent, ahead of crime, 33 percent; and jobs, 15 percent. _ _ _
___
When asked a somewhat d i f f e r e n t question <^hat -^are~ ~'the two most serious
problems-facing thir_^oUhtr^4JU^qr,ime, 52 percentV^jumped~to"~tKe~top of^the
l i s t , weir ahead ofcRe^lth^-care,,, 21 percent;, and drugs a t 18 percent.
-
Humphrey Taylor i s president and CEO of Louis H a r r i s and Associates Inc.
****
f i l e d by:GN-F(—)
on 04/10/94 a t 13:20EST ****
**** p r i n t e d by:WHPR(l62) on 04/11/94 a t 07:19EST ****
TV
•-h
:V
�THE WISHIIVGTON POST SUNDAY. APWIL 3,1994
Are Americans Willing to Pay,,;;?
The Cost of Universal Coverage?
mittee, where the staff is beginning to pull together a draft
for Chairman Dan Rostenkowski (D-Dl.) to use in memberWariiin(U« Pox SufT Writer
by-member bargaining after the congressional recess.
The issue is, Rep. Nancy L. Johnson (R-Conn.) likes to Congressional sources said Rostenkowski wiD Skeb* .
say, "the bone marrow" of the health care debate: Is the use a version of the bill passed by his health subcomnut- , .
public willing to pay the cost of guaranteeing health cov- tee and one he introduced in 1991 as a starting point..,erage to all Americans?
Both expand Medicare to cover the uninsured and the
After a year of high-profile debate, President Clinton's poor and included a requirement that employere pay for. .
call for "universal coverage" has become such a widely part of their employees' health insurance.
accepted goal that even Republican opponents use it to
Under Medicare, the federal health care program for ,
pitch their plans.
the elderly, the government sets the rates for paying
But public opinion pollsters and the recent experienc- doctors and hospitals. In 1991, Rostenkowski pre
es oi members of Congress trying to advance legislation funding the expanded program with a 9 percent pa;
suggest it is not at all clear how firm the conunitment is tax. But sources predicted last week that such a tax is
to put money behind the ideal.
"unlikely" to be in this year's committee bill
Under the Clinton {dan the poor and uninsured would
Two similar polls show that public support for increased taxes or premiums tofinancehealth coverage use government money to buy health insurance froni
for everyone has declined 691165 percent to 48 percent competing health plans.
in the space of a few months':
Last month Rostenkowski predicted his bill would tt";
The central question in this whole debate is how to pay "much more conservative" than the Clinton plan and that
for it," said Robert Blendon, an expert in health care and members "will not fall on their swords" to pay for insuf*'
public opinion at Harvard University's School of Public ance for every American, although it is a goal he said he
Health. "At the moment, there's not an obvious willing- wants to achieve.
ness."
Other polls pose difficulties in judging public sentiment
Uwe Reinhardt, a Princeton University economist and 00 the issue. For example, a recent Time/CNN poO
health expert, said the real problem with thefinancingis- showed the public split when offered a choice between
sue boils down to the level of public commitment to solve univenal coverage with higher taxes and one that holds
taxes steady, but fails cover everyone.
the problem of the uninsured
But when pollsters for NBC News/Wall Street Journal'
"It we tell [lawmakers] our ethics, theyU do the policy," he said recently. "What the debate shows is an un- asked people to choose between the Clinton bill and an &•
spoken, tough disagreement over our social ethic
It tentative bill that would not raise taxes but might leave 10:
has to do with being our brothers' and sisters' keeper. milbon uninsured, the public supported Clinton's plan 3 to
1.
We have the money, are we willing to do it?"
The White House went out of its way to develop a plan Asked whether they would be willing to pay more in mthat did not ask Americans to face the question directly. surance premiums or taxes so everyone could get health
The Clinton plan limits consumer tax increasestoa ciga- coverage, 65 peroent of those polled by the Harvard pubicrette tax. But recent polls show the public believes uni- health school last year said yes, and 30 percent said no. In a
versal coverage will mean increased taxes anyway, no recent poll conducted by the University of Cincinnati's In-.
stitute for Health Policy and Health Services Research*
matter what the White House says.
That is the gnawing fact of life faced by three of the however, only 48 percent of those answering a similar
five committees trying to weave together reform bills. question said yes, while 40 percent said no.
The White House remains convinced that it has sohd
"No one wants to pay, that includes members d Congress," said Energy and Commerce Committee Chairman support for the new insurance purchase requirement on
John D. DingeD (D-Mich.), who has been negotiating with business and for the broader goal of universal coverage.
members of his committee over the past few weeks.
it's nonnegotiable from the public's point of view,"
Dingell is said by congressional sources to be at least said White House poUster Stanley Greenberg. "But there
*:
three votes short oi getting the 23 votes he needs to is a growing sensitivity to cost."
pass legislation out erf his panel The three Democrats he
Greenberg predicted that the debate over the employer ;
is courting—Reps. Jim Slattery (Kan.), Richard H. Leh- requirement would be largely over in a month when the;
man (Calif.) and Rick Boucher (Va.)—are all resisting major House committees havefinishedtheir work. The*
Dingell's proposal to require employers to pay part of White House worked hard last year to create a biD that*
their workers' health insurance.
wouldfinancecoverage for the 39 million uninsured Amen-1
"If you ask people, 'are you for guaranteed health insur- cans without a broad-based tax. They believed an upfront;
ance?' they say yes," said Boucher, i f you ask them 'are tax would be politically unacceptable, in part because it!
you prepared tofinancesuch a plan?* you get an entirely would be perceived as a redistribution of income from the:
;
different answer 'We don't think we're ready to do that.' " middle and upper-middle dass to the poor.
The employer requirement, they argue, expands on the ;
Boucher, whoee rural district in southwestern Virginia
consists overwhelmingly of mooMBd-pop enterprises, said current system and is therefore less disruptive. About 63;
that even with government subaidies for smallfirms,he percent of nonelderty Americans get coverage at work, ac- •
cording to the Employee Benefits Research Institute.
•
would be taking ariskto vote for Dingell's bdL
To counter concerns that the requirement would harm
The public here is not prepared for a fundamental,
mL
sweeping reform," he said. "As of today, they favor narrow M a husmPsiMk the White House proposed subsidies:
fa low-wagefirm*.The money for them was supposed:
solutions to well-identified problems."
Sources say the employer amnnce purehasinf require- to come from saviags in existing government programs;
ment is also die sharpest point of contentioa oftAe Senate and from a 1 percenUax on certain large coshpanirs with;
'
;
Finance Comnjlttee and thetiopatWays and Metfs Com- more ttafc 5,000 emitoyees.
By Dana Priest
2*
�MAY 11 '34 13:23 FRO I'l GREENBERG-1 NC
TO
HEALTH CASE PLU
W3LL
LAST D T
A
OP CALIINO 3I2E
FAVOB OTTOSE
456743.
PRGE.004/004
HMBLIW W- HtALTN CMC
APPKNE DISAPPR DK
OK
HARRIS POLL
HAkkIS POLL
KABRIS POLl
2/06/94
11/93
10/06/93
1252
59
1236
ss
64
34
34
30
LOS
LOS
LOS
LOS
t/19/94
1/19/94
12/07/93
9/28/93
1M7
1S14
1612
1491
41
4B
52
54
34
33
31
24
23
10
17
22
5/03/94
3/06/9*
1/16/94
12/14/93
10/24/93
09/22/93
1002
1S03
10O9
1002
1508
030
U
37
42
47
47
51
44
45
39
32
37
18
?0
18
19
21
IA
31
2/04/94
9/24/93
7/01/93
750
751
744
750
750
41
55
34
27
25 (GOOD/BAD FOK {.HlHM
18 ( O D B D F R CNTRY) 51
GO/A O
37
43
53
39
44
43
41
43
50
43
57
44
39
43
45
/2
.
33
36
31
15
13
14
14
15
17
21
12
ANCELES TtlCC
AIGtLES TINES
ANGELES tints
ANGELES TIMES
NSC/WALL STCCCT JOURNAL
NHC/MLL STREET JOURNAL
NBC/UALL STREET JOURNAL
NBC/WALL STREET JOUMil
NBC/WALL STREET JOURNAL
NBC N W
ES
•wwe
Escr
NWWE
ESEK
NWWE
ESEK
NEVSUEEK
NCUSUEEr
4/23/93
TIME/CNN
TIHE/CNH
TINE/CNN
TIKE/CNN
TI«/CNN
TIRE/CNN
TIHE/rUN
TIME/CNN
4/21/94
4/07/94
3/10/94
3/03/94
2/10/94
1/18/94
10/28/93
9/23/9?
600
800
800
SOO
SOO
1000
500
TIMES MIRROK
TtlffS MIRROR
TIMES HliaO)
12/05/93
10/24/93
9/27/93
1479
1200
1S?9
49
41
53
32
37
25
1UUU
48
35
19
17
16
16
43
42
32
10
6
12
19
22
22
8/31/93
30
46
41
3)
17
U.S. N W
ES
b y 11. I M
An
n
47
52
54
GREEIBERQ RESEARCH, IMC.
**
TOTRL
POGE.004
**
�Foster's death: Theories still abou
By juu> Keen
USA TODAY
A year ago today, White House deputy
counsel Vincent Foster committed suicide.
That's the conduskM readied by
Whitewater special counsel Robert
Fiske in a June 30 report. He found no
link between Foster's demise and President Qinton's Whitewater land deals.
"Any loss like that, you want to remember the good and not dwell on the
loss," says Thomas "Mack" McLarty, a
senior adviser to President Clinton. Foster, Clinton and McLarty knew each other since kinder^nea
"The Fiske report did put to rest a
number of the issues that to me never
had much substantive base. They have
been fully addressed," McLarty says.
But myriad theories about Foster's
death are the most lurid and stubborn aspects of the convoluted web of controversies known as Whitewater.
Flake's Judgment, which reaffirmed
law enforcement rulings, and next
week's congressional Whitewater hearings wont end the speculation.
"Conspiracy theories never die," says
White House counsel Lloyd Cutler.
Conservatives like Rush l.imhnngh
and Jerry Falwell are Steeping up the
drumbeat of skepticism about how and
where Foster died.
Rep. Dan Burton. R-Ind, says the
whole story isn't known. "We're not
paranoid. We're not conspiracy theo-
rists. People elected us tofindthe truth."
Persistent partisan questions about
Foster are one reason Whitewater wont
soon evaporate. There's still pleniy of investigating going om
• Fiske hasntfinishedlooldng into
the removal of documents from Foster's
White House office after his death.
• Fiske is in the early stages of his
probe of Clinton's Investment in Whitewater and financial relationships between their partner's failed thrift and
Ointon gibernatorial campaigns.
• Once Fiskefinisheshis work, there
will almost certainly be another set of
congressional hearings
There will have to be," says New
York Sen. Alfonse D'Amato, ranking
Senate banking committee Republican.
Clinton's support declines
President Clinton and first lady Hillary Rodham Clinton are both losing support in the polls.
The president is taking a big hit on approval of the way he works, and favorable opinion of
him is dropping:
More disapprove of the way Clinton is handling his job:
60%
t USA
TOIW
GALLUP B
50%
F w r approve
ee
Qinton's perfonnance
Smaller percentages approve
of the way the president is
handling;
• J a n . 17 | Now
1
1993
"
1994
Clinton loses most among women and those over 50
Percentage of people approving of president:
| Now
• Jan. 17 |
Q Jan. 17
50%
sr/.
42%
I
en
Men
I 43%
Women
49%
5 4 %
^
^1144% I J 43% I {41%
2!LL44%
18-29
18-29
30-49
50+
Rrct lady's support drops, too
Economy
Healthcare
policy
Bo
del
Crime
The percentage of respondents with a favorable opinion of the
first lady has dipped.
• G O P Q Democrats
48%
1/93
36%
54%
9/93
33%
40% rFavorable!
37%
28%
%
7/94
33%
29%
By Marcy E Mullins. USA TODAY
Clinton also loses personally
1994
H b y loses most among women
Uu
Stands up for what he believes
Percentage of those with a favorable opinion:
Q Jan. 17 Q April 24 | Now
63%
63%
46%
Shares your values
Keeps promises
Cares about people like you
Men
9
1/94
Honest, trustworthy
1993
49%
2
46%
34%
Tough enough for the job
20%
0%
l
Smaller percentages think these qualities apply to the president:
Q Jan. 17 | Now
.u.^
l62%
Can get things done I
[
60%
52%
For the first time in more than
two years, respondents see
Republicans as more able to
solve the nation's problems.
Foreicjn
affairs
Now
'
Republicans now leading
Democrats as problem solvers
Women
Sourer USA TOOAY/CNN/QaUup Po» at 1,001 adults natJonwtd* oo July 15-17 by Maphonr Margin ol m r . ±3 pwMntaga potrrta.
�SRN' SPOT
TOG UP R
m HAT PAS
ELH LN
THE NEW YORK TIMES, WEDNESDAY,
JULY 20, 1994
right."
Eight of 10 Americans Back
Universal Care, Poll Says
By MAUREEN
DOWD
f \
Amid the cacophonv of warring
health care plans and partisan jibes,
the public remains strongly commuted to getting a plan passed and continues to endorse universal coverage.
Americans are now as concerned
about health care as they are about
crime, and a majority say they are
willing to pay higher taxes to get
everyone insured, according to the
latest New York Times/CBS News
poll.
Eight in 10 polled continue to say
that it was "very important" that
every American receive health insurance coverage.
"The President should not compromise on that," said Roberta Lake, a
21-year-old graduate of Wooster College in Ohio who has moved back to
her mother's house in Maryland until
she begins an internship with the
dean of black students at Wooster.
"This is a biggie for me because 1
was diagnosed last summer with
multiple sclerosis, and I'm not insured. The percentage of Americans
who would get left out are those who
need it most."
Miss Lake was one of the respondents who agreed to follow-up interviews after participating in the nationwide telephone poll of 1,339 adults,
taken Thursday through Sunday. The
poll has a margin of sampling error
plus or minus three percentage
points.
I
—President Clinton s still having ;
trouble getting traction on a spectrum of issues. His overall job approval rating slipped slightly to 42
percent, just about the same percentage that elected him in 1992, and
public confidence on his foreign affairs performance continues to erode.
While he has succeeded in pushing
health care to the top of the national
agenda, Mr. Clinton has not benefited
(rom it politically because he is mired
in growing skepticism about Washington's ability to quickly pass anv
sort of health care plan.
Most people said they would be
disappointed
if Congress never
passes a health care plan, and a substantial number — 39 percent — said
they would be less likely to re-elect a
member of Congress who voted
against a health care plan.
The yearning for overhauling the
health care system and attaining universal coverage clearly has a wistful
side, since 78 percent of those polled
now say they think Congress will not
be able to agree on a plan before the
end of the year.
Leonard Smith, a 40-year-old unemployed plumber and part-time
farmer from a town in southeastern
Iowa called Figourney — "You know,
like that actress Sigourney Weaver'
— sees it this way: "Clinton's trying
to do something that needs to be done,
but he himself doesn't have the power
to do diddly squat. If the Democrats
are for something, the Republicans
automatically think they have to be
against it. They won't work for what's
If Mr. Smith was resigned. Estia
Douglas, 68, a grandmother and Democrat from Orlando, Fia., was riled.
"The Republicans are coming up
with a lot of garbage about how we
can't afford to cover everybody," she
said. "Well, we couldn't afford to send
a man on the moon either, but we did,
didn't we?"
Although the public has a clear
preference for universal coverage, a
slight majority believed that it would
be all right if Mr. Clinton compromised at 95 percent coverage.
" I t ' l l have to be scaled down, it'll
never pass the way it is," Mr. Smith
said. "Clinton is like the guy who
wants $75 for his bicycle so he asks
$150 to start with. It's just a selling
game."
Clinton Compromise Urged
Roma Templeton, 39, an office supervisor from League City, near
Houston, agreed that the President
"should compromise on a few things
to get it passed and then work on
those things later."
Ms. Templeton said she was not
averse to higher taxes. "Either you
pay more in taxes or you pay more in
health care," she said'. "It's one or the
other."
Like others interviewed, she suggested that perhaps Mr. Clinton and
his wife, Hillary, should have brought
the country along a little more slowly.
"The way he presented it, he just
threw this whole big, huge issue at
you. No one had time to digest it or
pick it apart. Whenever someone acts
like it's his way or no way, I just draw
a line in the dirt and say I ain't
crossing that line."
Reflecting the deepening disillusionment with Washington, there has
been a slight erosion in the size of the
majority that believes m the Government's responsibility to guarantee
medical coverage, and in the size of
the majority-thai is-willing to pay
higher taxes to get universal coverage.
Split on Abortion
The public was split on the issue of
employer mandates and abortion
coverage.
Forty-nine percent said employers
should be required to pay most of the
cost of health insurance for all their
workers, while 40 percent said employers should only be required to
offer their workers a chance to buy
their own health insurance.
Fifty-three percent said abortion
should not be covered by a basic
health care plan, but 16 percent wanted abortion automatically covered,
and 28 percent said it should be an
available option.
As ihe Clintons lead a selling blitz
this week on their health care plan,
they will at least find an audience
thai agrees that the problem is pressing. For the first time this year, when
asked to name the most important
problem facing the country, 19 percent chose health care, equal to the 19
percent that cited crime and violence.
Hillary Rodham Clinton's favorability rating has risen slightly from last
spring, with 38 percent now expressing a positive view and 26 percent a
negative one.
Some of the male respondents interviewed after ihe poll talked about
their lingering difficulty in adjusting
to a First Ladv with overt power.
Charles Jansen. a 72-year-old retired electronic technician from
Wichita. Kan., complained that Mrs.
Clinton should not be helping make
appointments since she was not elected. Mr. Jansen. a Democrat, was
asked what his wife, a Republican,
thought.
" I ' m afraid to ask her." he replied.
Summoning up his nerve, he asked
his wife, Dorothy, how she felt about
the First Lady and reported back:
"She gave a typical wife answer, that
the woman should have input into
White House decisions."
The President's rating on nandimg
the economv has been stable for
months at 43 percent. But, peppered
by stories about Haiti, Rwanda, Bosma and North Korea. Americans are
more dubious about the 47-year-old
President's ability to navigate the
gray waters of this nerve-racking
post-cold war world. The approval ol
his foreign policy stewardship has
slipped to 36 percent, from 50 percent
in January.
Asked about Mr. Clinton's ability to
: deal "wisely" with a difficult internai tional crisis, only 32 percent expressed confidence, while 64 percent
said they were uneasy.
"He drifts a little bit too mucfl,; „,
Mr. Jansen said. "Right or wrong,-h*>
should pick out a way and stay wiDu
it."
T
"He's a great talker, he says a l o t
of stuff I like to hear, but then nothing
happens," Mr. Jansen continued, add' ing somewhat cheerfully, "I'm-not
going to be around in another 40
i years, so I won't have to worry about
j t anyway."
Roberta Lake said she worried thav
i Mr. Clinton needed more experieitegd
: hands around him. "1 guess it's goed
putting trust in my generation," Sftg;
said. "But 1 know how 1 am arwW'
wouldn't want a bunch of 21-year-dJS^;
running things."
ZZSl
Although some White House otti"
cials worry that Paula Jones's sexiiflOC
harassment suit might be a drag onthe President's poll numbers, a rna?^
jority of those polled continued to sav
that Mr. Clinton has "about the sat&aT
honesty and integritv as other Presidents."
s,iZ
With Congressional hearings on-ttoX
Whitewater matter scheduled to OF]
gin next week, nearly half of tbae^
polled continued to reserve judgm^jlT.
on whether the Clintons did anything:
wrong.
J.ZHer words laced with the twan^-oi
her native West Virginia, Mrs. Douglas, the Orlando grandmother, declared that Mr. Clinton was '-Uhe
greatest President we've had in m\
lifetime."
�She J e |}ork Simcs | CBS NEWS Pol 1
SW
Americans' Attitudes on Health Care
What is tne most imoortant
DtoDlem tacmg tne country
toaav
Should President Clinton suck
'.o ms coal or maKino sure lOQ'vc
o* Americans nave neaith
nsurance coverage?
Not very
important 3% —
7
How important is it that even,American receive neai;n
insurance c o v e r a a e
compromise
so tna; 95%
ot Americans
are covereo
53%
9
Somewhat
imponant
17%
Q
tn
W
Z
Q
I
to
Very
important
0
79/<
'94
J
F
M
A
IH
J
J
Should employers be required
to pay most of the cost of
health insurance for their
workers or should they just
be required to make available
insurance that workers
can pay for?
. -it
Will Congress pass a health care
plan before the end of this year
or will they be unaole to a g r e e
9
80%
70
If. in the next year. Congress
ooes not pass any health care
reform, and the current health
care system continues as it is.
would you be pleased
or qisaopomted?
j <
JUll
'- - 1 -
*
Z
60
Unable to aqree
50
40
Make
available
40% —
'tpB^'
* "
30
20
Disappointed
69% .
10
0
9 4
J
F
M
A
M
j
J
Based on polls conducted by The New York Times and CBS News The latest
poll was conducted by telepnone July 14-17 with 1.339 adults nationwide
How the Poll Was Taken
The latest New York Times/CBS News
Poll is based on telephone interviews conducted July -i4 tw-l? with 1.339 attahs
around the United States, excluding Alaska and Hawaii.
The sample of telephone exchanges
called was selected by a computer from a
complete list of exdianstes in the country.
The exchanges were chosen to assure
trial eacn region of the country was represented in proportion to us population. For
each exchange, the telephone numbers
were formed by random digits, thus permuting access to both listed and unlisted
numbers Within each household, one
adult was designated by a random procedure to be the respondent.
The results have been weighted to take
accoum of household size and number of
telephone lines into the residence and to
adjust for variations in the sample relating to region, race, sex, age, and education:
— In theory, in 19 cases out of 20 the
results based on such samples will differ
by no more than three percentage points
in either direction from what would have
been obtained by seeking out all American adults.
For smaller subgroups, the potential
sampling error is larger For example,
for blacks, it is plus or minus nine percentage points.
In addition to sampling error, the practical difficulties of conducting any survey
ol public opinion may introouce other
sources of error into the poll Variations ;
in question wording or the order of ques- i
lions, for instance, can lead to somewhat i
different results
DIARY
Health Care Developments
WHITE HOUSE
In an appearance bh the"ABC~News" program "GaocTMoming
America." Hillary Rodham Clinton endorsed coverage for everyone
"The only thing that will work is to get everybody into the system
sne said. Asked if the White House would insist on universal
coverage in any bill, she replied. "Well. I think that if you don't msis'
on it at least being phased in at some point, you will make the
problem worse "
CONGRESS
The Democratic leadership in the House met with heads of the nean
committees, who are putting together an initial effort at a consensu
pill. They expect to have il ready by the end of the weeK. ana will
oeam showing it to members of the Democratic caucus, looking for
further refinements that can get tnem to 218 votes, the number
needed for passage. Speaker Thomas S Foley repeated his
determination to get a vote on a Pill Pefore the House adiourns for i:
August recess, now scheduled to begin Aug. 12. but widely
predicted to be pushed back.
5
YESTERDAY
President Clinton and Senator Bob Dole of Kansas, the minority
leader, addressed the nation s governors on health care while leaders
n Congress continued their work on legislation.
GOVERNORS
m a soeech ;o tne National Governors Association President Clinton
softeneo his can tor insurance coverage for all Americans, saying that
95 percent or 98 oercent might do. One aav after tne governors
reiectea nis prooosai mat emoiovers pay much ot tne cost ot their
workers insurance Mr. Clinton suggestea to the group at its meeting
m Boston that ne would consider otner financing methods, though he
thought empfoyer payments were fairest and best. Senator Dole,
speaking betore Mr. Clinton, said the President had tried to do too
much, too soon. He added that the President s oroposals for
universal coverage financed in large part by payments from
employers were d e a d " m the Senate.
LOBBYISTS
Rock the Vote the group that organized a campaign to get young
people to register to vote m 1992. began an effort to distribute a
million copies of a nonpartisan guiae to health proposals Organizes
also released a survey that found that many young people nad to
foreoo medical care in the past year Pecause tney could not afford
�
Dublin Core
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Title
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Health Care Task Force Records
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White House Health Care Task Force
Is Part Of
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
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William J. Clinton Presidential Library & Museum
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2006-0885-F
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White House Health Care Task Force
Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 3
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Box 24
<a href="http://clinton.presidentiallibraries.us/items/show/36148" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
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Clinton Presidential Records: White House Staff and Office Files
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William J. Clinton Presidential Library & Museum
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3/16/2015
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42-t-12093080-20060885F-Seg3-024-006-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/d9ef720cd644bc8bf48c4d2afb2083df.pdf
77d748d88d078fa40b05e72b8710947d
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4786
FolderlD:
Folder Title:
Jackson Hole Group
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
3
3
�JACKSON HOLE GROUP
February 2, 1993
Dear Ms. Hillary Rodham Clinton: Several weeks ago, prior to your accepting a leadership role with the Interagency Task Force on
Health Care Reform, I had invited several senior Administration officials to the February meeting
of the Jackson Hole Group. This meeting will focus on both the public and private sector
implications of adoption of managed competition reforms by the Clinton Administration. Our
discussion would be greatly enhanced, and we would be most honored, if you could join us as
well.
The Jackson Hole Group is a changing and unstructured group of individuals who meet in my
home as part of an effort to develop better approaches to the delivery and funding of health care.
This technique has allowed these leaders of private sector health care organizations to articulate
the many strengths that their organizations possess and the contributions they have made, while
also confronting the fundamental failure of the system they have helped to sustain. Our
discussions have proven remarkably successful at persuading these leaders that the time has come
to adopt fundamental reforms, and that their organizations must move into a new alignment.
While the Jackson Hole Group may be perceived by some as an interest group acting in defense
of established private sector interests, I see it as a vehicle for influencing the positions of those
interests while benefittingfromtheir expertise and power. Many of these leaders have come a
long way, now accept that the era of indemnity insurance and individual fee-for-service medicine
is coming to an end, and are ready to embrace more radical reforms envisioned by managed
competition.
The vitality and strength of the Jackson Hole discussions seem to come from a delicate
mechanism: participation by the important and well-informed stakeholders of American health
care under the protective veil of informal and candid conversation in a setting far removed from
the board room and hearing room. Participants at the February 20 meeting (see attached roster)
will include:
- the senior executives of insurance carriers representing over 120 million Americans,
- leaders of major health maintenance organizations covering over 10 million people (over
one-fourth of all HMO members in the U.S.),
- executives of the American Medical Association, American Group Practice Association,
and Federation of American Health Systems representing physicians, large multispecialty
clinics (such as Mayo), and over 1000 hospitals,
M A I L I N G ADDRESS:
P.O. Box 350
Teton Village, WY 83025
U P S / F E D E X ADDRES
Phone: 307/739-1176
•
Fax: 307/739-1177
6700 North Ellen Creek Ro;
Jackson, WY 83(X
�- several major purchasers of health care, such as the General Electric, Carlson, and
General Motors companies, and the Washington Business Group on Health,
- the chairman of the Pharmaceutical Manufacturers' Association and leaders of two of
the world's largest pharmaceutical companies, Glaxo and Merck.
Discussion at these meetings has been increasingly forthright, since participants have come to
realize that their own organizations' successes of recent years have been built upon an unsound
foundation. They now recognize that the long-term health of their organizations and professions
is only assured if they take the initiative, along with Federal and State governments, in building
a new and fundamentally strong core structure.
The time has come to consider how the managed competition model can be rapidly and
successfully implemented in the current economic, political, and cultural landscape. The
February meeting will provide an opportunity to pose key questions to some of the best minds
in the field:
- How fast can Accountable Health Plans (AHPs) be established?
- How can we ensure that AHPs will provide high quality and accessible servicetorural
and inner city areas?
- How quickly can managed competition bring premium increases to the same levels as
overall inflation?
- How can private sector organizations work with the Clinton Administration to explain
these reforms and persuade consumers that the reforms will genuinely serve their interests
and those of society as a whole?
We have worked at these and related questions for several years and will welcome any
opportunity to contribute our experience to the policy development process. The Jackson Hole
Group has convened teams of experts drawn from academic centers, private industry, public
agencies, and professional associations to develop specific policy and implementation suggestions.
We will convey to you their results as they become available. Current teams are addressing:
• Rural and inner city services from AHPs
• Definition of Uniform Effective Health Benefits plan
• Definition of health outcomes data reporting requirements
• Role of academic medical centers in rationalizing the supply of providers
�• Implementation manual for creation of Health Plan Purchasing Cooperatives
«Implementation plan for National Health Board and associated standard-setting bodies
»Estimation of a risk-adjustment model for equitable compensation of AHPs
I would be very pleased for an opportunity to meet with you and explore how we might be of
assistance. I would be happy to come to Washington at any time, and already plan to be there
on February 5, 11, and 24, as well as March 5, if any of those dates are convenient.
Finally, let me reassure you regarding the eclectic and independent nature of our work. The
Jackson Hole Group holds no dogma, rarely speaks with a single voice, and has no special
interest. We believe only that the basic structure and incentives of U.S. health care are in need
of fundamental change, and that public and private sector organizations must work together to
define the most effective model for serving all Americans. We now have a President ready to
provide leadership and an industry accepting the need for change. The next step is for the parties
to sit together, pool their insights, and build a new system we all can take pride in. I know all
of us are ready to work with your team in advancing this process.
Sincerely,
••"7
Paul M. Ellwood, M.D.
President
cc:
Carol Rosco
Ira Magaziner
Margaret Williams
�PARTICIPANTS OF THE FEBRUARY 20 - 23, 1993 JACKSON HOLE GROUP MEETING
Jesse Brown *
Secretary Designate, Secretary of Veteran Affairs
Department of Veteran Affairs
Chuck Buck, ScD
Staff Executive for Health Care Programs
General Electric
Paul M . Ellwood, M.D.
President
Jackson Hole Group
Lawrence P. English
President - CIGNA Employee Benefits Division
CIGNA Corporation
Alain Enthoven, PhD
Marriner S Eccles Professor of Public and Private Management
Graduate School of Business
Stanford University
Lynn M . Etheredge
Co-Author Jackson Hole Initiatives, Clinton Transition Team
Paul Freiman
Chairman - Pharmaceutical Manufacturers Association
Chairman & CEO - Syntex Corporation
Tom Glassberg
Senior Health Policy Analyst - Implementation Team
Trustee - Jackson Hole Group
Terry Hartshorn
President & CEO
PacifiCare Health Systems
�- 2Wade J. Henderson
Director - Washington Bureau
National Association for the Advancement of Colored People
David Jones
Chairman of the Board & CEO
Humana Corporation
David Lansky, PhD
Director - Center for Outcomes Research & Education
St. Vincent Hospital & Medical Center - The Heart Institute
David Lawrence, M.D.
Chairman & CEO
Kaiser Foundation Health Plan Inc.
William P. Link
Executive Vice President and President, Group Operations
The Prudential
Alice Lusk
Corporate Vice President & Group Executive for Insurance Group
GM/EDS
Ira Magaziner
Senior Advisor for Policy Development
Clinton Administration
James W. McLane
Group Executive - Aetna Life & Casualty
CEO - Aetna Health Plans
AETNA
John D. Moynahan, Jr.
Executive Vice President
Metropolitan Life Insurance Company
�- 3Glen Nelson, M.D.
Vice Chairman
Medtronic, Inc.
Marilyn Carlson Nelson
Vice Chairman
Carlson Holdings
G. Robert O'Brien
Executive Vice President
CIGNA Corporation
Daniel Roble, Esq.
Ropes & Gray
Barry K. Rogstad
President
American Business Conference
Governor Roy Romer *
State of Colorado
Governors Office
J. Patrick Rooney
Chairman of the Board
Golden Rule
William L. Roper, M.D.
Director
Centers for Disease Control
Charles Sanders, M.D.
Chairman & CEO
Glaxo, Inc.
�-4David Scherb
Chairman of the Board - Washington Business Group on Health
Vice President, Compensation - Pepsico Inc.
For Mary Jane England, M.D., President
Washington Business Group on Health
Ray Scheppach, PhD
Executive Director
National Governors' Association
Donna Shalala *
Secretary
Department of Health and Human Services
David F. Simon
Senior Vice President and Corporate Counsel
U.S. Healthcare
James Todd, M.D.
Executive Vice President
American Medical Association
Barney Tresnowski
President
Blue Cross & Blue Shield Association
Robert Waller, M.D.
Chairman of the Board
Mayo Clinic
John L. Zabriskie, Jr., M.D.
Executive Vice President
Merck & Co., Inc.
Have not yet received confirmation of attendance.
�JACKSON HOLE GROUP MEETING
February 20 - 23, 1993
AGENDA
THEME: GETTING READY FOR MANAGED COMPETITION
Saturday
February 20. 1993
4:00 p.m.
7:00 p.m.
Goals of the Meeting
- Paul Ellwood, M.D., President
Jackson Hole Group
Assessing the Nation's Health Status
A. The Function and Well-Being of Americans
- William L. Roper, M.D., Director
Centers for Disease Control
B. The Growth of Health Expenditures - Targets for Health
Spending Reductions
- Representative,
Office of Management and Budget or HHS
- Lyn Etheridge
Sunday
February 21 1993
T
7:30 a.m.
11:30 a.m.
C. Cost Containment Models for Managed Competition
- Alain Enthoven, PhD
Marriner S Eccles Professor of Public and Private
Management, Graduate School of Business
Stanford University
D. The Health Industry as a Source of Jobs
- Ray Scheppach, PhD, Executive Director
National Governors' Association
Tooling up for Managed Competition
A. Progress Reports on Building the Managed Competition
Infrastructure
�- 21. Quality and Accountability, Combining Process and
Outcomes Measures
- William Link, Executive Vice President
and President, Group Operations
The Prudential
- Charles Sanders, M.D., Chairman & CEO
Glaxo, Inc.
2. Deciding on a set of Uniform Effective Health Benefits
- William Straub, M.D., Implementation
Team
Jackson Hole Group
3. A Manual for Health Care Purchasing Cooperatives
- Tom Glassberg, Director, Implementation
Team Member
Jackson Hole Group
4:00 p.m. 7:15 p.m.
4. Making Adjustments for Selection Bias
- Michael Moore, M.D., Implementation
Team
Jackson Hole Group
5. Planning for a National Health Board
- David Lansky, PhD, Director
Center for Outcomes Research &
Education
St. Vincent Hospital & Medical Center
B. Capacity and Premium Projections for Accountable Health
Plans in a Managed Competition Environment
1. Hospitals
- David Jones, Chairman of the Board & CEO
Humana Corp.
2. Physicians and Physician Groups
- Robert Waller, M.D., Chairman of the
Mayo Clinic
3. Carriers
- Barney Tresnowski, President
Blue Cross & Blue Shield Association
Board
�- 3- James McLane, Group Executive - Aetna Life &
Casualty, CEO Aetna Health Plans
Aetna
Monday
February 22. 1993
7:30 a.m. 11:30 a.m.
- David Lawrence, M.D., Chairman & CEO
Kaiser Foundation Health Plans
- Terry Hartshorn, President & CEO
Pacificare
C. The Political Landscape for Managed Competition
1. The Clinton Administration
- Ira Magaziner, Senior Advisor for Policy
Development, Clinton Administration
2. Purchasers
- David Scherb, Chairman of the Board
Washington Business Group on Health
Vice President, Compensation - Pepsico
- Alice Lusk, Corporate Vice President & Group
Executive for Insurance Group
GM/EDS
- Marilyn Carlson Nelson, Vice Chairman
Carlson Holdings
- Charles Buck, ScD, Staff Executive for Health
Care Programs
General Electric
3. Health Sector
- James Todd, M.D., Executive Vice President
American Medical Association
�-4February 22, 1993
4:00 p.m.7:15 p.m.
Building a Seamless Health Care System in America (Continuity of
Coverage, Reimbursement, and Benefits)
A. Medicaid and the Uninsured or Underinsured
- Roy Romer, Governor
State of Colorado
- Wade J. Henderson, Director Washington
Office
NAACP
B. Medicare
- Representative, HHS
C. Integrating the Public Health System with the Private Health
Delivery System
- William L. Roper, M.D., Director
Centers for Disease Control
D. Veterans (tenative)
- Represenative, VA
Tuesday
February 23. 1993
7:30 a.m. 11:30 a.m.
Expanding the Managed Competition Strategy (work in progress)
A. Rural and Sparsely Populated Areas, Review of a New
Policy Paper
- Charles BuckJII, Implementation Team
Jackson Hole Group
B. Health Manpower Production, Solving the Primary Care
Problem
- Paul M. Ellwood, M.D., President
Jackson Hole Group
C. Compatible Malpractice Reform
- Tom Glassberg, Director, Implementation
Team Member
Jackson Hole Group
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
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Health Care Task Force
Paul Jamieson
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Clinton Presidential Records: White House Staff and Office Files
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Collection/Record Group:
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Health Care Task Force
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4786
FolderlD:
Segment 3
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53
3
3
3
�Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
AND TYPE
SUBJECmTTLE
DATE
RESTRICTION
001. statement
Phone No.'s (Partial) (1 page)
03/11/1993
P6/b(6)
002. resume
DOB (Partial) (1 page)
n.d.
P6/b(6)
003. resume
Address (Partial); Phone No. (Partial); DOB (Partial) (2 pages)
n.d.
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4786
FOLDER TITLE:
[Interest Groups] [loose] [3]
2006-0885-F
im758
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)|
Freedom of Information Act - |S U.S.C. SS2(b)|
PI
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C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�THE WHITE H O U S E
WASHINGTON
June 16,
1993
Ronald West
Small Business Council of America
Health Care Task Force
4800 Hampden Lane
7th Floor
Bethesda, MD
20814
Dear Mr. West:
Thank you for bringing to my attention the Small Business
Council of America's position on health care reform and please
excuse my delay i n responding. As we develop our proposal for
health care reform, we are cognizant of the v i t a l role that small
business plays i n the American economy and the harmful effect
that rapidly r i s i n g health costs are having on small business.
As a former small business owner, I have been struck by these
inequities myself.
Through insurance reforms and strong cost containment
measures, we are confident that our plan w i l l greatly reduce
costs for those small businesses who now provide comprehensive
health insurance. We w i l l also minimize any adverse e f f e c t s on
those businesses who are not insuring by gradually phasing i n
coverage.
Thank you again for your input to this process.
Regards,
1
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICM:mb
�Small Business Council of America
4800 Hampden Lane, 7th Floor
Bethesda, M D 20814 301-951-9325
CHAIRMAN
l l a r o k l I. A p n l i n s k y
B n m i m ; h ; i m . Al:ih:un;i
PKUSIRENT
.' . ^ h u i l a A . C a l i m a f d c .
"--Ikllic^Ja. Marvlaiul
March 11, 1993
via: i'Ki;sm'i:NTS
M i c l i a d li. Pictzsth
rhiH-ni.v. A r i z o n a
M o r i o n A. I l a n i s
C o l u m h u s . Georgia
Ira Magaziner
Senior Advisor for Policy Development
The White House
1600 Pennsylvania Avenue, N.W.
Washington, DC 20500
Re:
SI:CRI:TAI(Y
P a l l i d a I- Hi o w n
l.a.s Vegas. N e v a d a
TI(I:ASUI(I:R
Charles D Jolinson
Colunibus. Georgia
PAST PRI:SIOI:Nis
Health Care Reform
Dear Ira Magaziner:
U,>" f
On behalf of both the Small Business Council of
America (SBCA) and the many thousands of small businesses
and their employees which the SBCA represents, please accept "b
our official Position Paper on Health Care Reform. Please also
accept our sincere offer to assist in the process of reform in
whatever way possible.
r
The SBCA is a unique organization and potential
resource. First, approximately 95% of our small business
members DO provide health insurance for their employees.
They recognize the need for such coverage. Second, our
members generally, and our leaders in particular, are sophisticated in the legal and technical issues involved with employee
benefits and small business taxation. Indeed, the small
business clients of just the lawyers on our Legal Advisory
Board and Board of Directors number in the thousands. Third,
as the Position Paper makes clear, we have constituents who
will be affected by health care reform in many diverse ways.
We can and do serve as a source of information to each of
them.
The SBCA supports health care reform to improve access
and control costs. We know this will require new rules
regarding coverage. We know this will require new funding
mechanisms. We are very concerned that the perspective of
small business be heard.
I l a r r v V. 1.anion, Jr.
A l l a m a , Geoigia
M o i l o n A. H a r r i s
•> i C u l u m h n s , G e o r g i a
L J ' V i e k S|ieeil
d i a l 1.1nooga, Tennessee
SPIiCIAL COUNSPL
A l v i n D. U i r i e
N e w Y o l k , New Y o r k
HOARD OI DIRPCTORS
Miehael Antin
-OS A n g e l e s , C a l i f o i nia
|ohn W. liaker
A l l a m a , Georgia
S l a n l e y L. l l l e n d
San A m o n i o . Texas
I). Stephen Itoner
San D i e g o . C a l i r o r n i a
W i l l i a m L. C a s s i i l y
Mompelier. Yennonl
A l a n P. C l e v e l a i u l
M.lneliesler. New Hampshire
l a m e s P. C o n a h a n
kishei Island, Plorida
D o n a l d C. Daldgren
Seanle. W a s l i i n g l o n
Louis It. D i a m o n d
Waslfmglon. OC
Thomas C Pamain
Si L o u i s . MlSSOLU i
Ira S. I V I d m a n
I'hoeni.x. A r i z o n a
Slanley I I . Ilaekell
Allama. Geoigia
D a \ ' i d I. K u p e r i n a n
A u s l i n . Texas
R o h c r t D. L e h e n s o n
Las Vegas, N e v a d a
Jaek A . L i n l o i i
Reading. Pennsvlvama
Alson ii. M a n i n
O v e i l a n d P a r k , Kansas
L i n u s A. M e z z u l l o
Kiehmond, Virginia
R o l l e r ! R. M i d i c i l i
I l o i i o h i l u , 1 lawau
S l e p h e n H. Paley
HelheSLla. M a r y l a n d
James M. Parker
Alluu|iieKHie. New Mexico
Larry C. Riehlei
J a e k s o i u ' i l l e . Ploiiela
Piedenek M. Rolhen
Tampa. Lloi'kla
I V i i - r |. S h a n l e y
W i l m m g i o i l , Delawai
M y r o n I". S i l i l o n
Kansas C i l y , M i s s o m
K i n e e |. T e m k i n
Toluea Lake, C a h l o r i i
D i . J o h n D. W a l s o n ,
Cokimbus. Geoigia
/
:
A l l o l l i e e r s aie m e m b e r s ul
die hoard of D n eelors
V\
�To assist you in the process of reform, we offer reliable data and "front
line" insight into the probable reaction of and effects on small business of various
reform components, including various coverage and funding alternatives.
Our interest is in having the small business viewpoint represented during
the reform process. While we hope the Position Paper provides you with a
summary of that viewpoint, we hope you will consider us a sounding board for
specific proposals as you proceed with the reform process. I had hoped to present
some of our ideas at this morning's briefing with the Small Business Legislative
Council, but as you were not feeling well, it seemed inappropriate. However, we
have many specific ideas that we think might help the Task Force and would
welcome the opportunity to participate.
Thank you.
Sincerely,
Ronald West
SBCA Health Care Task Force
RJW:kim:026
�Small Business Council of America
4800 Hampden Lane, 7di Floor
PQ Box 18521
Bethesda, MD 20814 301-951-9325 Washington, DC 20036 202-232-9191
SMALL BUSINESS COUNCIL OF AMERICA
HEALTH CARE TASK FORCE
POSITION PAPER
I.
INTRODUCTION:
Health care reform affects no group more than the small businesses of
America. Indeed, small business is at the center of the storm. It is the country's
major employer and covers the majority of Americans who have health care
benefits. Yet, it is also the segment that fails to provide coverage to many
Americans because it is the segment that finds it most difficult to afford any
increase in bottom line cost.
Small business is the sector of the economy most likely to fuel economic
recovery. Two major roadblocks to the growth of small business have been rising
health care costs and rising payroll taxes. Recent proposals aimed at reducing tax
incentives to cover employees with health insurance while mandating such coverage
have thrown a cloud of uncertainty over the plans of small business to expand. In
fact, if unartfully drawn, such legislation will chill even modest growth. And, as
goes small business, so goes the American economy.
At the same time, health care itself is delivered by thousands of other "small
businesses" employing millions of workers. From hospitals, to clinics, to medical
equipment companies, to multi-provider groups and single doctor practices, the
business of health care in this country is dominated by small businesses, all
standing on the brink of momentous change. It is itself a multibillion dollar
industry. Any legislation aimed at this group will have a profound impact on the
economic welfare of hundreds of thousands of health care workers and on the
economy in general.
Finally, but not less importantly, the actual health care of millions of
employees and their families depends upon maintaining and improving the access to
and quality of health care provided by this small business system. Many have
stated that we cannot afford our current system. We can afford even less a misstep
in health care policy in either economic or human terms.
�II.
OUR POSITION:
Small business SUPPORTS health care reform to improve access to and
control the cost of health care. The magic will be in HOW this is accomplished.
The SBCA represents a broad cross-section of those businesses which will be most
affected. We stand ready to cooperate and urge our inclusion in the reform
process.
The SBCA supports all due haste in completing a comprehensive plan. We
support the work of the President's task force. We support the concept of managed
competition. However, we warn of the truly mortal danger to our country of the
implementation of any carelessly charted reform plan.
If ever there should be a non-partisan, carefully studied issue, health care
should be it. A system which has delivered the finest health care in history, by
every measure, should be overhauled with learned respect. We are not predicting
or even urging one specific outcome. We are pressing for both a rational process
and a recognition of how change will radically affect small business and our
economy.
To assist in the process, the SBCA offers the following:
III.
SBCA's TEN POINT PLAN:
We are in favor of the following ten proposals to facilitate sound health care
reform legislation and small business support:
A.
Convene a Presidential Blue Chip Panel: Until the last few
months, health care reform has been discussed primarily as a
campaign issue. Since that time, Hillary Rodham Clinton's
Task Force has begun piecing together a plan. We support its
efforts and urge a very specific "next step": convene a private
panel made up of the leaders of industry and business, large and
small, of union leaders and doctors, HMO executives and
actuaries, the medical directors of major clinics and small town
practices, of nurses and lawyers and insurance company
executives. Make it a full ad hoc "Congress" of the private
sector. There is nothing wrong with the government and
academic panels working to date, but let's convene the players
themselves. Let's learn what they know by hard experience.
Let's get their support of the process. Industry will respond to
�the President's call as to no other. The President has arranged
an "economic summit". Can a health care summit be any less
important?
B.
A Moratorium on Piecemeal Reform: Recently, health care
reform has become an issue on which some politicians rely for
immediate recognition. While this indicates the importance of
the issue to the public, exploiting the public fear and desire for
a "quick fix" could result in random reform which will
seriously cripple both the existing system and comprehensive
reform. Certainly, whatever the sponsors' intentions, bills
proposed during this debate can only muddy the waters and
create divisive reactions to what should be a deliberate, national
initiative. Again, relying on the singular power of a newly
elected President, all would-be reformers should be encouraged
to cooperate with the coordinated effort.
C.
Private. Not Public. Management: Public opinion polls make it
crystal clear that the public does not desire a federal
bureaucracy handling its health care. While the public may
desire some government assistance in paying for health care, it
wishes the delivery system and the management to be in private
hands. This is not a criticism of government activism, but a
recognition that the huge, centralized bureaucracies that are
necessary for federal programs do not fit well with the flexible,
personalized, hands-on treatment people desire from their health
care system. The impersonal treatment and red tape of the
insurance companies should not be replaced by even larger and
less customer sensitive government bureaucracies. The entire
system must be streamlined (with electronic billing, published
fee schedules, etc.), not bureaucratized.
D.
Preservation of Small Business and Employee Tax Incentives:
Perhaps the most disturbing proposals for the public in general,
and for the small business public in particular, involve either or
both the elimination of business tax deductions for health care
premiums and the elimination of the exclusion of health care
benefits from the taxable personal income of the employee. In
an effort to raise revenue to pay for coverage of the uninsured,
it may seem easiest to penalize those small businesses and their
- 3 -
�employees who currently DO provide or receive such benefits,
but it is backwards. THESE INCENTIVES PROMOTE
HEALTH CARE COVERAGE. Small business needs the
incentives. Businesses and employees must be encouraged to
provide good insurance coverage AND to reduce utilization.
Tax disincentives to coverage send a very wrong message and
could seriously weaken our country's economic recovery.
E.
Clear Antitrust Guidelines: The experimentation with new
structures which so characterizes American small business has
been chilled by the application of extremely vague antitrust
rules. Developed for application to other industries, the
antitrust laws and regulations have crippled small business
efforts to coalesce and experiment with new structures in the
health care industry. Specific, clear, and enforceable rules that
allow group purchasing and group selling of health care services need to be developed. Only in this way can economies of
scale, common utilization standards, and quality controls be
effectively applied. This is not to say that abusive combinations in restraint of trade should be permissible. Rather, legal
experts in the field should be convened to draw up specific,
reliable guidelines that promote efficient health care delivery
and purchase. The SBCA can assist in bringing appropriate
experts to the table.
F.
No P r i ^ Freezes that Cause Shortages: While many are
enticed to try to control inflation with price controls, market
forces will always come into play. Any sort of cap on fees,
budgets, or spending must be reviewed in light of the shortages,
delays, and decline in service that is likely to occur. In no area
of the economy would lack of access, delays, or shortages have
a more devastating effect. In fact, these are the very
shortcomings we seek to eliminate. In our rush to control
costs, we must remember what it will be like if, for example,
we cannot find immediate care for our sick children. Survey
after survey has shown that the American public is far more
satisfied with the quality of its health care system than are the
citizens of Canada, Great Britain, and other "universal
coverage" countries. There is no argument from any quarter
that their dissatisfaction is due to the shortages and delays
- 4-
�caused by price controls. Let's be careful. Controlling cost
must not be permitted to create delays or reduce access.
G.
A "Sunshine Law" for Health Care Data: In previous debates,
the actual information on health care in this country has been
selectively furnished to serve the interests of whomever released
it. From premium data, to utilization, to fee schedules, to the
number of uninsured and underinsured, the information has
been available only in piecemeal fashion. Objective numbers
are available. It will not slow reform to insist that these
numbers are agreed upon, published and used as the foundation
for restructuring the health care system. What IS spent on terminal illness? What percentage of health care costs IS spent on
doctor fees? Hospital charges? Unnecessary surgeries, etc.?
By forcing all involved to "come to the table" with their actual
numbers, we will at least have the data needed to make
informed policy choices. The SBCA itself stands ready to
supply accurate numbers in its possession.
H.
National Awareness and Education: During the course of
reform in 1993 and 1994, public education about health care delivery and reform should be initiated. Wellness and educated
consumption are the only permanent means to reduce health
care costs. To proceed with the reform effort without the
general public being given the time or the information to understand the issues, the process, or the decisions will almost certainly doom the reforms to failure. We are a public who is demanding the very best in health care for considerably less than
we pay now.
Let's ensure that the public understands the trade-offs and is
prepared to participate in the system's success. Otherwise, by
their own actions within the new system, or at the polls
thereafter, they will undo the new system without ever giving it
a chance.
- 5-
�I.
J.
IV.
Limited Exception to ERISA Pre-Emption and Other Roadblocks:
The Employee Retirement Income Security Act of 1974 was
drafted and has been enforced as principally a PENSION law.
It's application to health care plans has severely stifled the
innovative growth of new types of arrangements on the state,
local and private levels. There is no reason to bundle pension
and health benefits which have entirely separate goals and
problems when a limited exception could be granted for health
plans. Similarly, any legislation that would encourage litigation, or restrict states in their ability to control the major cost
factors in their own states (such as malpractice insurance and
tort reform) should be eliminated.
Preservation of Out-Of-Panel Physician Choice: Overwhelmingly, the American public favors, even insists upon, free
physician choice. This makes sense. If one is not satisfied
with the physician taking care of his family's health, he must
have the right to look elsewhere. Freedom of choice is as
important in health care as in any other aspect of American life.
While it may be far easier to control monetary costs when there
are closed panels, the social cost of this system has been
demonstrated repeatedly in countries with socialized medicine.
This is not to say that closed panels or high copayments in the
event of out-of-panel selection are not one appropriate alternative. It is to say that the health care system should not be designed to eliminate a choice of physician for those who are
willing to pay the additional cost. Ultimately, it is the public's
open selection of competing health care providers which will
ensure the quality of our system.
CONCLUSION:
The SBCA fervently believes both in reform and in preserving what is
"right" about the current health care system. It is the finest health care
system in the world. While we must improve access and eliminate unnecessary costs, government planners must be keenly aware of the effect of any
specific proposals on small business, whether that small business is the
purchaser or seller of health care services. The economic and social costs of
any mistakes will be enormous. We are the major players and we want to
- 6-
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001. statement
SUBJECT/TITLE
DATE
Phone No.'s (Partial) (1 page)
03/11/1993
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4786
FOLDER TITLE:
[Interest Groups] [loose] [3]
2006-0885-F
im758
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)|
Freedom of Information Act - |S U.S.C. SS2(b)|
PI
P2
P3
P4
b(l) National security classified information 1(b)(1) of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) of the FOIA|
b(3) Release would violate a Federal statute 1(b)(3) of the FOIA|
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) of the I OI A|
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the F01A|
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells 1(b)(9) of the FOIA]
National Security Classified Information 1(a)(1) of the PRA)
Relating to the appointment to Federal office 1(a)(2) of the PRA|
Release would violate a Federal statute ((a)(3) of the PRA|
Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) of the PRA|
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(S) of the PRA|
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�cooperate and be part of the process. The SBCA stands ready to assist in
any way we can.
Small Business Council of America
Health Care Task Force
Ronald J. Waldheger, Chairman
Cleveland, Ohio
(216) 835-0600
oo
Harold I. Apolinsky
Birmingham. Alabama
Lawrence Mitchell
Woodland Hills. California
P6./(b)(6f'
Patricia L . Brown
Las Veeas. Nevada
Michael E . Pietzsch
Phoenix. Arizona
P6/(b)(6)
Paula Calimafde
Bethesda. Maryland
v
Peter J. Shanley
Wilmington, Delaware
•Y
••^PjB^b)^).'
Thomas C. Farnam
St. Louis. Missouri
Ronald D. Weslt
Bethesda. Marv and
P6/(b)(6)
Robert R. Midkiff
Honolulu. Hawaii
.
.
Thomas Yearian
Atlanta. Georeia
• P6/(b)(6)
RJW:kim:025
- 7-
ryjv; :,«-""••••' •••Zpm
�THE
WHITE
HOUSE
WASHINGTON
May 12, 1993
Eugene P. Schwartz
Fprmer President
Missouri AARP Chapter
7207 Pershing Avenue
Saint Louis, MO
63130
Dear Mr. Schwartz:
I want to thank you for your l e t t e r indicating your concern
about health care reform. I would l i k e to assure you that we are
committed to many of the goals of the single payer model -universal coverage, cost containment, administrative
simplification, and reduced waste and inefficiency. I ask that
you take a fresh look at our proposal when i t i s released and
judge for yourself whether i t s goals are the same as those you
support.
I appreciate your bringing your concerns to my attention and
hope that we can work together to achieve r e a l health care
reform.
Regards,
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICM:mb
�AARP
CHAPTER
7207 Pershing Ave
s t
"
L o u i s
'
m
6 3 1 3 0
1 993
Mr. I r a Magaziner
H e a l t h Task Force
White House
Washington, D.C. 20500
Dear Mr. Magaziner:
News t h a t your h e a l t h team i s a c c e p t i n g t h e HMO and managed
c o m p e t i t i o n as t h e model f o r your proposed C l i n t o n p l a n i s very
d i s t u r b i n g i n t h a t i t looks l i k e t h e r e w i l l be l i t t l e change
as promised i n ah u n i v e r s a l h e a l t h p l a n . With n a t i o n a l and
l o c a l groups c r y i n g o u t f o r a s i n g l e - p a y e r system, t h e C l i n t o n
a d m i n i s t r a t i o n w i l l be s u b j e c t t o c r i t i c i s m by t h e very groups
t h a t supported him - t h e poor, t h e middle c l a s s , t h e e l d e r l y
and o t h e r s .
Here i n M i s s o u r i , t h e M i s s o u r i S o c i a l Welfare A s s o c i a t i o n ,
M i s s o u r i C o a l i t i o n f o r Single-Payer H e a l t h Care, t h e S o c i a l
Workers f o r Single-Payer H e a l t h Care, P h y s i c i a n s f o r N a t i o n a l
H e a l t h Program M i s s o u r i Chapter, M i s s o u r i C o u n c i l o f Senior
C i t i z e n s , and M i s s o u r i C i t i z e n s A c t i o n w i t h o t h e r s have been
w r i t i n g Congressman Richard Gephardt w i t h hundreds o f c a l l s
to support s i n g l e - p a y e r . A l l t h i s t o f i n d t h a t h i s own s t a f f
person i s on your team and y e t no word t h a t you a r e c o n s i d e r i n g
the s i n g l e - p a y e r system. Rep. Gephardt knows what we want.
A s t a t e - w i d e conference on s i n g l e - p a y e r h e a l t h care w i l l be
h e l d on May 1 a t which time we w i l l d i s c u s s t h e C l i n t o n p l a n
and h o p e f u l l y take a c t i o n i n response t o i t . On May 15 over
25 s t a t e c o a l i t i o n s f o r s i n g l e - p a y e r w i l l h o l d a n a t i o n a l
conference t o respond t o t h e C l i n t o n p l a n . On May 21-23 t h e
P h y s i c i a n s f o r a N a t i o n a l H e a l t h Program w i l l meet i n Chicago
t o review t h e C l i n t o n p l a n i n hopes i t i n c l u d e s t h e s i n g l e - p a y e r
program.
i t i s b e l i e v e d t h a t t h e r e w i l l be a l o u d clamor f o r r e a l change
• i f t h e mananed c o m p e t i t i o n and HMO models a r e used. I t
c e r t a i n l y w i l l make people f e e l t h a t p o l i t i c a l reasons and n o t
a c t u a l needs w i l l serve as t h e b a s i s o f these plans which do
not a l l o w f o r i n d i v i d u a l c h o i c e o f p h y s i c i a n s o r h o s p i t a l s and
leave t h e insurance i n d u s t r y as t h e o n l y b e n e f i c i a r i e s .
This
i s p o l i t i c s as u s u a l .
I n t h e hope t h a t t h e above i s w i t h o u t f a c t , we l o o k f o r w a r d
t o a r e a l change i n your recommendations.
Sincerely,
Eugene P. Schwartz,*
Past P r e s i d e n t , AARP chapter
A Chapter of the American Association of Retired Persons, Inc.
�D
r
PHYSICIANS FOR
A NATIONAL
HEALTH
PROGRAM
Physicians For A
National Health Program
7207 Pershing Ave.
St. Louis, MO 63130
Summary of PNHP's Proposed National Health Program
The most important feature of PNHP's proposal is the removal of allfinancialbarriers to medical care.
Every American would be covered for necessary medical care by a public insurance plan administered
by state and regional boards.
Coverage would include standard medical care as well as care for mental health, long-term illness, dental
services, occupational health services, and prescription drugs and equipment.
Patients would receive a National Health Program (NHP) card entitling them to care at any hospital or
doctor's office. Patients would not be billed for approved medical care. They would not pay any
deductibles, co-payments, or out-of-pocket costs. All approved costs would be paid by the NHP.
Most hospitals and nursing homes would remain privately owned and operated, receiving an annual
"global" lump sum from the NHP to cover all operating costs. Global operating budgets would be
negotiated with the NHP board. Capital expansion funds would be distributed separately by regional
NHP boards on the basis of health planning goals.
Private doctors would continue to practice on a fee-for-service basis with fee levels set by the NHP
board. HMOs would receive a yearly lump siim from the NHP for each patient, removing incentives to
skimp on care. Neighborhood health centers, clinics, and home care agencies employing salaried doctors
and other health providers would be funded directly from NHP on the basis of a global budget.
The NHP would pay pharmacists wholesale costs plus a reasonable dispensing fee for prescription drugs
on the NHP formulary. Medical equipment would be covered in a similar fashion.
Private insurance which duplicates NHP coverage would be eliminated, saving an estimated $44 billion
a year in industry profits and overhead. Removing the complex and redundant insurance bureaucracy
would gready simplify paperwork now required of doctors and hospitals, generating "billions of dollars
of additional savings. More than half of the 20% of hospital budgets that now go for billing and
administration would be saved under this plan.
Costs would be constrained through streamlining of billing and bureaucracy, improved health planning,
and the NHP's ability to set and enforce overall spending limits. According to the highly respected
General Accounting Office, the PNHP plan could cover all of the uninsured and eliminate co-payments
and deductibles for those with insurance, while holding health costs to $3 billion less than we now spend.
The Canadian national health program employs a similar, structure. There, health costs are held to less
than 9% of GNP with 11% spent on billing and administration. In the U.S., health costs are 13% of
GNP with 24% spent on billing and administration. The Canadian system minimizes costly overbedding
and duplication of high technology services while largely avoiding the shortages of facilities which plague
many U.S. rural and inner city areas.
Further details of the PNHP proposal are offered in the January 12, 1989 edition of the New England
Journal of Medicine and the May 15, 1991 issue of the Journal of the American Medical Association.
�THE WHITE H O U S E
WASHINGTON
May 12,
1993
Alvin From
President
Democratic Leadership Council
3J.6 Pennsylvania Avenue SE
Suite 500
Washington, DC
20003
Dear Mr. Fium;
Thank you for bringing to my attention the proposal of
P h i l i p Marcus and other physicians to improve the quality of
health care i n inner c i t y communities. I t i s encouraging to see
such a response to the President's c a l l to service. Your
recommendation has been passed on to members of the Task Force
who are focusing on the particular concerns of urban communities.
Thank you again, and I look forward to seeing you soon.
Regards,
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICM:mb
�DLC
April 7, 1993
Mr. Ira Magaziner
Senior Advisor to the President for Policy Development
White House
Old Executive Office Building
Room 216
Washington, D.C. 20500
Dear Ira:
I wanted to call to your attention an innovative proposal from a group of
retired physicians to improve the quality of health care in inner city communities.
Philip Marcus, a retired physician, is the president of Emeritus Medical Staff at
Cedars-Sinai Medical Center in Los Angeles. He represents a group of 300-plus
retired physicians who are willing to offer their knowledge, experience and service
to help staff primary care medical clinics in inner city Los Angeles (see attached).
I think this is a wonderful idea and one that should be encouraged in other
cities around the nation. Not only does this proposal address some of the pressing
needs of these urban communities, i t also builds upon the Clinton
Administration's call to service — a call which is not limited to young Americans.
I hope you can find the time to take a look at this idea and consider how i t
might f i t into the broader agenda for national health care reform. The Democratic
Leadership Council fully supports such local initiatives, especially when they
combine the merits of non-bureaucratic problem-solving with community service.
I f there is anything I can do to help, please let me know. Good luck in
putting together the Task Force's finished proposal.
Sincerely,
Alvin From
President
cc. Eugene C. Gratz
i 16 Pemisylmma A mine. SE
Suite am
Washwut,,,,. DC 20001
202-W,-0001
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EUGENE C. C R A T Z
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March 23, 1993
Al From, Executive Director
Deboraih Smulyan, Deputy Director
Democriatia Leadership Council
316 Pennsylvania Avenue
Suite 500
Washington, D.C. 20003
Re:
Medical Reform Propoaala
i
Dear Deb and All
A very close friend of mine, Philip Marcus, M.D.,
a
retired physician, i a tha President of an organization known a«
th* "Emeritus Medical S t a f f of Cedara-Sinai Medical Center i n
Loo Angeles, consisting of approximately 300 retired doctors who,
during, their active careers, were members (and often senior
member's) of the Cedars-Sinai medical staff.
;
The Bmeritus Medical Staff has come up with an idea,
which :they have sought to present to Hilary Rodham ClintonI
Basically, i t i s a proposal to tap their Vast store of medical
knowledge and experience to provide staffing for c l i n i c s offering
primary medical services to inner c i t i e s and other areas in need of
c l i n i c a l access. Such centers could be established at minimum
cost, and maintained at similar low cost because the moat expensive
element, the physicians' services, would be contributed.
i
I am enclosing a copy of the letter that Dr. Marcus has
sent tb Mrs. Clinton on behalf of his organization; knowing the
vast amount of correspondence she and her medical reform staff must
receive, I thought X would pass i t on to you with the thought that,
i f you believe the idea meritorious, or at least worthy of
consideration, you might know the better channels through which to
transmit i t to people in a position to take action.
Tp:
�•P 24 '93 09:09 G A Z L W O F G L C R .
MR
RT A F/AB OP
P.3
i
CAW ornces
EUGENE C
CRATZ
Al From
Deborah Smulyao
March 23
1993
Page Two
r
j You might aiao be interested to know that Phil (Dr.
MaroUB), who was — and remains — axtrfctnely well connected in the
medical community nationwide, has run this Idea by several of his
acquaintances, and has found much support for the idea among hia
professional colleagues, to the extent that, with sufficient
exploration, the proposal might become an actual element in the
reform;proposal.
From my (political) perspective what i s most interesting
about a l l of this, irrespective of the merits of the proposal
itself,; i t the thought and energy that i s being put into the ideas
of refdnii, even from sources from which hostility i s anticipated*
To me, i t i s signal of the fact that the "spirit" of the "Clinton
Revolution," the "Mew
Covenant," i s taking hold in America,
inspiring the people to think about their country and how to make
i t work. Phil's proposal, in fact, i s only one that I have
received from physician friends of mine, and I am actually at work
on an a r t i c l e on h e a l t h i n s u r a n c e
The New Democrat.
reform aimed f o r p u b l i c a t i o n i n
t
! I f you think the proposal meritorious and/or would like
to explore i t further, including the possibility of making i t a DLC
project;, please feel free either to c a l l Dr. Marcus directly or to
c a l l me; I would be more than happy to serve as an interface in
whatever capacity I can.
Best regards from Meredith, who enjoyed seeing you when
she was back in Washington last week, and we are both looking
forward to meeting with you when next we are in town.
Very truly yours,
!
LAW OFFICES Of
i
EDGEitE
ECG/hS ;
0323.1 ;
cc. Dr. Philip M. Marcus
. GRATZ
�•MAR 24 ' 9 0 0 9 : 1 0 GRATZ LAW OFF/GALB CORP.
P.4
ARS£UMAI C8 S MEMCAL CENTER.
Emeritus Medical Staff
George E. Gourrkth, M.D., Chatrman
Philip M. Marcui, M.D., Prtsid««t
H a t c h 12,
1993
1
Hillary Rodham Clinton
the White House
Washington, D.C.
1
Dear Mrs. Clinton:
At the request of the Executive Committe* of the Baeritus
Staff of Cedars-Sinai Medical Center in Los Angeles, I have
been asked to write and offer our suggestions and aervice to
you and our country with respect to medical care. Our
group, the Emeritus Staff, consists of approximately 300
retired physicians who have served as members of the active
niedical staff for at least twenty years. W have a vast
e
background and are well qualified in all of the medical
Specialties.
Although retired from active practice, we are s t i l l an
integral part of the hospital and maintain our relationship
in many ways. Cedars-Sinai i s one of the largest hospitals
in the country and one of very few with an active Emeritus
Staff.
W would like to suggest that a large number of "mini"
e
tilinics be established throughout the city where retired
physicians such as in our group, could be of great help
(without cost) in staffing thaw. This could also be a pilot
program for the entire country. In this way, care would be
provided for indigent and low income patients. W offer
e
access to a huge source of unused medical talent. The plan
would also give additional needed purpose to the retirees.
Thifl suggestion would c ? f a J i ¥ - * -i-n JLins. with the
<rcJ'l-b
President's proposal to cut medical expenses.
I f you feel that there i s a place for us in the President's
program please contact me at the following address.
Sincerely yours,
i
Philip M. Marcus, M D
..
President, Emeritus Medical staff
Cedars-Sinai Medical Center
$700 Beverly Blvd.
Los Angeles, CA 90048
PMo
M/c
' 8700 BEVERLY BOULEVARD • LOS ANGELES CALIFORNIA 900^1869 •TCL£PH0NE: (213) 855-5000
;
CORRESPONDENCE: P.O. BOX 48730 • LOS ANQELES CALlPO RNiA 90048-0730
�THE WHITE H O U S E
WASHINGTON
May
12,
1993
f
Thomas J . McAteer
ChoiceCare
Corporate Center
395 North S e r v i c e Road
M e l v i l l e , NY
11747-3127
Dear Mr.
n,
McAteer:
I want to thank you for sending me the d i s c u s s i o n paper on
the need to u t i l i z e community resources. Long I s l a n d ' s d i v e r s e
composition of businesses and r e s i d e n t s i s c e r t a i n l y i n d i c a t i v e
of our n a t i o n s ' d i v e r s e needs. Accordingly, we a p p r e c i a t e the
input of a d i v e r s e group of providers and a d m i n i s t r a t o r s and
t h e i r a s s o r t e d t a l e n t s to wage a s u c c e s s f u l reform e f f o r t .
Thank you again for your input to t h i s process.
/
Regards,
I r a C. Magaziner
Senior Advisor to the P r e s i d e n t
for P o l i c y Development
ICMrmb
cc:
R. B o o r s t i n
�immmmmdi^iaM
March 10, 1993
Mr. Ira Magaziner
Health Care Task Force
Old Executive Office Building
Washington D.C. 20500
Dear Mr. Magaziner:
Bob Boorstin's office suggested that you might be interested in the attached. We have
been closely tracking the activity around national health care reform. The attached is a
discussion paper we developed for the Long Island Association which is the Chamber of
Commerce for our region.
Long Island presents a unique opportunity to test the full potential of managed
competition. It is a well defined region with natural boundaries and 2.7 million residents
-- larger than 20 states. Its economy is based on 38.000 small businesses (50 employees
or fewer) providing access to health care for nearly one million people. In addition,
legislation goes into effect on April 1st of this year requiring regional community rate
structure for small businesses (50 or fewer employees) and individuals.
Long Island has a well developed system of health care resources including a full array of
primary care, specialty and sub-specialty providers, three renowned tertiary care facilities,
29 community hospitals and a network of publicly run facilities, including five county
health centers (Suffolk) and a county owned and operated hospital (Nassau) all servicing
the uninsured and underinsured.
In one of the Jackson Hole policy papers, (21 si Century American Health System Policy
Paper #2 September 1991) they suggest that local Chambers of Commerce would be
appropriate places to form HIPCs. We are actively exploring that possibility here on Long
Island. Any thoughts you may have would be greatly appreciated.
Sincerelv,
Thomas J. McAteer
TM:02/apk
cc: B. Boorstin
C orporaic Cvnier. >.'5 Norih Scrx ice Rj.. \k-!\ Iw.
7
o
�THE
WHITE
HOUSE
WASHINGTON
May 12, 1993
Dr. Russell L. Ackoff
Interact
401 City Avenue
Suite 525
Bala Cynwyd, PA
19004
Dear D r r - f t c k o * ^
Thank you for the alternative design for a national health
care system that your consortium submitted. Your suggestions
w i l l be very helpful as we try to produce a reform package that
i s committed to better u t i l i z i n g our resources and retaining the
privilege of choice. I ask that you take a fresh look at our
proposal when i t i s released next month and judge for yourself
whether i t s goals resemble yours.
Thank you again for your input into t h i s process.
Regards,
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICMrmb
�n
1
H O
�f:
INTERACT
The Institute for Interactive
March 25, 1993
Management
Dr. Russell L. Ackoff
Ira Magaziner
Room 216
Old Executive Office Building
Washington, DC 20500
215-660-7423
215-660-7433
INTERACT
The Institute for Interactive Management
401 City Avenue • Suite 525 • Bala Cynwyd, Pennsylvania 19004
FAX 215-660-9201
Dear Ira:
I wrote you on March 8th about an alternative design of a National Healthcare System
that a consortium we organized has come up with. I don't know whether it ever got
through the wall of filters that must surround you. On the chance that it hasn't I'm
writing this with a certain desperation.
We have presented our design to a number of important figures in the health arena
and they have been enthusiastic. Several of them have suggested we take out full
page ads in major newspapers making the public and those in Congress who have
not seen it aware of an alternative to what you are likely to come up with.
I do not want to take an adversarial position vis a vis the Clinton administration. On the
other hand I would not expect you to grab our proposal as is and adopt it. However,
we are anxious that whatever is eventually done leaves open the possibility of moving
toward our design over time because I am convinced that none of the other proposals
that have been put forth will survive the test of time.
I would much rather work collaboratively with you than have to take an adversarial
position. I know how busy you must be because I am at least equally occupied. But I
can't think of anything more important for both of us than discussing the Interact
alternative.
I enclose a very recently prepared executive summary of the design and an academic
vita, the latter for the benefit of your staff who may be more inclined to pass this on to
you if they are convinced that I am not a nut.
You
urp,
Russell L. Ackoff
401 City Avenue • Suite 525 • Bala Cynwyd, Pennsylvania 19004
215-660-9200 FAX 215-660-9201
�Chapter 1
1.
EXECUTIVE
SUMMARY
THE APPROACH
The design of a national healthcare system that is presented here differs significantly
from other designs currently in consideration:
•
It addresses every question that has been raised about current healthcare in a
systemic way, that is, taken together as a whole, with all their interactions.
•
Instead of patching up the current system with band-aids, this design process
began with the assumption that the current system was destroyed last night.
The consortium then proceeded to design that system with which it would
replace the destroyed system if it were free to replace it with any system it
desired, without any constraints.
•
This enabled the consortium to take a fresh approach to healthcare, not to
fixing the existing system, but to designing a new one.
•
Therefore, unlike other designs that have been proposed, this one
involves changes of all the aspects of the system, not just reimbursement:
It affects:
provider behavior,
consumer behavior,
community behavior,
employer responsibility,
involvement of insurance companies,
�Chapter 1
•
wellness and illness care,
•
malpractice,
•
Information and management systems, and
the role of the U.S. government.
There is little value to changing the way healthcare is paid for without changing the system
paid for.
The conventional approach to healthcare improvement has consisted of
identifying the problems currently confronting the system and attempting to
solve each of them taken separately. In contrast, the consortium sought to
dissolve these problems by redesigning the system so that all of them
disappeared.
•
For example, placing the instruction "Close Cover before Striking" on the front of
old matchbook covers to prevent a flying spark from igniting the matches it contained,
constituted a solution to the problem. When the abrasive was placed on the back of the
matchbook rather than the front, the problem was dissolved.
Representatives of all stakeholder groups have been involved in preparing
the design.
•
The design has been presented to and reviewed favorably by a number of
healthcare organizations including:
The Healthcare Forum,
Allegheny Outpatient Surgery Center (Pittsburgh, PA),
Mt. Carmel Health (Columbus, OH),
Southwest Washington Medical Center (Vancouver, WA),
INOVA Health Systems (Norfolk, VA),
�Chapter 1
Institute for Healthcare Improvement (Boston),
Delaware Valley Healthcare,
Henry Ford Mercy Health Network,
Sentara Health Systems (Norfolk, VA),
American Organization of Health Executives,
Northside Hospital (Atlanta, GA),
Mercy Hospital and Medical Center (San Diego), and
The Conference on "Strengthening Hospital Nursing" sponsored by
the Pew Charitable Trust and the Robert Wood Johnson
Foundation.
•
The design has been and is being applied to several communities under the
assumption that it has not been adopted nationally:
•
Sisters of Charity of Nazareth Corporation in Kentucky, Tennessee, and
Arkansas,
•
•
THE
•
General Health Corporation in Baton Rouge, LA., and
Mount Carmel in Columbus, Ohio.
DESIGN
The design would provide essential healthcare services (including preventive,
wellness, optical, auditory, and dental) to every legal resident of the United
States.
•
These services would be funded by an annual healthcare tax paid by
individuals.
�Chapter 1
•
This tax would reflect the individual's income, age, number of
dependents, life-style, health status, and environment.
Employers would pay a healthcare tax proportional to the hazards of their
employment conditions. In addition , they could elect to pay all or part of their
employees' healthcare taxes. If they elect not to pay any of these taxes, they
would initially increase employees' salaries by the amount they, the
employers, contribute to the employees' healthcare insurance.
The IRS would collect the taxes and issue annual healthcare vouchers and
wellness stamps to each individual. The value of these would be independent
of the amount of taxes paid.
•
The value of the voucher would reflect the health-related characteristics of
the individual, for example, age, disabilities, and lifestyle.
Individuals would be free to select any primary-care provider to whom they
would give their vouchers.
•
The primary-care provider would then be required to pay for all essential
healthcare services he/she prescribes. (Therefore, the better the health of
those served, the more profitable they would be for the primary-care
provider.)
Healthcare programs would be administered by healthcare boards established
in each community.
•
These boards would define essential healthcare services, certify
�Chapter 1
healthcare providers, and monitor the quality of their services.
(Such
monitoring would reduce the number and intensity of malpractice suits.)
In addition, they would maintain a medical information system that would
be part of a national network, and they would establish courts to
adjudicate complaints.
•
The NIH or another appropriate body would establish medical-record
standards to be adhered to by all communities.
•
The IRS would provide each community with a budget with which to carry
out its responsibilities.
Individuals would be able to choose primary care providers outside the system,
but they would still have to pay the healthcare tax.
Primary care providers would be able to operate either within or outside the
system, but not both.
•
Those operating within the system would have some say in selecting and
retaining patients.
The system provides the following checks and balances to assure the patient's
receiving as much service as is needed:
The audit of providers by the community healthcare board.
•
The community-based information system would educate individuals and
providers regarding the best practices as well as providers.
�Chapter 1
•
(
Dissatisfied individuals could appeal to community boards as well as
change to other primary-care providers.
•
The value of an individual's voucher would increase with each annual
re-registration with the same primary-care provider.
•
The federal government would provide scholarships to medical school to those
who agree to serve for a specified period of time as a primary care provider in
a rural or urban area assigned to them.
ESTIMATED POTENTIAL SAVINGS
•
The total estimated savings of this system are estimated to be at least $306
billion per year. This estimate is based on the following components:
•
$200
Billion —
Overpriced and
Unnecessary
Treatments.
"Wasted Health Care Dollars," Consumer Reports, July 1992, pp.
435-448.
$80 Billion — Fraud. "Wasted Healthcare Dollars," (as above) and
Janice Castro, "Condition: Critical," Time, Nov. 25, 1991, pp. 34-37.)
$21 Billion — Defensive Medicine. Janice Castro (as above).
$4 Billion — Reduction of Malpractice Suits.
The actual cost of
malpractice cases makes up only about 1% [.01 x $800 billion = $8 billion]
of America's health care bill, according to consumerists groups." (Burton
A. Weisbrod, "The Health Care Quadrilemma...," Journal of Economic
Literature, June 1991, pp. 523=553.) (We estimate that at least half of this
amount would be saved by the design presented here.)
�Chapter 1
•
$1 Billion — Claim-Settlement.
Susan Dentzer, "Work-Care," The
New Republic, June 1, 1992, pop. 18-21
In 1991, $2800 = annual per capita healthcare expenditure. (Call it $3000.)
Then, since an estimated 38,000,000 people are not currently covered,
38,000,000 x $3000 = $114 billion. $114/$306 (estimated savings) = 37%.
This leaves 63% of current expenditures to cover overestimates of savings, and
optical-, auditory-, dental-, and wellness-program costs. The cost of these
additional services certainly ought not to exceed conventional healthcare
costs, or 37% of current expenditures.
•
Therefore, it is not unreasonable to expect the system proposed here to
provide a net saving.
MAJOR POTENTIAL E F F E C T S OF THE DESIGN
•
There would be a substantial reduction of costs but an extention of coverage to
all residents of the United States.
•
Medicare and Medicaid would be eliminated.
•
The role of the federal government in healthcare would
be
significantly
reduced.
•
Employers would be required to cover cost of only work-related healthcare.
•
The new system would be entirely market driven with incentives to discourage
abuse by any of the participants.
�Chapter 1
It would increase the proportion of healthcare providers who would provide
primary care—since it would make such practice more attractive and
rewarding—and it would reduce the number of specialists.
It would provide healthcare services to areas currently underserved.
It would encourage use of the system by many of those who do not use the
current system.
It would encourage the formation of integrated healthcare systems.
It would promote health at least as much as it would treat illness and
disabilities, and therefore would reduce national illness-care costs and losses
incurred because of illness (e.g., absence from work).
�Withdrawal/Redaction Marker
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Health Care Task Force
Paul Jamieson
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2006-0885-F
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P2 Relating to the appointment to Federal office 1(a)(2) of the PRA)
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personal privacy 1(a)(6) of the PRA|
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b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) of the FOIA]
b(3) Release would violate a Federal statute 1(b)(3) of the FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) of the FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA]
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C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�R U S S E L L
L.
ACKOFF
Chairman of the Board of INTERACT: The Institute for Interactive
Management, 401 City Ave., Suite 525, Bala Cynwyd, PA 19004
(215) 660-9200.
Anheuser-Busch Professor Emeritus of Management Science,
The Wharton School of the University of Pennsylvania.
August A. Busch, Jr. Visiting Professor Marketing, John M. Olin
School of Business, Washington University, St. Louis, MO.
BORN:
EDUCATION:
POSITIONS:
P6/(b)(6)
00 2
B. Architecture, University of Pennsylvania, 1941.
Ph.D. in Philosophy of Science, same University, 1947.
Asst. Instructor, Philosophy, Univ. of Penna., 1941-42, 1946-47
U.S. Army, 1942-46.
Asst. Professor, Philosophy and Math., Wayne University, 1947-51.
Methodological Consultant (on leave from Wayne), U.S. Bureau of the
Census, Jan-June, 1950.
Assoc. Prof, and Prof., Operations Research, and Director,
Operations Research Group, Case Institute of Technology,
1951-64.
Joseph Lucas Visiting Professor, Operations Research, University of
Birmingham (U.K.), 1961-62.
Professor, Silberberg Professor of Systems Sciences, and AnheuserBusch Professor of Management Science; Chairman of the
Dept. of Statistics and Operations Research, and Dept. of
Social Systems Sciences; Director, Management Science
Center and the Busch Center, Univ. of Penna., 1964-86.
Visiting Professor, National Autonomous University of Mexico,
1975-76.
Board Member, The Tallberg Foundation (Sweden) 1987-
AWARDS:
Sigma Xi and Tau Sigma Delta honorary fraternities.
Fellow, American Statistical Association, 1965D. Sc. (Honorary), Univ. of Lancaster (U.K.), 1967.
Silver Medal, Operational Research Society (U.K.), 1971.
George E. Kimball Medal, Operations Research Society, 1975.
Annual Award (1979) for Outstanding Contribution to the Art and
Science of Planning, Southern Calif. Corp. Planners Assoc.
Fellow, International Academy of Management, 1989-
BOOKS:
Psychologistics. 1946, with C. W. Churchman
Measurement of Consumer Interest. 1947, ed. with C. W. Churchman
and M. Wax.
Methods of Inquiry. 1950, with C. W. Churchman
The Design of Social Research. 1953.
Introduction to Operations Research. 1957, with C. W. Churchman and
E. L. Arnoff.
Progress in Operations Research, i, (ed.), 1961.
Scientific Method. 1962.
A Mgnagers Guide to Operations Research. 1963, with p. Rivett.
Fundamentals of Operations Research. 1968, with M. Sasieni.
�A Concept of Corporate Planning, 1970.
On Purposeful Systems. 1972, with F. E. Emery.
Systems and Management Annual, (ed.), 1974.
The SCATT Report. 1976, with T. A. Cowan, Peter Davis, et. al.
The Art Of Problem gQlving, 1978.
Creating the Corporate Future. 1981.
A Guide to Controlling Your Corporation's Future. 1984, with E.V. Finnel
and J. Gharajedaghi.
Revitalizing Western Economies. 1984, with P. Broholm and R. Snow.
Management in Small Doses. 1986.
Ackoff's Fables. 1991
ARTICLES:
More than 150 in a variety of Journals.
EDITORIAL:
Have served and am sen/ing in editorial capacities for Biological
Abstracts, Philosophy of Science, Operations Research, Conflict
Resolution, Management Science, Mathematical Spectrum, Management
Decision, Human Relations, General Systems, European Journal of
Operations Research, Managing Tomorrow, KMG Video Journal, and as
Advisory Editor in Management Science to John Wiley & Sons, N.Y.C.,
Advisory Editorial Board of the Encyclopedia of the Future.
RESEARCH:
For more than 300 corporations and government agencies, including
ALCOA, American Airlines, Anheuser-Busch, AT&T, Department of
Justice, Eastman-Kodak, Emerson Electric, Ford, General Electric,
General Foods, General Mills, Government of Mexico, IBM, Internal
Revenue Service, Martin Marietta, Metropolitan Life, Monsanto,
National Institute of Mental Health, National Science Foundation,
and U.S. Army and Air Force.
MANAGEMENT
EDUCATION:
MEMBERSHIPS
Participation in many Management and Executive Development Programs,
including ones at Columbia University, Penn State University, Cornell
University, Institute of Management Studies, ALCOA, Holiday Inn, IBM,
Naval War College, Rockwell, Univac, U.S. Steel, Standard Oil, Sun,
Veterans Administration, Youngstown Steel.
Operations Research Society, charter member, former V.P. and
President.
Operational Research Society (U.K.)
The Institute of Management Sciences, charter member and former V.P.
American Statistical Association
Society for General Systems Research, former President
Peace Science Society
ISO - Institute for the Study of Human Systems Organizations, Patronage
Committee
�MEMORANDUM
DATE: March 23,
1993
SUBJECT: C o n v e r s a t i o n With Jack Resnick,
M.D.
1. As we d i s c u s s e d , I c a l l e d Dr. Jack Resnick, P r e s i d e n t o f CHP, a
m u l t i - d i s c i p l i n e group p r a c t i c e which runs a f u l l y c a p i t a t e d HMO
a s s o c i a t e d w i t h t h e Long I s l a n d Jewish H o s p i t a l .
2. Dr. Resnick wanted t o share t h e experience o f t h e i r group, which
has managed a f u l l r i s k , f u l l y c a p i t a t e d HMO w i t h e v i d e n t l y g r e a t
success over t h e p a s t 20 y e a r s . The HMO has been p r o f i t a b l e f o r
e v e r y year over t h e p a s t 12 y e a r s . The c e n t r a l t h e s i s i s t h a t f o r
success t h e most c r i t i c a l f e a t u r e i s a s t r o n g p r i m a r y c a r e c o r e o f
p h y s i c i a n s . These p h y s i c i a n s have no r e s t r i c t i o n s on
their
r e f e r r i n g p a t t e r n s w i t h i n t h e group, and can r e c e i v e p e r m i s s i o n f o r
o u t o f group r e f e r r a l s f o r cause.
s
3. He f e e l s q u i t e s t r o n g l y t h a t t h e system t h a t i s c r e a t e d o u t of \
t h e r e f o r m e f f o r t must be f l e x i b l e enough t o p e r m i t i n n o v a t i v e / ^ ? Y - ^
groups o f p h y s i c i a n s and o t h e r p r o v i d e r s t o o r g a n i z e t o compete \
^'J^
w i t h l a r g e i n s u r a n c e based HMOs, I concur t h a t t h i s i s a c r i t i c a l
f e a t u r e o f an o p t i m a l system.
v
4. Another aspect he emphasized was t h e need t o p r o v i d e more
r e s o u r c e s and i n c e n t i v e s t o t e a c h and r o l e model p r i m a r y c a r e i n
M e d i c a l School, n o t j u s t i n p o s t - D o c t o r a l programs. T h i s group does
n o t use much o f t h e " r o u t i n e " U t i l i z a t i o n Review d a t a t o manage
t h e i r system. They r e c e n t l y have implemented a r e l a t i v e l y e x t e n s i v e
c l i n i c a l i n f o r m a t i o n system, w i t h encounter data and moving towards
a f u l l y computerized c l i n i c a l r e c o r d system. He f e e l s t h a t t h i s i s
i n d i c a t e d t o h e l p o p t i m i z e t h e care o f p a t i e n t s and s u p p o r t t h e
c a r e p r o v i d e r s . The a b i l i t y t o access c l i n i c a l i n f o r m a t i o n f o r
q u a l i t y management i s a by-product o f t h e move t o t h i s approach,
and i s n o t a p r i m a r y reason f o r t h e commitment o f c a p i t a l
e x p e n d i t u r e t o implement such a system i n t h e i r group.
�CHP
A SN E 1973
IC
A THE MEDICAL GROUP
AFFILIATED WITH LONG ISLAND JEWISH MEDICAL CENTER
410 LAKEVILLE R A • NEW HYDE PARK, N.Y. 11042 • (718) 343-7500 • (516) 352-2000
OD
March 16,
1993
I r a Magaziner
The White House
Washington, D.C.
Dear Mr. Magaziner,
The Community H e a l t h Program o f Queens Nassau(CHP) i s a 20-year o l d
m u l t i - s p e c i a l t y group p r a c t i c e based a t a major t e a c h i n g h o s p i t a l .
CHP c o n t r a c t s w i t h most o f t h e HMOs i n t h e area — a l w a y s on a
g l o b a l l y - c a p i t a t e d b a s i s . That i s , we accept f u l l , f i n a n c i a l r i s k
f o r a l l o f h e a l t h care — i n p a t i e n t , o u t - p a t i e n t , p h y s i c i a n
services, diagnostics, etc.
Here i s what e x p e r i e n c e has t a u g h t us:
l - A r e l a t i v e l y s m a l l group p r a c t i c e can p r o v i d e g l o b a l l y
c a p i t a t e d c a r e and t a k e t h e f u l l r i s k f o r a p o p u l a t i o n .
2 - A d m i n i s t r a t i v e c o n t r o l s — p r i o r approval, l i s t s of
c o n s u l t a n t s , c o n c u r r e n t and r e t r o s p e c t i v e r e v i e w , e t c . — a r e n o t
necessary t o make t h e system work.
3 - The c r u c i a l f e a t u r e o f such an o r g a n i z a t i o n i s a c o r e o f
p r i m a r y c a r e p h y s i c i a n s which c o n t r o l s t h e o r g a n i z a t i o n and i t s
mode o f p r a c t i c e .
4 - M e d i c a l s t u d e n t s and r e s i d e n t s who a r e exposed t o such a
s e t t i n g l i k e i t and wind up e n t e r i n g p r i m a r y care f i e l d s o f
practice.
I would l o v e t h e o p p o r t u n i t y t o d i s c u s s these o b s e r v a t i o n s i n
g r e a t e r d e t a i l w i t h anyone you might t h i n k a p p r o p r i a t e .
Sincerely,
Jack Resnick,
President
EAB PLAZA
UNIONDALE, NY 11556
(516) 683-9000
,1
M.D.
8 MAPLE AVENUE
BAY SHORE, NY 11706
(516) 968-9000
97-77 QUEENS BLVD.
REGO PARK, NY 11374
(718) 275-9300
�Withdrawal/Redaction Marker
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RESTRICTION
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COLLECTION:
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Health Care Task Force
Paul Jamieson
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[Interest Groups] [loose] [3]
2006-0885-F
im758
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PI National Security Classified Information 1(a)(1) of the PRA|
P2 Relating to the appointment to Federal office 1(a)(2) of the PRA|
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P5 Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA]
b(l) National security classified information 1(b)(1) of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency |(b)(2) of the FOIA]
b(3) Release would violate a Federal statute [(b)(3) of the FOIA|
b(4) Release would disclose trade secrets or confidential or financial
information |(b)(4) of the FOI A]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes |(b)(7) of the FOIA)
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIA]
h(9) Release would disclose geological or geophysical information
concerning wells [(b)(9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
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RR. Document will be reviewed upon request.
�CURRICULUM VITAE
•-
• r
DC
PROFESSIONAL SOCIETIES
Group Health A s s o c i a t i o n of America.
Member, Board of Directors — 6/87 - 6/91
Medical D i r e c t o r s D i v i s i o n — Chairman, 6/87- 6/91
Secretary, 6/85-6/87
American College of Physicians. Fellow.
New York Academy of Medicine. Fellow.
American College of Physician Executives. Fellow
American Academy of Medical Directors. Member.
L i a i s o n Council. Member
Society for General I n t e r n a l Medicine.
Member, Regional Leadership Committee
MEDICAL EDUCATION
Medical School
New York University School of Medicine
July, 1967 - June, 1971
M.D.
Internship
University of Buffalo School of Medicine
E . J . Meyer and Buffalo General Hospitals
I n t e r n a l Medicine-July, 1971 - June, 1972
Residency
University of Rochester School of Med.
Strong Memorial and Associated Hospitals
I n t e r n a l Medicine-July, 1974 - June, 1976
Fellowship
Psychosomatic Medicine with Dr. George
Engel
University of Rochester School of Med.
July, 1976 - June, 1977
�* -
PROFESSIONAL EXPERIENCE
President
Managed Health - New Hyde Park, N.Y.
October, 1990 - present
President
CHP - The Medical Group a f f i l i a t e d w i t h
Long Island Jewish Medical Center
New Hyde Park, N.Y.
March, 1983 - present
Medical D i r e c t o r
Assistant Medical
Director
Staff I n t e r n i s t
Manhattan Health Plan - HIP Manhattan
Health Center
New York, N.Y.
August, 1977 - February, 1983
General P r a c t i t i o n e r
National Health Service Corps
US Public Health Service
Bladenboro, N.C.
July, 1972 - June, 1974
�JACK A. RESNICK. M.D.
HOSPITAL APPOINTMENTS
Attending Physician
Dept. o f I n t e r n a l Medicine
Long I s l a n d J e w i s h - H i l l s i d e Med. Center
New Hyde Park, N.Y.
March, 1983 - p r e s e n t
Adjunct Physician
Dept. o f I n t e r n a l Medicine
Lenox H i l l H o s p i t a l
New York, N.Y.
January, 1978 - p r e s e n t
Attending Physician
Dept. o f I n t e r n a l Medicine
New York Infirmary/Beekman Downtown Hosp.
New York, N.Y.
September, 1981 - p r e s e n t
Attending Physician
Dept. o f I n t e r n a l Medicine
Southeastern General H o s p i t a l
Lumberton, N.C.
J u l y , 1972 - June, 1974
Attending Physician
Depts. o f Medicine and P s y c h i a t r y
Strong Memorial H o s p i t a l
Rochester, N.Y.
J u l y , 1976 - June, 1977
ACADEMIC APPOINTMENTS
Clinical
Instructor
I n s t r u c t o r & Fellow
Dept. o f Community Medicine
Mount S i n a i School o f Medicine
New York, N.Y.
October, 1980 - p r e s e n t
Depts. o f Medicine & P s y c h i a t r y
Univ. o f Rochester School o f Medicine
Rochester, N.Y.
J u l y , 1976 - June, 1977
CERTIFICATION
Board C e r t i f i e d
American Board o f I n t e r n a l M e d i c i n e
May, 1976
Board C e r t i f i e d
American Board o f M e d i c a l Management
January, 1989
�JACK A. RESNICK, MD.
r
OUTSIDE INTERESTS
Editor and Publisher,
Newspaper.
The Main Street WIRE. Roosevelt Island's Community
Amateur Theater — The Main Street Theater. Roles have included Nathan
Detroit i n Guys and Dolls. Prez in The Panama Game and Bratt in How to
Succeed i n Business Without Really Trying.
PERSONAL
Birth Date P6/(b)(6)
Citizenship - USAFamily Status - Married, four sons
New York Medical License # 1237 54
�JACK A. RESNICK. M.D.
PUBLICATIONS AND PRESENTATIONS
M e d i c a l E d u c a t i o n i n HMO's. The HMO Magazine. May, 1991.
J o s i a h Macy, J r . Foundation Conference, The F u t u r e o f t h e G e n e r a l i s t
P h y s i c i a n . Boston, MA. A p r i l 6 - 8 , 1989. I n v i t e d p a r t i c i p a n t .
An HMO-Based I n t e r n a l Medicine F e l l o w s h i p . HMO P r a c t i c e , V o l . 2, No. 4,
1988
Gatekeepers and Cost-Containers i n HMOs. L e t t e r . New England J o u r n a l o f
Medicine. V o l . 318, No. 25, pp. 1698-9, 6/23/88.
HMO's and Academic M e d i c a l Centers. SREPCIM. New York, N.Y.
1987.
March 6,
How Can We Move M e d i c a l Education t o t h e Ambulatory S e t t i n g ? A r e HMO's an
Answer? New York, N.Y. February 19 & 20, 1987. Organized by CHP & L I J .
P r e s e n t e r s i n c l u d e d : Saul Farber, M.D.
and Robert P e t e r s d o r f , M.D.
L e g a l and E t h i c a l C o n s i d e r a t i o n s f o r t h e HMO P h y s i c i a n . Group H e a l t h
Foundation. D a l l a s , Texas. November 22, 1986
The I m p l i c a t i o n s o f t h e Growth o f HMO's f o r t h e Primary Care R e s i d e n t .
I n t r o d u c t i o n t o H e a l t h P o l i c y Seminars. NYU/Bellevue Primary Care
Residency Program. New York, N.Y. October 14, 1986.
HMO's: The Changing Environment o f H e a l t h Care i n New Y o r k . H e a l t h Care
A d m i n i s t r a t i o n Alumni A s s o c i a t i o n o f Baruch C o l l e g e and t h e Mt. S i n a i
School o f M e d i c i n e . New York, N.Y. A p r i l 7, 1986.
Graduate M e d i c a l E d u c a t i o n i n t h e HMO. NY S t a t e HMO M e d i c a l D i r e c t o r s
Conference. Rochester, N.Y. A p r i l 27, 1985.
The I n t e r a c t i o n o f Key HMO Managers. Group H e a l t h A s s o c i a t i o n o f America.
Miami, F i a . March 4, 1985
A P r i m a r y Care I n t e r n a l Medicine F e l l o w s h i p i n a H e a l t h Maintenance
O r g a n i z a t i o n . New York S t a t e HMO M e d i c a l D i r e c t o r s Conference. New York,
N.Y. November 2, 1984
I m p r o v i n g t h e Q u a l i t y o f S e r v i c e i n an HMO. 1984 Group H e a l t h I n s t i t u t e
Proceedings. June, 1984
I m p r o v i n g P h y s i c i a n P r o d u c t i v i t y . Group H e a l t h I n s t i t u t e .
June, 1983
D a l l a s , Texas.
S t a f f Development: D e a l i n g w i t h P a t i e n t Complaints and t h e Complaint
System. Proceedings o f t h e Medical D i r e c t o r s Conference, V o l . 5, No. 3,
Feb., 1981
�P r a c t i c i n g i n an HMO. V i s i t i n g C l i n i c i a n - U n i v e r s i t y of V i r g i n i a
of Medicine. C h a r l o t t e s v i l l e , Va. May 19-23,1980
School
Medical Problems of Male Homosexuals, i b i d .
A Comparison of the Incidence of Patient Complaints Generated by
Psychologically Trained Physicians and t h e i r T r a d i t i o n a l l y Trained
Colleagues. U n i v e r s i t y of Rochester Symposium on Psychosomatic Medicine.
A p r i l 5, 1980
F i n a n c i a l I n c e n t i v e s f o r Physicians i n a Developing HMO.
I n s t i t u t e . Phoenix Az. June 6, 1979
Group Health
�CHP
A SN E 1973
IC
A THE MEDICAL GROUP
AFFILIATED WITH LONG ISLAND JEWISH MEDICAL CENTER
410 LAKEVILLE R A • NEW HYDE PARK, N.Y. 11042 • (718) 343-7500 • (516) 352-2000
OD
March 19,
1993
I r a Magaziner
The White House
Washington, D.C.
Dear Mr. Magaziner,
I w r o t e two days ago about our o r g a n i z a t i o n ' s unique h i s t o r y i n
managed c a r e and how i t has s p e c i a l lessons f o r your team.
Enclosed i s an a r t i c l e from y e s t e r d a y ' s New York Times which
d e s c r i b e s a n o t h e r o r g a n i z a t i o n — The G e i s i n g e r C l i n i c i n
P e n n s y l v a n i a — w i t h a s i m i l a r e x p e r i e n c e . That i s , t h e y
s u c c e s s f u l l y p r o v i d e care under g l o b a l c a p i t a t i o n w i t h o u t t h e s o r t s
of a d m i n i s t r a t i v e c o n t r o l s t h a t p a t i e n t s , d o c t o r s and h o s p i t a l s
bemoan.
I've i n c l u d e d a copy o f my o r i g i n a l l e t t e r , t h e Times a r t i c l e and
once a g a i n say t h a t I ' d l o v e t h e o p p o r t u n i t y t o p r e s e n t o u t
e x p e r i e n c e t o a r e l e v a n t member o f your t a s k f o r c e .
Sincerely,
Jack Resnick,
President
EAB PLAZA
UNIONDALE, NY 11556
(516) 683-9000
M.D.
8 MAPLE AVENUE
BAY SHORE, NY 11706
(516) 968-9000
97-77 QUEENS BLVD
REGO PARK, NY 11374
(718) 275-9300
�CHP
• SN E 1973 A THE MEDICAL GROUP
IC
AFFILIATED WITH LONG ISLAND JEWISH MEDICAL CENTER
410 LAKEVILLE R A • NEW HYDE PARK, N.Y. 11042 • (718) 343-7500 • (516) 352-2000
OD
March 16,
1993
I r a Magaziner
The White House
Washington, D.C.
Dear Mr. Magaziner,
The Community H e a l t h Program o f Queens Nassau(CHP) i s a 20-year o l d
m u l t i - s p e c i a l t y group p r a c t i c e based a t a major t e a c h i n g h o s p i t a l .
CHP c o n t r a c t s w i t h most o f t h e HMOs i n t h e area — a l w a y s on a
g l o b a l l y - c a p i t a t e d b a s i s . That i s , we accept f u l l , f i n a n c i a l r i s k
f o r a l l o f h e a l t h care — i n p a t i e n t , o u t - p a t i e n t , p h y s i c i a n
services, diagnostics, etc.
Here i s what e x p e r i e n c e has t a u g h t us:
l - A r e l a t i v e l y s m a l l group p r a c t i c e can p r o v i d e g l o b a l l y
c a p i t a t e d care and t a k e t h e f u l l r i s k f o r a p o p u l a t i o n .
2 - A d m i n i s t r a t i v e controls — p r i o r approval, l i s t s of
c o n s u l t a n t s , c o n c u r r e n t and r e t r o s p e c t i v e r e v i e w , e t c . — a r e n o t
necessary t o make t h e system work.
3 - The c r u c i a l f e a t u r e o f such an o r g a n i z a t i o n i s a core o f
p r i m a r y c a r e p h y s i c i a n s which c o n t r o l s t h e o r g a n i z a t i o n and i t s
mode o f p r a c t i c e .
4 - M e d i c a l s t u d e n t s and r e s i d e n t s who a r e exposed t o such a
s e t t i n g l i k e i t and wind up e n t e r i n g p r i m a r y care f i e l d s o f
practice.
I would l o v e t h e o p p o r t u n i t y t o d i s c u s s these o b s e r v a t i o n s i n
g r e a t e r d e t a i l w i t h anyone you might t h i n k a p p r o p r i a t e .
Sincerely,
Jack Resnick,
President
EAB PLAZA
UNIONDALE, NY 11556
(516) 683-9000
M.D.
8 MAPLE AVENUE
BAY SHORE, NY 11706
(516) 968-9000
97-77 QUEENS BLVD.
REGO PARK, NY 11374
(718) 275-9300
�NEW YORK TIMER
MARCH IR, 1993
Saving Lives and Money Too:
Doctors Say It Can Be Done
By ERIK ECKHOLM
Special to The New York Times
DANVILLE, Pa. - Dr. James C.
Blankenship, a cardiologist with a
health-maintenance organization in
central Pennsylvania, performs costly,
risky procedures in which tubes are
pushed to the heart to help find whether coronary vessels are clogged.
In his catheterization laboratory, he
studied X-rays revealing a partly
blocked artery in a 55-year-old man.
"What are the chances this will shut
off, causing a heart attack, versus the
risks of surgery?" he asked. "The studies differ."
"I'll.advise him to watch and wait,"
said the doctor, whose salary would not
be affected one way or the other. " I
want to do everything that's necessary,
but not too much."
As Americans consider a more frugal medical future, possibly dominated
by competing H.M.O.'s or other forms
of "managed care" that limit consum-
A Search for Limits
A periodic look at prescriptions (or
an ailinfi health-cure system.
er choice, urgent questions are rising
about the quality of care and how to
protect it. Will people be pushed into
health plans staffed by sullen, rushed
doctors whose decisions are secondguessed and who are paid extra to
scrimp on costly tests arid operations?;
Or will they find sensitive doctors
who have no financial incentive to do
too much or too little, have ready access to the best technologies and hold
down costs by preventing illness and
avoiding procedures with little benefit?
Room for Judgment
Medical experts are scrutinizing better health plans around the country to
see how large savings might be gained
through efficiency and prudence, not
through, shortchanging the sick. And
the evidence suggests that institutions
that foster physicians like Dr. Blankenship and allow them to exercise professional judgment may be in the best
position to pursue that goal.
At his organization, the Geisinger
Foundation in Danville, the decision
about how much is enough is left to the
doctors. Their cautious style of medicine has held costs well below the national average. Increases here have
still averaged 8.6 percent in recent
years, though, raising questions about
whether the country will be able to
tame medical inflation without cutting
into the quality of care.
The 530 salaried doctors who work
Com/nued on Page D22. Column 1
�trli-.
sscw
j \J t\ r\
invito
i i_< n o L-'-n r.
Trying to Save Lives
While Saving Money
Continued From Pajje Al
enough, tnen I'm not sure it can be done
in a way that fulfills the medical expectations of society," said Dr. Stuart
here, and offer care through a prepaid Heydt, president of the Geisinger Founinsurance plan, do receive prodding dation.
from above. But It involves not con- While America's medical costs are
stant second-guessing or rewards for increased by administrative waste, exicrimplng, but rather a steady flow of cess equipment, incentives to use proresearch news and tips that helps suf- cedures lavishly and outright fraud, in
fuse the institution with an ethic of the end spending mainly reflects the
routine decisions of physicians. They
:onservaUve care.
decide when a patient needs a $70 elec"Here, we don't police; we trust our trocardiogram, when to order a $100doctors," said Dr. Howard G. Hughes, dollar antibiotic instead of a $10 one,
who directs the H.M.O., the Geisinger and when $40,000 bypass surgery is
Health Plan.
truly likely to improve a patient's
In the case of the 55-year-old man, chances of survival or quality of life.
some doctors would have recommend- "The best way to control costs and
ed immediate surgery, but Dr. Blan- preserve quality is to have the physikenship felt sure that a trial period of cians do It," said Dr. Arnold S. Relman,
drug therapy wis in his patient's best the former editor of The New England
Journal of Medicine. "The whole
interest
health-care system Is built on the behavior of doctors, and that behavior is
Covers Wide Area
greatly influeno d by the way health
care is organized:!'
Of Pennsylvania
Dr. Relman, who has been studying
plans around the country,
In Danville, a town of 6,000 people, health Geisinger lor high doctor mopraised
Geisinger runs an advanced 577-bed rale and a systeqf of mutual review
hospital as well as a network of clinics that promotes excfllent care.
over a wjde area of central and north- While no organizational structure
eastern Pennsylvania. Its growing guarantees quality care, Geisinger has
H.M.O. serves 142,000 members, while
i t The bed- As Americans consider a more frugal medical future, the likelihood of
the same doctors and clinics also pro- several traits that promote the careful being part of a "managed care" prdferam, where choice is limited, will
rock, officials here say, is
vide the same style of care to hundreds selection of doctors who share the increasingly occur. Dr. James C. Blankenship, left, conferred with a
of thousands more people covered by group philosophy and are happy to
heart patient, Mary C. Reinhart of Orangeville, Pa. " I want to do
government or other insurance.
work for a salary. Since they are. not
The doctors insist that their brand of paid piecework, they make decisions
medicine improves on a system laden with no direct financial interest At
with incentives to overuse procedures. stake. (Nationally, doctors are salaried sicker patients to specialists only when formed at the main hospital in Danville, as is open-heart surgery. This
And they are saving money. The In some but not all H.M.O.'s or other necessary.
Now about 30 percent of the plan's does mean, though, that some patients
H.M.O. has the lowest ra^es in Pennsyl- forms of managed care.)
doctors provide primary care, but have to travel up to 100 miles for major
vania, according to the state insurance The salaries here are enough to
studies suggest the proportion should procedures.
department, with monthly premiums
an affluent
With central control, too, can come
this year of $109.70 for individuals and support but for manylife in this rural rise to close to 50 percent. Dr. Beck
region,
doctors they are said. This means cutting back on spe- imbalances in staffing, sometimes
$285.22 for families for a plan covering well below potential earnings In pricialties, a painful and controversial causing long waits. Currently, for exnearly everything but prescriptions.
ample, because of a shortage of gyneBut the numbers suggest, too, just' vate practice. Primary-care doctors topic among the medical staff.
of
how severe the challenge is. The health have starting salaries in the rangethe
Dr. Emest W. Campbell, a primary- cologists in the group, an appointment
$75,000 to $90,000, while among
plan's charges have risen by an aver- most experienced specialists who care physician and head of the Gei- for a routine pelvic checkup can take
age of 8.6 percent a year since 1985, Dr. might earn several times as much else- singer clinic in the nearby town of several months. Officials insist that
Hughes said. That is a good record
Bloomsburg. had been in independent that is a temporary side effect
compared with that of most insurers: where, "very few go beyond $300,000/' practice for 18 years before he and his But in surveys of H.M.O. patients
H. Beck, senior
nationwide, H.M.O. rates grew by an said Dr. Laurence with improving vice partner decided to join the salaried that generally find high satisfaction
president charged
effi- group in 1985.
with care and doctors, intermittent difaverage of 11.7 percent per year from ciency and quality.
ficulty in getting quick appointments
1986 to 1992, and rates for traditional
"We looked at the H.M.O. and liked has been the most common complaint,
fee-for-service plans rose annually by
what they were saying." he said. "It s said Dr. Duane Davis, medical director
14.2 percent, according to A. Foster
more geared toward preventive medi- of the health plan.
Higgins & Company, a consulting firm. Less Reliance
cine, keeping people healthy rather
But it remains well above the nationOn the Specialists
than just meeting the acute needs as
al goal of steady jeal spending set bv
they arise." He said the switch in- When Supervision
President Clintoa Recent increases
Morale rests on the pleasures of pa- volved a significant loss in income, but
have mainly reflected the rising cos; of tient care, collaboration, leaching and offsetting this was a drop in work time! Is From Within
nurses, technicians and other persciv research, said Dr. Francis J. Mena- to 60 to 70 hours a week. Since patients
nel, the soaring price of new di i . - jnd pace, the director of cardiology. "We are in a prepaid plan, he said, "now we
For all its emphasis on efficiency,
other factors, officials said.
look for a different type of physician, can tell them they have no excuse for Geisinger does little of the routine
Geisinger doctors and adminisira- one who still looks at medicine as a not coming in when they are ill."
oversight that is now so prevalent in
fors, most of them practicing phvsi- profession, not a business."
A large
cians, insist that through steady refine- As in most H.M.O.'s, all patients singer's canunified system like Geiof the health-insurance industry and so
also avoid duplication
annoying to doctors. Instead, the docriiem they can save much more without must choose a primary-care physician.
compromising care. Just hou much Usually trained in family practice, in- costly equipment and readily monitor tors are expected to watch themselves.
its use. For example, all cardiac cathe- "We have a high awareness of what
and how fast, though, no one is sure.
ternal medicine or pediatrics, these terizations, which are Dr
'41 this modfl can't hold down prices doctors provide most care and refer ship's diagnostic specialty, Blanken- our colleagues are doing in the next
are per- room," Dr Blankenship said ."There's
6
everything that's necessary, but not too much," he said. Dr. Ernest W.
Campbell examined a 3-week-old infant in his clinic in Bloomsburg,
Pa. He left his private practice in 1985. "We looked at the H.M.O. and
liked what they were saying," he said.
lots of intercommunication, lots of in-: leagues. Asked to explain, he said, "I'm
a Cadillac; can you afford a CadiUac?"
formal second opinions."
Peer review is, however, increasing- recalled Dr. Robert M. Haddad, who
oversees seven primary-care clinics.
ly backed up with research and suggestions from above. The H.M.O., for ex- "But 1 would say he overused tests,"
ample, keeps track of prescribing pat- Dr. Haddad said. "A 30-year-old man
terns and sends out newsletters urging doesn't need an E.K-G. every year."
physicians to prescribe cheaper drugs The continuous search for "better"
or generic versions where they have ways of doing things is not simply a
been shown to be equally effective.
code word for "less," Dr. Beck said.
In another example, officials studied "What our physicians insist on is to
whether patients who were put on an look at the outcomes and make them as
expensive cholesterol-lowering drug consistent and good as possible," he
were first asked to experiment witfj said. "If we do things the right way,
dietary change. By sharing the results and reduce variation, we will end up
with other physicians and stressing the with savings."
recommended course, doctors found
The question is how far even the
that the proportion of patients trying best-organized providers can trhn
diet changes had risen. Some will end. without choking off tests and treatup needing the drug anyway, but some ments of significant benefit.
will avoid indefinite use of a drug that
Dr. Beck said he believes that Geican have dangerous side effects.
singer and other similar groups still
Dr Campbell, the primary-care doc- have large opportunities to wring out
tor, said he welcomed these "timely expense. Increasingly important, he
reminders," and stressed that he re- said, will be reliance on clinical guidemained free, without any pressure, to lines that reflect research, done locally
prescribe a costly alternative when he or nationally, on what sequences of
tests and treatments work best
felt it was indicated.
Still, Dr. Beck said, "At some point
When a doctor's prescribing and referral patterns diverge significantly there will be tradeoffs between cost
from the norm, a senior doctor might and qualitv." If price controls are loo
ask why. In one case, a doctor who has severe, he said, society will have to
since left for private practice was openly face the issue of rationing.
found to be ordering twice as many "Those are decisions the individual
tests and costly drugs as his col- phvsician can't make in his office."
�
Dublin Core
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Health Care Task Force Records
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White House Health Care Task Force
Is Part Of
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
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William J. Clinton Presidential Library & Museum
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2006-0885-F
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White House Health Care Task Force
Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 3
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Box 24
<a href="http://clinton.presidentiallibraries.us/items/show/36148" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
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Clinton Presidential Records: White House Staff and Office Files
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3/16/2015
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42-t-12093080-20060885F-Seg3-024-004-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/7f2efe20b4a6dba9cc82eb11a0c32ab3.pdf
141c67cab44285868549373ff2c12a8f
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FOIA Number:
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This is not a textual record. This is used as an
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Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4786
FolderlD:
Segment 3
Folder Title:
[Interest Groups] [loose] [2]
Stack:
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Position:
S
53
3
3
3
�-0 U
&
Hepworth Associates
660 HIGHLAND DRIVE
PT. ROBERTS, WASHINGTON 98281
206/945-1370 TELEPHONE
206/945-1371 FAX
R. Gordon Hepworth
MD, FACS, FRCSC
. „„ , . .
ArriLiAi IUINO.
Buckingham, Doolitile
& Burroughs
Altorncys
Jack Diamond. J.D.
216/376-5300
T
n N <
Medical Management
Development Assoc.
1-800/25 LEARN
April 27 1993
Ira Magaziner,
Senior Aide Health Care Task Force,
The White House,
1600 Pennsylvania Avenue,
Washington, D.C. 20500
Page 1 of 2
Dear Mr. Magaziner:
The enclosed Universal Health Care Act written for the United States has
been prepared by myself and colleagues. We are not a lobby group and the Act is not
in any way connected with any branch of organized medicine, any group or groups who
maybe considered to have vested interests, including insurance companies, and it will not
help our group work in any way. Also, I have no fiscal interest in any aspect of the Act
or the computer system proposed for cost control. The Act takes the profit out of
managing ill health.
The Act is an enabling Act for introduction of Universal Health Care and is
based on the President's enunciated requirements for a health care plan: Universal
coverage, limitation of costs, global budgeting, cost control. It gives significant flexibility
to States as long as they operate within federal guidelines.
As you know there are at least four different standards of care in the U.S
today:
Private Sector: In general high quality care.
Medicaid:
The standards are disgraceful and many providers refuse
to handle medicaid patients.
Medicare:
The standards are almost as bad as medicaid. Senior
citizens deserve a decent standard of care equivalent
to that in the Private Sector. Currently, they do not
even have the right to be private patients.
HMO/PPO/GROUP: These limit the choice of physician and in most cases
limit care to a specific geographic region.
�Page 2 of 2
There are four criteria enunciated in the plan:
Public Administration
Comprehensiveness
Universality
Portability
Accessibility
The Act covers financing, cost containment and utilization issues. A
government already has in effect a computerized system which processes claims,
pays accounts, and initiates peer review. The system is very effective in printing out
standard deviations and has massive abilities in cost containment without impacting the
quality of care. It is attached as an addendum to the Act and is available.
A summary of the Act is at the beginning of the document and there is an
index covering all aspects of the Act. Although the Act will stand alone as it is presented,
I believe a different system would use large pieces of the proposed legislation as there
is the unique cost control aspect.
The Act has not been circulated to any group or to the public and is
submitted only to help you in finalizing the legislation for presentation to congress.
A great deal of work including research, has gone into preparation of this proposed
legislation, for which no return is expected. The Act has not been released to the media.
The Act has an initial summary, a table of contents, and is prepared as
though it was going directly to congress. It will stand alone.
My own interest was sparked by the fact I practiced under the British
system, under the Canadian system, and under various different group, university, HMO
and other systems in the United States, so I have a great deal of understanding about
what each means.
My request is that the enclosed Act be read and be given consideration in
the preparation of your proposed legislation. It would be disappointing if this was ignored
because it did not come from a pushy political lobby group,
R.Gordon Hepworth M.D., FRCSC, FACS
Enclosed: Universal Health Care Act for
the United States
�uumn
HEALTH
T
To be enacted by the Senate ^ House of Representatives of
the
United States
R
Hepworth Associates
He
w
G
- £2?!} P orth, M.D.
660 Highland Drive
Point Roberts, WA 98281
�(UHMMiiai&iL mmm ©mm
To be enacted by the Senate & House of Representatives of
the
United States
�RICHARD GORDON HEPWORTH, M.D.
660 HIGHLAND DRIVE
POINT ROBERTS, WA 98281
206/945-1370 FAX 206 945/1371
ACADEMIC QUALIFICATIONS' • • •
Vie Grammar School, Batley, England
University of Leeds, Leeds, England
Member Royal College Surgeons, England
License Royal College of Physicians
License Medical Council of Canada
Certified Specialist in Urology
Fellow Royal College of Surgeons
Fellow American College of Surgeons
Licenses: Arkansas, Calif., Iowa, Tennessee
EXPERIENCE OVERVIEW
Doctor/Medical Superintendent
Family Practitioner
Urology Training
Urologist/Management Positions
Teaching/Management/Clinical
Health Maintenance Organization (HMO)
Medical Director, Whittaker Health Plans
Hospital Medical Director
Medical Director (PRO)
Faculty Member:
University British Columbia
University Tennessee
C.O.M.P. College, California
Medical Management Development Assoc.
Medicare: Hospital/Physician Advocate
HEPWORTH ASSOCIATES (est 1989)
Graduated with Scholarships
(Equivalent of M.D.)
(M.R.CS.)
(LR.C.P.) London
(LM.C.C.)
Canada
United States
Government Hospital
Arctic, Prairies
Toronto Western Hospital
British Columbia, Tennessee
British Columbia, Tennessee, California
CIGNA Health Plan, California
California
California
Professional Peer Review Organization
Health Care Financing Admin.
PRESENT
OTHER APPOINTMENTS/HONORS
Chairman, Vancouver Board of Trade Health Commission
President, Corporate Medical Practice and Alexard Holdings
President, International Flying Physicians Association
Hospital Positions, Various Hospitals (QA/UR)
Publicatiotts: Professional papers and novel "Making of A Chief"
�To be enacted by the Senate & House of Representatives of
the
United States
�SUMMARY OF PROVISIONS IN THE HEALTH CARE ACT
The intent of the Act is to ensure as a right that all American citizens, or legally
designated permanent residents of the United States, be entitled to health care at any
given time if they so choose, without financial or other barriers.
Each state of the United States and the District of Columbia will provide a
Comprehensive Medical Plan. Administration will be carried out by a public body and
each State will be subject to criteria established by Federal guidelines ensuring a
comprehensive and universal plan with complete freedom of choice of physician.
Financing of the plan will be achieved from Federal and State funds using
existing revenue bases plus employers' contributions and contributions from individuals
designated as insured persons with exceptions as set out the Act.
The plan will be portable in structure so as to allow insured persons of one
State to obtain health care in any other State with certain restrictions as detailed in the
Act. Health care services must be on a uniform basis and be accessible to all
Americans with benefits and exclusions as outlined in the plan.
All recipients of Social Security payments will be assessed the amount to
cover Medicare Part B, which will be collected by the Federal government. All persons
will be required to pay a deductible for services as outlined in the plan. Individuals who
have no taxable income however, will not be required to make any payment towards
provision of their health care, nor will they be required to pay any deductible.
For persons requiring emergency admission to hospital the deductible will be waived.
Cost containment is of critical importance to the plan. Each State shall
determine a per diem for each hospital who will be required to participate in the plan
as outlined in the Act. Licensed physicians and other licensed practitioners
participating in the plan will have a uniform fee schedule worked out by negotiation
between the State Medical Association and The State Health Care Authority as
outlined in the Act.
Payment of accounts to providers by each State Health Care Authority will be
managed and controlled by a computerized system capable of processing claims while
at the same time the system will be assimilating other statistical information as
outlined in the Act. The system has the ability to print out data, as required, to permit
monitoring of all fiscal aspects medical practice as well as utilization of services
based on material collected and entered into the computerized system. This ensures
meaningful peer review and identifies aberrant patterns of practice which allows Peer
Review Committees to evaluate performance as outlined in the Act.
�TABLE OF CONTENTS
PAGE
SECTION
SECTION I
INTENT OF THE ACT
CITIZENS RIGHTS
PROFIT MOTIVE
1
1
1
SECTION II
COVERAGE & EXCEPTIONS
ARMED SERVICES
VETERANS
WORKMEN'S COMPENSATION
RESPONSIBILITY OF THE STATES
2
2
2
2
2
CRITERIA
"THE HEALTH CARE AUTHORITY"
ADMINISTRATION
COMPREHENSIVE
UNIVERSALITY
PORTABILITY
ACCESSIBILITY
PUBLIC ADMINISTRATION
THE HEALTH CARE ADMINISTRATION CRITERION
DELEGATION OF AUTHORITY OF THCA
3-8
3
3
3
3,5
3,5
3,5,6
3,7
4
4
4,5
DEFINITIONS
AMERICANS
BIRTHING CENTER
CHRISTIAN SCIENCE SANATORIUM
CONVALESCENT FACILITY
CUSTODIAL CARE
DRUG & ALCOHOL
HEALTH CARE PLAN
HEALTH CARE PRACTITIONER
HOME HEALTH CARE AGENCY
HOSPICE AGENCY
HOSPICE CARE
HOSPICE FACILITY
HOSPITAL
INSURED
MEDICAL PRACTITIONER
MEDICAL SUPPLIES
NON-OCCUPATIONAL DISEASE
8-16
8
8,9
9
9,10
10
10,11
11
11
11,12
12
12
12,13
13
13
14
14
14
SECTION III
SECTION IV
�NON-OCCUPATIONAL INJURY
NURSE ANESTHETIST
NURSE MIDWIFE
OCCUPATIONAL ILLNESS
PHYSICIAN ASSISTANT
PHYSICIAN OR SURGEON
PER DIEM
PHYSICIAN SERVICES
PROSTHbllC DEVICE
SECRETARY
SKILLED NURSING FACILITY
THE HEALTH CARE AUTHORITY
14
14
14
14,15
15
15
15
15,16
16
16
16
16
16-35
SECTION V
COMPREHENSIVE MEDICAL EXPENSE BENEFITS
COVERED SERVICES
AMBULANCE
PRE-ADMISSION TESTING
SURGICAL PROCEDURES
SECOND OPINION
DURABLE MEDICAL EQUIPMENT
MEDICAL SUPPLIES
DRUGS & PRESCRIPTIONS
PROSTHETIC DEVICES
BOARD & ROOM
REHABILITATION SERVICES
HOSPITAL EMERGENCY ROOM SERVICES
ALCOHOL & DRUG REHABILITATION SERVICES
PREGNANCY BENEFITS
BIRTHING CENTER EXPENSES
CONVALESCENT FACILITY
HOME HEALTH CARE
HOSPICE CARE
SKILLED NURSING FACILITY
INSTITUTES OF EXCELLENCE
SPECIAL SERVICES
MEDICAL SERVICES OUTSIDE THE U.S.A.
SPECIAL SERVICES: CHILDREN
SPECIAL SERVICES: SENIORS
PUBLIC HEALTH BENEFITS
SCREENING
IMMUNIZATION
SECTION VI
Page 2
16
16
16,17
17
18
18,19
19,20
20
20,21
21,22
22,23
23,24
24
24,25
25,26
26
27
27,28
28,29
29,30
30,31
31,32
32
33
33
34
34
34
PLAN SUMMARY OF COVERED SERVICES
35-37
�SECTION VII
FINANCING
PAYMENTS TO STATES
REVENUE BASE
STATE REVENUES
INSURED'S RIGHTS & OBLIGATIONS
MEDICAID, MEDICAL, MEDICARE
INDIAN HEALTH SERVICES
EMPLOYERS
MATCHING CONTRIBUTIONS
TAXABLE INCOME
MEDICARE PART B
DEDUCTIBLE
EXCLUSIONS FROM DEDUCTIBLE
FAMILY MEMBERS
EMPLOYMENT, STATUS CHANGES
SMALL, L^RGE EMPLOYER
TERMINATION
INDEPENDENT CONTRACTORS
MULTIPLE EMPLOYERS
DIVORCE, SEPARATION
NEW BORNS
CUSTODY, ADOPTION, FOSTER CHILDREN
PRIVATE PATIENT RIGHTS
NON-PARTICIPATING PRACTITIONER
PENALTIES
38-46
38
38,39
39,40
40-45
40,41
41
41
41
41
41
42
42
42
43
43
43,44
44
44
44
44,45
45
45
46,5^
46
SECTION VIII
PAYMENT, COST-CONTAINMENT,
DISCIPLINARY ACTION
HOSPITAL CONTRACTS
PER DIEM & THCA
DEFICITS
AUDITS
FRAUD
SPECIALIZED HOSPITALS
PRIVATE BENEFACTORS
NEW EQUIPMENT
APPROVAL OF THCA
APPLICATIONS BY HOSPITALS
NEW CONSTRUCTION
LICENSED PHYSICIANS
FEE SCHEDULE AND THCA
BILLING
PRIVATE PATIENTS
NON-PARTICIPATION
46-57
46,47
47
48
48
48
48,49
49
49
49
50
50
50-52
50,51
51
51
52
Page 3
�52
52
52
52
52
FAILURE TO AGREE
GLOBAL BUDGET
ILLEGAL BILLING
GROUPS, PARTNERSHIPS
HEALTH MAINTENANCE ORGANIZATIONS
RESTRICTION ON EMPLOYERS CHOOSING
PARTICIPANTS' PHYSICIANS
OTHER LICENSED PRACTITIONERS
PAYMENT OF ACCOUNTS
COMPUTERIZED SYSTEMS
PEER REVIEW
COMPLIANCE
RE-REVIEW
RESPONSIBILITY FOR MONITORING
HEARINGS FOR INFRACTIONS
OFFICE OF THE INSPECTOR GENERAL
ABERRANT VALUES & STANDARD DEVIATIONS
DISCIPLINARY ACTION
PHYSICIAN
HOSPITAL
52,53
53
53
53,54
54
54,55
54,55
55
55
55
55
56
56
56
SECTION IX
MALPRACTICE
57
SECTION X
PREPONDERANCE O F PROVISIONS
OVER OTHER LEGISLATION
57
ADDENDUM
C O S T CONTAINMENT
COMPUTER SUPPORT FOR UNIVERSAL HEALTH CARE
SYSTEM:
Registration
Submission of Claims
Payment of Claims
Monitoring & Utilization
Per diem Cost System
Communication & Inquiries
DIAGRAMATIC SUMMARY OF PROFILE SYSTEM
Manual for use of system
Statistical Printouts
Page 4
�1
2
Page 1
SECTION I
INTENT OF THE ACT
3
1. To ensure as a right that all American Citizens, or legally designated
4
permanent residents of the United States ("Americans") be entitled to all preventive,
5
diagnostic and therapeutic measures available in the health care field at any given
6
time, and that access to quality health care shall be universal and without financial or
7
other barriers.
8
9
2. That Americans achieve further improvement in their well being by combining
10
lifestyles which emphasize prevention of disease, preservation of good health, and
11
promotion of programs to ensure good health, using collective action against social,
12
environmental and occupational causes of disease. Moreover, Americans desire a
13
system of health services which will promote action to protect them against physical or
14
mental disease.
15
16
3. That there be a cooperative partnership between government, health
17
professionals, insurance bodies, and voluntary organizations as well as individual
18
Americans.
19
20
21
22
23
4. That the profit motive be eradicated from the health care system.
�1
Page 2
2
3
4
SECTION II
COVERAGE AND EXCEPTIONS
1. All Americans, irrespective of age, cultural or ethnic background, fiscal
5
viability, who have congenital or acquired disease, or who have sustained injury or
6
disability through injury, poisons, drugs, chemicals, or other noxious substances, be
7
entitled to health care without financial or other barriers.
8
9
2. Exceptions:
-
Members of the armed services and their
10
families, veterans and where applicable their families, who are entitled to programs
11
established for those services.
12
13
- Those falling under Workmen's Compensation.
3. Responsibility to establish coverage.
14
Each State of the United States or District of Columbia shall
15
provide for bona fide residents of that State, a Comprehensive Medical Plan which
16
shall be funded by Federal and State contributions to ensure the basic intent of the
17
plan is carried out. Each State shall be subject to criteria and Federal guidelines as
18
stated in this Act.
19
20
21
22
23
�1
2
SECTION III
3
4
5
CRITERIA
1. Administration shall be carried out by a public body:
"The Health Care Authority" (THCA).
6
7
2. Comprehensive.
8
9
3. Universal.
10
11
4. Portable.
12
13
14
15
16
17
18
19
20
21
22
23
Page 3
5. Accessible.
�1
2
3
4
Page 4
(1)
PUBLIC ADMINISTRATION
In order to satisfy the criterion respecting public administration,
The Health Care Administration (THCA) of a State must be:
5
(a) Administered by Commissioners appointed by
6
the State government.
7
(b) Operated on a non-profit basis.
8
(c) Responsible to the State government for
9
administration and operation of the State plan.
10
(d) Subject to audit of its accounts or those of
11
12
any contracting agency.
The criterion respecting public administration is not contravened if the
13
THCA designates any agency, group, insurance company or other body is designated
14
by the THCA to:
15
(e) Receive on its behalf any amounts under the
16
State comprehensive insurance plan; or
17
(f) Carry out any and all responsibilities on its
18
behalf the receipt or payment of accounts rendered for insured
19
health services provided it is a requirement that all such
20
accounts are subject to assessment and approval by the THCA
21
and that public authority shall determine the amounts to be
22
paid in respect thereof.
23
(g) Conduct reviews for utilization and quality of care.
�1
Page 5
2
(h) Provide the THCA with statistical information
3
obtained by use of the Federal Statistical Evaluation Methods
4
for cost containment as laid out in Section VIII of the Act.
5
6
(II)
7
COMPREHENSIVE
In order to satisfy the criterion of the
comprehensive nature of the
8
plan the THCA must ensure that all insured health services provided by hospitals or
9
health care practitioners licensed by the State are available to all insured recipients.
10
11
12
(III) UNIVERSAL
In order to satisfy the criterion respecting universality, the health care insurance plan
13
of the State must entitle one hundred per cent of the insured persons in the State to
14
any and all insured health services provided for by the plan on uniform
15
terms and conditions.
16
17
(IV)
PORTABLE
18
In order to meet the criterion of portability the THCA of the State must:
19
(a) Not impose any minimum period of residence in the State, or
20
waiting period, in excess of 90 calendar days before residents
21
of the State are eligible for or entitled to insured health
22
services.
23
(b) Must provide for the payment of amounts incurred by residents
�1
Page 6
2
who are temporarily absent from the State on the following
3
basis:
4
(i) Payment for services will be at the rate
5
approved by the THCA for residents of the
6
State in which the services would
7
ordinarily be provided, unless special arrangements have
8
been made between the States to apportion the costs.
9
This will apply to emergency or elective services
10
provided in one of the States of the United States.
11
12
(ii) Where insured services are provided
13
outside the United States, as provided under Section V
14
(XIX), payment will be made on the basis of the amount
15
that would have been paid by the State for
16
similar services rendered in the State
17
itself, with due regard to the size of hospital,
18
standards of care rendered therein,and such other
19
relevant factors as the THCA may determine to be
20
pertinent in the circumstances.
21
(c) Must provide for the payment of any health
22
care services rendered by another State, during the waiting
23
period imposed by the other State, for any permanent resident
�1
Page 7
2
of the former State, who has taken up
3
permanent residence in the new State chosen by the insured
4
for permanent residency.
5
6
(V)
ACCESSIBLE
7
In order to meet the criterion of accessibility, the THCA must:
8
(a) Provide insured health services on a uniform
9
basis which does not impede or preclude, on a fiscal or any
10
other basis, reasonable access to those services available to
11
insured persons.
12
(b) Provide payment for insured health services in
13
accordance with the fee schedule established with practitioners,
14
and the per diem designated to be paid to hospitals.
15
16
17
18
19
20
21
22
23
�1
SECTION IV
2
DEFINITIONS
3
"Americans" means those who are citizens or legal permanent residents of the United
4
5
Page 8
States.
"Birthing Center" means a free standing facility which meets the following tests:
6
1. It is licensed as such by the jurisdiction of location.
7
2. It is set up and equipped to run as a setting for prenatal care,
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
delivery, and immediate post partum care.
3. It ordinarily charges for services and supplies it provides.
4. It is run under the direction of at least one physician specializing
in obstetrics and gynecology.
5. It has a physician or certified nurse mid-wife present at all births
and during the immediate post partum period.
6. It extends staff privileges to physicians who have privileges to provide
obstetrical and gynecological care in a hospital.
7. It has a minimum of two beds or two birthing rooms for use by patients
while in labor and during delivery.
8. It provides full time skilled nursing services by registered nurses
or certified nurse mid-wives in the delivery and recovery rooms.
9. It has diagnostic X Ray and laboratory equipment needed to perform
tests on the mother and child
10. It has equipment and supplies needed to perform minor surgery including
episiotomy and repair of perineal tear.
�1
Page 9
2
11. Equipment and supplies are available to administer local anesthetics.
3
12. Equipment and trained personnel are available to handle medical
4
emergencies and to provide immediate supportive measures to sustain
5
life should complications arise during labor or if a child is born with
6
7
8
abnormalities which impair function or impair life.
13. Admission policies determine that only patients with low risk pregnancy
are admitted.
9
14. There is a written agreement with an area hospital for immediate transfer
10
of a patient or child in case of emergency and all members of staff are
11
aware of the procedures to effect such a transfer.
12
13
14
15. On-going quality of care programs carried out with reviews by physicians
other than those who own or direct the facility.
16. Medical records are kept on each patient and child.
15
"Christian Science Sanitorium" is an institution operated or listed and certified by
16
the First Church of Christ, Scientist, is considered a hospital but only for
17
an individual admitted for healing (not rest or study) while he is under the
18
care of a practitioner listed in the Christian Science Journal as an
19
authorized practitioner.
20
"Convalescent Facility" means an institution or part thereof which meets one of the
21
following tests:
22
1. It has been approved by the Secretary of Health Education and Welfare
23
for participation as an extended care facility.
�1
Page 10
2
2. It meets all of the standards for, and has been certified to be, an
3
accredited Extended Care Facility by the Joint Commission of Accreditation
4
of Hospitals and Organizations.
5
In no event will an approved Convalescent Facility include any institution or part
6
thereof which is other than incidentally a place for rest, custodial care, for educational
7
care, for the care of mental disorders, or a place for the aged. An approved
8
Convalescent Facility will be treated the same as a Hospital as the term is used in
9
determining benefits for physicians' services.
10
"Custodial Care" is care which consists of services and supplies including board and
11
room and other institutional services, furnished to an individual primarily to
12
assist the individual in activities of daily living whether or not the individual is
13
disabled. These services and supplies are custodial care regardless of the
14
practitioner or provider who prescribed, recommended or performed them.
15
When board and room and skilled nursing services are combined with other
16
necessary therapeutic services, and supplies in accordance with a generally
17
accepted standards to establish a program or medical treatment, they will
18
not be considered "Custodial Care".
19
"Drug and Alcohol Treatment Facility" means an institution or part thereof which fully
20
meets the following criteria:
21
22
23
(a) Is primarily engaged in providing on a full time basis a program for the
diagnosis, treatment and evaluation of alcoholism and/or drug abuse.
(b) Provides detoxification services on the premises twenty four (24) hours a
�1
2
3
Page 11
day.
(c) Provides, or has an arrangement with, an acute hospital in the area to
4
provide medical services other than those related to drug and alcohol abuse and has
5
the necessary staff and equipment to provide emergency services for conditions other
6
than conditions produced by drug and alcohol abuse.
7
8
9
10
11
12
13
14
15
16
(d) Provides a staff of physicians and licensed skilled nurses to be available on
a twenty four hour basis.
(e) Provides a written medical record which must also contain a treatment plan
specific to the drug and alcohol related problem(s).
(f) Provides psychological, social as well as medical needs under the direction
of a licensed physician.
(g) Meets the licensing standards of the jurisdiction in which it is located.
"Health Care Plan" means the plan established by each State in conformance with
medical guidelines contained in the Federal Act.
"Health Care Practitioner" means a person who is licensed as :
17
(I) A physiotherapist
18
(II) A psychologist
19
(III) A podiatrist
20
(IV) A chiropractor
21
(V) A dentist
22
23
"Home health Care Agency" means an agency which:
(a) is primarily engaged in and licensed to provide skilled nursing services and
�1
2
3
Page 12
other therapeutic services.
(b) It has policies established by a professional group associated with the
4
agency or organization - this group must include at least one physician and at least
5
one registered nurse to govern the services provided it also:
6
(i) Provides full time supervision of services by a registered nurse.
7
(ii)Maintains a complete medical record on each patient.
8
(e) Has a full time Administrator.
9
10
"Hospice Agency" means an agency or organization which supplies care twenty-four
hours a day, meets licensing standards in the jurisdiction in which it is
11
located, and provides the same services on an out-patient basis as
12
those required for a "Hospice Facility".
13
14
15
"Hospice Care" means care rendered as part of a hospice care program to a terminal
ill individual by or under arrangements with a hospice care facility.
"Hospice Facility" means a facility or part of a facility which meets the following
16
parameters:
17
1. Hospice care is available twenty-four hours a day.
18
2. It is licensed by the jurisdiction in which it is located.
19
3. Provides skilled nursing services, social services, psychological
20
and dietary counseling and bereavement counseling.
21
4. Keeps medical records on each patient.
22
5. Provides a quality of care program with reviews by physicians other
23
than those who own or direct the facility.
�1
Page 13
2
6. There is a staff of physicians one of whom is on call at all times.
3
7. A registered nurse is present to supervise nursing services twenty-four
4
5
hours a day.
8. There is a full time administrator.
6
"Hospital" means an institution established and licensed by the State and approved by
7
the Joint Commission of Accreditation of Hospitals and Organizations and is
8
primarily engaged in providing medical, surgical, and obstetric facilities for
9
the diagnosis, treatment and care of injured and sick persons under the
10
supervision of a group of physicians. The surgical requirement may be
11
waived for a mental institution in which the insured or a family member is
12
confined as in patient. Hospitals provide twenty-four hour registered
13
graduate nursing service and are not, other than incidentally, a place or rest
14
for the aged, drug addicts, alcoholics or a nursing home.
15
16
"Insured" means a beneficiary who has been a resident of a State for the required
minimum time (not more than 90 days) to obtain health services under the plan
17
established by The Health Care Authority of each State, but who is not:
18
(a) A member of the armed services or veteran or a dependent thereof who
19
is covered by alternate health care services provided by the Federal
20
government.
21
(b) A person covered by an alternate health care plan established by the
22
Federal or State government and rendering equivalent benefits to those
23
provided by this Act.
�1
2
3
4
Page 14
"Medical Practitioner" means a person licensed to practice medicine in a State and
who is a graduate of a school of medicine or school of osteopathy.
"Medical supplies" means supplies ordered by a physician and considered
5
medically necessary for treatment of a condition but does not include
6
adhesive tape, antiseptics, or other common First Aid supplies.
7
"Non-Occupational Disease" means a disease which did not arise out of, or in the
8
course of any work for pay or profit, unless it is not covered under a worker's
9
compensation law or other law of similar purpose, for a particular disease
10
under such law, in which circumstances that disease shall be considered
11
"non-occupational" regardless of its cause. For benefits, the term "Non-
12
occupational Disease" shall include any congenital abnormality or
13
hereditary complication including those of a newborn child.
14
"Non-occupational Injury" means an accidental bodily injury which does not arise out
15
of (or in the course of) any work for pay or profit nor, in any way results
16
from an injury that does.
17
18
19
20
21
"Nurse Anesthetist" means a registered nurse who has become certified to give
anesthetics.
"Nurse Midwife" means a registered nurse who has had special training and is
certified as qualified to perform normal deliveries.
"Occupational Illness" means an illness sustained in the course of employment which
22
is covered by any federal or state workers' compensation, industrial insurance
23
law, employer's liability contract, special insurance, or self insurance program.
�1
Page 15
2
Sole proprietors, partners, and elected corporate officers are eligible for the
3
health plan if they are not covered under such labor or industrial coverages.
4
"Physician Assistant" means a qualified person who has taken a special training to
5
assist a physician in the office or hospital environment.
6
"Physician or Surgeon" a legally qualified physician. The following medical
7
practitioners are recognized under this definition, so long as they have a license
8
under applicable state licensing laws and they are acting within the scope of their
9
license when rendering any service for which they are remunerated under the plan:
10
Doctors of:
11
1.
Medicine
12
2.
Osteopathy
13
3.
Podiatry
14
4.
Chiropractic
15
5.
Optometries
16
6.
Dentistry (for covered dental surgical procedures only)
17
7.
Licensed or certified Psychologists.
18
"Per diem" means a specific sum paid to a hospital to cover costs on a daily basis to
19
be inclusive of all services as listed in Section V A and B (II through XIV) with the
20
exception of "exclusions" listed in Section V IX B (a^b) of the Act, but with the
21
addition of such other items as The Health Care Authority of each State may
22
determine appropriate for that State.
23
"Physician Services" means any medically necessary services rendered by medical
�1
23
Page 16
2
practitioners.
3
"Prosthetic Devices" are artificial parts used to replace natural parts of the body.
4
"Secretary" ("The Secretary") means the Secretary of Health and Human Services.
5
"Skilled Nursing Facility" is a specially qualified facility which has the staff and
6
equipment to provide skilled nursing care or rehabilitation services and other
7
related services and is so registered with the State.
8
"The Health Care Authority" means a Board of Commissioners appointed by the State
9
government to form the Public Administration Authority under the Health Care
10
Plan.
11
SECTION V
12
A. COMPREHENSIVE MEDICAL EXPENSE BENEFITS
13
The plan will pay COMPREHENSIVE MEDICAL EXPENSE BENEFITS incurred
14
in connection with a non occupational disease or injury as defined under the Act. If,
15
however, any of the expenses incurred are excluded from coverage as described in
16
the medical expenses benefits exclusion Section V (XXII), these expenses will not be
17
allowed.
18
B. COVERED MEDICAL SERVICES:
19
(I) AMBULANCE TRANSPORTATION
20
Ambulance transportation is medically necessary transportation which is used
21
when the transportation of a patient by other means would endanger the patient's
22
health. It is provided by a licensed commercial entity (including air ambulance)
23
to transport a patient as follows:
�1
2
3
Page 17
(i) To a hospital or skilled nursing facility that can provide the type of care
required for treatment of the emergency condition resulting from either:
4
(a) An accident.
5
(b) Acute illness occurring in the patient's home, temporary or other
6
residence.
7
(ii) From a hospital or skilled nursing facility to the patient's home.
8
(iii) From a hospital to a skilled nursing facility or convalescent facility.
9
10
(II) PRE-ADMISSION TESTING:
Testing conducted prior to surgery by a hospital, surgery center, or licensed
11
diagnostic laboratory facility for the outpatient testing of the insured or the family
12
member related thereto, and performed within seven days prior to scheduled
13
admission to a hospital or surgery center is a covered benefit if:
14
(i)
The patient undergoes the scheduled admission to a hospital or
15
surgery center. However, this does not apply if testing shows
16
that the surgery should not be performed or the confinement is
17
not necessary because of the insured or family member's physical
18
condition.
19
20
21
22
23
(ii)
The patient has not already been admitted to the hospital as an
in-patient.
(iii) The tests are not unnecessarily repeated in or by the hospital or
surgery center where the surgery is performed or confinement occurs.
�1
2
3
Page 18
(III) SURGICAL PROCEDURES:
A.
(i)
All charges made by the operating surgeon and any approved
4
assistant, for the performance of the surgical procedures and
5
all necessary postoperative care for twenty-one days following
6
the surgical procedure.
7
(ii)
8
Charges of the anesthesiologist or physician administering
the anesthetic.
9
(iii)
All charges for drugs, medications, intravenous infusion, blood,
10
X ray or other laboratory services incurred during the
11
performance of surgery.
12
B.
Out patient surgical expenses furnished in a hospital, free standing
13
licensed surgical center, or physician's office as stated in Section V III A,
14
but a surgical procedure should not performed on an outpatient basis if
15
such a procedure is expected to:
16
(i)
Result in extensive blood loss.
17
(ii)
Require major or prolonged invasion of a body cavity.
18
(iii) Involve any major blood vessels.
19
C. SECOND SURGICAL OPINION:
20
!
A second surgical opinion shall be mandatory when required by the
21
hospital or free standing surgical center as stated in the institution's
22
by-laws or regulations or as required by the operating surgeon the only
23
restriction being that the second opinion shall be given by a physician
�I
I
1
Page 19
2
or surgeon who is not associated in practice with the first physician who
3
recommended and proposed the surgery.
4
5
(IV) DURABLE MEDICAL EQUIPMENT
Durable medical equipment (DME) is equipment that is medically necessary for
6
treatment of an illness or injury, or to improve function of a malformed body member
7
or members which meet the following criteria: The equipment or device...
8
I Can stand repeated use
9
II Must be related to the physical disorder
10
III Is not useful in the absence of illness or disorder
11
IV Must be ordered by a physician who will give an estimate of the period for
12
which the device or equipment is needed.
13
The plan pays for the use or rental of the following provided they are
14
ordered by a licensed medical practitioner as defined under the Act:
15
16
V Necessary casts, splints, crutches, braces, surgical and orthopedic
appliances.
17
VI Dialysis equipment or Iron Lung.
18
VII Wheel chair, seat lift chairs, or other devices approved by the Secretary.
19
VIII Other DME whose only function has been determined to be necessary for
20
medical treatment of an illness or accidental injury not covered under the
21
Workmen's Compensation Act, which can be expected to improve the
22
functions of one or more malformed body members.
23
IX
Equipment for the administration of oxygen.
�1
2
Page 20
Benefits do not include payment for the following:
3
(i) Environmental control devices or equipment such as particle arresting
4
devices, air cleaner purifiers, humidifiers, or other atmospheric control devices.
5
(ii) Precautionary or hygienic equipment and comfort or convenience items not
6
primarily medical in nature such as jet or whirlpool baths, wheel chair lifts etc.
7
(V) MEDICAL SUPPLIES
8
The plan pays benefits for the following medical supplies:
9
I Surgical dressings for wounds, burns, diabetic and decubitus ulcers.
10
II Splints and casts.
11
III Catheters
12
IV Syringes and needles for administering insulin.
13
V Blood & blood plasma
14
VI Anesthetic agents and oxygen
15
* Benefits do not include the following :
16
Supplementary supplies such as batteries, tape, gauze,
17
alcohol pads, tubing, gel, crutch tips etc.
18
19
20
21
(VI) DRUGS AND PRESCRIPTIONS
Drugs or medications if approved by the prescription of a licensed physician
may be obtained but only by the physician's prescription provided that:
(i)
Where available "a generic drug or medication" is used. This meets the
22
following requirements:
23
(a)
It is manufactured and marketed under the chemical name or a
�1
Page 21
2
3
shortened version thereof.
(b)
4
5
It is approved by the U.S. Food and Drug Administration for
safety and effectiveness.
(c)
It is manufactured after the original patent expires by a
6
company different from the company that originally patented
7
the chemical formulation.
8
9
10
(d)
It is less expensive than the product manufactured by the
company that patented the chemical formulation.
(ii) Where no generic equivalent is available, patented drugs are covered for the
11
insured or family members provided they have no taxable income.
12
(VII) PROSTHETIC DEVICES
13
Prosthetic devices will be paid for provided they are medically necessary. The
14
following devices are covered under the health plan:
15
I Approved corrective lenses following cataract surgery.
16
II Breast prosthesis following mastectomy for disease.
17
III Colostomy, ileostomy, urinary diversion bags and related supplies.
18
IV Heart pacemakers, or other devices of a similar nature when they are
19
approved by the Secretary.
20
V Artificial limbs and eyes.
21
VI Arm, leg, back and neck braces.
22
VII Orthopedic shoes necessary to correct a congenital abnormality.
23
�1
, 2
Page 22
(VIII) DIAGNOSTIC TESTS AND OTHER TESTING PROCEDURES:
3
4
Diagnostic tests and other procedures that lead to treatment are covered for the
insured and family members as follows:
5
(i)
6
X Ray, covering CAT scans, MRI and all other radiological services
including nuclear medicine.
7
(ii)
8
(iii) All pathological services including biopsy and consultative work on blood
9
10
All laboratory work.
smears.
(IX)
11
BOARD AND ROOM
This is a comprehensive medical expense benefit limited to:
,12
(i)
An institution which is a hospital, including a mental hospital, drug
13
and rehabilitation center, licensed convalescent facility or hospice
14
facility depending on the benefit described.
15
(ii)
16
17
That admission to the institution is to a room not containing more
than four beds.
A.
Benefits include:
'18
(a)
All meals including special diets.
19
(b)
Use of operating room, recovery room and all other areas
20
21
relating to the operating suite.
(c)
22
23
Use of the intensive care unit and "step down units" as
considered medically necessary.
(d)
All beds in the hospital except that the insured may be required to
�1
Page 23
2
pay for a Private Room in the institution should such a room be
3
requested.
4
5
(e)
B.
All regular and specialized nursing services.
Exclusions are:
6
(a)
Use of a telephone and charges incurred.
7
(b)
Use of any other facilities such as radio or television or other
8
items which may be considered for the comfort of the patient
9
or the patient's family and not directly related to treatment.
10
11
12
(X) REHABILITATION SERVICES
Rehabilitation services are medically necessary services which meet the
13
following criteria:
14
(a)
Must be prescribed by a licensed physician.
15
(b)
The physician alone, or in consultation with a therapist,
16
17
sets up a documented plan of treatment.
(c)
18
19
20
The physician must review the treatment plan as considered
necessary but not less than twice weekly.
(d)
The therapist must keep a daily record of progress.
Services Included:
21
(i)
Physical therapy or restoration services.
22
(ii)
Occupational therapy.
23
(iii)
Speech therapy.
�1
Page 24
2
(iv)
3
4
5
Any other services which fall under a physical rehabilitation
of the patient.
(XI) HOSPITAL EMERGENCY ROOM SERVICES:
These services shall be all inclusive for any type of diagnostic tests and
6
therapeutic regime as required under the regulations of the Joint Commission of
7
Hospitals and Organizations.
8
9
Services shall include all minor surgical procedures, stabilization of
acutely ill patients, but shall not include care beyond twenty-four hours from the time
10
of the insured or family member's admission to the emergency room.
11
(XII) ALCOHOL AND DRUG REHABILITATION PROGRAMS
12
13
Comprehensive benefits are included for effective treatment of alcoholism or
drug abuse when they are rendered in:
14
(i)
A hospital.
15
(ii)
A licensed alcohol and drug treatment facility.
16
However, the maximum number of days coverage will be given for effective
17
treatment of alcoholism and/or drug abuse for each family member during his life time
18
is one hundred thirty-five days.
19
20
21
Effective treatment and drug abuse shall mean a program of therapy that meets
the following conditions:
(a)
It is prescribed and supervised by a physician who certifies that a
22
follow-up program has been established prior to discharge from the
23
facility.
�1
2
Page 25
(b)
3
4
It begins within two weeks following release from the hospital or
treatment facility.
Treatment solely for de-toxification or primarily for maintenance care although
5
covered by the plan is not considered complete and effective treatment.
6
(XIII) PREGNANCY BENEFITS
7
Comprehensive medical expense benefits are payable under the plan during the
8
whole of the pregnancy and for hospital confinement and such other medical services
9
and supplies furnished to a female due to the pregnancy and will be on the same
10
basis as any non-occupational disease. Pregnancy related conditions are covered
11
under each benefit subject to any other provisions of the act or limitations herein.
12
All services and supplies if provided on the recommendation of a licensed
13
physician shall be covered under the plan. All hospital care including nursery care or
14
care in a neo-natal intensive care unit shall be covered under the plan. The newborn
'15
16
shall be covered automatically as of the date of birth and shall be enrolled in the plan.
The plan provides when one of the following complications occurs,
17
comprehensive medical expense benefits are payable under the plan on the same
18
basis as any other non-occupational disease.
19
(i)
Surgical operations for extra-uterine pregnancy or other complications
20
requiring intra-abdominal surgery after termination of pregnancy
21
(including repair of a ruptured uterus or a hysterectomy because
22
or placenta accreta, or a similar cause).
23
(ii)
Pernicious vomiting of pregnancy.
�Page 26
1
2
(iii)
Toxemia with convulsions.
3
(iv)
Toxemia without convulsions in hospital but only if the diastolic
4
blood pressure is elevated to 100 or more and the urine reveals
5
an albumin of 4+. On an outpatient basis coverage is provided
6
as for any other non-occupational disease.
7
(v)
Pelvic abscess.
8
(vi)
Acute renal failure.
9
(vii)
Acute yellow atrophy of the liver.
10
(viii)
Cerebral thrombosis or cerebral hemorrhage.
11
(ix)
Extra uterine pregnancy.
12
(x)
Hydatidiform mole.
13
(xi)
Any type of malignancy.
14
(xii)
Placentia abruptio, placentia preavia, marginal or premature
separation of the placentia.
15
16
(xiii) Post partum hemorrhage.
17
(xiv)
Psychosis requiring hospitalization and shock therapy.
18
(XV)
Puerperal sepsis and all complicating conditions.
19
(xvi)
Pulmonary embolism infarct.
20
(xvii) Thrombophlebitis.
21
A.
BIRTHING CENTER EXPENSES
22
The plan pays for services and supplies furnished by a birthing center or
23
hospital birthing room for all services up to twenty-four hours following delivery.
�1
Page 27
2
XIV CONVALESCENT FACILITY
3
The insured or family member who is confined in a licensed convalescent facility and
4
receives skilled nursing and physical restoration services from an injury or disease.
5
Admission to the facility must be approved and recommended by a licensed
6
physician and the patient must:
7
(i)
Be recovering from an acute disease or injury.
8
(ii)
Require professional and practical nursing care.
9
(iii)
Remain under the active medical supervision of a physician.
10
Exclusions:
11
No benefits are covered for:
12
(i)
Confinement principally for custodial care.
13
(ii)
Care for alcoholism or drug addiction.
14
(iii)
Care for senility, mental deficiency or mental retardation.
15
(iv)
Care for mental or nervous disorder other than short term convalescent
16
care where the prognosis for recovery or improvement is deemed
17
favorable.
18
(v)
Care which cannot be provided by a licensed facility.
19
(vi)
Care that could be managed by an licensed Home Health Care Agency
20
where such agency is available.
21
(XV) HOME HEALTH CARE
22
As defined under Section IV of the act home health care will be paid for by the Health
23
Care Plan established under The Health Care Authority when such is required for part
�1
Page 28
2
time or intermittent skilled nursing care which can include up to eight hours of
3
reasonable and necessary care per day as determined by a licensed medical
4
practitioner for a period determined by the medical practitioner.
5
The following services are available:
6
(i) Physical therapy.
7
(ii) Speech therapy.
8
(iii) Occupational therapy.
9
(iv) Medical Social Services.
10
Medical supplies and DME shall not be excluded from the services provided.
11
Exclusions under the health care plan:
12
(i) General household services.
13
(ii) Meal preparation, shopping services.
14
(iii) Services performed to meet purely personal or family or domestic
15
16
needs.
(XVI) HOSPICE CARE
17
Hospice care is covered under the act as follows:
18
(i)
Board and room and other services and supplies furnished to the
19
insured and family member while confined as full time patient for
20
pain control and other acute and chronic symptom management.
21
22
23
(ii)
Services and supplies furnished to a patient who is not confined as
a full time inpatient.
(iii) Full time, part time or intermittent nursing care by a registered
�1
Page 29
2
nurse or a licensed practical nurse.
3
(iv)
Medical social services when ordered by a physician.
4
(v)
Psychological and dietary counseling.
5
(vi)
Physical and occupational therapy.
6
(vii)
Part time or intermittent home health aid services which consist
7
of caring for the patients for up to any eight hours in any one
8
day.
9
(ix)
10
prescribed by a physician.
11
12
Medications, medical supplies, drugs and other therapies as
Also included are all charges by a physician.
(XVII) SKILLED NURSING FACILITY
13
The plan will pay a benefit following hospital stay provided that daily
14
skilled nursing or rehabilitation services are considered essential and that these
15
services can only be provided by such a facility, and if the following conditions are
16
met:
17
18
19
20
21
22
23
(i) The stay in hospital has been for at least three consecutive days not
including the day of discharge before transfer is made to the facility.
(ii) Care is required following admission for a condition that required
hospitalization.
(iii) Skilled nursing services or rehabilitation must take place within twenty one
(21) days of leaving the acute care hospital.
(iv) A licensed medical practitioner certifies that skilled nursing or rehabilitation
�1
Page 30
2
services are necessary, that they are needed on a daily basis, and should the services
3
be necessary for more than seven (7) days, recertification is carried out by a licensed
4
medical practitioner every seven (7) days.
5
6
The following benefits will be provided when ordered by a licensed medical
practitioner:
7
(i) Payment for a room containing not more than four (4) beds
8
(ii) All meals including special diets.
9
(iii) Regular nursing services.
10
(iv) Rehabilitation therapy, physical, occupational or speech.
11
(v) Drugs furnished by the facility as ordered by the medical practitioner.
12
(vi) Blood transfusions.
13
(vii) Other medical supplies.
14
(Viii) Use of durable medical equipment.
15
(XVIII) INSTITUTES OF EXCELLENCE
16
In so far as major costs are incurred in the treatment of various serious
17
diseases, for example, transplants, The Health Care Authority shall make application
18
to the Secretary for certification of Regional Hospitals for specific transplant services
19
should a proposal to utilize services other than those regional services already
20
approved in this act. These institutes of excellence approved are:
21
Baylor University Medical Center
22
Dallas, Texas.
23
Bone marrow, heart &
liver transplants
�1
Page 31
2
Massachusetts General Hospital
3
Heart & liver transplants
Boston, MA.
4
5
Rush-Presbyterian St. Luke's
6
Medical Center,
7
Bone marrow & liver
Chicago, Illinois.
transplants
8
9
10
Cedars-Sinai Medical Center
Los Angeles, California
Heart, liver & lung
transplants
11
12
13
14
(XVIII) SPECIAL SERVICES
1. Voluntary Sterilization
This is a covered benefit when done on an out-patient basis. However, if
15
the patient is an in-patient at a licensed health care facility, and is in the hospital for
16
reasons other than sterilization, this is deemed a covered benefit whether or not this is
M7
118
19
a vasectomy or tubal ligation.
2. Mental or Nervous conditions
For patients who are not confined to hospital payments will made as for
20
any other condition and are applicable after the deductible as described in
21
Section VII 3 I (f). This will apply to treatment of mental illness not related to or
122
23
accompanying alcoholism or drug abuse.
3. Alcohol and drug abuse treatment as an out-patient
�1
2
Page 32
Expenses for out-patient treatment of drug or alcohol abuse are a
3
covered benefit if they are supervised by a physician and to the extent that the are
4
recognized by the medical profession as appropriate methods of treatment and meet
5
accepted standards of medical care.
6
4. Optometric Services
7
The health plan pays for the services of a licensed optometrist only after
8
cataract surgery or as provided for on the recommendation of a physician in
9
Section V (XX) of the Act.
10
11
(XIX) MEDICAL SERVICES OUTSIDE THE UNITED STATES
The plan does not pay for medical services or hospitalization outside the United
12
States or the District of Columbia. However, under certain circumstances benefits will
13
be considered in approved Canadian or Mexican hospitals as follows:
14
(i) Where the insured or family member is in the United States and an
15
emergency arises and a Canadian or Mexican hospital is closer than the nearest
16
United States hospital provided this hospital can provide the emergency services
17
needed and meets professionally recognized standards of care.
18
19
20
21
22
23
(ii) The insured or family member's ordinary domicile is the United States but
the closest medical facility is located in Canada or Mexico.
(iii) The insured is travelling between Alaska and the United States and
requires medical service in Canada.
�1
2
3
4
Page 33
(XX) SPECIAL SERVICES FOR CHILDREN OR SENIOR CITIZENS
(i) Children up to the age of eighteen (18) shall be entitled to the following
benefits without charge:
5
(a) Annual "clothes off" physical examination to include testing of hearing
6
and eyes.
7
(b) Referral to special educational facilities where this is determined to be
8
indicated.
9
(c) Supply of eyeglasses or deaf aids as approved by the Secretary
10
where the determination for such is made on the recommendation of a
11
physician licensed in these areas of expertise.
12
(d) Annual dental examination and teeth cleaning and report to the
13
parent or authority responsible for the care of the child.
14
(ii) Senior citizens aged sixty five (65) or more shall be entitled to a "clothes off"
15
physical examination once each year and on reaching the age of seventy (70) the
16
following services without charge:
17
(a) Special testing for sight and hearing by a qualified physician
18
specializing in these areas.
19
(b) On the recommendation of such a physician, as designated in (ii) (a),
20
Senior citizens of seventy (70) or over shall be entitled to eyeglasses
21
and hearing aids as determined acceptable by the Secretary.
22
23
�1
2
Page 34
(XXI) PUBLIC HEALTH BENEFITS
3
A. SCREENING SERVICES
4
All screening services which meet reasonable standards of medical care shall be
5
provided by the Federal Government without charge to the recipient of such services.
6
7
(i) All innoculations, immunizations or vaccinations for children of any
age, the age of commencement of such services to be determined by the Secretary.
8
9
10
11
12
13
14
15
16
(ii) All screening services to men, women and children as determined
desirable by the Secretary but including as a minimum:
(a) Screening services annually for colo-rectal cancer for persons of forty years
or above.
(b) Screening services annually for women of thirty years or above for cervical
cancer (Papaniculou smears).
(c) Screening services for breast cancer by mammography for all women over
fifty years.
(d) Screening services for men over the age of forty for prostatic cancer, to
17
include at least a digital rectal examination and blood evaluation of serum acid
18
phosphatase and Prostatic Specific Antigen.
19
20
21
22
23
(iii) Innoculations or immunizations for senior citizens for the prevention of
influenza or any other communicable disease.
�1
2
Page 35
(XXII) EXCLUSIONS UNDER THE HEALTH PLAN
3
1. Occupational disease or injury which is covered by Workmen's
4
Compensation or other equivalent insurance.
5
2. Members of the armed services or families thereof who are covered.
6
3. Veterans of the armed services and their family members provided they are
7
also covered.
8
4. Services which are not medically necessary for treatment of the disease or
9
injury.
10
5. Charges for intentionally self-inflicted injuries unless they fall under a
11
diagnosis of mental health disease made by a licensed medical practitioner.
12
6. Charges for custodial care.
13
7. Charges in connection with dental work other than work related to congenital
14
defects or major injury and as provided elsewhere in the Act for child care.
15
8. Charges in connection with eye examinations, glasses, hearing aids, or the
16
fitting of such devices, except as otherwise provided.
17
9. Charges for services or supplies provided primarily for educational purposes.
18
SECTION VI
19
COVERED MEDICAL SERVICES PLAN SUMMARY
20
1.PHYSICIANS'OFFICE:
21
(i)
All initial and follow up office visits.
22
(ii)
Diagnostic tests and procedures.
23
(iii)
Drugs and biologicals which cannot be self administered.
�1
Page 36
2
(iv)
Medical supplies ordinarily used in a physicians' office.
3
(v)
Rehabilitation services which are ordinarily supplied therein.
4
(vi)
Services of the physicians' nurse.
5
(vii) Surgical procedures ordinarily performed on an out-patient basis.
6
(viii)
7
8
Written prescriptions, or where prescriptions are issued out of the clinic
or office, the law related to prescriptions shall be followed.
2. HOSPITAL OUTPATIENT:
9
(i)
Diagnostic test and procedures.
10
(ii)
Drugs and biologicals which cannot be self-administered.
11
(iii) Emergency room services.
12
(iv)
Medical supplies ordinarily used in a physicians'office.
13
(v)
Surgical procedures.
14
(iv)
Written prescriptions.
15
3. HOSPITAL INPATIENT:
16
(i)
Ambulance transportation to and from the hospital.
17
(ii)
Board and room.
18
(iii) Diagnostic tests and procedures including pre-
19
admission testing.
20
(iv)
Drugs, medications including oral and injectable.
21
(v)
Durable medical equipment and prosthetic devices.
22
(vi)
Medical supplies.
23
(vii) Rehabilitation services.
�1
2
3
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(viii) Surgical procedures.
4. SKILLED NURSING FACILITY:
4
(i)
Ambulance transportation to and from the facility.
5
(ii)
Board and room.
6
(iii) Drugs and medications.
7
(iv)
8
(v)
9
Durable medical equipment.
Medical supplies.
5. HOME HEALTH CARE:
10
(i)
Durable medical equipment.
11
(ii)
Medical supplies.
12
(iii) Intermittent skilled nursing care.
13
(iv)
14
Rehabilitation services.
6. CONVALESCENT FACILITY:
15
(i)
Ambulance transportation to and from the facility.
16
(ii)
Board and room.
17
(iii) Drugs and medications.
18
(iv)
Durable medical equipment.
19
(v)
Medical supplies.
20
(vi)
Rehabilitation services.
21
22
23
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2
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SECTION VII
3
FINANCING
1
1. The Secretary of Health and Human Services ("the Secretary") shall be
2
required to pay to each State per fiscal year, an amount determined by the Secretary
3
based on:
4
(a) The population of the State.
5
(b) The total contributions received from the individual residents,
6
corporations, or other taxable entities ordinarily subject to taxation by the Federal
7
government and the contributions made by residents of the State to the State, as
8
reported annually by the State to the Health Care Financing Administration.
9
(c) The demographic aspects of health care as related to the age groups
10
of the population in the State, based on experience over the previous twelve month
11
period.
12
2. Revenue Base:
13
(I) Federal:
14
(a) Contributions from taxes on substances which may adversely
15
affect the health of Americans such as alcohol and tobacco.
16
(b) Revenue from taxation on oil, gasoline, or other energy related
17
18
19
20
resources.
(c) Revenue ordinarily derived from general
taxation.
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2
(d) Revenue derived from contributions received from Medicare
3
beneficiaries.
4
(II) State:
5
This relates to the measure of relative capacity for that state to derive revenue for that
6
fiscal year.
7
(a) Personal Income Tax.
8
(b) Corporation Income Taxes, revenues from government
9
business enterprises.
10
(c) General and miscellaneous sales taxes and amusement taxes.
11
(d) Tobacco and alcohol taxes.
12
(e) Fuel taxes derived from the sale of gasoline or diesel fuel.
13
(f) Non-commercial or commercial motor vehicle licensing
14
revenues.
15
(g) Hospital and Medical Care insurance premiums.
16
(h) Succession duties and gift taxes.
17
(i) Race track taxes.
18
(j) Taxes from gambling or any other legal form of entertainment.
19
(k) Forestry Revenues.
20
(I) Revenues identified as oil revenues and consisting of royalties,
21
22
23
license fees, taxes, rentals, levies, or payments that are
�1
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2
derived in respect of any person, persons, corporations, State
3
or Federal government within the rights of the State.
4
(m) Revenues identified as natural gas revenues and consisting of
5
royalties, license fees, taxes, rentals,levies and payments or
6
remittances that are derived in respect of any person, persons,
7
corporations, State or Federal government within the rights of
8
the State.
9
(n) Sales of leases and reservations on oil and/or natural gas
10
lands.
11
(o) Oil and gas revenues other than those described heretofore.
12
(p) Metallic and non-metallic mineral revenues.
13
(q) Water power rentals.
14
(r) Insurance premium taxes.
15
(s) Payroll taxes.
16
(t) State property and all other State purpose taxes.
17
(u) Lottery Revenues.
18
(v) Miscellaneous State taxes from any source.
19
20
3. INSURED PERSONS OBLIGATIONS AND RIGHTS
21
I.
Under this section "individuals" means insured persons receiving covered
22
benefits and includes all persons as defined in Section IV of the Act and includes
23
persons previously designated as "medicaid," "mediCal," "medicare," recipients of
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2
Indian Health Services ("native Americans"), state or civic employees or any other
3
group not excluded by Section II 2 of the Act.
4
(a) All employers who make Social Security payments for their employees are
5
required to make a contribution for each employee and his dependents to the health
6
care plan of the State in an amount to be determined by the THCA.
7
(b) All persons who are gainfully employed shall make a matching contribution
8
to the health care plan in the amount determined in Section VII 2 (II) (g). Such
9
contribution shall cover the insured and dependent family members up to the age of
10
twenty one (21) years provided they are not gainfully employed and provided they
11
have no other coverage.
12
(c) Individuals who have no taxable income shall not be required to make any
13
payment towards the provision of health care but shall be entitled to health care
14
provided they meet the residency requirements of the State in which they reside and
15
are not covered by any other insurance. Students who are enrolled at a licensed
16
school, college or university shall be entitled to coverage without premiums provided
17
they are twenty one (21) years of age and meet the residency requirements of the
18
State and are not covered by any other insurance.
19
(d) Under the Social Security system Medicare (Part B) all persons receiving
20
Social Security payments excepting those who have no taxable income as stated
21
under Section VII 3 (c) shall be assessed the amount required to cover Part B and
22
such payments will continue to be collected by the Federal government and will be
23
forwarded to the THCA of the state of residence of the individual as part of the
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2
payment made by the Federal government to the State THCA under the plan. All
3
persons receiving Social Security shall be covered by the plan and shall be entitled to
4
all benefits of the plan without any other premium than that required under Part B
5
Medicare.
6
7
8
(e) All insured persons shall have access to equivalent care as provided
under Section I (5) "Accessible."
(f) All persons shall be required to pay a deductible for services. The
9
deductible will be determined by the THCA but will be not more than five hundred
10
dollars ($500) per person per fiscal year or not more than fifteen hundred dollars
11
($1,500) per family per year except that:
12
(i) Should the insured have no taxable income the deductible fee will be
13
14
waived.
(ii) Should the insured be admitted to an acute care hospital as a genuine
15
16
emergency, the fee shall be waived.
(iii) Should the insured be determined to require pre-natal care the deductible
17
18
19
20
shall be waived.
(g) THCA shall provide for appropriate changes in the coverage of family
members to take into account:
(i)
Changes in family composition, including marriage, divorce (or legal
21
separation), birth or adoption of children and the ageing of children into
22
adulthood.
23 '
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2
Page 43
(ii)
Changes in employment status:
3
A. The terms: "Employee, employer, employment, wages" shall have the same
4
meaning as such terms have for purposes of Chapter 21 of the Internal Revenue
5
Code of 1986. Where an employee normally performs for his employer at least 25
6
hours of service for that employer, he shall be designated "full time."
7
An employee who performs less than 25 hours work per week for the employer shall
8
be designated "part time."
9
B. The term "small employer" means, with respect to the calendar year, any employer
10
who employs not more than five (5) employees on a full time basis on a typical
11
business day during the calendar year. Such employers are excepted from making
12
contributions to the state THCA.
13
C. The term "Large Employer" applies to any employer who employs more than five
14
(5) full time employees on a typical business day during the calendar year, or for
15
purposes of the Act, an employer who employs ten (10) or more part time employees
16
during the year. Such employers are required to make contributions to the State THCA
17
in amounts determined by the State THCA.
18
D. Where an employer terminates an employee, or where an employee terminates his
19
employment voluntarily, the employer and employee must inform the state THCA who
20
will, within the thirty day period following such termination, make a determination as to
21
how the coverage of the terminated employee and, where applicable, members of his
22
family, shall be covered under the Health Plan. If the employer terminates the
23
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2
employee he shall be deemed responsible for any contributions due to the state THCA
3
for not more than thirty days from the termination of employment. If the employee
4
voluntarily terminates his employment, the employer shall not be responsible for
5
further contributions to the state THCA from the date the THCA receives notification
6
that the employee voluntarily terminated employment.
7
E. Consultants and Independent Contractors shall be regarded as individuals under
8
the Act and shall be responsible for the payment of premiums to the State THCA. The
9
state THCA has the authority to determine whether a "Consultant" or "Independent
10
Contractor" is correctly designated, or is in fact an employee of one or more
11
individuals, partnerships or corporations.
12
F. In families where there are multiple employers and more than one income is
13
taxable, the employers shall be liable for the same payment to the state THCA as
14
though there was only one employer employing a family member. However, only one
15
family contribution shall be required from the head of the family which member
16
contribution shall be elected by the head of the household.
17
Where changes in the above take place the THCA shall cause changes to be made in
18
thirty days of the event and shall give notice to all persons affected in not more than
19
thirty days after the event. The THCA is charged with ensuring there are no periods of
20
non-coverage for the insured and will provide, in the case of change of family status
21
such as marriage, divorce or legal separation, for proper cost-sharing among the
22
individuals concerned in an equitable and administrable manner. Newborns are
23
immediately covered as under Section V (XIII) of the plan and, should a woman not be
�1
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2
covered under the plan by reason of any exclusions as to birth, nationality, legality of
3
residence, the newborn shall automatically be covered for benefits provided an
4
application is made to the THCA within sixty (60) days of the birth.
5
(h) Any child voluntarily relinquished to a public or private agency, or any
6
child removed from family custody to an agency pursuant to a court order or
7
otherwise, shall be deemed to be automatically enrolled in the Health Plan upon
8
notification of the state THCA.
9
(i) Any child placed for adoption shall, as of the date of placement for
10
adoption, shall be treated as the child of the individual and be enrolled and covered
11
under such plan. Similarly, a child placed as a legal ward or foster child shall be
12
treated as the child of the person or persons with custody and be automatically
13
enrolled in the health plan upon notification of the state THCA.
14
4. PRIVATE PATIENT RIGHTS
15
The insured may seek the services of a medical practitioner on a private patient
16
basis but should the insured do so he or she must:
17
(a) Declare his or her intention at the commencement of service and sign a
18
declaration that the fee or fees for services will be paid directly to the practitioner.
19
(b) Should the practitioner be a participating practitioner in the health plan
20
operated under the THCA, the patient may claim the amount that would ordinarily
21
have been paid to the practitioner under the fee schedule negotiated with the
22
physicians, also hospital costs incurred should admission have been determined to be
23
necessary will be covered as provided in the plan. In no circumstances will payment
�1
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2
be made unless the deductible determined by the State under Section III I (f) has
3
been met.
4
(c) Should the practitioner be a non-participating practitioner the insured shall
5
be entitled only to expenses incurred by hospitalization and not to any expenses
6
incurred for physician services.
7
5. PENALTIES
8
Should an insured person who is required to make contributions to the plan, or is
9
required to make a deductible payment for services, fraudulently fail to do so, on
10
complaint of the State or Federal Authorities, the court may issue a fine or fines of up
11
to two thousand dollars ($2,000) or impose six months imprisonment plus any costs
12
incurred by the State or Federal Authorities incurred in the collection of the sums due
13
or the prosecution of the case. The THCA may determine that such persons are not
14
entitled to receive benefits for services rendered under the plan and they shall then
15
become personally indebted to those who rendered the services in any reasonable
16
amount determined by the supplier of those services.
17
SECTION VIII
18
A.
19
(I)
PAYMENT, COST CONTAINMENT, DISCIPLINARY ACTION
HOSPITAL CONTRACTS
The Health Care Authority in each State shall determine a per diem for such
20
hospitals who meet the criteria for participation in the plan. To participate in the plan
21
a hospital must be accredited by the Joint Commission of Accreditation of Hospitals
22
and Organizations and must meet all the requirements of the Act as laid out
23
heretofore.
�1
2
Page 47
The per diem shall be based on the following criteria:
3
(a) The number of licensed beds in the hospital.
4
(b) The capabilities of the hospital to take care of multiple disciplines
5
eg. Surgery, medicine, obstetrics, pediatrics, mental health etc.
6
(c) The number of admissions to the hospital in the last twelve calendar
7
months.
8
(d) The level of care offered in the institution: Primary, secondary or
9
tertiary or special care eg. Mental Health.
10
(e) The geographic location of the hospital in relation to other institutions.
11
(f) Demographic makeup of the area served by the hospital
12
(g) Any other factors considered pertinent by the State.
13
The per diem as defined in Section IV of the Act shall be determined annually
14
by The Health Care Authority by evaluation of the productivity and cost-effectiveness
15
of the institution. The figures for this determination will be obtained from the computer
16
cost containment program in each State and submission by the hospital of the audited
17
expenses of each hospital. The fixed per diem for each institution determined by the
18
State shall be final for the year of that determination and there shall be no appeal
19
process.
20
The hospital shall supply to the Health Care Authority any and all figures
21
required for evaluation of fiscal performance, evaluation of clinical performance and
22
such other figures as may be determined by THCA at anytime.
23
�1
2
Page 48
If a hospital is in a deficit position at the end of the year the Health Care
3
Authority shall cause an audit to be conducted by auditors approved by the State
4
and the results of the audit shall be published. The Health Care Authority shall
5
determine in not more than sixty (60) days:
6
(i)
The deficit is justifiable and will be financed by the State.
7
(ii)
The deficit is not justified in which case the hospital shall lose its
8
mandate to participate in the Universal Health Care Plan.
9
If the hospital has exercised effective cost control, the Health Care Authority shall take
10
this into account when they approve a proposed budget. Under no circumstances shall
11
a hospital be penalized for cost effective management unless:
12
(a)
Auditors in the health care field have determined serious quality of
13
care issues in the institution.
14
(b)
15
owners, whether corporate, individual, community, partnership or any
16
other organized or unorganized entity having any part in control of the
17
institution.
There is evidence of fraudulent practices by the hospital, it's
18
B. THCA shall not pay sums, per diem or other payments, to any hospital which has
19
not been approved to participate in the Health Care Plan by the THCA.
20
C. SPECIALIZED HOSPITALS
21
A hospital with specialized facilities, limiting practice to mental health, drug and
22
alcohol rehabilitation, or any other facilities as described in Section V of the Act, shall
23
�1
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2
receive a per diem by determination of their audited overall costs for the previous
3
year.
4
D. PRIVATE BENEFACTORS
5
Bequests or moneys voluntarily given to hospitals shall be declared to the
6
THCA but shall be the sole property of the hospital for their exclusive use as
7
determined by the hospital board and shall in no way affect the per diem determined
8
by the THCA.
9
E. NEW EQUIPMENT
10
I
If a hospital has a surplus in their annual budget they may use that
11
surplus in one of the following ways subject to the approval of the THCA who will
12
determine if the proposed usage is in the public interest:
13
(i)
Purchase of new equipment of any kind.
14
(ii)
Upgrading or replacement of old equipment.
15
(iii)
Refurbishing and refurnishing.
16
(iv)
Expansion or extension of the institution.
17
18
II
(a) A hospital without a surplus may apply to the THCA for any of the
19
above Section VIII E (i) through (iv). THCA will establish a panel of not less than nine
20
persons consisting of at least two physicians who shall not be employees of the
21
government and are not involved in the hospital making the application or any other
22
institution in the same area, one nurse who fulfills the same criteria, one person
23
receiving Social Security benefits, one individual resident within five miles of the
�1
2
Page 50
applicant hospital and four experts designated by the THCA.
3
(b) Within one hundred and twenty (120) days the panel shall report to
4
the THCA recommendations regarding the validity of the application, the results of any
5
hearings they may have held relating to the application, and their final
6
recommendations to the THCA. The THCA must make a final determination within
7
ninety (90) days of receipt of the report. The decision of the THCA is final and cannot
8
be appealed.
9
F. NEW HOSPITAL CONSTRUCTION
10
On application from a Community for the establishment of a new hospital in an
11
area, the THCA shall submit the application to the State government who shall make a
12
determination concerning the necessity of such construction taking into account:
13
(i)
The desires and needs of the community.
14
(ii)
Accessibility to other facilities by the members of the community.
15
(iii)
Cost effectiveness of such a facility.
18
(iv)
The written opinion of THCA concerning such construction.
17
18
(II) LICENSED PHYSICIANS
19
(i)
20
negotiate a State fee schedule with the THCA for the physicians
21
practicing in the State based on a fee schedule worked out by the
22
Medical Association in consultation with its various specialist
23
The Medical Association of the State shall be empowered to
�1
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2
components. The fee schedule proposed shall be presented to the THCA
3
within sixty (60) days of a written request to the Medical Association from
4
the THCA. Representatives of the Medical Association shall meet with
5
the representatives of the THCA and determine between them a cost
6
effective contract which shall be for a two year period. The contract shall
7
be renegotiated every two (2) years. Each physician shall then sign an
8
agreement of participation in the Universal Health Plan and be
9
designated a "participating physician."
10
(ii)
Participating physicians shall be entitled to bill the fiscal
11
intermediary appointed by the THCA directly for services rendered in the
12
amount determined by the fee schedule established by negotiation and
13
this shall be the full payment for services and the patient shall not be
14
billed for further fees other than as provided for in
15
Section VII 3 (f) (i), (ii), (iii), relating to deductibles. The patient shall
16
present proof of having met the deductible within thirty (30) days of the
17
service or shall be responsible for payment of the physician's fees.
18
(iii)
19
provided this is at the request of the patient. Under such circumstances
20
there must be a written request for private patient status signed by the
21
patient and a copy of the written request and the bill for the full amount
22
must be given to the patient and submitted to the THCA. The THCA will
23
pay to the patient only the amount allowed as determined by the
Participating physicians shall be entitled to accept private patients
�1
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2
negotiated schedule of fees and the patient will be responsible for any
3
extra fees.
4
(iv) Physicians who do not elect to become participants in the Universal
5
Health Care Plan shall be designated "non-participating" and shall not be
6
entitled to bill the THCA for any services performed by them whether or
7
not the patient has contributed to the Health Care Plan.
8
(iv) Should the Medical Association fail to reach an agreement with the
9
THCA within the period prescribed in Section VIII (II) (i), the THCA shall
10
determine a global budget for the fiscal year and the physicians will bill
11
the THCA until such time as the global budget is exhausted when no
12
further payments will be made. Under such circumstances it shall be
13
deemed illegal to bill the patient for services and fines of one thousand
14
($1000 dollars) a day may be imposed on any practitioner who bills any
15
patient and Section VIII (II) (iv) shall also be null and void.
16
(v) Nothing in the Act shall be construed as preventing physicians from
17
operating as a partnership, a group practice, a Health Maintenance
18
Organization (HMO) or other body legally organized for the management
19
of medical practice. Nothing in the Act shall be construed as changing
20
the internal fiscal structure of such partnerships, groups or HMO's,
21
provided that they do not offer services which are in conflict with the
22
basic intent of the Act. However, it shall be clearly understood that it is
23
the responsibility of the individual , not the employer, to select their own
�1
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2
physician and it is in contravention of the Act for any employer or other
3
organization to select a physician or medical services for an employee.
4
(vi) A patient shall have the right to go to the practitioner of his choice
5
and a practitioner, except under emergency circumstances, shall have
6
the right to refuse to treat a patient provided the practitioner refers the
7
patient for care elsewhere and provided the practitioner to whom the
8
patient is referred expresses willingness to undertake the care of the
9
patient.
10
(III) OTHER LICENSED PRACTITIONERS
11
The THCA shall determine a fee schedule for all other licensed
12
practitioners based on actuarial studies of usual and customary fees over the last
13
three (3) years. Their decision shall be final and there shall be no appeal from this
14
decision. The fee schedule shall be revised every two (2) years.
15
(IV) PAYMENT OF ACCOUNTS
16
Each State THCA shall use a computerized system selected by the
17
Health Care Financing Administration (HCFA). The system shall have the following
18
capabilities:
19
(i)
Processing of claims.
20
(ii)
Statistical tabulation of items billed per physician, amount paid
21
per procedure to each physician, and the number of procedures
22
performed by each physician, also the number of hospital or office
23
visits or any other services monitored by the system.
�1
2
Page 54
(iii)
The ability to print out on a quarterly, six monthly, or annual basis
3
a comparison of physicians in similar circumstances doing the
4
same or similar work in any geographic area in the State, and to
5
present to the THCA the results of such a study with standard
6
deviations printed out. Comparison between groups and
7
individuals inside and outside groups shall be
8
available.
9
10
11
12
(IV) PEER REVIEW
(i)
The existing contractual arrangements between government
authorities and all types of peer review organizations shall be cancelled.
(ii)
Hospitals shall be required to have their medical staff members
13
appoint a Peer Review Committee which shall meet monthly and evaluate at least ten
14
charts in each discipline in which the hospital is licensed to admit. A full report on
15
each case shall be submitted to the THCA on a monthly basis. Parameters for review
16
shall be determined by the State Medical Association in discussion with
17
representatives appointed by the THCA.
18
(iii)
Where there is one hundred per cent or less than fifty per cent
19
compliance with all parameters as set up by the Medical Association and THCA,
20
charts for a period of not less than three months shall be submitted to an external
21
authority for re-review, which authority shall:
22
(a) Not have any relationship to the hospital under review.
23
(b) May be selected from any state of the United States.
�1
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2
(c) May be physicians employed by a State or Federal agency, such as HCFA.
3
(d) May be a division of the Joint Commission of Accreditation of Hospitals and
4
organizations.
5
(iv)
Where the work of a physician, or the work of the hospital, is
6
determined to be of less than optimal caliber the THCA shall convene a hearing to
7
determine why the infraction(s) should not be reported to the office of the Inspector
8
General and disciplinary measures taken to remove the physician or an entity from the
9
program. The regulations as currently determined by HCFA for "gross and flagrant
10
violations" and "substantial violations in a substantial number of cases" shall apply
11
and the law related thereto shall remain in force except that on the recommendation of
12
the THCA, the HCFA will make recommendations to the Office of the Inspector
13
General as already enacted in law. All the appeals processes shall be available under
14
the same terms and conditions as provided in Section 1156 of the Social Security Act.
15
If it is considered by the Hearing Committee that the infraction(s) do not warrant such
16
action, the matter shall be reported to the State Board of Licensure who shall take
17
action on the matter within sixty days of notification and shall issue to the THCA a
18
report on the action(s) taken. This option shall only be available two (2) times. If the
19
problem(s) occur on a third occasion, the matter shall be reported to the Office of the
20
Inspector General who shall determine the action to be taken.
21
(v) Where an aberrant pattern of practice is determined by the statistical information
22
obtained from the computer print out, and specifically should any physician
23
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2
or institution be any standard deviation from the norm, the acceptable or unacceptable
3
number of deviations will be determined by the State THCA and their advisors, but in
4
any case whenever a physician or institution or both are two or three standard
5
deviations from the norm, the THCA must take action as determined herein. In the
6
case of:
7
(a) A physician, within not more than sixty (60) days he shall be called before a
8
board which shall consist of two members of the State Board of Licensure, two
9
practitioners who practice in the same specialty and a similar geographic environment,
10
one physician appointed by THCA, one physician appointed by HCFA, and one
11
physician appointed at the request of the physician who has a number of standard
12
deviations from the norm, that number being unacceptable to the THCA. Disciplinary
13
action as determined in Section VIII (IV) (iv) may be taken on the recommendation of
14
this hearing.
15
(b) A hospital or other institution, within not more than sixty (60) days the hospital
16
governing authority or Administrator shall appear for a hearing before a panel
17
consisting of two hospital administrators from hospitals not in the immediate area of
18
the first hospital, two attorneys from an area over one hundred miles from the hospital
19
or institution under investigation, two physicians who are not connected with the
20
hospital or institution or a competing hospital or institution, two members appointed by
1
the THCA and one member appointed by HCFA. The laws and regulations as
2
determined under Section 1156 of the Social Security Act shall apply and the case
3
�1
Page 57
2
must be dismissed, a corrective action instituted, or a recommendation made to the
3
Office of the Inspector General.
4
Should a hospital be brought before a hearing committee on a subsequent occasion,
5
the evidence previously submitted in the previous case will be deemed admissible in
6
its entirety.
7
SECTION IX
8
9
MALPRACTICE
Where a claim of malpractice is filed in any State or in the District of Columbia, the
10
State shall cause a panel to be established which shall consist of licensed physicians,
11
nursing personnel, knowledgeable members of the public appointed by THCA, an
12
attorney and an Administrative Law Judge ("Hearing Officer") who shall chair the
13
panel. The panel shall consist of not less than seven (7) members. All cases claiming
14
malpractice shall be submitted for evaluation by the panel at a hearing. The panel
15
shall be empowered to subpoena witnesses, examine witness, hear arguments by
16
representatives of the parties and make a determination to dismiss or to assess
17
damages where indicated. Individuals or parties to the action shall have the right to
18
appeal to the Court of Appeal should the decision be unacceptable to them. In such
19
cases the transcripts of the hearing, and the written decisions and recommendations
20
as stated by the Hearing Officer shall be entered into evidence in the Court of
21
Appeals.
22
23
�1
Page 58
2
SECTION X
3
Where the provisions of this Act are in conflict with any other Act with respect to
4
medical care, including the Social Security Act, the law as enacted in this Act shall be
5
considered to be authoritative and binding. Where the provisions of the Act are in
6
conflict with legislation related to malpractice, the arbitration process proposed shall
7
substitute for any legislation which is in conflict with this Act.
8
�I
i
i
i
i
i
i
i
t
i
i
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Addendum
Page 1
COMPUTER SUPPORT FOR UNIVERSAL HEALTH CARE SYSTEM
The management of Universal Health Care ("UHS") will be supported by a
comprehensive computer system. This is a system which is in place and manages a
similar system. This system is not a packaged system and can be tailored to fulfill the
requirements of the Act. The major sub-systems are:
REGISTRATION
Registration of all Americans, physicians, hospitals and all other care providers
("Providers") covered by the Act. The registration information will be used to ensure
claims made on the UHS by Providers for services are processed accurately and
promptly.
SUBMISSION OF CLAIMS
Although it is possible to process claims manually, claims should be submitted
electronically to minimize the processing costs associated with paper submissions and
minimize the time required to process a claim. The care providers should have an on
line computer to enter and validate claims prior to submission. This is to minimize the
submission of invalid claims and thus reduce the need for rejection and re-submission
of claims.
The validation of a claim will be based on the eligibility rules of the Federal and State
Acts. If a claim is denied the provider will be advised using an electronic method. This
minimizes inquiries by Providers requesting an explanation of why an individual claim
has not been paid. If a Provider cannot accept an electronic message then a letter will
be generated at the end of each month.
PAYMENT OF CLAIMS
Payments will be made to Providers for valid claims submitted in the previous
reporting period. The payment system can make the payment electronically to the
Providers bank account using direct deposit technology or a check can be issued. A
report will support the check or direct deposit indicating the number of claims received,
claims paid, and claims denied. The reason for the claim being denied will be given.
The system design will ensure claims denied will be kept to a minimum.
MONITORING AND UTILIZATION SYSTEM
An essential part of the system will be a Claims Utilization Provider System. This
system will have the capability of comparing the claims practice of an individual
Provider with the claims practice of other Providers. The system, using sophisticated
statistical analysis will "measure" how far the individual Provider differs from other
�1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Page 2
similar Providers. Based on the analysis each Provider is ranked. The ranking and
points awarded to each Provider can then be reviewed and, based on this review,
Providers can be selected for detailed review. (Samples of this are attached; names
are fictitious.)
PER DIEM COST SYSTEM
Based on the costs associated with each intervention/procedure the system will
calculate a fee schedule. The cost module will include all relevant cost factors to
calculate a fee for each intervention or procedure. The system will also calculate an
index for any unusual situation to be applied to the fee: example, procedure or
intervention done after midnight in the patient's home.
COMMUNICATION AND INQUIRIES
A health care system is very complex and initially will generate many inquiries. The
system will be designed to minimize the need for inquiries and to provide on line
information to Providers on the status of a claim or the status of an American to
receive service under the plan.
* Attachments describe
- Provider Profile System information
- Example of Peer Review Profile with
ranking.
�DIAGRAMATIC SUMMARY OF PROFILE
SYSTEM
MANUAL FOR USE OF SYSTEM WITH
STATISTICAL
PRINTOUTS
�k
CONWAY>
INFORMATION SYSTEMS INC.
CONWAY
Provider
Profile
System
�Conway Health Support
�Conway's Provider Profile System
Claims/
Encounters
Parameters
Providers
Performance
Standards
Time Series
lily Service
Monitoring
Graphics
Profile
Enquiry
Provider
Profiles
Peer Group
Profiles
Rankings
�Provider Profile System
IComcare
.System
Providers
Claims/Encounters
Conway's
Provider
frofile
System
Peer Group
Reports
Provider
Reports
Ranking
Reports
�Conway's Provider Profile System
�Profile Reports
Peer Group
ilSlilPili
Summary
ISiiiliill
Distrlbufion
Age/Sex.
Adjusted
�CONWAY>
k
INFORMATION SYSTEMS INC.
CONWAY INFORMATION SYSTEMS INC
PROVIDER PROFILE
SYSTEM
"EXCELLENCE,
ON TIME...ON BUDGET"
�INTRODUCTION
The purpose of the manual i s t o i n t r o d u c e Medical D i r e c t o r s
and Research Analysts ( r e f e r r e d t o i n t h e manual as USERS)
t o CONWAY'S PROVIDER PROFILE SYSTEM.
The PROVIDER PROFILE SYSTEM i s a c l a i m s u t i l i z a t i o n
m o n i t o r i n g system. The System i s designed t o a s s i s t Medical
D i r e c t o r s i n Health Maintenance Organizations, P r a c t i t i o n e r
Provider Organizations and H o s p i t a l s t o m o n i t o r P r o v i d e r s
u t i l i z a t i o n o f m e d i c a l s e r v i c e s . T h i s i s achieved i n a
very unique way.
PROVIDERS a r e g r o u p e d i n t o PEER GROUPINGS. The P e e r
Groupings can be by one, o r a
combination
of s i x
c h a r a c t e r i s t i c s t h a t describe a Provider. A l l claims made by
the Providers i n the group are then selected from t h e CLAIM
FILE and AVERAGE STATISTICS a r e c a l c u l a t e d f o r t h e group.
The group s t a t i s t i c s are then c a l c u l a t e d f o r a l l P r o v i d e r s
i n c l u d e d i n t h e g r o u p . The c l a i m s p r a c t i c e o f e a c h
i n d i v i d u a l w i t h i n the group i s t h e n compared t o t h e group
"NORM".
The comparisons are based on seven CLAIM STATISTICS.
RANKING STATISTICS are:
1.
2.
3.
TOTAL COST OF SERVICE
TOTAL NUMBER OF SERVICES PROVIDED
TOTAL NUMBER OF PATIENTS SEEN
4.
5.
6.
COST PER SERVICE
COST PER PATIENT
NUMBER OF SERVICES PER PATIENT
7.
These
NUMBER OF EXCEPTION FLAGS
By RANKING each PROVIDER compared t o t h e GROUP NORM, t h e
u t i l i z a t i o n p r a c t i c e o f the Providers can be "MEASURED".
PERCENTILE and STANDARD DEVIATION S t a t i s t i c s a r e used t o
d e t e r m i n e t h e degree a P r o v i d e r i s o u t s i d e t h e EXPECTED
VALUE (AVERAGE) o f t h e Group.
Based on t h e d e g r e e a
Provider i s outside the norm, EXCEPTION FLAGS are s e t .
The above s t a t i s t i c s are reported by various "views" o f t h e
DATA. The views a r e r e p o r t e d i n t h r e e s e t s o f PROFILE
REPORTS.
CONWAY INFORMATION SYSTEMS INC.
�PROFILE REPORTS
There are three sets of REPORTS.
p a r t s . Each p a r t
provides
Each s e t has a number of
a different
view of t h e
u t i l i z a t i o n service pattern of the Provider.
1.
PROVIDER PROFILES
PROVIDER SUMMARY
GENERAL INFORMATION SUMMARY
SPECIAL SERVICE SUMMARY
MONTHLY DISTRIBUTION SUMMARY
AGE/SEX SUMMARY
FEE ITEM SUMMARY
2.
PEER GROUP PROFILES
PEER GROUP SUMMARY
GENERAL INFORMATION SUMMARY
SPECIAL SERVICE SUMMARY
MONTHLY DISTRIBUTION SUMMARY
AGE/SEX SUMMARY
FEE ITEM SUMMARY
3.
RANKING PROFILE
Providers
i n t h e Peer Group a r e s o r t e d by one of t h e
Rankings.
As there are seven rankings, seven reports can be
requested.
CONWAY INFORMATION SYSTEMS INC.
�SYSTEM HIGHLIGHTS
1.
P r o f i l e s use two input f i l e s .
1.
2.
CLAIMS
PROVIDERS
2.
The CLAIMS FILE contains information on the services
provided and charged by the Providers.
3.
The PROVIDER F I L E contains c h a r a c t e r i s t i c data on
a l l Providers. S i x c h a r a c t e r i s t i c s can be used t o
define the Provider. This f e a t u r e makes the system
very f l e x i b l e .
4.
Based on t h e P r o v i d e r c h a r a c t e r i s t i c s , P e e r
Groupings can be automatically created. For example,
i f the f i r s t c h a r a c t e r i s t i c s were the P r o v i d e r ' s
s p e c i a l i t y a Peer Group could be created f o r a l l
Providers whose s p e c i a l i t y i s surgery.
5.
The P r o f i l e user can define the c h a r a c t e r i s t i c s of
the c l a i m data t o t h e s y s t e m .
F o r example t h e
AGE/SEX groupings can be t a i l o r e d for the Peer Group
being reviewed.
6.
The system can produce P r o f i l e s using actual data or
adjusted data. The user has the option to request
adjusted data.
7.
The system produces a great d e a l of i n f o r m a t i o n .
However, the user can request the information a t the
summary and d e t a i l l e v e l .
8.
The Provider S e r v i c e s can be reported by PERSONAL
and REFERRED s e r v i c e s .
9.
The main components of the Provider P r o f i l e ,
Group and Provider reports a r e :
Peer
SUMMARY INFORMATION
GENERAL INFORMATION COMPONENT
SPECIAL SERVICE SUMMARY
MONTHLY DISTRIBUTION COMPONENT
AGE/SEX SUMMARY COMPONENT
PROCEDURE SUMMARY COMPONENT
10. The AGE/SEX and MONTHLY DISTRIBUTION of a P r o v i d e r s
data can be adjusted to the GROUP AVERAGE.
CONWAY INFORMATION SYSTEMS INC.
�SYSTEM BENEFITS
1.
UTILIZATION PATTERNS of
monitored.
P r o v i d e r Groups can
The m o n i t o r i n g
c a n be by
one
or
be
a
combination of the Provider c h a r a c t e r i s t i c s .
2.
PROVIDERS CLAIMS PRACTICE can be MONITORED a g a i n s t
the PEER GROUP AVERAGE.
3.
PROVIDERS c a n be a s s i g n e d
to
one
o r more
PEER
GROUPS.
4.
The system can i d e n t i f y :
D e v i a t i o n s from the PEER GROUP average.
V a r i a t i o n s i n c l a i m p a t t e r n s by:
SPECIAL SERVICE SUMMARY
AGE/SEX
MONTHLY DISTRIBUTION
CPT CODE
FEE ITEM
5.
The system can be t a i l o r e d to measure
the degree a
PROVIDER v a r i e s from the AVERAGE PROVIDER i n t h e
PEER GROUP.
6.
The PROVIDER PROFILES can be used f o r PEER GROUP
reviews.
7.
The Provider information can be reported a t v a r i o u s
degrees of d e t a i l .
: N A INFORMATION SYSTEMS INC.
OWY
�#**»**
«»«#»*
•«*»»
## *
*»
C O N W O Y
H E P L T H
S Y S T E M S
PAGE t
* * » * * # » * * * # » # « » * * * * * » # # * « * * # • # » * * * » » « # # * » # » » * « « « » # • # *
«
PEER GROUP PROFILE
*
» « * * «•*««**« « « » * * » » # » * * * » » * «
*
SUMMOHY
#
*
INFORMATION
*
PRINTED
PEER GROUP t V I C T O R I A GENERAL PROCS
ON OS OCT 19fl5
< VICGP
REPORT PERIOD JAN 8 6 - DEC 8 6
***«*»**«*******«****•**»»»*
**» PEER GROUP D E T A I L S * » #
3
NUMBER OF MEMBERS CURRENTLY I N GROUP
NUMBER OF A C T I V E MEMBERS I N GROUP
PROVIDER EARNINGS NEEDED TO Q U A L I F Y
PROVIDERS Q U A L I F I E D FOR S T A T I S T I C S
3
DETAILS *»#
AVERAGE
LOWEST
HIGHEST
TOTAL FLAGS
I
£503
1945
3046
TOTAL COSTS
TOTAL SERVICES
TOTAL PATIENTS
j
I
I
COSTS PER SERVICES
COSTS PER PATIENTS
SERVICES PER PATIENTS
:
:
t
* O
3
*** SERVICING
«
*
7,300
74
8
• 6, 9 0 0
61
4
« 100
1,095
10
* 88
* 690
7
*
7,700
88
10
ACTIVE
£1,900
223
24
*
TOTAL
21,900
223
24
REFERRED
TOTAL
#*»**
PRINTED
GENERAL INFORMATION
DEFINED GENERAL INFORMATION
MONTHLY DISTRIBUTION
MONTHLY DISTRIBUTION ADJUSTED
AGE/SEX DISTRIBUTION
AGE/SEX DISTRIBUTION ADJUSTED
SERVICE GROUP TOTALS
FEE ITEM DETAILS
C O N W A Y
*
TOTAL
* 120
* 770
15
PERSONAL
***** PRINT OUT D E T A I L S
QUALIFIED
H E A L T H
<
<
YES
NO
YES
NO
YES
YES
S Y S T E M S
AVG FLAGS
N/A
N/A
>
>
164
O
371
O
92
208
PRINTED
<
<
YES
NO
YES
NO
YES
YES
AVG FLAGS
N/A
N/A
PEER GROUP
>
>
161
O
439
O
93
229
PRINTED
YES
NO
YES
NO
YES
NO
<
<
AVG
FLAGS
117
O
163
O
466
O
N/A
N/A
)
)
SUMMARY INFORMATION
V I C T O R I A GENERAL PRACS
( VICGP
)
�CONWAY
*
PEER GROUP PROFILE
*
«*«***»**«*****«*»««««#**««*
*
GENERAL
*
*
INFORMATION
*
***»•*»*»***********•***»«**
H E A L T H
S Y S T E M S
PAGE £
PRINTED ON 08 OCT 1985
PEER GROUP s VICTORIA GENERAL PRACS
( VICGP
REPORT PERIOD JAN 86 - DEC 86
-JL.
6RP AVR
t- O. A S. D.
I GROUP 91
I PERCENT
COSTS I
PERSONAL COSTS
SELF-REFERRED COSTS
REFERRED-OUT COSTS
TOTAL REFERRED COSTS
3,981
1,929
2,1A2
3,703
TOTAL COSTS
PERCENT OF COSTS REFERRED
7,431
50
SERVICES :
PERSONAL SERVICES
SELF-REFERRED SERVICES
REFERRED-OUT SERVICES
TOTAL REFERRED SERVICES
38
23
20
41
TOTAL SERVICES
PERCENT OF SERVICES REFERRED
79
51
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I GROUP
t AVERAGE
I
I
4,300 I
2,500 I
2,900 I
4, 300 I
I
7, 700 I
56 I
I
I
I
• I
41 I
30 I
29 I
47 I
I
88 I
53 I
PATIENTS :
PERSONAL PATIENTS
SELF-REFERRED PATIENTS
REFERRED-OUT PATIENTS
TOTAL REFERRED PATIENTS
6
6
6
7
I
I
I
I
i
9 I
90 I
I
TOTAL PATIENTS
PERCENT OF PATIENTS REFERRED
CONWAY
H E A L T H
S Y S T E M S
7
7
7
8
I
I
I
I
10 I
lOO I
I GROUP
! STD DEV
I
I
3,833 I
1, 700 I
1,767 I
3,467 I
I
7,300 I
47 I
I
I
I
I
37 I
21 I
16 I
37 I
I
74 I
49 I
I
I
I
I
6 I
5 I
5 I
7I
i
a:
87 !
I PROVIDER
i COUNT
368
572
939
591
327
6
11
6
1
2
1
2
3
9
I
I
I
I
I
I
I
i.
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I GROUP
I MEDIAN
3, 800
1, 400
3
3
3
3
3, lOO
3
3
7, 300
45
i , aoo
3
3
3
3
36
18
11
39
3
3
74
53
3
3
3
3
6
6
4
8
3
3
10
SO
GENERAL INFORMATION
PEER GROUP : VICTORIA GENERAL PRACS
( VICGP
)
�C O N W A Y
«
PEER GROUP PROFILE
H E A L T H
S Y S T E M S
PAGE 3
*
##**«#«**#»•**»****##**«*»*#
*
GENERAL
*
INFORMATION
PRINTED ON 08 OCT 1965
#
*
P E E R GROUP i
REPORT PERIOD JAN 86 - DEC 86
^
COSTS PER SERVICES s
PERSONAL COSTS / PERSONAL SERVICES
REFERRED COSTS / PERSONAL SERVICES
REFERRED COSTS / REFERRED SERVICES
TOTAL COSTS / TOTAL SERVICES
COSTS PER SERVICES :
PERSONAL COSTS / PERSONAL PATIENTS
REFERRED COSTS / PERSONAL PATIENTS
REFERRED COSTS / REFERRED PATIENTS
TOTAL COSTS / TOTAL PATIENTS
^
2^
-2k
GRP AVR
• O. 4 S. D.
2L-
I GROUP 91
I PERCENT
I
I
110 I
96 t
104 I
I
106 I
I
I
I
' I
831 I
665 I
618 I
I
1,30a i
i
I GROUP
I AVERAGE
I
I
119 I
105 I
iao i
I
1 SO I
I
I
I
I
1,073 I
750 I
750 I
I
1,825 I
I
I
SERVICES PER PATIENTS I
PERSONAL SERVICES / PERSONAL PATIENTS
REFERRED SERVICES / PERSONAL PATIENTS
REFERRED SERVICES / REFERRED PATIENTS
TOTAL SERVICES / TOTAL PATIENTS
C O N W A Y
H E A L T H
< VICGP
V I C T O R I A GENERAL PRACS
S Y S T E M S
7I
7I
6 I
I
ia i
9 I
7I
6 I
I
15 t
I GROUP
I STD DEV
I
I
104 I
92 I
97 I
I
100 I
I
I
I
I
731 I
627 I
558 I
I
1,095 I
I
I
I
I
7 I
6 I
I
10 t
I
I PROVIDER
I COUNT
15
9
17
14
250
96
149
517
1
0
1
3
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
!
I
I
I
I
I
t
I GROUP
I MEDIAN
I
109
89
91
3
3
3
93
633
614
538
3
3
3
770
6
7
6
3
(
GENERAL INFORMATION
PEER GROUP : VICTORIA GENERAL PRACS
( VICGP
)
�C O N W A Y
»#*#****»**« ***##*«#*##**«#*
*
PEER GROUP PROFILE
#
H E A L T H
S Y S T E M S
PAGE 4
PRINTED ON OS OCT 1985
#**«•##*##*###*«**#*»•*«*»##*
*
*
PERSONAL
MONTHLY
I MONTHS
1
!
1
!
i
1
1
!
i
1
1
1
1
*
DISTRIBUTION
1
GROUP
i
VICTORIA
COSTS
1
t
1
1
1
1
1
:
1
i
1
1
550
982
499
1, 3 9 8
849
286
0
0
0
0
0
O
GENERAL
( VICGP
PRACS
*
REPORT PERIOD JAN 86 - DEC 86
GROUP AVERAGE + 0.4 STANDARD D E V I A T I O N
1
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
PEER
SERVICES P A T I E N T S
5
10
6
13
a
3
O
o
o
o
0
o
1
2
1
3
2
1
O
0
0
o
o
o
GROUP 9 1
1
C/S
C/P
S/PI
COSTS
ISO
122
70
119
148
74
O
O
O
O
•O
0
325
400
301
516
486
158
O
O
0
O
0
O
31
41
4(
41
51
21
01
Ol
01
Ol
Ol
Ol
900
1, 4 0 0
aoo
1, 6 0 0
1, ooo
SOO
0
o
0
o
0
o
===================
1 TOTAL
1
l
SERVICES P A T I E N T S
c/s
C/P
S/Pi
2
3
2
4
2
2
O
O
300
ISO
89
130
200
125
O
0
O
O
O
O
450
467
400
650
500
250
0
O
0
O
O
0
51
51
51
5!
61
3!
Ol
Oi
01
Ol
0!
Ol
IO
15
9
13
10
4
0
O
O
O
O
O
o
o
o
0
=========== = = = = a = =± = = = = = = =
3,981
=================== =
PERCENT
38
6
110
= = = = = = = = = = = = = = = = = = = E = = = = = a = = = = = = =
831
======
71
4, 3 0 0
41
=========== ==========
7
=
======== ======
119
1, 0 7 5
=
91
= = = ======
MONTHLY DATA ACCUMULATED BY PAID DATE
C O N W A Y
H E A L T H
S Y S T E M S
PERSONAL MONTHLY DISTRIBUTION
PEER GROUP : VICTORIA GENERAL PRACS
( VICGP
)
�**#******#*
# *« *#**
»* # # »
•
C O N W O Y
»***«*««»**•***»»•««*****•*•
*
PEER GROUP PROFILE
*
»«»*«**«*#•******»«**•******
*
PERSONAL
»
*
MONTHLY
DISTRIBUTION
H E A L T H
S Y S T E M S
PEER GROUP t VICTORIA GENERAL PRACS
PAGE 5
PRINTED ON OS OCT 1985
( VICGP
REPORT PERIOD JAN 86 - DEC 86
»
#*****#*«**#*»***»**##*»»#**
i MONTHS
1
t
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GROUP STANDARD DEVIATION
1
1
COSTS
SERVICES PATIENTS
400
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
1
1
I
1
I
I
I
I
1
I
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1
1
1
1
1
1
1
1
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1
1
367
1, 300
767
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4
8
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130
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55
110
128
53
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41
31
41
41
21
Ol
01
01
01
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01
374
455
330
£45
£05
£16
0
O
0
0
0
O
4
5
4
1
2
2
0
O
0
71
368
1
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0
0
0
0
o
o
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250
372
233
461
467
117
O
0
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37
6
104
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3,833
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39
24
52
53
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170
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MONTHLY DATA ACCUMULATED BY PAID DATE
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PAGE 6
PRINTED ON OS OCT 1985
PEER GROUP I VICTORIA GENERAL PRACS
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REPORT PERIOD JAN 86 - DEC 86
«**»********»***«"»**•»•«****
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JAN
FEB
MAR
APR
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JUN
JUL
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OCT
NOV
DEC
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a i
1
1
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11
41
41
41
51
21
01
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01
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Ol
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61
1
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90
93
75
123
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33
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300
350
300
400
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633
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o
o
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0
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36
6
109
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MONTHLY DATA ACCUMULATED BY PAID DATE
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PEER GROUP i VICTORIA GENERAL PRACS
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REPORT PERIOD JAN 86 - DEC 86
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1
GROUP AVERAGE + O.4 STANDARD D E V I A T I O N
1
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1
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1,112
1,941
1,194
1,847
1,582
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O
O
0
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0
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1
1
PERCENT
i
! JAN
! FEB
1 MAR
: APR
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! JUN
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11
20
16
18
15
11
0
0
O
O
0
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7,431
79
9
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C/P
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204
120
64
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153
125
0
0
0
0
0
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3
4
3
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4
0
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O
O
O
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SERVICES PATIENTS
370
503
298
576
371
254
0
O
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0
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31
51
41
51
31
31
Ol
Ol
Ol
Ol
Ol
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COSTS
SERVICES P A T I E N T S
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19
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24
20
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13
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O
0
O
O
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2, 30O
1, 9 0 0
1, 2 0 0
O
O
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0
o
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========= ========== ======= =
106
1, 3 0 2
121
4
4
4
4
7
4
O
O
O
O
O
O
C/S
C/P
300
ISO
75
130
200
171
0
0
0
O
0
O
475
700
450
650
400
300
0
O
O
O
0
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S/PI
51
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61
51
41
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01
Ol
01
Ol
01
Ol
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7, 7 0 0
IO
120
1, 8 2 5
151
MONTHLY DATA ACCUMULATED BY PAID DATE
C O N W A Y
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PEER
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VICTORIA GENERAL PRACS
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PAGE 11
# • * * * * * * # * # * * # * * * * * » » # * * # » * » * * * » » * * * * # * # * * * # » * » * * # # # *
PRINTED ON OS OCT 1985
PEER GROUP « VICTORIA GENERAL PRACS
< VICGP
REPORT PERIOD JAN 86 - DEC 86
*
X
! MONTHS
!
:
!
1
!
!
!
!
i
1
!
!
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GROUP AVERAGE
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1
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
COSTS SERVICES PATIENTS
i
1
i
1
l'
1
1
1
1
1
1
1
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1,600
900
1,667
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933
O
0
O
O
O
O
1
C/S
C/P
7
16
IS
16
13
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0
O
O
O
O
0
S
A
3
3
A
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0
O
0
O
O
0
167
0
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325
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525
3A9
233
0
O
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0
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a
lOO
1, 095
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50
108
13A
105
0
O
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31
Al
31
51
31
31
01
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01
Ol
Ol
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GROUP STANDARD DEVIATION
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779
852
735
ASO
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205
0
O
O
0
O
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1
0
2
9
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7
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O
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2
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o
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o
o
o
o
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7,300
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32
35
22
A7
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O
O
O
O
O
O
1 IA
195
IBA
127
56
51
O
O
O
O
O
O
S/PI
21
21
21
Ol
11
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lOI
327
11
3
IA
517
31
MONTHLY DATA ACCUMULATED BY PAID DATE
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H E A L T H
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TOTAL MONTHLY DISTRIBUTION
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REPORT PERIOD JON 86 - DEC 86
GROUP MEDIAN
I
1
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300
2
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15
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12
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POGE 12
PRINTED ON OS OCT 1985
PEER GROUP I VICTORIO GENERAL PROCS
»
PROVIDER
COUNT
: JON
! FEB
I MOR
! OPR
I MOY
! JUN
! JUL
! RUG
I SEP
! OCT
I NOV
I DEC
========
I TOTOL
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1
1
1
1
1
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A
A
A
A
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O
0
O
O
0
O
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C/P
S/PI
300
21
300
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2£5
31
575
51
375
31
225
31
0
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O
Ol
o
0
Ol
o
0
O
Ol
0
Ol
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0
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======= = a = =5=s =
770
91
93
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115
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0
MONTHLY DATA ACCUMULATED BY PAID DOTE
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TOTAL MONTHLY DISTRIBUTION
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-20
- 30
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- 99
! TOTAL
CONWAY
S Y S T E M S
261
998
794
O
626
O
< VICGP
REPORT PERIOD JAN 86 - DEC 86
SERVICES PATIENTS
C/S
C/P
1
1
1
37
78
91
O
70
O
261
998
794
O
626
O
4
11
a
o
o
5
o
o
2, 090
H E A L T H
PAGE 13
PRINTED ON OB OCT 1985
PEER GROUP t VICTORIA GENERAL PRACS
GROUP AVERAGE + O.4 STANDARD DEVIATION
COSTS
O
11
21
31
41
51
H E A L T H
1
103
S Y S T E M S
GROUP 91 PERCENT
S/PI
COSTS
4I
11I
81
Ol
51
Ol
SOO
1, 400
1, 200
O
1, 200
O
lOI
2, 400
SERVICES PATIENTS
7
14
11
O
9
O
1
1
1
O
1
O
C/S
C/P
71
10O
500
1, 400
log
i , aoo
o
i , aoo
o
o
133
O
120 1,200
I
S/PI
71
141
11 I
01
91
Ol
== ==
=
lOI
PERSONAL FEMALE AGE/SEX DISTRIBUTION
PEER GROUP : VICTORIA GENERAL PRACS
( VICGP
)
�C O N W A Y
H E A L T H
S Y S T E M S
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PAGE 14
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»«««»*»*««**•«««»««•****«***
PRINTED ON OS OCT 1985
VICTORIA GENERAL PRACS
( VICGP
REPORT PERIOD JAN 86 - DEC 86
* # • * * • * * * # # * * * * * * « » » # * * * » * * »
! AGE/SEX
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!
: o - io
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21
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!
1
!
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1
GROUP AVERAGE
167
767
633
O
400
O
1
C/S
C/P
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0
1
1
0
0
24
61
84
0
44
O
167
767
633
0
400
0
2-1
81
71
01
31
Ol
236
579
403
O
566
O
2
8
7
O
3
O
1,967
========== ================ =
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- - - - - — ================ ============= =
! TOTAL
1
o
= = = = =» = S3
£1
= = = =
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SERVICES P A T I E N T S
3
6
3
O
4
O
C/S
1
C/P
S/PI
0
O
O
O
O
O
34
236
31
43
579
61
18
403
31
O
Ol
0
63
566
41
0
O
O!
=================== = = = = = = = = = ====== =======
309
O
1
IS
£59
11
96
889
91
=s = = = s s z 3 a = ======== = = = = = = = ===== ======== =========== =================== ============== =======
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2
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< VICGP
REPORT PERIOD JAN 86 - DEC 86
GROUP MEDIAN
1
1
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PAGE 15
PRINTED ON OB OCT 1985
COSTS
1
1
1
1
1
1
SERVICES PATIENTS
0
0
0
900
11
1
AOO
6
1
! 21 - 30
1
O
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C/P
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0
82
75
0
0
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O
900
AOO
O
O
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90
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01
11 1
61
Ol
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01
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101
==========
C O N W A Y
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PRINTED ON OS OCT 1985
PEER GROUP I VICTORIA GENERAL PRACS
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REPORT PERIOD JAN 86 - DEC 86
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21
31
41
51
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20
30
40
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99
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0
386
531
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1,917
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301
:
i
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1
1
0
1
1
0
183
121
0
100
79
O
2
9
O
3
6
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17
4
========== ========= E3 =
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C/P
301
i.oai
0
386
342
O
121
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718
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COSTS
S/PI
C/S
C/P
S/P I
400
1, 4 0 0
O
500
400
O
41
11 1
Ol
51
61
Oi
400
1, 4 0 0
0
500
SOO
O
61
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4
11
0
5
7
O
1
1
0
1
2
O
300
129
O
133
114
O
2, OOO
21
91
01
31
41
01
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SERVICES P A T I E N T S
19
4
133
950
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POGE 17
PRINTED ON OS OCT 1985
< VICGP
REPORT PERIOD JON 86 - DEC 86
###»***#**»***#*#********»*#
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GROUP OVEROGE
I OGE/SEX
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11 - 2 0
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300
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17
3
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C/S
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O
0
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1
O
125
21
O
57
A7
0
170
368
O
216
189
O
21
21
Ol
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SERVICES P A T I E N T S
233
933
0
300
267
O
=========
1,867
COSTS
C/P
133
1 13
0
78
60
0
1
1
0
1
1
a
S/PI
C/S
SERVICES PATIENTS
COSTS
1
GROUP STONDORD DEVIATION
= = = ssss = = = =
625
=======
21
81
Ol
31
31
Ol
61
170
368
0
216
327
O
2
2
O
2
3
O
125
i
21
Ol
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2
=========a=========
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1
==========
232
18
21
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PERSONAL MALE AGE/SEX DISTRIBUTION
VICTORIA GENERAL PRACS
( VICGP
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PRINTED ON 08 OCT 1985
PEER
*
«
C O N W A Y
i
VICTORIA
GENERAL
PRACS
<
VICGP
REPORT
GROUP M E D I A N
1
PROVIDER
PERIOD
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DEC 8 6
1
!
.
COSTS
SERVICES
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C/S
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1
1
1
300
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0
400
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1
1
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1
1
100
1£7
0
lOO
67
O
3
0
£
£
1
1
1
1
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==== ========== ======= =
=========
TOTAL
GROUP
» * * • » *
1 COUNT
1
1
1
1
18
* » * * # » * * * # * * * » * * * * * * * * * * * * * * » * « » * * * * » » » » * • » » * * * » * # » * *
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1
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16
4
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119
C/P
300
900
0
400
400
O
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S/PI
11
71
Ol
31
41
01
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500
51
PERSONAL MALE AGE/SEX DISTRIBUTION
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( VICGP
)
�H E A L T H
CONWOY
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PAGE 19
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ft«ti« * * * • » * * * * * * * * * * * * * * * • * # «
PEER GROUP i VICTORIO GENEROL PROCS
»
PERSONAL TOTOL
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30
40
50
99
! TOTAL
CONWOY
1
( VICGP
REPORT PERIOD JAN 86 - DEC 86
GROUP AVERAGE + O.4 STANDARD DEVIATION
1
GROUP 91 PERCENT
1
i
1
1
!
COSTS
SERVICES PATIENTS
1
1
1
1
1
550
1,870
794
386
931
O
6
18
3
8
O
1
£
1
1
£
0
1
3,981
38
6
H E A L T H
a
S Y S T E M S
C/S
C/P
S/PI
COSTS
178
114
91
lOO
1 16
O
3£5
1, 199
794
386
818
O
31
lOI
81
31
71
Ol
900
£, 300
1 10
71
831
SERVICES PATIENTS
C/S
C/P
a
450
1, 400
1, 075
i , aoo
o
11
£1
11
5
9
O
a
o
300
1£7
109
133
133
O
4, 300
41
7
1 19
1, aoo
SOO
£
1
1
i , aoo
SOO
i , aoo
O
S/PI
61
11 i
11 1
51
91
Ol
91
PERSONAL TOTAL AGE/SEX DISTRIBUTION
PEER GROUP : VICTORIA GENERAL PRACS
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PERSONAL TOTAL
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«
AGE/SEX DISTRIBUTION
*
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PRINTED ON OS OCT 19S5
PEER GROUP : VICTORIA GENERAL PRACS
COSTS
< VICGP
REPORT PERIOD JAN 86 - DEC 86
GROUP AVERAGE
I AGE/SEX
! GROUPS
PAGE SO
SERVICES PATIENTS
GROUP STANDARD DEVIATION
C/S
C/P
1S/PI
COSTS
SERVICES PATIENTS
!
!
C/S
C/P
127
18
18
57
28
O
187
290
403
216
377
O
2!
1 I
3!
SI
SI
Ol
15
250
1 I
S/P!
4
: o - io
: i i - so
!
!
!
!
SI
31
41
51
-
30
AO
50
99
400
1, 7 0 0
633
300
800
0
4
16
7
3
7
O
1
1
1
1
O
127
106
84
78
105
0
3, 8 3 3
37
6
104
£
==============
! TOTAL
C O N W A Y
H E A L T H
S Y S T E M
S
250
1, 0 8 3
633
300
667
O
£1
101
71
31
61
374
434
403
S16
327
O
5
4
3
1
O
O
£
o
1
O
0
368
3
1
0
Ot
======== =========== ======= =============== ==== ======= ======
731
71
PEER
GROUP
PERSONAL TOTAL AGE/SEX DISTRIBUTION
VICTORIA GENERAL PROCS
( VICGP
)
�*
PEER GROUP PROFILE
C O N W O Y
H E O L T H
S Y S T E M S
*****************************************************
#
PRINTED ON OB OCT 1985
«*«#«*»****#**##»***»***##•*
*
«
PERSONAL TOTOL
OGE/SEX DISTRIBUTION
******
*
*
PEER GROUP i VICTORIO GENEROL PROCS
REPORT PERIOD JAN 86 - DEC 86
PROVIDER
COUNT
GROUP MED ION
i
- 10
- £0
- 30
- AO
- 50
- 99
t
£
3
3
£
3
O
COSTS
1
1
1
1
1
1
300
1, AOO
AOO
AOO
BOO
O
= = = = = . ==================
====*=
3 1
3, aoo
SERVICES PATIENTS
1
17
6
3
7
O
1
£
1
1
1
0
36
6
= = s = ; = =s = = = = = = =3 = =
! TOTOL
= = = = =
CONWOY
1
f
1
o
11
£1
31
41
51
< VICGP
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! OGE/SEX
! GROUPS
:
!
1
:
1
!
PAGE £1
H E O L T H
C/S
8£
HO
75
lOO
1 IA
O
C/P
300
1, 150
AOO
AOO
AOO
O
S/PI
1 1
11 1
61
31
61
01
====================
109
633
61
SSS
S Y S T E M S
PERSONOL TOTOL OGE/SEX DISTRIBUTION
PEER GROUP : VICTORIO GENERAL PROCS
( VICGP
)
�C O N W A Y
«'*««****«#»«»**•»*****«*«**»
*
PEER
GROUP
PROFILE
TOTAL FEMALE
AGE/SEX D I S T R I B U T I O N
S Y S T E M S
PAGE 31
PRINTED ON 08 OCT 1985
««•*«*»*»**«*«•«»»*«««**•«»»
*
*
H E A L T H
* * » * * # # « * * * * * * * * • * * * * » • » * # * * • * » # * * * * « - * + * » * * * * » # * « • » * #
»
PEER GROUP : VICTORIA GENERAL PRACS
»
*
( VICGP
REPORT PERIOD JAN 86 - DEC 86
* * * # # * * « * » # • * # • » * * * * # # • * * # # *
1 AGE/SEX
GROUP AVERAGE + 0.A STANDARD DEVIATION
•
1
i
!
1
!
1
1
1
O - 10
11-20
21 - 30
31 - AO
A l - 50
51 - 99
! TOTAL
C O N W A Y
COSTS
GROUP 9 1 PERCENT
SERVICES PATIENTS
C/S
C/P
S/PI
COSTS
37
73
9A
26
7A
72
261
1,290
1, 350
IOA
1,253
688
Al
151
1AI
21
91
81
500
1, 70O
1, 70O
200
2, AOO
900
7
18
17
A
17
10
103
1, 537
1AI
A, lOO
A7
1
1
i
1
1
1
261
1,290
1, 350
IOA
1, 253
688
A
15
IA
2
9
a
1
1
1
1
1
1
1
3, 866
A2
A
H E A L T H
1
S Y S T E M S
SERVICES PATIENTS
PEER
GROUP
1
C/S
C/P
S/P!
1
1
1
1
1
1
71
9A
100
SO
1A1
90
500
1, 700
1, 700
200
2, AOO
goo
71
18!
17!
Al
17!
IO!
5
121
2, 050
17 1
TOTAL FEMALE AGE/SEX DISTRIBUTION
VICTORIA GENERAL PRACS
( VICGP
)
�C O N W A Y
H E A L T H
S Y S T E M S
PAGE 32
# » # * * * * » # # * # * » » » # # # * # * # * # * » * » » * • * » » * » » * * » » # » # * * » » » * * *
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1 .
PEER
GROUP
COSTS
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SERVICES
»
167
!
0 - 1 0
1
**###*»**»»#»#«#*»*#«»*#**«*
1 41 - 50
! 51 - 99
1
1
800
533
1 TOTAL
!
3, 7 6 7
67
: * 1 - AO
i
# # 3* * * * » * * * * » » * » * * # * * # * » » » * *
C O N W A Y
H E A L T H
GROUP STANDARD D E V I A T I O N
C/S
C/P
S/PI.
COSTS
O
1
1
0
0
1
24
57
91
17
A7
56
167
1, OOO
1, 2 0 0
67
SOO
533
21
121
131
11
61
61
236
726
37A
9A
1, 1 3 1
386
3
96
1,319
131
2A9
AO
*
*
1
PATIENTS
2
12
13
1
6
6
1
0
* 11 - 2 T O T A L 1 F E M A L E 1, OOO
1, 2 0
!
* 2 1 G E /3 0 X D 1S T R I B U T I O N 0
A - SE
I
( VICGP
REPORT PERIOD JAN 86 - DEC 86
GROUP AVERAGE
1
1
*
PRINTED ON OB OCT 1985
PEER GROUP I VICTORIA GENERAL PRACS
S Y S T E M S
1
SERVICES
PATIENTS
C/S
C/P
3
2
8
A
O
O
0
O
0
0
34
41
6
24
67
40
236
726
374
94
1, 1 3 1
386
31
81
31
21
5
1
18
546
3!
a
3
PEER
GROUP
S/PI
a:
41
TOTAL FEMALE AGE/SEX DISTRIBUTION
VICTORIA GENERAL PRACS
( VICGP
)
�«####
#»«»«
»•*###
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*
*
»
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GROUP
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*
»
TOTOL FEMOLE
OGE/SEX D I S T R I B U T I O N
C O N W O Y
H E O L T H
S Y S T E M S
POGE 33
»
» # * * » * » * * * * * * # » * * * * # * * # * » * # # * * * * » * * * * * # * • * * * * * * * # * * » *
*
*
PEER GROUP : VICTORIO GENEROL PROCS
PRINTED ON OB OCT
1985
< VICGP
REPORT PERIOD JON 86 - DEC 86
*****»#**»»#*##**********»»»
! OGE/SEX
! GROUPS
:
!
!
!
1
!
1
O 1121 31 41 51 -
IO
20
30
40
50
99
! PROVIDER
1 COUNT
SERVICES POTIENTS
'
1
1
t
1
1
1
O
1, 300
1, 100
0
0
700
O
17
13
O
0
9
3
H E A L T H
COSTS
1
2
3
1
1
2
i
1
1
I
I
TOTAL
C O N W A Y
GROUP MEDION
1
I
3, 700
40
S Y S T E M S
0
1
1
0
0
1
1
C/B
C/P
S/PI
0
76
89
0
O
78
O
1, 300
1, lOO
0
0
700
01
171
131
01
01
91
88
1,167
131
PEER
GROUP
TOTAL FEMALE AGE/SEX DISTRIBUTION
VICTORIA GENERAL PRACS
( VICGP
)
�C O N W O Y
#»»##*
*»«»»#
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*
*
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o - io
1 1
21
31
41
51
- 2 0
- 30
- 40
- 50
- 93
PAGE 34
PRINTED ON OB OCT 1985
PEER GROUP i VICTORIO GENERAL PROCS
( VICGP
*
REPORT PERIOD JAN 86 - DEC 86
X
GROUP 91 PERCENT
9
21
0
9
12
5
1
3
0
1
2
1
36
5
109
1, 150
lOI
4, OOO
41
7
1
3, 6 6 9
a
111
118
0
ISO
200
1, OOO
2, 3 0 0
0
900
650
600
91
21 1
0!
91
61
51
119
1, 6 0 0
ioa
1
-
1 TOTAL
ll
ll
S Y S T E M S
il
H E O L T H
ll
II
CONWOY
-
1 , OOO
2, 3 0 0
0
900
1, 3 0 0
600
1
61
161
01
61
51
31
S/PI
1
663
1,618
0
728
457
398
6
17
0
6
C/P
1
84
110
0
104
76
120
663
1,799
0
728
784
398
C/S
1
3
1
2
0
1
1
1
!
1
1
1
1
1
SERVICES POTIENTS
II
COSTS
ll
S/PI
SERVICES POTIENTS
1
C/P
COSTS
1
C/S
1
:
S Y S T E M S
GROUP AVERAGE + 0 . 4 STANDARD DEVIATION
AGE/SEX
!
I
!
!
!
H E O L T H
* » * * * # * * # * * * » * * * * # * » » * * * » * * # » » * * * * # » # # * • » • » * * * * # * * * * * #
TQTOL MOLE OGE/SEX DISTRIBUTION
PEER GROUP : VICTORIO GENEROL PROCS
( VICGP
)
�C O N W A Y
##»#*»#********«***«##**#**»
*
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GROUP
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*
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TOTAL MALE
AGE/SEX D I S T R I B U T I O N
H E A L T H
S Y S T E M S
PAGE 35
***•*•»*«•**•*»*»»**•***••****•***************»•*«*««
»
PRINTED ON 08 OCT 1985
PEER GROUP l VICTORIO GENERAL PRACS
#
•
< VICGP
REPORT PERIOD JAN 86 - DEC 86
****•*«»»*•*****««***•****•»
1
1
1
i
!
1
!
1
0
11
£1
31
41
51
-
IO
£0
30
40
50
99
! TOTAL
C O N W A Y
-X.
GROUP AVERAGE
AGE/SEX
COSTS
1
1
1
1
1
1
SOO
1, 6 0 0
0
567
567
300
5
15
• O
5
6
3
1
3, 5 3 3
34
H E A L T H
SERVICES PATIENTS
S Y S T E M S
GROUP STANDARD DEVIATION
C/S
C/P
S/PI
COSTS
0
1
1
1
65
104
O
80
58
87
500
1, 3 1 1
O
567
350
300
SI
131
Ol
51
41
31
408
497
O
403
544
£45
4
4
O
4
5
£
O
1
O
O
1
0
5
105
96£
91
340
6
£
1
£
SERVICES P A T I E N T S
PEER
GROUP
:
C/S
C/P
47
14
O
45
84
408
766
0
403
£68
£45
4 1
71
01
41
31
£1
9
469
41
&£
S/PI
TOTAL MALE AGE/SEX DISTRIBUTION
VICTORIA GENERAL PRACS
( VICGP
)
�C O N W O Y
«•**»*«*«**********»»««****»
#
PEER GROUP PROFILE
*
##»***»*»####***#*#»*#«*»»*#
#
TOTOL MOLE
*
#
OGE/SEX
DISTRIBUTION
H E O L T H
S Y S T E M S
PRINTED ON 08 OCT 1385
PEER GROUP i VICTORIO GENEROL PROCS
( VICGP
«
REPORT PERIOD JON 86 - DEC 86
***#»****#*»#***##»##»******
1 OGE/SEX
! GROUPS
1
1 PROVIDER
1 COfjNT
!
1
1
1
1
!
I
GROUP MEDION
1
COSTS
2
3
O
2
2
2
1
1
1
1
1
1
500
1, 3 0 0
O
800
AOO
300
6
IA
0
6
6
3
3
I
3 , AOO
3A
1
O - IO
1 1 - 20
21 - 30
3 1 - AO
A l - 50
51 - 93
,
1
I
(
1
1
TOTAL
C O N W O Y
H E O L T H
POGE 36
* * * • * * * * * # * * * * # * * # * * » * » * # * * * # # # # » * • * • » * » # * » # « » « * » » # * *
S Y S T E M S
SERVICES POTIENTS
1
1
0
1
1
1
1
C/S
C/P
S/PI
83
110
0
89
67
60
500
1, 2 0 0
O
800
AOO
300
61
1AI
Ol
61
61
31
lOO
SOO
81
TOTOL MOLE OGE/SEX DISTRIBUTION
PEER GROUP : VICTORIO GENEROL PROCS
( VICGP
)
�CONWOY
««««*«»««*»»**•»**»*»»«**««*
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PEER GROUP PROFILE
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)
REPORT PERIOD JON 86 - DEC 86
1
GROUP 91 PERCENT
1
1
i—
t
COSTS
SERVICES POTIENTS
:
o - io
i
11 - £0
£1 - 30
31 — AO
A l - 50
51 - gg
1
1
1
1
i
316
£, 718
1, 350
813
1, 63A
1, 083
10
29
IA
13
12
1
3
1
1
2
2
1
7, A31
79
9
a
==========================
CONWOY
POGE 37
PRINTED ON OB OCT 19fl5
GROUP OVEROGE + O.A STONDORD DEVIOTION
1
S Y S T E M S
PEER GROUP i VICTORIO GENEROL PROCS
!
!
I
1
I
1 TOTOL
H E O L T H
H E O L T H
C/S
C/P
S/PI
76
103
9A
100
118
81
5A1
1, 69£
1, 350
61A
1, 506
5A1
61
171
1AI
51
121
61
=======
106
=======a==
1, 302
121
COSTS
1, SOO
3, OOO
1, 700
1, OOO
2, AOO
1, 500
= = = = = = = 1=5=
7, 700
SERVICES POTIENTS
16
31
17
13
17
IA
£
A
1
2
2
2
C/S
9A
no
100
ISO
1A1
1 15
C/P
750
£, 300
1, 700
goo
2, AOO
750
S/PI
81
£1 1
17!
7!
17!
71
========================== ==============
88
IO
120
1,825
15!
========== = = = =
S Y S T E M S
TOTOL OGE/SEX DISTRIBUTION
PEER GROUP : VICTORIO GENEROL PROCS
< VICGP
)
�CONWOY
*
PEER GROUP PROFILE
*
•***•««•»***»»*****«*«•««*•*
*
TOTAL
*
»
OGE/SEX DISTRIBUTION
*
1
COSTS
H E A L T H
POGE 38
PRINTED ON 08 OCT 1985
PEER GROUP I VICTORIO GENEROL PROCS
( VICGP
REPORT PERIOD JON 86 - DEC 86
SERVICES POTIENTS
r
7
1
1 0 - 10
1
667
: i i - £0
1
£,60O
£7
1 £1 - 30
13
1
!
1,£00
1
! 31-40
!
633
6
! 41 - 50
!
1,367
1£
1
1 51 - 99
1
833
9
1
========== ================ =====================
74
8
1
7,300
! TOTOL
C O N W O Y
S Y S T E M S
GROUP OVEROGE
! OGE/SEX
!
H E O L T H
S Y S T E M S
GROUP STONDORD DEVIOTION
C/S
C/P
S/PI
COSTS
SERVICES POTIENTS
51
7
59
417
6a4
1
98 1, 433
151
394
4
1
131
374
3
O
91
1, aoo
41
450
5
76
467
1
105 1, 150
101
818
4
0
6£4
6£
51
6
1
417
===== ======= ============ ======= =====================
101
327
100 1, 095
11
3
PEER
GROUP
C/S
C/P
S/PI
4a
312
3f
12
646
61
6
374
31
61
368
31
30
890
51
48
312
3:
======= ===== =======
14
517
31
TOTAL AGE/SEX DISTRIBUTION
VICTORIA GENEROL PRACS
( VICGP
>
�C O N W O Y
»
PEER GROUP PROFILE
H E O L T H
S Y S T E M S
*
»*»*»#***»**»»#**»##**»*****»***»»»**#*#*##»»*»*»»*#*
*
PEER GROUP I VICTORIO GENEROL PROCS
POGE 33
PRINTED ON OB OCT 1985
*
*
TOTOL
OGE/SEX DISTRIBUTION
i OGE/SEX
! GROUPS
:
1
1
»
1 PROVIDER
1 COUNT
1
!
1
!
t
!
0 - 1 0
1 1 - 2 0
£1 - 3 0
31 - 40
41 - 50
51 - 99
! TOTOL
C O N W O Y
REPORT PERIOD JON 86 - DEC 86
1
1
GROUP MEDION
|
1
£ 1
COSTS
SERVICES POTIENTS
C/9
1
3
3
2
3
2
1
I
1
1
I
500
2, 5 0 0
1, 100
900
1, 3 0 0
1 , OOO
6
29
13
6
12
13
1
2
1
1
1
2
83
103
89
77
108
71
i
3 1
7, 3 0 0
74
10
93
1
:
H E O L T H
( VICGP
S Y S T E M S
C/P
500
1, 2 5 0
1, 1 0 0
SOO
650
500
770
S/PI
61
161
131
61
61
71
91
PEER GROUP
TOTOL OGE/SEX DISTRIBUTION
VICTORIO GENEROL PROCS
( VICGP
)
�»«**««**«*»»**»***•********«
*
PEER GROUP PROFILE
*
##**•***«##**#*#**####*
* PERSONAL SERVICE GROUPS *
*
AND F E E I T E M S
C O N W A Y
H E A L T H
S Y S T E M S
PAGE 40
#***»*##»*»*##*»##*»*****#**##*****»*»*##»#»»#»*#»»»#
PRINTED ON OS OCT 1985
PEER GROUP t VICTORIA GENERAL PRACS
( VICGP
REPORT PERIOD JAN 86 - DEC 86
*
*****«***«**»*«*»****»•.»*»**
X
: SERVICE
: GROUPS
!
FEE
ITEMS
:
1
i
!
!
ORTHO
ORTHO
ORTHO
ORTHO
ORTHO
1328
3622
6621
8445
TOTAL
!
!
1
!
PEDS
PEDS
PEDS
PEDS
3389
5613
7213
TOTAL — >
! XRAY
1 XRAY
1 XRAY
<
1327
8331
TOTAL — >
GROUP AVERAGE + 0.4 STANDARD D E V I A T I O N
«
COSTS
SERVICES
PATIENTS
C/B
C/P
1
1
1
1
603
317
104
657
1, 5 4 9
9
3
1
5
17
4
2
1
2
5
64
106
104
170
96
195
269
104
328
372
31
31
11
21
4!
604
583
433
1,586
7
4
4
14
3
2
3
5
123
272
125
123
239
358
181
370
31
21
11
31
471
483
949
4
4
9
2
2
4
135
119
127
236
352
275
21
31
31
> (
p
t
!
i
i
1
i
i
i
C O N W A Y
H E A L T H
GROUP 9 1 PERCENT
S/PI
:
COSTS
SERVICES
PATIENTS
C/S
C/P
S/P!
800
AOO
200
11
3
1
6
17
4
2
1
2
6
73
133
200
200
lOO
267
AOO
200
400
425
41
31
11
3!
41
a
167
400
133
142
250
AOO
200
425
E
4!
31
2!
31
167
133
ISO
250
400
300
1
3!
4I
3!
aoo
1 700
1
1
700
700
500
1, 7 0 0
5
4
15
4
2
3
5
500
600
1, 1 OO
5
5
9
2
2
4
1
= = = = = = = = = s = = =: = = = = = =: = = s = s==i = = = s 3 a
! TOTAL
1
3, 9 8 1
=============
S Y S T E M S
38
=
=
=
=
=
i
6
=
=
======= ======== ========
no
831
============= ======= ======= ======== =====
•
=
=
•
=
71
A, 3 0 0
PEER
GROUP
41
7
1 19
1, 0 7 5
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PERSONAL. SERVICE GROUPS AND FEE ITEMS
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P E R S O N A L S E R V I C E GROUPS
AND F E E I T E M S
SERVICE
GROUPS
FEE
ITEMS
PRINTED
*
*
PEER
GROUP
:
VICTORIA
GENERAL
PRACS
<
ON 0 8 OCT 1 9 8 5
VICGP
REPORT
PERIOD
JAN 8 6 -
^L
!
GROUP A V E R A G E
•
GROUP
STANDARD
1
DEVIATION
COSTS
! ORTHO
SERVICES
PATIENTS
C/S
C/P
S/PI
COSTS
SERVICES
PATIENTS
C/S
C/P
189
125
94
141
£05
2
0
0
1
1
0
0
0
0
1
9
42
94
49
14
72
131
94
71
96
94
125
82
216
2
2
O
1
1
44
126
14
18
35
62
21
55
94
125
205
1
1
1
! ORTHO
! ORTHO
! ORTHO
1328
3622
6621
8445
TOTAL
I
I
I
> 1
533
267
67
600
1, 467
9
3
0
4
16
3
1
O
2
5
60
89
67
ISO
90
167
£17
67
300
333
31
31
01
£1
41
1
!
1
1
PEDS
PEDS
PEDS
PEDS
3389
5613
7213
TOTAL
|
1
1
> 1
567
533
400
1 , SOO
6
3
3
13
3
2
2
4
106
222
119
116
225
333
172
348
31
£1
1 1
31
!
XRAY
1327
8331
TOTAL
|
1
> 1
433
433
867
4
4
2
1
3
117
109
113
217
333
258
£1
31
£1
!
ORTHO
DEC 8 6
S/PI
1 1
1 1
Ol
11
11
|
1
o
0
o
11
11
Ol
01
f
! XRAY
! XRAY
============ = = = = = = s = s = = c==a = =x = =
! TOTAL
1
C O N W O Y
H E O L T H
I
&s : s = a = = = = =
=
a
=============
3, 833
S Y S T E M S
37
= Bic: = = s = a
6
104
==================
731
71
= = = = = s= = s : s s == =a = = = = = = =
368
3
47
01
47
i:
42
Ol
o
======== ======= ======== = = = = =
250
1
15
i:
0
0
44
25
35
PERSONOL SERVICE GROUPS OND FEE ITEMS
PEER GROUP : VICTORIO GENEROL PRACS
( VICGP
)
�C O N W A Y
«**»»**»
#*<#»
•* )- •
*
*
!
SERVICE
FEE
P E E R GROUP P R O F I L E
!
GROUP
t
VICTORIA
GENERAL
GROUP
PROVIDER
*
1 —
1
!
!
3
3
1
3
3
!
!
!
!
PEDS
PEDS
PEDS
PEDS
3
3
3
3
!
!
PRACS
(
COSTS
SERVICES
1
1
1
1
1
AOO
300
O
SOO
1, 5 0 0
8
3
0
A
17
1
1
1
> 1
500
500
AOO
1,600
a
f
i
!
1
1
1
1
1327
8331
TOTAL
1
1
> 1
3
3
3
1
1
1
PERIOD
JAN 86 -
DEC 8 6
MEDIAN
1
PATIENTS
C/S
C/P
S/PI
57
lOO
O
167
lOO
133
ISO
250
375
31
31
01
21
Al
A
IAO
125
107
250
350
167
320
21
21
21
31
2
1
3
125
120
122
250
300
275
21
31
21
31
0
2
A
o
1
1
A
3
12
2
£
2
aa
i
i
f
1
XRAY
ON 0 8 O C T 1 9 8 5
VICGP
|
I
3389
5613
7213
TOTAL
PAGE A2
REPORT
P E R S O N A L S E R V I C E GROUPS *
AND F E E I T E M S
#
S8
1
» * * * • # 1»3 * » # * * # # * * * * *
ORTHO
3622
1
6621
1
ORTHO
ORTHO
BAAS
1
ORTHO
TOTAL
> 1
! ORTHO
* « * * * * * * #
S Y S T E M S
PRINTED
PEER
GROUPS
ITEMS
1 COUNT
#*«#«***»#»*##«#****###»»»«#
*
«
H E A L T H
* * # # » * # * * » » # * * * » * » * # » • * » # * # # * » * » » * # * * » # * # * # » » * # » * # » * »
500
AOO
900
A
! XRAY
A
! XRAY
9
========= = = a = = = = = = = = = = = = = = a = = = = = = =====================B ss BS ssor saaa ata
=================s = = = = = = = =====
! TOTAL
3 , SOO
109
1
3 1
36
6
633
61
C O N W A Y
H E A L T H
S Y S T E M S
PERSONAL SERVICE GROUPS AND FEE ITEMS
PEER GROUP : VICTORIA GENERAL PRACS
< VICGP
)
�PROVIDER PROFILU
PRINTED O 24 M R 1987
N
A
SUMMARY
INFORMATION
PROVIDER
: DR. JOHN A. GALT
- 1000
REPORT PERIOD JAN 86 - DEC 86
- VICGP
PEER GROUP t VICTORIA PRACS
DR. JOHN A. GALT
STATUS
SPECIALITY
TOP
QUALIFIED FOR INCLUSION IN THEPEER GROUP STATISTICS
_
-
I
1
I
* • SERVICING DETAILS *
'*
TOTAL FLAGS
RANK
t
TOTAL COSTS
TOTAL SERVICES
TOTAL PATIENTS
1
COSTS PER SERVICES
COSTS PER PATIENTS
SERVICES PER PATIENTS
1
1
'
|
VALUE
3
ZONE
LHA
RHD
$ 7.700
88
10
3
2
2
$ 88
$ 770
9
FLAG VALUE
0
0.4
0.8*
1.2
1.2 t V 1.6
2
1.6 t 6 N\
2/to \2.4
2.f to ^2.8
2.8 to 3.2
3.2 to 3.6
above
3.6
&«TOH
1
2
3
4
5
6
7
8
9
$ 7.300
74
8
$ 100
t 1.095
10
STD DEV
\
u
PERSONAL
'"\'
i
t
i
AVERAGE
Q
1
1
2
NUMBER OF ACTIVE MEMBERS IN GROUP
0.4\to
0.8 \o
REFERRED
PERCENTILE
be 1 OM
91 to
92 to
93 to
94 to
95 to
96 to
97 to
98 to
above
91
92
91
94
9'i
96
97
98
99
99
TOTAL
PRINT OUT DETAILS
PRINTED
GENERAL INFORMATION
DEFINED GENERAL INFORMATION
MONTHLY DISTRIBUTION
MONTHLY DISTRIBUTION ADJUSTED
AGE/SEX DISTRIBUTION
AGE/SEX DISTRIBUTION ADJUSTED
SERVICE GROUP TOTALS
FEE ITEM DETAILS
CONWAY
HEALTH
<-<-N
O
N
O
N
O
N
O
N
O
N
O
S Y S T E M S
FLAGS
N/A
NA
/
->
->
0
0
0
0
0
0
PRINTED
<-<-N
O
N
O
N
O
N
O
N
O
N
O
FLAGS
NA
/
NA
/
->
->
0
0
0
0
0
0
PRINTED
FLAGS
N
O
N
O
N
O
N
O
N
O
N
O
<--
PROVIDER
: DR. JOHN A. GALT
PEER GROUP : VICTORIA PRACS
NA
/
N/A
SUMMARY I Nl I) KM A I I U
N
- 1001)
- VICCP
�CONWOY
»
PROVIDER PROFILE
*
»«•••*««*•»»*«»**»**•**»«••*
*
GENEROL
•
*
INFORMOTI ON
*
H E O L T H
S Y S T E M S
PRINTED ON 08 OCT 1985
PROVIDER
I DR. JOHN A. GALT
( I OOO
REPORT PERIOD JAN 86 - DEC 86
PEER GROUP I VICTORIO GENERAL PRACS
I FLAG
I
COSTS I
TOTAL COSTS
PERCENT OF COSTS REFERRED
I
I
I
I
I
39
39
39
39
PROVIDER
VALUE
TOTAL SERVICES
PERCENT OF SERVICES REFERRED
POTIENTS :
PERSONOL POTIENTS
SELF-REFERRED POTIENTS
REFERRED-OUT POTIENTS
TOTOL REFERRED POTIENTS
TOTOL PATIENTS
PERCENT OF PATIENTS REFERRED
C O N W A Y
H E A L T H
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
3,AOO I
1,AOO I
£,900 I
A,300 I
I
7,700 I
56 I
3,981
1,9£9
£,1A£
3,703
7 A31
50
t
39
£9
Al
18
£9
A7
39
19
88
53
I
I
I
I
I
I
I
I
I
£9
£9
39
IO
7
7
7
8
I
I
I
I
6
6
6
7
IO
IO I
80 I
9
90
39
S Y S T E M S
I GROUP
I AVERAGE
GROUP AVG
I GROUP 9 1
+ O. A S. D. I PERCENT
SERVICES :
PERSONAL SERVICES
SELF-REFERRED SERVICES
REFERRED-OUT SERVICES
TOTAL REFERRED SERVICES
( VICGP
X
^
PERSONOL COSTS
SELF-REFERRED COSTS
REFERRED-OUT COSTS
TOTOL REFERRED COSTS
PAGE £
38
£3
20
Al
79
51
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
A,300
S,SOO
£,90O
A,300
7,700
56
Al
30
£9
A7
88
53
7
7
7
8
IO
100
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
t
I
t
I GROUP
I STD DEV
I
I
3,833 I
1,700 !
1,767 I
3, A67 I
I
7,300
A7
37
£1
16
37
7A
A9
6
5
5
7
8
87
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
t
I
I
I
I
f
t
I
I PROVIDER
I COUNT
368
57£
939
591
I
1
I
I
I
I
I
!
I
3
3
3
I
I
:
:
I
-»
t
I
:
I
3£7
6
I
I
I
I
I
I
3
3
3
7
9
9
I
I
I
I
I
3
3
3
3
11 I
6 I
I
I
I
3
3
1
£
t
I
1 I
£
t
3
3
3
3
3
3
GENERAL INFORMATION
PROVIDER
: DR. JOHN A. GALT
< lOOO
)
PEER GROUP : VICTORIA GENERAL PRACS
( VICGP
)
�C O N W O Y .
««*«**•«•«•«*•*«**«•««#«««*•
*
*
PROVIDER PROFILE
GENERAL
INFORMOTION
H E O L T H
S Y S T E M S
PRINTED ON OB OCT 1985
PROVIDER
*
*
i DR. JOHN A. GALT
< lOOO
REPORT PERIOD JON 86 - DEC 86
PEER GROUP i VICTORIA GENEROL PROCS
FLOG
PROVIDER
VALUE
39
TOTAL COSTS / TOTAL SERVICES
83
105
91
88
COSTS PER SERVICES I
PERSONAL COSTS / PERSONAL PATIENTS
REFERRED COSTS / PERSONAL PATIENTS
REFERRED COSTS / REFERRED PATIENTS
486
614
538
TOTAL COSTS / TOTAL PATIENTS
770
SERVICES PER PATIENTS I
PERSONOL SERVICES / PERSONOL POTIENTS
REFERRED SERVICES / PERSONOL POTIENTS
REFERRED SERVICES / REFERRED POTIENTS
29
TOTOL SERVICES / TOTAL PATIENTS
H E A L T H
S Y S T E M S
-y.
1 GROUP 91
I + O. 4 S.D. I PERCENT
COSTS PER SERVICES I
PERSONOL COSTS / PERSONOL SERVICES
REFERRED COSTS / PERSONAL SERVICES
REFERRED COSTS / REFERRED SERVICES
( VICGP
-X
I GROUP AVG
A.
C O N W A Y
POGE 3
»»»«•»*•*•»**•**«»»»«*•«•«•**»*»*»*»**»••••««•**»*«•«
»
6
7
6
9
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I GROUP
I AVERAGE
I
I
no i
96 I
104 I
I
106 I
I
831
665
618
1,302
7
7
6
I
I
I
I
I
I
I
I
I
I
I
I
I
I
12 I
I
119
105
120
120
1,075
750
750
1,825
9
7
6
15
I
I
I
I
I
I
I
I
I
I
I
t
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I PROVIDER
I COUNT
I GROUP
I STD DEV
104
92
97
lOO
731
627
558
1,095
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
7 »
6 I
6 I
I
10 I
I
I
I
15 I
9 I
17 I
3
3
3
14 I
250
96
149
517
1
0
1
3
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
3
3
3
3
3
3
GENERAL INFORMATION
PROVIDER
: DR. JOHN A. GALT
< lOOO
)
PEER GROUP : VICTORIA GENERAL PRACS
< VICGP
)
�C O N W A Y
**#»»**#«**##*#»#»*##**#»»*»
*
PROVIDER PROFILE
#
»**«**«•»»«»•*»••••*•«*»•»**
*
PERSONAL
*
»
MONTHLY DISTRIBUTION
*
H E A L T H
S Y S T E M S
PRINTED ON OS OCT 1985
PROVIDER
I DR. JOHN A. GALT
< lOOO
I
1
)
REPORT PERIOD JAN 86 - DEC 86
COSTS
1
SERVICES
1
PATIENTS
1
C/8
1
C/P
1
S/P
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i1
7^
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( VICGP
PEER GROUP i VICTORIA GENERAL PRACS
1 MONTHS
PAGE 4
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
1 TOTAL
I 39
1
1
1
1
1
1
I
1
1
1
1
1
VALUE
900
700
300
1,000
SOO
O
O
O
O
O
O
O
3,400
XTC 1 FLAG
ae 1 39
ai
s
29
15
O
O
O
O
O
O
O
1
1
1 10
1
1
1
1
1
1
1
1
lOO 1 39
VALUE
10
a
4
13
6
0
O
o
o
o
o
o
41
*T9 1
24
20
IO
32
15
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O
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1 39
1
1
1
1
1
1
1
1
1
1
1
lOO 1 29
VALUE 1 FtAG
VALUE 1 FLhG
VALUE 1
FtfAG
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21
21
1 t IO
31
11
Ol
Ol
Ol
Ol
Ol
Ol
Ol
901 29
SSI
751
771
831 10
01
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Ol
Ol
Ol
Ol
Ol
4501 39
3501
3001 10
3331
5001 29
Ol
01
01
01
Ol
Ol
Ol
51
41
41
41
61
Ol
01
Ol
Ol
Ol
O1
01
71
831
4861
6!
MONTHLY DATE ACCUMULATED BY PAID DATE
C O N W A Y
H E A L T H
S Y S T E M S
PERSONAL MONTHLY DISTRIBUTION
PROVIDER
» DR. JOHN A..GALT
( lOOO
>
PEER GROUP : VICTORIA GENERAL PRACS
< VICGP
>
�C O N W A Y
*#»»••#«»*#»»»*##«*#*»#*#»«*
*
PROVIDER PROFILE
H E A L T H
S Y S T E M S
PAGE 6
*
PRINTED ON OB OCT 1985
*
TOTAL
»
*
MONTHLY DISTRIBUTION
*
«««»»******•****»••»«***»*»•
1 MONTHS
1
1
PROVIDER
1 JAN
1 FEB
1 MAR
1 APR
1 MAY
! JUN
1 JUL
! AUG
i SEP
1 OCT
1 NOV
1 DEC
1 39
1
1
1
1
t
1
1
1
I
I
1 TOTAL •
1 39
1
< lOOO
)
< VICGP
)
REPORT PERIOD JAN 88 - DEC 88
PEER GROUP I VICTORIA GENERAL PRACS
COSTS
1
1 FLAG
I DR. JOHN A. GALT
VALUE
1, 900
1, lOO
900
1, AOO
1,500
900
O
0
0
0
0
0
7, 700
SERVICES
1
-1XTC 1 FLAG
VALUE
25
IA
12
18
19
12
O
O
O
O
O
O
1 39
1
1
1 10
1
1
1
1
1
1
1
1
19
15
12
IB
IA
IO
' O
O
O
O
O
0
lOO 1 39
88
1
1
S/P
PATIENTS
1
C/S
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1
1
-11
1
1
1
VALUE1 FLAG
VALUE1 FLAG
VALUE 1
XT8 1 FLAG
VALUE1 FLAG
22
17
IA
20
16
11
0
O
0
O
O
O
1
1
1
1
1
1
1
1
1
1
1
1
39
10
IO
10
100 1 10
Al
Al
Al IO
Al
Al
Al
01
01
01
Ol
01
Ol
lOI
lOOl 39
731
751
781
1071 10
901
Ol
Ol
Ol
Ol
Ol
Ol
881
A75I 39
2751
2251
3501
3751 29
2251
Ol
Ol
01
Ol
Ol
Ol
51
Al
3!
51
AI
31
Ol
Ol
01
Ol
01
Ol
7701
91
MONTHLY DATE ACCUMULATED BY PAID DATE
C O N W A Y
H E A L T H
S Y S T E M S
TOTAL MONTHLY DISTRIBUTION
PROVIDER
> DR. JOHN A. GALT
( 1000
)
PEER GROUP : VICTORIA GENERAL PRACS
< VICGP
>
�C O N W A Y
H E A L T H
S Y S T E M S
»
PROVIDER PROFILE
*
**•«««»*»***»*««*»••*«**•*»*
*
»
PROVIDER
PAGE 7
•»*»»»*»*»**»•*»*•«»*•*«»*•«•***»«*«»««»»*«••»»*****»
PERSONAL FEMALE
AGE/SEX D I S T R I B U T I O N
PRINTED ON OS OCT 1985
*
*
i DR. JOHN A. GALT
< lOOO
REPORT PERIOD JAN 88 - DEC 86
PEER GROUP I VICTORIA GENERAL PRACS
1 AGE/SEX
1 GROUPS
1
1
1
1
1
1
1
O
11
21
31
41
51
-
IO
20
30
40
SO
99
1
TOTOL
C O N W A Y
COSTS
1 FLAG
1
1
1
H E A L T H
XTC
500
900
300
O
0
O
lOO
1 FLAG
29
53
1,700
1 39
1
1
1
1
VALUE
SERVICES
VALUE
1 39
1 10
ia 1
O 1
O 1
O 1
7
11
4
0
0
1 39
22
S Y S T E M S
o
( VICGP
1
PATIENTS
1
1
C/S
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1
1
1-I11
XT9 1 FLOG
VALUE 1 FLAG
VALUE 1 FLAG
VALUE1 FLAG
VALUE!
32
1 39
1 IO
18 t
o 1
0 1
o 1
so
lOO
1 39
1 1 39
1 1 IO
1t
01
01
01
71 1
821
75 t
Ol
Ol
31
771
Ol
39
SOOI 3 9
9 0 0 I IO
3001
01
01
01
5671
71
11 1
41
Ol
01
Ol
71
PERSONAL FEMALE AGE/SEX DISTRIBUTION
PROVIDER
i DR. JOHN A. GALT
< lOOO
)
PEER GROUP s VICTORIA GENERAL PRACS
( VICGP
)
�C O N W A Y
*
PROVIDER PROFILE
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S Y S T E M S
.
•*«**»••»#•*•*»•«•****«»«•«•*•**•#*«**«»**•*«***•*•*»
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#
PERSONAL MALE
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PRINTED ON OB OCT 1985
»
»
PROVIDER
i DR. JOHN A. GALT
< lOOO
1
1
1
1
1
1
o
11
21
31
41
51
-
10
20
30
40
50
99
COSTS
1 FLAG
1 29
1
1
1 IO
1
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SERVICES
VALUE
400
500
0
AOO
400
O
1,700
I TOTAL
H
^
A L T H
)
< VICGP
)
REPORT PERIOD JAN 86 - DEC 86
PEER GROUP i VICTORIA GENERAL PRACS
I AGE/SEX
I GROUPS
1
PAGE a
XTC 1 FLAG
24
29
O
24
24
0
PATIENTS
VALUE
1 39
1
1
1
1 IO
1
4
6
0
3
6
O
lOO I 39
19
S Y S T E M S
XTS 1 FLAG*
SI
32
0
16
32
O
1 IO
1
1
1 10
1
1
lOO I 10
C/8
VALUE 1 FLAG
1 1
1 1
Ol
1 1 29
1 1
Ol
41
C/P
S/P
VALUE 1 FLAG
VALUE 1 FLAG
lOOl 29
83 1
Ol
1331 IO
671 10
Ol
4001 39
SOOI
01
4001
4001 29
Ol
41
61
01
31
61
Ol
4251
51
891
VALUE 1
PERSONAL MALE AGE/SEX DISTRIBUTION
PROVIDER
: DR. JOHN A. GALT
< lOOO
)
PEER GROUP : VICTORIA GENERAL PRACS
< VICGP
)
�C O N W O Y
»
PROVIDER PROFILE
H E O L T H
S Y S T E M S
POGE 3
•••»**•»»••»*•»***•»»*«»»*•««»»••••«•***•*»»•«••»»**«
#
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»
*
PERSONOL TOTOL
OGE/SEX D I S T R I B U T I O N
PRINTED ON OS OCT 1985
#
»
PROVIDER
I DR. JOHN O. GOLT
( lOOO
1
1
1
1
1
1
O
11
21
3 1
41
51
-
IO
20
30
4 0
50
99
1 TOTOL
CONWOY
1
COSTS
1
1 FLOG
VOLUE
1 39
I
I
1 10
1
'
900
1,400
300
400
400
O
1
3, 4 0 0
H E O L T H
( VICGP
)
REPORT PERIOD JON 86 - DEC 86
PEER GROUP i VICTORIO GENEROL PROCS
1 OGE/SEX
1 GROUPS
1
)
XTC 1 FLOS
26
41
9
12
12
0
1 39
1
1
1
1
1
100 1 3 9
S Y S T E M S
SERVICES
VOLUE
11
17
4
3
6
0
41
1
POTIENTS
1
S/P
1
C/S
1
C/P
1
11
-IXTS 1 FLOG
VOLUE1 FLOG
VOLUE1 FLOG
VOLUE1 FLOG
VOLUE1
27
41
10
7
15
0
1 39
1 io
1
1 IO
1
1
21
21
11
1 1 29
11
Ol
lOO
1 29
71
821 2 9
821
751
1331 I O
671
Ol
831
4501
7001
3001
4001
4001
01
4861
39
61
91
4!
31
61
Ol
61
PERSONOL TOTOL OGE/SEX DISTRIBUTION
PROVIDER
I DR. JOHN O. GOLT
< lOOO
)
PEER GROUP : VICTORIO GENEROL PROCS
< VICGP
)
�CONWOY
»«««**•***»»«***»»**•«•»««**
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»
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*
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*
*
OGE/SEX DISTRIBUTION
»
*»****«**«***«*«*»***»***»»»
! OGE/SEX
! GROUPS
!
!
I
I FLAG
! O - IO
I 11 - 20
I 21 - 30
I 31 - 40
I 39
I IO
I
I 39
I 41
I
-
SO
I 51 - 99
TOTAL
C O N W A Y
POGE 13
( lOOO
>
< VICGP
)
REPORT PERIOD JON 86 - DEC 86
I
SERVICES
I
XTC I FLAG
VALUE
VALUE
SOO
1,300
800
200
900
3,700
H E O L T H
I DR. JOHN O. GOLT
PEER GROUP i VICTORIO GENEROL PROCS
0
I
S Y S T E M S
PRINTED ON OB OCT 1985
PROVIDER
COSTS
I 29
H E O L T H
14
35
22
5
0
I 39
I IO
I
I 39
7
17
9
4
24 I 29
IO
I
PATIENTS
I
C/S
I
C/P
I
S/P
I
I
I
I
I
I
XTS I FLAG
VALUE I FLAG
VALUE I FLAG
VALUE I FLAG
VALUE I
1
lOO I
0
39
S Y S T E M S
47
15
36
19
9
0
I 39
I IO
I
I 39
1
Ol
21 I 10
100
1 I 33
11 IO
11
1 I 39
I 39
711 39
761 IO
891
501 39
Ol
SOOI 39
1,3001 IO
8001
2001 39
Ol
11 29
901 29
9001 29
SI
791
7401
71
171
91
41
01
lOI
91
TOTAL FEMALE AGE/SEX DISTRIBUTION
PROVIDER
i DR. JOHN A. GALT
< lOOO
>
PEER GROUP i VICTORIA GENERAL PRACS
( VICGP
)
�C O N W O Y
»*####»*#***#*#*»***»*»#»#»#
*
PROVIDER PROFILE
»
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*
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»
*
OGE/SEX
DISTRIBUTION
I
I
I
I
!
!
O
11
21
31
41
51
-
IO
20
30
AO
50
99
I TOTOL
C O N W A Y
( 1000
POGE 14
)
( VICGP
)
REPORT PERIOD JON 88 - DEC 86
PEER GROUP I VICTORIO GENEROL PROCS
COSTS
SERVICES
VOLUE
I 39
I
I
I 10
I
I 39
1, 000
1,200
O
800
400
600
!
4,OOO
H E A L T H
I DR. JOHN 0. GOLT
#
I
I FLOG
39
S Y S T E M S
PRINTED ON OS OCT 1985
PROVIDER
• « » * * * * * » # * * * » * * # * » * » » * » » » * *
! OGE/SEX
! GROUPS
H E O L T H
•*»»»**»***«•*»•***»*»*«*«»»•*•••**«*»*•*««**«***»«•*
•IXTC I FLOG
25
30
O
20
IO
15
I 29
I
I
I 29
I
I
lOO I 3 9
S Y S T E M S
VALUE
POTIENTS
C/S
C/P
S/P
•I•I•I1
XTS I FLOG
VALUE I FLAG
VALUE I FLAG
VALUE I FLAG
VALUE I
9
14
O
9
6
3
22
34
O
22
15
7
I 10
I
I
I IO
I
I 10
41
lOO I
1 t 29
1I
Ol
1I
1I
1 I 39
51
1 1 1 I 39
861
Ol
891 IO
671
2001 39
981
l,OOOI 29
1,200 I
Ol
SOOI 29
4001 10
6001
SOOI
91
141
01
91
61
31
81
TOTAL MALE AGE/SEX DISTRIBUTION
PROVIDER
: DR. JOHN A. GALT
< 1OOO
)
PEER GROUP i VICTORIA GENERAL PRACS
< VICGP
>
�«**#**##»#»*#**»*•««*****»*»
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PROVIDER
I
I
I
I
(
I
I 39
I
I
I 29
I
I 29
1,500
2,500
800
l.OOO
400
1,500
I 39
7,700
C O N W A Y
COSTS
H E A L T H
< lOOO
)
< VICGP
)
REPORT PERIOD JON 86 - DEC 86
I
I
I FLOG
I TOTOL
I DR. JOHN O. GOLT
PEER GROUP i VICTORIO GENEROL PROCS
i OGE/SEX
! GROUPS
!
O - 10
11 - £0
21 - 30
31 - 40
41 - SO
51 - 99
POGE 15
VOLUE
I
SERVICES
I
XTC I FLOG
VOLUE
19
32
10
13
S
19
I
I
I
I
I
I
39
29
10
16
31
9
13
6
13
lOO I 39
88
39
S Y S T E M S
I
POTIENTS
I
C/S
I
I
XTS I FLOG
VALUE I FLOG
18
35
IO
15
7
15
I 39
I
I
I 39
1
I 10
lOO I 10
21 £9
21
11
21
11
21 29
lOI
I
C/P
I
VALUE I FLAG
94 1 23
811
891
771
671
1151 29
881
I
S/P
I
I
I
VALUE I FLAG
VALUE I
7501 £9
1,2501
8001
SOOI 19
4001
7501 IO
7701
81
161
91
71
61
71
91
TOTAL AGE/SEX DISTRIBUTION
PROVIDER
: DR. JOHN A. GALT
( lOOO
)
PEER GROUP : VICTORIA GENERAL PRACS
( VICGP
)
�CONWOY
H E O L T H
S Y S T E M S
POGE 16
PROVIDER PROFILE
PRINTED ON 08 OCT 1985
PROVIDER
» PERSONOL SERVICE GROUPS *
*
OND FEE ITEMS
«
*»##*»»#»»#*»#*»*»#»»»»**»*»
I SERVICE
I GROUPS
I
ORTHO
ORTHO
ORTHO
ORTHO
ORTHO
PEDS
PEDS
PEDS
PEDS
3389
5613
7213
TOTAL
XRAY
XRAY
XRAY
1327
8331
TOTAL
FLOG
VALUE
39
400
lOO
200
500
1, 200
39
>
>
10
)
( VICGP
)
REPORT PERIOD JON 86 - DEC 66
COSTS
1328
3622
6621
8445
TOTAL
( lOOO
PEER GROUP i VICTORIO GENEROL PROCS
FEE
ITEMS
I
!
!
!
!
I
I
I
i
I
I
!
I
I
t DR. JOHN O. GOLT
700
SOO
40O
1,600
300
300
600
SERVICES
*TC I FLAG
12
3
6
15
I
I
I 39
I 39
I IO
I
21 I IO
15 I
12 I
I 39
I
I 39
I
I IO
C/8
POTIENTS
VALUE
7
3
1
6
17
8
4
3
15
5
4
9
XTS I FLAG
17
7
2
15
I 39
I
I 39
I
I 39
I
20 I 39
10 t IO
7 I
I 39
12 I
10 I
VALUE I FLAG
41
1I
1 I 39
21
61
I
41
21
21 29
51
I
21
1I
31
C/P
S/P
•I
I1
VALUE I FLAG
VALUE I FLAG
VALUE I
571
331
2001 39
831
71 I
I
881
1251
1331 39
1071
I
601
751
671
lOOl
1OOI
2001
2501
200i
I
1751
2501
200 I
3201
I
ISO I
3001
2001
1O
39
39
10
21
31
1 !
31
31
t
21
21
2 I
3 I
!
39
39
39
3!
4 I
3 I
===
3,400
I TOTAL
C O N W A Y
H E O L T H
S Y S T E M S
100 I 39
41
lOO I 29
71
831
4861
6!
PERSONOL SERVICE GROUPS OND FEE ITEMS
PROVIDER
i DR. JOHN O. GOLT
< lOOO
)
PEER GROUP : VICTORIO GENEROL PROCS
( VICGP
)
�C O N W A Y
**«•**#»##******»#*•###*»*•*#
#
•
#
»
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*
*
H E A L T H
S Y S T E M S
PAGE
PRINTED
PEER GROUP i VICTORIA GENERAL PRACS
( VICGP
3000
lOOO
SOOO
REPORT
DR. WILLIAM C. FRAZER
DR. JOHN A. GALT
DR. JAMES R. BURKE
PERIOD
JAN 8 6 -
PATIENTS
1 C/S
COSTS
1
SERVICES
1
FLAGS
1
1
11.
1.
, 1 RANK
1VALUE 1 RANK
VALUE 1
VALUE 1 RANK
VALUE 1 RANK
1 RANK
1
1
1
1
S
3
3046 1
£518 1
1945 1
£
1
3
7300 1
7700 1
6900 1
3
1
61 1
88 1
74 1
£
3
£
1
41
10 1
IO 1
C/P
RANK
H E A L T H
S Y S T E M S
PEER
GROUP
:
VICTORIA
GENEROL
PRACS
DEC 8 6
S/P !
RANK !
:
1
3
£
1
£
3
RANKING
C O N W A Y
1985
)
*#***##*•»**»•*»»***»##»»»**
T a b l e i n f o r m a t i o n based o n TOTAL
data f o r t h e f o l l o w i n g providers i
ON OB O C T
1
(
VICGP
1 !
£ !
3 ;
REPORT
)
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
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William J. Clinton Presidential Library & Museum
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2006-0885-F
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A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
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White House Health Care Task Force
Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 3
Is Part Of
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Box 24
<a href="http://clinton.presidentiallibraries.us/items/show/36148" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
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William J. Clinton Presidential Library & Museum
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3/16/2015
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42-t-12093080-20060885F-Seg3-024-003-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/7eb7910bc6df4d17e9ec7fc1cc7ba854.pdf
b8fd1473d2719d428d79439a14430bf2
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
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Jamieson
Subseries:
OA/ID Number:
4786
FolderlD:
Segment 3
Folder Title:
[Interest Groups] [loose] [1]
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
3
3
�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
�K mm
LLARi
A,
8
IIBTS
DA E E
�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
�Ms
1 sV
>.
>
LW11 111 ti l l
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
[Interest Groups] [loose] [1]
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Health Care Task Force
Paul Jamieson
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F Segment 3
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 24
<a href="http://clinton.presidentiallibraries.us/items/show/36148" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Medium
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Reproduction-Reference
Date Created
Date of creation of the resource.
3/16/2015
Source
A related resource from which the described resource is derived
42-t-12093080-20060885F-Seg3-024-002-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/12091d48a2630f097c96433b51f7e66d.pdf
6dfdffa7d480177b2ad7acc7609609aa
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
4787
OA/ID Number:
FolderlD:
Folder Title:
[Big Business/Group] [loose]
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
4
1
�^PM-PA—Health Care, Bjt,500
"Business Groups Oppose Paying 90 Percent of Health Care B i l l
"By SHARON L. LYNCH= "Associated Press Writer=
HARRISBURG (AP) Two of the state's leading business organizations are
united in their opposition to a health care reform plan that c a l l s on
employers to pay the lion's share of the cost.
Pennsylvania lawmakers have joined p o l i t i c i a n s i n many other states and on
the f e d e r a l l e v e l i n searching f o r a way t o hold down sky-high h e a l t h care
costs.
What has emerged in Harrisburg i s a package of l e g i s l a t i o n that would
require insurers to provide a basic health care package through a network of
handpicked doctors and hospitals. Prenatal care for mothers, dental, vision
and hearing care for children and immunizations would a l l be covered.
Gov. Robert P. Casey, who introduced the proposal in May, also wants the
plan to cover regular doctor's v i s i t s , hospital care, preventive exams, lab
tests, home care and mental health services.
Businesses would be responsible for paying 90 percent of the lowest
oremium offered for the benefits package while workers would pay 10 percent.
~ * I t appears that a disproportionate share of the burden to finance t h i s
Dlan i s transferred d i r e c t l y to the business community,'' said David McBride,
Df the Pennsylvania Chamber of Business and Industry.
McBride made the remarks Tuesday during a round-table discussion organized
oy the Senate Public Health and Welfare Committee. I t was the second i n three
lays of hearings t h i s week.
"The cost s h i f t s i n the current system are merely i d e n t i f i e d and the
business community i s asked t o pay the m a j o r i t y of those costs,'' McBride
said. ""This i s unacceptable.''
Both McBride, whose organization represents about 3,400 Pennsylvania
businesses, and James Zawacki of the National Federation of Independent
business favored some form of health care reform. But neither of them believe
:mployers should be forced to foot the b i l l .
"We do not believe t h a t a mandate i s necessary. The evidence i s clear
hat small business owners w i l l purchase health insurance i f i t becomes
f f o r d a b l e , ' Zawacki said.
McBride c i t e d one study t h a t showed about 80 percent of small businesses
Iready provide b e n e f i t s and the remaining 20 percent c i t e sky-high costs as
he main reason they don't.
As f o r the s t a t e plan under consideration i n the L e g i s l a t u r e , he was most
oncerned w i t h the burden on businesses t h a t can't a f f o r d h e a l t h care
overage f o r t h e i r employees. He urged lawmakers t o concentrate on capping
edical costs so more companies could p a r t i c i p a t e i n the e x i s t i n g h e a l t h care
ystem.
Zawacki said individuals who benefit from health care should bear more
esponsibility for their own care.
Tuesday's session y i e l d e d more questions about the pending proposal than
nswers, however. Sen. Hardy Williams, D-Philadelphia, i s hoping the
ound-table meetings followed by a series of p u b l i c hearings w i l l help
l a r i f y the issues.
Williams i s the main sponsor of Casey's h e a l t h care proposal i n the
enate.
1
�N E W S
A N A L Y S I S
MORNING
NEWS
SUMMARY
Room 160 OEOB. Ext 71 ?1
Recent Labor Contract Results Portend
A Rough Bargaining Year for Unions
FRIDAY. JUNE 25. 1993
aged-care systems, companies are able to
save money by negotiating set prices with
a specific network of doctors and hospitals.
However, the unions got a gain-sharing
package they had sought, as well as pension and life insurance improvements.
A few contracts have gone counter to
the trend, with wage boosts that exceeded
previous ones. The Communications
Workers of America won wage increases of
3%. 4% and 4 for 2.700 Cincinnati Bell
%
workers in a three-year contract reached
earlier this month. The union also won
pension increases of 5%. 570 and 47c and a
new "job bank" that minimizes the use of
contract workers. The workers, however,
agreed to penalties for not using managed
health-care plans. Instead ol paying 10%.
they would pay 2 7 by the end of the
5c
contract.
The Amalgamated Clothing & Textile
Workers also won a 4 o wage increase in
7
recent weeks at its annual negotiations
with Southern textile chains. It also
switched to a preferred-provider network
for the first time ever at some companies.
"We've beaten inflation for three years
running," says Bruce Raynor. the union's
Southern director. "But lets put it in
perspective: Textiles is the lowest-paying
industry in America and the most productive in the world." The union has lost
thousands of workers to automation in the
past decade.
thev fight for what we used to call fringe
benefits.''
By KEVIN G. SALWEN
And DANA MILBANK
S i a f f R t p o n e n of T H E W A L L S T R E E T J O U R N A L
It's shaping up as another rough bargaining year for unions.
In negotiation after negotiation, unions
are emerging with skimpy pay increasesoften slipping behind the current inflation
rate of 3.2%. Health-care givebacKs are
becoming standard; as an alternative tt
paying a higher share, many unions are
agreeing to limits on workers ability to
choose their own doctor.
The two bright spots for unions: pensions, where increases are coming from
many companies' overfunded plans, and
success at slowing the pace of job cuts
Negotiator Walks Tightrope
John PMerpauL the top airline negotiator for the Machinisu union, is walking a
tightrope in Ulks with Northwest Airlinaa. Article on page
because of technology and plant closings.
But the layoff issue is tough because the
pressure comes from the broader economy. "Unions are making gains but can't
possibly stem the erosion of employment at
the bargaining table," says Greg Tarpinian, executive director of the Labor Research Association, a union-oriented economic think tank.
As a rule, "there are hardly any (pay]
increases going on. period." says Douglas
Kuhns. an economist with the Machinists
union, instead, employers are offering
bonuses in lieu of pay increases that
become part of the base wage and compound in future years. "Health care."
he adds, "is going to the bottom al) over the
place."
On Average, Smaller Increases
Last year, for the first time since 1988,
new contracts provided smaller wage increases than the contracts they were replacing. Now, says Alvin Bauman at the
Bureau of Labor Statistics. " I don't see
anything on the horizon that says things
are going to get very much better."
In the first quarter, wage boosts for the
first year of contracts averaged 2.8%, the
bureau says. For the life of the contract,
those increases will average 3.l7 . By
comparison, raises in the contracts they
replaced were 4.4% for the first year and
3.97c annually over the life of the accord.
Several major contracts are in the
negotiating phase now. The United Auto
Workers earlier this week opened talks
with General Motors Corp. that will set the
tone for the other two major car companies. The Teamsters union is working on a
new contract with its largest employer.
United Parcel Service. And the Minewbrk
ers are staging selective strikes at a string
of mines to press their case for a better
t
deal.
The core problem for organized labor is
a nagging one: international competition
is hurting the sluggish manufacturing
sector where most unions operate. Mean
while, unionized companies m service in
dustnes face nonumomzed competition,
which in the recession were forced to hole!
the line or cut prices and wages.
Unions "are not in a position to make
strong demands.'' says Sar Levitan. director of the Center of Social Policy Studies a;
George Washington University. "So thev
setue for minimal iwagej increases and
Economist Audrey Freedman. who runs
a management-consulting firm in New
York, calls the agreements "holding actions" for organized labor. "If there were
no unions these things would be lost
sooner, so the unions can sav thev've
slowed down the losses. "
Fighting Doesn't Seem to Help
The economy is clearly helping the
companies' bargaining position. The 325
workers - 25% of whom are on layoff - at
PPG Industries Inc.'s flat-glass plant in
Mount Zion. 111., agreed to scale back their
health-care coverage in favor of a costsharing plan. The union, represented by
the Aluminum. Brick & Glass Workers,
also agreed to lump-sum payments in lieu
of hourly pay increases.
Fighting the company apparently
doesn't help much. At PPG's flat-glass
plant in Fresno. Calif., the 200 workers
struck for two weeks over health care but
accepted a plan earlier this month that
the company says is "essentially the
same" as Mount Zion's. The workers at
PPG's Greensburg. Pa., plant rejected a
similar contract: PPG says it plans to close
the plant, but calls the decision unrelated.
Two other PPG plants are still on strike.
Government Jobs haven't fared much
better than the private sector. "When
private sector settlements are in a depressed condition, it catches up with everybody," says Don Wasserman. director of
collective bargaining at the Association of
Federal. State. County and Municipal Employees. The association settled for a
much-publicized wage freeze in Philadelphia.
Los Angeles members of the American
Federation of Teachers took a 1 % pay cut
0
over the life of their two-year agreement,
effective July 1. The district, citing financial distress, had imposed a 1 % cut.
2
reduced to 1 % by a mediator. The
0
teachers decided against a strike, figuring
it wouldn't help. The teachers also agreed
to increase the amount they pav for medical bills to 30% from 20% if they choose
their own doctors.
"We've had a pretty rough time because of the financial condition of local and
state government." says AFT President
Albert Shanker. "A lot of other places
haven't seen salary increases in two.
three, four years."
Pooling Interests
To better their chances, some unionsparticularly the United Steelworkershave begun pooling their interests with
those of management.
At Inland Steel Industries Inc.. the two
sides signed a six-year contract that gives
workers a board seat and a no-layoff clause
in exchange for easing work rules and
staffing levels. Workers also agreed to only
one wage increase (averaging 3.77ci in the
contract's first three years, as well as
bonuses tied in part to corporate periorm
ance.
Aluminum Co. of America and Rey
nolds Metals Co.. the country' s two largest
aluminum makers, stuck to a more traditional contract with the Steelwomrs and
the Aluminum Brick & Glass Workers. The
three-year contracts, reached earlier this
month, provide modest wage increases of
about 19 c in 1 9 and 1 9 and a new
.7
93
95
managed health-care plan. Under man-
Washington Wire
A Special Weekly Report From
The W a l l Street Journal's
Capital Bureau
CLINTON AND CONGRESS map tax-bill
conference-committee strategies.
Presidential aides are tight-lipped on the
sort of tax-increase compromise they favor,
preferring to stress the goodies. Pressing
hard to save what is left of its investment
agenda, the White House insists on "empowerment zones." bigger tax breaks for
small-business equipment purchases and
expansion of the eamed-income tax credit.
A bigger gasoline tax than the Senate's
4.3-cent levy remains an option, but would be
a hard sell. Rostenkowski predicts the gas
tax may be wedded to a new levy on
residential and commercial utility bills. A
bigger tax would allow the conference to pay
for Clinton-backed tax breaks, and to avoid
such deep Medicare cuts.
instant feedback: House Democratic
conferees will brief rank-and-file lawmakers daily an the progress of talks.
/
COST CONCERNS lead to a rethinking of
health-package beneflts.
Mental-health and dental oenefits are
among those that may be scaled back.
Clinton planners also consider raising the
annual out-of-pocket maximum, perhaps beyond $3,000. And they consider stretching
out the phase-in time for the hugely expensive effort to bring Medicaid recipients into
a national health system.
In a step to keep the health plan's
financial base as broad as possible. Hillary
Rodham Clinton tells a House group that
only employers with more than 5.000 employees may be allowed to opt out of the huge
insurance buyingpools.
�Clinton Says All HEALTH
Firms S o l
h ud
Join H at Plan
e lh
By EDWIN CHEN
and ROBERT A. ROSENBLATT
TIMES STAFF WRITERS
WASHINGTON —President
Clinton has decided that all companies, regardless of size, should be
required to join the new national
health program, according to senior White House officials.
The decision is a blow for those
large corporations which had
hoped to retain the power to structure health benefits for their workers. But the President has ruled
that "nobody opts out," said one
high-ranking Administration
source, because the White House
wants a consistent set of benefits
and rules for the national health
program.
The effect of the President's
decision on individual workers who
currently have company health
insurance would vary widely, depending on how their existing plan
compares to the proposed government sundards, which have not
yet been announced.
Under the plan, large employers
would be permitted to operate as
so-called health alliances, the basic
building block of the Clinton plan.
As an alliance, companies could
offer health care for their workers
but the actual providers—networks of doctors and hospitalswould have to follow strict standards requiring them to provide a
government-defined minimum
package of benefits.
Please see HEALTH, A12
Contiaued from Al
Most alliances would be local
organizaUons operating independently of employers. They might
include hundreds of thousands, or
even 1 million or more, of residents.
The alliances would negotiate
with eight or 10 health plans in an
area to provide physician and hospital services. Each plan would
have to provide the minimum benefits package and would be free to
offer levels of coverage exceeding
that minimum. Individuals would
then choose the plan they prefer,
although Administration sources
have said that they probably would
have to pay taxes on any benefits
they receive above the government minimum.
Administration health planners
had considered giving large employers an" exemption from the
requirements placed on local alliances. Instead, under the Clinton
plan, corporations would give up
the option of offering their workers
custom-designed benefit packages,
such as so-called cafeteria plans
that allow workers to vary the
amounts of health insurance, life
insurance, child care outlays and
other benefits.
Companies could, however, retain the authority to select the
various networks of doctors and
hospitals their employees could
use—in effect, functioning as an
alliance, provided they "conform to
all the other requirements of an
alliance," the source said.
Health plans now jointly operated by management and labor, such
as the health insurance funds for
carpenters, laborers and other
workers in the construction trades,
also would be allowed to call
themselves health alliances. But,
just as with large corporations,
their autonomy would be curtailed
to meet the federal standards.
"We want the companies that
form their own health alliances to
be sizable enough to really run
serious alliances and to fulfill the
same quality requirements: guaranteed benefits package and everything else." the Administration
source said. "We're not surprised, but we're
disappointed," said Stephen Cook,
coordinator of the Coalition to
Preserve Health Benefits. His
group's membership includes some
major corporations and some small
and medium health insurance firms
whose, business would be sharply
curtailed under the Clinton plan.
"They are seeking to create one
standard of operations across the
board but it would \ake the employer out of the equation entirely," Cook said. Business firms
"would just be a mechanism to
collect money with no incentive to
reduce costs or encourage innovation," according to Cook.
The health policy director for a
major business group, who asked
not to be identified, also expressed
disappointment and concern.
"Companies should be able to get
the advantage of being superior
managers of their health benefits
programs. But they would no longer be able to do that," she said.
Alliances, whether established
for a geographic area, such as Los
Angeles, or created by a single
corporation for its workers, would
negotiate with providers of health
services—health plans like Kaiser,
Blue Cross. Blue Shield and a
variety of health maintenance organizations.
The money spent by local and
corporate health alliances alike
would come from businesses and
their workers. The Administration
is discussing a levy of 7% of
payroll costs for companies and 3%
of salary for employees. This
method of financing would replace
the current widely disparate system in which most firms offer
coverage.
The Administration has not decided how large companies would
have to be to operate as alliances,
although it is considering proposals
that would give firms with more
than 1,000 workers a chance to be
designated as independent units.
Some conservative Democrats in
Congress who promote the idea of
health alliances are skeptical of the
Clinton plan. Congressional proposals would instead preserve a
high degree of autonomy for firms
in bargaining with insurance companies and with networks of hospitals and doctors, as well as designing health benefits packages for
their workers.
The Clinton plan, in sharp contrast, would leave little authority
and decision-making power to the
firms beyond being able to call
themselves health alliances.
"There will be regional alliances
and there will be corporate alliances," an Administration source
said.
But the corporate alliances will
have to follow the standanK rules
and procedures adopted by the
regional alliances.
•
�'bc-Group-Health-Assoc
TO BUSINESS AND HEALTH EDITORS:
BOARD CHAIRMAN CHARGES THAT MEMBER RIGHTS COMMITTEE I S TRYING TO
PAINT A "BIG L I E " ABOUT GROUP HEALTH ASSOCIATION
WASHINGTON, J u l y 14 /PRNewswire/ — The f o l l o w i n g statement was i s s u e d
t o n i g h t by David Greenberg, chairman o f Group H e a l t h A s s o c i a t i o n ' s board o f
t r u s t e e s i n response t o a l l e g a t i o n s made today by t h e GHA Member R i g h t s
Committee.
"The Members R i g h t s Committee i s t r y i n g t o p a i n t a b i g l i e about t h e p a s t ,
p r e s e n t and f u t u r e f i n a n c i a l c o n d i t i o n o f Group H e a l t h . They a r e l o o k i n g a t
the s i t u a t i o n t h r o u g h r o s e - c o l o r e d g l a s s e s .
" T h e i r o p p o s i t i o n appears t o be based on emotion r a t h e r t h a n l o g i c , and
l a c k s r e l e v a n c e t o t h e c r i t i c a l i s s u e s f a c i n g t h e members o f Group H e a l t h .
" A l l o f t h e i r charges a r e groundless and w i t h o u t any s u b s t a n t i a t i o n
whatsoever.
" F r a n k l y , I am t i r e d o f t h e f a l s e a c c u s a t i o n s a g a i n s t our hard w o r k i n g
member-elected consumer board. A p p a r e n t l y these s e l f - s t y l e d e x p e r t s want t o
i g n o r e t h e f a c t t h a t t h e Humana p r o p o s a l a l l o w s GHA t o p r o t e c t t h e h e a l t h
care coverage f o r a l l o f our members as w e l l as m a i n t a i n t h e i r d o c t o r - p a t i e n t
relationships.
"We p r o v i d e d them w i t h an i n - d e p t h two-hour b r i e f i n g t h i s p a s t Monday and
gave them a t w o - i n c h t h i c k b r i e f i n g book t o t a k e home t h a t i n c l u d e d d e t a i l e d
f i n a n c i a l f o r e c a s t s o f our o r g a n i z a t i o n . Charges o f secrecy a r e unfounded.
We have i n f o r m e d everyone i n v o l v e d as soon as we were l e g a l l y p e r m i t t e d t o do
so. Any business person r e c o g n i z e s t h e c r i t i c a l need f o r c o n f i d e n t i a l i t y i n
such s e n s i t i v e n e g o t i a t i o n s .
"The member r i g h t s group does a d i s s e r v i c e t o t h e c o n s c i e n t i o u s
member-elected consumer board who have l i v e d and b r e a t h e d t h i s complex issue
f o r t h e l a g t two y e a r s . Some o f t h e same d i s s i d e n t s were GHA members i n t h e
1970s and c l e a r l y do n o t understand t h e c o m p e t i t i v e p r e s s u r e s t h a t we face
today.
" I t i s i n t e r e s t i n g t h a t t h e t h r e e d i s s e n t i n g v o t e s on t h e board o f
t r u s t e e s came from t h e t h r e e newest members o f t h e board — people who were
asked t o v o t e on t h i s c r i t i c a l i s s u e a t t h e i r v e r y f i r s t board meeting.
" T h e i r group wants t o t u r n t h e i s s u e i n t o a t h e o r e t i c a l debate o f
f o r - p r o f i t v e r s u s n o t - f o r - p r o f i t h e a l t h c a r e . Our board has decided t h a t
the key i s s u e i s h e a l t h s e c u r i t y f o r our members.
"People who d e p o s i t money i n savings and loans n o r m a l l y do n o t care i f
d i v i d e n d s have been p a i d i n a p r e v i o u s q u a r t e r . They would r a t h e r know t h a t
t h e i r d e p o s i t s a r e s a f e and secure. Our members a r e most concerned about t h e
s e c u r i t y o f t h e i r h e a l t h care coverage and t h e c o n t i n u a t i o n o f t h e i r
r e l a t i o n s h i p w i t h t h e i r d o c t o r s — n o t whether Humana p a i d a d i v i d e n d l a s t
quarter.
"The Humana p r o p o s a l c a l l s f o r c o n t i n u e d coverage f o r a l l members,
i n c l u d i n g o u r more v u l n e r a b l e s e n i o r members. I t a l s o c a l l s f o r t h e
c o n t i n u a t i o n o f t h e c u r r e n t d o c t o r - p a t i e n t r e l a t i o n s h i p s t h a t mean so much
t o our members.
"These a r e t h e v i t a l i s s u e s upon which t h e board's judgement was made."
-0- 7/14/93
/CONTACT: Edward Segal o f Edward Segal Communications, 202-333-7966, f o r
Group H e a l t h A s s o c i a t i o n / CO: Group H e a l t h A s s o c i a t i o n ST: D i s t r i c t o f
Columbia I N : HEA SU:
TM — NY105 — 3632 07-14-93 21:07 EDT
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
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2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
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Paper
Dublin Core
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[Big Business / Group] [loose]
Creator
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White House Health Care Task Force
Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 3
Is Part Of
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Box 24
<a href="http://clinton.presidentiallibraries.us/items/show/36148" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
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Clinton Presidential Records: White House Staff and Office Files
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William J. Clinton Presidential Library & Museum
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Adobe Acrobat Document
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3/16/2015
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42-t-12093080-20060885F-Seg3-024-001-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/3a3e1ef131e6af16caccdbc1b8b4c98e.pdf
cd3030a6e23ec5e9da035e687804ad27
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
4787
OA/ID Number:
FolderlD:
Folder Title:
[Mrs. Clinton] [loose]
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
4
1
�Mrs. $ K * * ~
�7"bc-breastcancer-comment - a0904
"(ATTN: Feature editors)
"Breast Cancer Leaves a Legacy of Shared Pain (Los Angeles)
"By Robin Abcarian= "(c) 1993, Los Angeles Times=
LOS ANGELES The " p o l i t i c s of meaning'' met breast cancer the other day
when Hillary Rodham Clinton came to town.
The event was a g l i t t e r i n g luncheon fund-raiser for the University of
California, Los Angeles' I r i s Cantor Center for Breast Imaging. The f i r s t
lady addressed a sea of mostly female faces, gathered i n the ballroom of one
of the c i t y ' s fanciest hotels. How many i n that room would be facing the
trauma of breast cancer, I wondered. How many already have?
Although her c a l l for higher p o l i t i c a l truths and deeper human connections
i s often demeaned as New Age mumbo jumbo, Clinton spoke
a simple, but often overlooked truth about women's health: Breast cancer may
strike one in nine women, but i t s effects are f e l t by everyone.
Women, said C l i n t o n , are so o f t e n the care g i v e r s o f the community. And a
woman's well-being, she added, i s i n e x t r i c a b l e from the w e l l - b e i n g o f her
family.
She t o l d the s t o r y of a f r i e n d , a V i r g i n i a woman who l o s t her b a t t l e
against breast cancer l a s t week. The f r i e n d , whom C l i n t o n i d e n t i f i e d only as
Sherry, wanted her c h i l d t o meet the president. Sherry sat i n a wheelchair,
said C l i n t o n , as the l i t t l e boy clutched h i s mother's l e g . When the f a m i l y
l e f t , Sherry made a plea t o the Clintons: "Don't ever l e t anyone f o r g e t what
t h i s disease does t o those who are l e f t behind.•'
As Clinton spoke, I noticed a rather well-known woman at the table next to
me, a woman who has recently conquered breast cancer. The woman had tears in
her eyes, and the arm of a friend around her shoulder.
Every three minutes, the f i r s t lady was saying, a woman w i l l be diagnosed
w i t h breast cancer. Every 12 minutes, a woman w i l l d i e of i t .
Whose l i f e , r e a l l y , has not been touched i n some way by breast cancer?
I t has been only r e c e n t l y i n the l a s t three years t h a t breast cancer,
indeed women's h e a l t h issues as a whole, have been given the research
emphasis they deserve. Most people date the change t o June 1990, when t h e
General Accounting O f f i c e reported t h a t the subjects o f medical research are
mostly males and males are usually the b e n e f i c i a r i e s .
C l i n t o n t i c k e d o f f the i n s u l t s : Heart disease i s the leading cause of
death f o r American women as w e l l as American men, yet one of the most
important c l i n i c a l t r i a l s of the l a s t decade the study t h a t found an a s p i r i n
every other day may reduce the r i s k of heart disease involved more than
22,000 men and no women.
Women l i v e longer than men, C l i n t o n said, yet the presumption t h a t they
are so much h e a l t h i e r i s wrong. "Too o f t e n , those b e n e f i t s we can look
forward t o because of our gender, are sadly, no bonus a t a l l .
She could have also mentioned t h a t a 1990 Harvard study, which concluded
coffee d i d not promote heart disease, was based on the h i s t o r i e s o f more than
45,000 men and no women.
Or t h a t hormone replacement therapy has been used f o r years t o t r e a t
symptoms of menopause, yet i t ' s only been r e c e n t l y t h a t large-scale c l i n i c a l
t r i a l s t o assess the long-term b e n e f i t s and r i s k s of such treatment have
gotten underway.
Or t h a t even though women l i v e longer than men, a National I n s t i t u t e on
Aging study begun i n 1958 only got around t o i n c l u d i n g women two decades
later.
The good news i s t h a t , as C l i n t o n put i t : "The n a t i o n a l research agenda
i s f i n a l l y recognizing women's special needs.••
These days, no speech by H i l l a r y Clinton i s complete without a c a l l for
health care reform, and this was no exception. The estimated 40 million
Americans who have no coverage i s a hard fact to grasp, so she told a simple,
graphic story about a woman she recently met i n New Orleans, a woman who
happened to be a 15-year employee of a company that does not offer health
1 1
�insurance. The woman's doctor found a suspicious lump in her breast and
referred her to a surgeon. Normally, the surgeon told her, he'd biopsy the
lump, but since she didn't have health insurance, he'd j u s t watch i t .
"She f e l l into a c r a c k , said Clinton, " i n which there are 40 million
of our fellow c i t i z e n s , most of them women and c h i l d r e n .
This i s not a crack. This i s a gaping chasm.
Millions of people are forced to make an unpleasant and unfair choice:
rent or health insurance; food or health insurance.
"Thank God, you might be thinking, "at least I have health insurance. But
as Clinton pointed out, w i l l you have i t next year? How do you know your job
won't evaporate? What w i l l you do then?
The same week that Clinton's friend died of breast cancer, a comprehensive
survey on women's health found that only 44 percent of women older than 50
ever get mammograms. The reason: they can't afford to or t h e i r health
insurance doesn't pay for mammography. (Why insurance companies would rather
pay for surgery than preventive care i s always a boggling issue.)
The f i r s t lady made i t clear on Monday: The woman who misses the
mammogram, whose breast cancer goes undetected, who dies of the disease, i s
not an individual tragedy.
She i s the tragedy of a family, a community, a profession.
I f we s t a r t to see women's health issues i n t h i s larger context, we can
start to understand why serving them serves everyone.
11
11
�" B C - H I — C l i n t o n - F i r s t Lady,0157
HANA, Maui (AP) F i r s t lady H i l l a r y Rodham C l i n t o n and her daughter,
Chelsea, f l e w t o Los Angeles on Sunday f o l l o w i n g a weeklong v a c a t i o n i n
Hawaii.
Around 100 people were a t Hana A i r p o r t t o see t h e C l i n t o n s d e p a r t i n a
m i l i t a r y h e l i c o p t e r f o r t h e hop t o K a h u l u i A i r p o r t . There t h e y boarded a
m i l i t a r y j e t l i n e r f o r t h e f l i g h t t o t h e Mainland.
Chelsea was i n Honolulu on J u l y 11 t o welcome her p a r e n t s a f t e r t h e i r
six-day t r i p t o A s i a .
Mrs. C l i n t o n and Chelsea had planned t o s t a y t h e week, w h i l e P r e s i d e n t
C l i n t o n was t o leave Wednesday. However, t h e p r e s i d e n t departed a day e a r l y
i n o r d e r t o keep tabs on t h e f l o o d i n g i n t h e Midwest.
While i n Honolulu, Mrs. C l i n t o n a t t e n d e d a h e a l t h care forum hosted by
Gov. John Waihee. She l a t e r f l e w t o Kauai I s l a n d t o view r e c o v e r y e f f o r t s i n
the wake o f H u r r i c a n e I n i k i b e f o r e c o n t i n u i n g on t o Maui on Wednesday.
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" F i r s t Lady t o v i s i t L.A.
LOS ANGELES (UPI) F i r s t Lady H i l l a r y Rodham C l i n t o n was scheduled t o
a r r i v e Sunday i n Los Angeles f o r a series of meetings on health care issues.
Mayor Richard Riordan plans t o meet w i t h the f i r s t lady a t a UCLA cancer
research fund-raiser Monday.
Riordan and Mrs. C l i n t o n worked together on educational p r o j e c t s p r i o r t o
his e l e c t i o n as Los Angeles mayor l a s t month.
But President C l i n t o n d i d not endorse Riordan f o r mayor. The president,
instead, backed Councilman Michael Woo, a f e l l o w Democrat, i n the nonpartisan
mayoral e l e c t i o n .
While endorsing Woo, C l i n t o n was c a r e f u l , however, not t o c r i t i c i z e
Riordan who i s a Republican.
The f i r s t lady also plans t o tour a teaching laboratory a t the Charles
Drew Medical School i n South Los Angeles. She i s expected t o t a l k w i t h
students and teachers a t the school on the same s i t e as M a r t i n Luther King
l e d i c a l Center.
At an anti-gang r a l l y i n East Los Angeles Sunday, the mayor said he plans
:o ask the f i r s t lady i f her husband plans t o l i v e up t o h i s e a r l i e r promise
:o help Los Angeles r e b u i l d a f t e r l a s t year's devastating r i o t s .
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�F i r s t lady c a l l s for more resources to treat women's diseases
BEVERLY HILLS, C a l i f . (UPI) F i r s t lady H i l l a r y Rodham Clinton c a l l e d
onday on the nation's health care system to devote more resources to
Lseases affecting women, saying there have been inequities i n the way women
ive been treated.
Speaking t o 750 supporters of a UCLA breast imaging c l i n i c , C l i n t o n said
ie believes women ""'have not met w i t h the same a t t e n t i o n as American men
ive received.''
The f i r s t lady said she's pleased breast cancer has gained the attention
f researchers. But she said more attention has to be paid to other diseases
uch as c e r v i c a l cancer, eating disorders, menopause and endometriosis.
""Today women are f i n a l l y on the radar screen,•• she said. ""We have t o
e a l i z e how f a r we s t i l l have t o t r a v e l . • '
Clinton spoke e a r l i e r Monday to students and faculty at Drew University in
outh-Central Los Angeles. She was expected to spend time Monday afternoon
ith her daughter, Chelsea, and appear Tuesday on local radio and t e l e v i s i o n
rograms to discuss health care.
. .
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F i r s t l a d y causes commotion on v i s i t t o f r i e n d
—'
By John Buzbee
Copley News S e r v i c e
LOS ANGELES A f t e r making a p l e a f o r i n c r e a s e d a t t e n t i o n t o women's h e a l t h
care i s s u e s , f i r s t l a d y H i l l a r y Rodham C l i n t o n dropped by Santa Monica on
Monday ( J u l y 19) t o v i s i t former mayor Ruth Goldway, a l o n g t i m e f r i e n d who i s
r e c o v e r i n g from s u r g e r y .
""Women are bombarded w i t h c o n f u s i n g and c o n f l i c t i n g messages about t h e i r
own h e a l t h a t c r i t i c a l stages o f t h e i r l i f e , ' ' C l i n t o n s a i d a t a $300-a-seat
luncheon a t t h e Regent B e v e r l y W i l s h i r e H o t e l .
I n an e a c l i e r appearance Monday, C l i n t o n p r a i s e d s t u d e n t s and i n t e r n s a t a
Watts medical s c h o o l f o r t h e i r commitment t o p r o v i d i n g h e a l t h care i n t h e
inner c i t y .
She a l s o made a p i t c h f o r t h e C l i n t o n a d m i n i s t r a t i o n ' s planned h e a l t h care
reforms, but she t o o k no q u e s t i o n s about t h e p r o p o s a l d u r i n g her scheduled
appearances.
A f t e r w a r d , C l i n t o n ' s caravan o f sedans f u l l o f Secret S e r v i c e agents,
highway p a t r o l c a r s , a s t a f f car and a l o n g b l a c k l i m o u s i n e s t a r t l e d some
r e s i d e n t s o f 7 t h S t r e e t and Ashland Avenue i n Santa Monica where Goldway
lives.
But Frank Green, Goldway's next-door neighbor, s a i d he was used t o t h e
a t t e n t i o n . He brandished a photo o f h i m s e l f and P r e s i d e n t C l i n t o n , who had
v i s i t e d d u r i n g t h e campaign.
""I'm t r y i n g t o g e t a photo w i t h t h e f i r s t l a d y ,
he s a i d w i t h
c o n f i d e n c e . At t h e end of C l i n t o n ' s h o u r - l o n g v i s i t , Goldway i n v i t e d Green
i n f o r a photo and i n t r o d u c t i o n .
Other neighbors drove by s l o w l y , c r a n k i n g t h e i r necks t o d i s c o v e r t h e
source o f t h e a c t i v i t y . Young women s t r o l l i n g w i t h babies asked t h e Secret
Service agents i n s u i t s and sunglasses f o r p e r m i s s i o n t o pass.
A C l i n t o n spokeswoman s a i d t h e v i s i t was a s o c i a l c a l l . P r e s i d e n t C l i n t o n
and Goldway's husband, Derek Shearer, are o l d s c h o o l chums from O x f o r d
U n i v e r s i t y i n England.
A f t e r t h e f i r s t l a d y ' s v i s i t , Goldway and her son, Anthony Yanatta, walked
her out td«her l i m o u s i n e and hugged her b e f o r e she c l i m b e d i n and sped away.
Yanatta s a i d h i s mother d i d n o t f e e l up t o d i s c u s s i n g t h e c o n v e r s a t i o n
pecause she's r e c o v e r i n g from a hysterectomy.
For h i s p a r t , he s a i d he'd been busy s c a r i n g up c h a i r s f o r t h e Secret
;ervice agents, p a s s i n g around c o o k i e s t o gawking n e i g h b o r s and j o u r n a l i s t s
md o t h e r w i s e b e i n g a good h o s t .
Some o f t h e n e i g h b o r s s a i d C l i n t o n won them over.
" " I t ' s n i c e o f her t o come o u t , ' s a i d Green's son, Norm. " " I t ' s a n i c e
g e s t u r e ' ' t o Goldway, he s a i d .
Shearer was a deputy u n d e r s e c r e t a r y f o r economic a f f a i r s d u r i n g t h e f i r s t
months of t h e C l i n t o n a d m i n i s t r a t i o n , b u t he r e s i g n e d a b r u p t l y i n May.
Shearer s a i d i n an interview t h a t he was leaving because Goldway was s i c k .
He was back i n Washington on Monday to give a speech, Yanatta s a i d .
The f i r s t l a d y , chairwoman o f t h e H e a l t h Care Task Force, was on t h e
Westside t o r e c e i v e t h e f i r s t I r i s Cantor H u m a n i t a r i a n Award a t t h e B e v e r l y
H i l l s luncheon.
The 750 guests who p a i d $300, $500 or $1,000 f o r c o l d c h i c k e n r a i s e d more
than $400,000 f o r t h e I r i s Cantor Center f o r B r e a s t Imaging a t UCLA.
U n i v e r s i t y r e p r e s e n t a t i v e s s a i d t h e money would h e l p p a y . f o r m o b i l e
mammography u n i t s t o screen women who wouldn't o t h e r w i s e g e t t e s t e d f o r
b r e a s t cancer. •
- C l i n t o n t o l d t h e audience o f c e n t e r s u p p o r t e r s , m e d i c a l f a c u l t y and
Beverly H i l l s l a d i e s about t h e p l i g h t o f a w o r k i n g woman w i t h o u t h e a l t h
insurance she had met i n L o u i s i a n a .
The woman was c a r e f u l to get annual breast screenings, but when one t e s t
1 1
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�revealed a lump she couldn't a f f o r d a biopsy t o t e s t f o r cancer, C l i n t o n
said.
""Can you imagine what i t must be l i k e for that woman to get up every day
ind wonder whether she i s living with cancer?•' Clinton asked.
The a d m i n i s t r a t i o n has not released d e t a i l s of the h e a l t h care reform
proposal, but C l i n t o n said i t would guarantee basic medical coverage t o the
;o m i l l i o n Americans who are now uninsured and t o anyone else who gets l a i d
j f f and loses b e n e f i t s .
""You w i l l have health insurance, no matter what,' she s a i d . ""That has
-o be a s o l i d commitment t h a t i s provided t o everyone. '
A f t e r her e a r l i e r tour of Drew U n i v e r s i t y i n Watts, she said the reforms
',ust e l i m i n a t e the d e n i a l of insurance because of p r e - e x i s t i n g medical
•onditions, ensure the a b i l i t y of p a t i e n t s t o choose t h e i r physicians and
educe bureaucracy.
" " I f you had wanted t o be a bookkeeper, you would have gotten a d i f f e r e n t
ind of education,'• she t o l d students a t the school b u i l t i n the aftermath
f the 1965 Watts r i o t s .
C l i n t o n o f f e r e d no clues on when a f i n a l proposal w i l l go t o Congress. A
pokeswoman f o r the f i r s t lady said the plan would not be completed before
ongress f i n i s h e s budget d e l i b e r a t i o n s .
She i s planning t o remain i n Los Angeles today, when she w i l l be a guest
n a l o c a l r a d i o c a l l - i n show and tape an episode o f t h e ABC TV series ""Home
mprovement.'•
1
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Staff writer John Rofe contributed
015PST
to t h i s story. RAMIREZ-CNS-SD-07-19-93
�-bc-CNShillary,0593
H i l l a r y C l i n t o n t o u r s L.A. h e a l t h - c a r e
facilities
By John Rofe
Copley News S e r v i c e
LOS ANGELES F i r s t lady H i l l a r y Rodham C l i n t o n came t o Los Angeles Monday
( J u l y 19) t o c e l e b r a t e what's good about t h e n a t i o n ' s h e a l t h care system and
to warn about t h e bad.
I n t h e f i r s t o f two appearances, C l i n t o n , i n charge o f r e s h a p i n g America's
h e a l t h care system, lauded s t u d e n t s and i n t e r n s a t a Watts m e d i c a l school f o r
t h e i r commitment t o p r o v i d i n g h e a l t h care i n t h e i n n e r c i t y .
During an a f t e r n o o n address, C l i n t o n warned w e a l t h y p a t r o n s o f a Westside
breast cancer d e t e c t i o n c e n t e r t h a t w i t h o u t u n i v e r s a l access t o h e a l t h care,
the l e g i o n s o f u n i n s u r e d p a t i e n t s w i l l grow.
" T h e r e ' s nobody here i n t h i s audience who w i l l r e a l l y be a b l e t o say w i t h
any c e r t a i n t y t h a t they w i l l be i n s u r e d themselves n e x t y e a r , ' ' C l i n t o n s a i d .
"We want t o guarantee your s e c u r i t y so t h a t no one ever needs t o be
a f r a i d again t h a t t h e y w i l l n o t have access t o q u a l i t y h e a l t h care,'• she
said.
C l i n t o n heads t h e p r e s i d e n t ' s t a s k f o r c e on h e a l t h care r e f o r m . The t a s k
f o r c e has p r e s e n t e d P r e s i d e n t C l i n t o n w i t h a s e r i e s o f r e f o r m p r o p o s a l s t h a t
he i s c o n s i d e r i n g .
During a h e a v i l y s c r i p t e d day t h a t i n c l u d e d no q u i i s t i o n s from r e p o r t e r s ,
Mrs. C l i n t o n o f f e r e d no c l u e s on when a f i n a l p r o p o s a l w i l l go t o Congress.
A spokeswoman f o r t h e f i r s t lady s a i d t h e p l a n would n o t be f i n a l i z e d
before Congress completes budget d e l i b e r a t i o n s .
" I t ' s hard t o p u t a month on i t , ' ' s a i d L i s a Caputo.
Mrs. C l i n t o n i s expected t o remain i n Los Angeles Tuesday, when she w i l l
be a guest on a l o c a l r a d i o c a l l - i n show and tape an episode o f t h e ABC TV
s e r i e s ""Home Improvement.''
She a r r i v e d Monday a f t e r spending a week i n H a w a i i , which p r o v i d e s h e a l t h
care t o 98 p e r c e n t o f i t s r e s i d e n t s i n what i s c o n s i d e r e d a model program.
The f i r s t lady spoke f i r s t a t Drew U n i v e r s i t y b u i l t i n t h e a f t e r m a t h o f
the 1965 Watts r i o t s a f t e r a s h o r t t o u r o f l a b o r a t o r i e s t h e s c h o o l uses t o
teach g r a d e - s c h o o l s t u d e n t s s c i e n c e and i n t e r e s t them i n m e d i c i n e .
She l a t e r addressed a B e v e r l y H i l l s luncheon t h a t r a i s e d $400,000 f o r t h e
T r i s Cantor B r e a s t Imaging Center a t UCLA, a w o r l d l e a d e r i n b r e a s t cancer
i r e v e n t i o n which i s s e e k i n g s u p p o r t t o expand i t s s e r v i c e s i n poor
immunities.
I n b o t h appearances, C l i n t o n s t r e s s e d t h a t t h e m e d i c a l community must be
ncouraged t o p r o v i d e p r i m a r y and p r e v e n t i v e care f o r a l l .
She added t h a t t h e r e f o r m s must e l i m i n a t e t h e d e n i a l o f i n s u r a n c e because
'f p r e - e x i s t i n g m e d i c a l c o n d i t i o n s , ensure t h e a b i l i t y o f p a t i e n t s t o choose
c h e i r p h y s i c i a n s , and reduce bureaucracy.
" " I f you had wanted t o be a bookkeeper,'' she t o l d s t u d e n t s ^ t Drew
J n i v e r s i t y , ""you would have g o t t e n a d i f f e r e n t k i n d o f e d u c a t i o n . ' '
She s a i d people a l s o w i l l have t o t a k e b e t t e r care o f themselves t o
prevent i l l n e s s e s . She s a i d government s h o u l d do i t s p a r t , t o o , i n p r o v i d i n g
preventive medicine.
At t h e Cantor c e n t e r f u n d r a i s e r i n B e v e r l y H i l l s , C l i n t o n c a l l e d f o r a
greater f o c u s on women's h e a l t h problems. She s a i d i t was i r o n i c t h a t wpmen
lave been i g n o r e d i n most r e c e n t major c l i n i c a l s t u d i e s because women a r e
j s u a l l y t h e primary care g i v e r i n t h e f a m i l y .
A r e c e n t s t u d y showed t h a t o n e - t h i r d o f a l l women do n o t r e c e i v e b a s i c
n e d i c a l s e r v i c e s . Only 44 p e r c e n t o f women over 50 have had a mammogram.
Before l e a v i n g , she r e t u r n e d t o h e r theme o f r e f o r m and u n i v e r s a l access.
""For many p e o p l e , i t ' s o f t e n a c h o i c e between food and h e a l t h c a r e , o r
rent and h e a l t h c a r e , '
she s a i d . " " H o p e f u l l y , we can b e h i n d us t h e days o f
Lnsensitivity.''.RAMIREZ-CNS-SD-07-19-93 1802PST
1
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Clinton,530
' F i r s t Lady T e l l s Luncheon H e a l t h Care Must Be A v a i l a b l e To A l l
"By MICHAEL FLEEMAN= "Associated Press W r i t e r =
LOS ANGELES (AP) F i r s t lady H i l l a r y Rodham C l i n t o n s a i d t h e s t o r y o f a
woman who was unable t o a f f o r d b r e a s t cancer t e s t s had s t r e n g t h e n e d h e r
r e s o l v e d t o seek an o v e r h a u l t h e n a t i o n a l h e a l t h care system.
Mrs. C l i n t o n t o l d a luncheon o f 400 people a t t h e Regent B e v e r l y W i l s h i r e
Monday t h a t a woman she met i n New Orleans d i d n ' t have h e a l t h i n s u r a n c e . The
woman went t o a d o c t o r , who found a s u s p i c i o u s lump and sent h e r t o a
surgeon.
"The surgeon examined h e r and t o l d h e r t h a t i f she had i n s u r a n c e he would
biopsy t h e lump i n h e r b r e a s t , b u t s i n c e she d i d n o t have i n s u r a n c e , he would
j u s t watch i t . ... I t h i n k many o f you can f e e l what I f e l t when I heard t h a t
woman say t h a t , ' Mrs. C l i n t o n s a i d .
""Can you imagine what i t i s l i k e f o r t h a t woman t o g e t up every day and
wonder whether she i s l i v i n g w i t h cancer and n o t knowing i t ? '
The $1,000-a-plate luncheon r a i s e d $400,000 f o r t h e UCLA M e d i c a l Center's
I r i s Cantor Center f o r Breast Imaging, u n i v e r s i t y o f f i c i a l s s a i d .
Mrs. C l i n t o n t o l d t h e luncheon t h e county needs t o emphasize p r i m a r y and
p r e v e n t i v e h e a l t h care because i t would ""save us money as w e l l as save us
lives. '
""We have done i t backwards f o r t o o l o n g . We have p a i d f o r t h e s u r g e r y ,
but n o t f o r t h e mammography,'' she s a i d .
*
Mrs. C l i n t o n heads P r e s i d e n t C l i n t o n ' s h e a l t h r e f o r m t a s k f o r c e , which has
presented o p t i o n s t o t h e p r e s i d e n t . He i s now w e i g h i n g them.
E a r l i e r Monday, t h e f i r s t lady v i s i t e d an i n n e r - c i t y m e d i c a l s c h o o l and
s a i d America s h o u l d f o l l o w t h e u n i v e r s i t y ' s example i n t r e a t i n g even t h e
poorest p a t i e n t s .
""We have t o t a k e our system and make i t a v a i l a b l e t o e v e r y o n e , ' she t o l d
300 s t u d e n t s and f a c u l t y a t Charles R. Drew U n i v e r s i t y o f Medicine and
Science.
But Mrs. C l i n t o n s a i d t h a t u n i v e r s a l h e a l t h c a r e comes a t a c o s t and t h a t
" " f o r most people t h a t w i l l mean some k i n d o f f i n a n c i a l c o n t r i b u t i o n . '
She s a i d people a l s o w i l l have t o t a k e b e t t e r care o f themselves t o
p r e v e n t i l l n e s s e s . She s a i d government should do i t s p a r t , t o o , i n p r o v i d i n g
preventive medicine.
She was vague, however, about t h e s p e c i f i c s o f f u n d i n g u n i v e r s a l h e a l t h
care.
The f i r s t lady a r r i v e d i n Los Angeles a f t e r v a c a t i o n i n g i n H a w a i i , where
she s t u d i e d t h e s t a t e ' s h e a l t h care system, c o n s i d e r e d by many t o be a model.
She t o u r e d Drew U n i v e r s i t y ' s l a b o r a t o r i e s and spoke w i t h s t u d e n t s and
young people i n y o u t h s c i e n c e programs.
I n v i s i t i n g Drew, Mrs. C l i n t o n saw a u n i v e r s i t y b o r n o u t o f t h e ashes o f
the 1965 Watts r i o t and d e d i c a t e d t o p r o v i d i n g h e a l t h c a r e t o poor and
m i n o r i t y r e s i d e n t s who l i v e i n South C e n t r a l Los Angeles.
Mrs. C l i n t o n t a l k e d w i t h f o u r t h - y e a r m e d i c a l s t u d e n t Gwen A l l e n , who wants
t o do h e r r e s i d e n c y i n South C e n t r a l .
" " I want t o g e t back t o t h e community,'' Ms. A l l e n t o l d her. ""I'm one o f
the p r o d u c t s o f t h e community. '
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First Lady Pushes for Health
Care Reform in Visit to L.A.
• Insurance: She says her goal is to ensure aooess to bask
benefits for all Her anecdotes touch an emotional chord.
By DOUGLAS P. SHU IT
TIMES STAFF WRITER
First Lady Hillary Rodham Clinton visited South-Central Los Angeles on Monday to seek support
for national health care reform,
telling an audience of several hundred medical students and hospiul
workers that we have too many
people without access to even basic
care.''
"In our country, we have probably the finest health care available in the world —if you can afford
it." Mrs. Clinton said in a speech at
the Charles R. Drew University of
Medicine and Science.
Later, she touched an emotional
chord with an audience at a benefit
luncheon in Beverly Hills with
personal anecdotes that she said
had stiffened her resolve to push
for an overhaul of the health
system.
At both stops, Mrs. Clinton, who
chairs the White House Task Force
on National Health Care Refonn.
spoke sometimes with an angry
edge as she addressed shortcomings in the health care system.
During a morning speech to
about 300 students, faculty members and health care workers at
Drew. Mrs. Clinton lamented those
"shut out of the system" by the
lack of medical insurance and hospitals that "are overworked to the
point of breaking."
Later, in a luncheon speech at
the Regent B* erly Wilshir ^
PleaM *** HEALTH, hfi
1
�HEALTH: HiUary Qinton Calls for Refonn
^oitiane^ from Al
aise money for the UCLA Medical
renters Ins Cantor Center for
Jreast Imaging, Mrs. Clinton em•hasized health issues facing womn.
She told the story of a friend who
lattled breast cancer.
"One of the last things she did
vas to bring her husband and her
oung son to the White House
>ecause she . wanted her son to
neet the Presidenl." she said. As
hey were leaving, the First Lady
:aid her friend, then in a wheel:hair, turned to the Clintons and
aid. "Don't ever lei anyone forget
vhat this disease does to those who
ire left behind.' 1 told her then that
would not. . . . I intend to fulfill
ny commitment."
Mrs. Clinton also recounted the
;tory of a woman she met in New
Orleans. She said the woman, who
lid not have health insurance, had
teen to a doctor who did a manual
examination of her breasts and sent
ler to a surgeon after finding a
uspicious lump.
"The surgeon examined her and
old her that if she had insurance
ie would biopsy the lump in. her
ireast, but since she did not have
nsurance, he would just watch
t. . . . I think many of you can
eel what 1 felt when I heard that
voman say that." Mrs. Clinton said.
Can you imagine what it is like for
hat woman to get up every day
ind wonder whether she is living
vith cancer and not knowing it?"
Aides lo Mrs. Clinton said it was
er first visit to Los Angeles withjt the President since the inauguition. Mrs. Clinton, who arrived
•jnday evening, had planned to
ay until Wednesday, but her staff
iid she now plans to leave today
;r Little Rock, the Clintons'
lometown.
Mrs. Clinton's speeches offered
ew specifics about the health care
eform plan she is working on with
iiher members of the task force.
She said at both stops that the
joal was to provide affordable
iealth insurance lo all Americans.
Mrs. Clinton told the crowd
gathered on the lawn outside the
Drew facility. "In today's world,
here is nobody here in this audience who will really be able to say
vith any certainty that you will be
hsured yourself n m year."
Sounding much like a candidate
or office, she said her goal was to
ttme up with a plan so that "no one
:v4r needs to b* afraid again that
TAMMY LECHNER / Los Angeles Times
The First Lady examines a specimenfroma cancer experiment with Valesca Perez, a participant in the
summer science program at Martin Luther King/Drew Medical Center in South Los Angeles.
they will not have access to quality
health care."
Just before the speech. Mrs.
Clinton loured a laboratory at the
Martin Luther King/Drew Medical
Center, which is across the street
from the medical school.
I
n medical center, the First Lady
peered through a microscope at
lab experiments and chatted with
children in science and health
classes set up to encourage elementary-school age minority students to consider careers in medicine.
Mrs. Clinton was guided through
the medical center by Dr. Reed V.
Tuckson. president of Drew. Tuckson is a member of Mrs. Clinton's
task force and a strong advocate of
early childhood education programs to introduceinner-city children to sc. T ce and medicine.
Tuckson taid he thought Mrs.
Clinton str
a responsive chord
with the audience because she
seemed to understand the problems they faced, as well as the
difficulties of the poor and uninsured in getting medical care.
The physician said people without insurance often wait too long
before seeking medical care, and
then it sometimes is too late.
"We feel a sense of frustration
when people come to us with a
disease that is far advanced be
cause it is not diagnosed early. She...
seems to understand that so well."
he said.
Mrs. Clinton told the luncheon
audience that the reforms she is
seeking "will provide security for
every American."
She said the insurance she envisions would provide a package of
benefits "that emphasizes primary
and preventive health care."
"We have done it backward for
too long. We have paid for the
surgery, but not for the mammography," she said.
The First Lady said sfce wants an
:
insurance plan that, unlike many
current plans, would pay for
checkups, immunizations. Pap tests
and other early detection and prevention treatments that she argued
"will save us money as well as save
us lives."
She added. "We want the decisions about health care to be made
by physicians, nurses, health care
professionals, not government and
insurance bureaucrats." she said.
_ Dr. Lawrence W Bassett. director of the bteast imaging center at
UCLA, said he was pleased to hear
Mrs. Clinton talk about the importance of patient-physician relationships. "Her idea is that if we
put more resources in preventive,
health, we won't be paying the bills
down the road to the people who
have the chronic diseases that are
much more difficult to treat." he
said.
UCLA Medical Center officials
said the luncheon raised $400,000
for the breast imvging center.
1
�1-21
"BC-HI~Hillary Clinton, 530
•"First Lady T e l l s Luncheon Health Care Must Be Available To A l l
"By MICHAEL FLEEMAN= "Associated Press Writer=
LOS ANGELES (AP) F i r s t lady H i l l a r y Rodham Clinton said the story of a
woman who was unable to afford breast cancer t e s t s had strengthened her
resolved to seek an overhaul the national health care system.
Mrs. C l i n t o n t o l d a luncheon of 400 people a t the Regent Beverly W i l s h i r e
Monday t h a t a woman she met i n New Orleans d i d n ' t have h e a l t h insurance. The
woman went t o a doctor, who found a suspicious lump and sent her t o a
surgeon.
""The surgeon examined her and t o l d her t h a t i f she had insurance he would
biopsy the lump i n her breast, but since she d i d not have insurance, he would
j u s t watch i t . ... I t h i n k many of you can f e e l what I f e l t when I heard t h a t
woman say t h a t , ' ' Mrs. C l i n t o n said.
""Can you imagine what i t i s l i k e f o r t h a t woman t o get up every day and
wonder whether she i s l i v i n g w i t h cancer and not knowing i t ? ' '
The $1,000-a-plate luncheon raised $400,000 for the UCLA Medical Center's
I r i s Cantor Center for Breast Imaging, university o f f i c i a l s said.
Mrs. C l i n t o n t o l d the luncheon the county needs t o emphasize primary and
preventive h e a l t h care because i t would ""save us money as w e l l as save us
lives. ' '
""Wt have done i t backwards f o r too long. We have paid f o r the surgery,
but not f o r the mammography,'' she said.
Mrs. Clinton heads President Clinton's health reform task force, which has
presented options to the president. He i s now weighing them.
E a r l i e r Monday, the f i r s t lady v i s i t e d an i n n e r - c i t y medical school and
said America should f o l l o w the u n i v e r s i t y ' s example i n t r e a t i n g even the
poorest p a t i e n t s .
""We have t o take our system and make i t a v a i l a b l e t o everyone,'• she t o l d
300 students and f a c u l t y at Charles R. Drew U n i v e r s i t y of Medicine and
Science.
But Mrs. Clinton said that universal health care comes at a cost and that
""for most people that w i l l mean some kind of f i n a n c i a l contribution.'
She said people also w i l l have t o take b e t t e r care of themselves t o
prevent i l l n e s s e s . She said government should do i t s p a r t , too, i n p r o v i d i n g
preventive medicine.
She was vague, however, about the s p e c i f i c s of funding u n i v e r s a l h e a l t h
care.
The f i r s t lady arrived in Los Angeles after vacationing in Hawaii, where
she studied the state's health care system, considered by many to be a model.
She toured Drew University's laboratories and spoke with students and
young people in youth science programs.
In v i s i t i n g Drew, Mrs. Clinton saw a university born out of the ashes of
the 1965 Watts r i o t and dedicated to providing health care to poor and
minority residents who l i v e in South Central Los Angeles.
Mrs. Clinton talked with fourth-year medical student Gwen Allen, who wants
to do her residency in South Central.
" " I want t o get back t o the community,'' Ms. A l l e n t o l d her. '"I'm one of
the products of the community.•'
1
�"bc-hillary - al836
"(ATTN: National editors) (Includes optional trims)
"Hillary Clinton Reafirms Pledge to Reform Health Care (Los Angeles)
"By Douglas P. Shuit= "(c) 1993, Los Angeles Times=
LOS ANGELES F i r s t lady H i l l a r y Rodham C l i n t o n v i s i t e d South-Central Los
Angeles Monday t o seek support f o r n a t i o n a l health reform, t e l l i n g an
audience of several hundred medical students and h o s p i t a l workers """that we
have too many people without access t o even basic c a r e .
""In our country, we have the f i n e s t health care a v a i l a b l e i n the world
i f you can a f f o r d i t , ' C l i n t o n said i n a speech a t the Charles R. Drew
University of Medicine and Science.
Later, she touched an emotional chord w i t h a luncheon audience i n Beverly
H i l l s w i t h personal anecdotes t h a t she said had s t i f f e n e d her resolve t o push
for an overhaul of the health system.
At both stops, Clinton, who chairs the White House Task Force on National
Health Care Reform, spoke sometimes with emotion and sometimes with an angry
edge as she addressed shortcomings in the current health care system.
During a morning speech t o about 300 students, f a c u l t y members and health
care workers a t Drew, C l i n t o n lamented those ""shut out o f the system' by
the lack of medical insurance and h o s p i t a l s t h a t ""are overworked t o the
point of breaking.''
Later, in a luncheon speech at the Regent Beverly Wilshirt to raise money
for the University of California, Los Angeles Medical Center's I r i s Cantor
Center for Breast Imaging, Clinton emphasized what she said were problems
that women in p a r t i c u l a r have in gaining access to health care.
She mentioned the story of a f r i e n d who b a t t l e d breast cancer. ""One o f
the l a s t things she d i d was t o b r i n g her husband and her young son t o the
White House because she wanted her son t o meet the p r e s i d e n t , she said. As
they were leaving, the f i r s t lady said her f r i e n d , then i n a wheel c h a i r ,
turned t o the Clintons and said, ""Don't ever l e t anyone f o r g e t what t h i s
disease does t o those who are l e f t behind.' I t o l d her then t h a t I would not.
... I intend t o f u l f i l l my commitment.'*
11
1
1
1 1
"(Optional add end)
Clinton also told the story of a woman she met in New Orleans. She said
the woman, who did not have health insurance, had been to
a doctor who did a manual examination of her breasts and then sent her to a
surgeon after finding what the physician said was a suspicious lump.
""The surgeon examined her and t o l d her t h a t i f she had insurance he would
biopsy the lump i n her breast, but since she d i d not have insurance he would
j u s t watch i t . ... I t h i n k many of you can f e e l what I f e l t when I heard t h a t
woman say t h a t , ' C l i n t o n said. ""Can you imagine what i t i s l i k e f o r t h a t
woman t o get up every day and wonder whether she i s l i v i n g w i t h cancer and
not knowing i t ? ' '
Aides to Clinton said i t was her f i r s t v i s i t to Los Angeles without the
president since the inauguration. Clinton, who arrived Sunday evening, had
originally planned to stay u n t i l Wednesday, but her s t a f f said she now plans
to leave Tuesday for L i t t l e Rock, Ark., the Clintons home before their move
to the White House.
1
�"bc-hillary - al717
"(ATTN: National editors)
"Hillary Clinton Defends President's Policy on Gays (Los Angeles)
"By Douglas P. Shuit= "(c) 1993, Los Angeles Times=
LOS ANGELES F i r s t lady H i l l a r y Rodham C l i n t o n wrapped up her two-day
v i s i t t o Los Angeles Tuesday by defending her husband's compromise p o l i c y on
homosexuals i n the m i l i t a r y and t a l k i n g about the need t o reform the h e a l t h
care system.
During a 30-minute l i v e interview on a r a d i o t a l k show, C l i n t o n said her
husband's p o l i c y on homosexuals i n the m i l i t a r y eased r e s t r i c t i o n s b a r r i n g
homosexuals but continued t o allow m i l i t a r y a u t h o r i t i e s t o i n v e s t i g a t e and
discharge gay men and lesbians f o r misconduct, i n c l u d i n g p u b l i c displays of
same-sex a f f e c t i o n .
The f i r s t lady c a l l e d the p o l i c y on homosexuals " a step f o r w a r d . ' When
asked whether she would be s a t i s f i e d w i t h t h a t answer i f she were gay,
Clinton said " " i f I knew anything about how government works, and how
d i f f i c u l t change i s , I would be e c s t a t i c . ' '
On s t i l l another subject, C l i n t o n c a l l e d f o r stronger c o n t r o l o f i l l e g a l
immigration. C a l l i n g immigrants ""a great source of s t r e n g t h f o r t h i s
country,'' she drew a d i s t i n c t i o n between l e g a l and i l l e g a l immigrants and
said she would l i k e t o see ""our laws (against i l l e g a l immigration) enforced
or changed so they can be b e t t e r enforced.''
Clinton, who heads a White House task force on health care reform, also
appeared on the national ABC t e l e v i s i o n show ""Home,' where she discussed
health care reform and family l i f e in the White House.
Since the president's inauguration i n January, the f i r s t lady has been
occupied w i t h d r a f t i n g a h e a l t h reform package t h a t w i l l provide a basic
medical b e n e f i t s t o the 40 m i l l i o n Americans who now lack h e a l t h coverage.
She said the plan would also t r y t o cap the sharply r i s i n g costs o f the
health care d e l i v e r y system. Current estimates are i n d i v i d u a l s , governments,
insurers and employers w i l l spend more than $900 b i l l i o n on h e a l t h care i n
1993,
a figure that has been growing by about $100 b i l l i o n a year.
Clinton told the t e l e v i s i o n audience that the unveiling of the White House
plan, which was i n i t i a l l y supposed to have been released in May, had been put
off u n t i l at least September because President Clinton has been concentrating
on the federal budget, his deficit-reduction plan and a tax increase package.
""Trying t o b r i n g anything else as important as h e a l t h care i n t o the
uddle of t h a t j u s t d i d n ' t seem possible,'' she said. ""Everybody wanted t o
:eep t h e i r focus on t r y i n g t o get a reasonable budget t h a t a c t u a l l y would
jring down the d e f i c i t . So we are a l l w a i t i n g f o r t h a t t o get f i n i s h e d and as
;oon as i t i s we are going t o come w i t h h e a l t h care.'•
Clinton also t a l k e d about motherly d i f f e r e n c e s she had w i t h her daughter,
Jhelsea, 13, over clothes and pierced ears. ""Sometimes I'm j u s t amazed a t
what they wear t o school,' C l i n t o n said.
1
1
1
�"AM-CA—Hillary Clinton, Bjt,400
"Mrs. C l i n t o n Says Even the Poor Should Pay Their Share of Health Care
'AP Photo
"mbfsml
"By MICHAEL FLEEMAN= "Associated Press Writer=
LOS ANGELES (AP) F i r s t lady H i l l a r y Rodham C l i n t o n said Tuesday t h a t
Americans of a l l income l e v e l s should j o i n businesses i n paying f o r health
care under a new system.
" I want even people who are on welfare to contribute something for their
own health c a r e , Mrs. Clinton, who heads a presidential task force on
health care reform, said in a radio interview on KABC-AM.
Mrs. C l i n t o n , wrapping up a three-day Los Angeles v i s i t , also appeared on
TV's ""Home'' show where she t a l k e d about health reform, spoke of l i f e i n the
White House and watched a demonstration on making c u r t a i n valances w i t h the
aid of a six-pack r i n g .
Meanwhile, f i r s t daughter Chelsea C l i n t o n was spotted Monday shopping i n
Santa Barbara. One stop f o r Chelsea, 13, was The Nature Store, where she was
seen browsing but not buying.
Mrs. Clinton's schedule c a l l e d f o r f l y i n g t o L i t t l e Rock, Ark., Tuesday
afternoon.
The f i r s t lady has dedicated her Los Angeles swing t o s e l l i n g health care
reform. The task force has presented options t o President Cli.iton, who i s
expected t o u n v e i l a plan i n September.
In her ""Home' appearance, Mrs. C l i n t o n said people shouldn't fear
changes i n the health care system.
"We don't need t o make a l o t of dramatic changes,•• she said. "We j u s t
need t o get about the business of doing what we do best i n t h i s country which
i s provide the best health care i n the world, but make sure everybody gets
it. ' '
She didn't say how much people would have t o pay so every American would
have access t o basic health care, but she suggested the costs should be
shared.
"(The) employee makes a c o n t r i b u t i o n , and the employer, and then
everybody i s covered, ' she said.
On a more personal matter, Mrs. Clinton said that the f i r s t s i x months in
the White House have offered ""a lot of good times'' but also "some hard
times.'' She said i t has been especially hard losing privacy.
But, she said, the family does have more time together.
""Somebody asked Chelsea the other day whether she gets t o see her f a t h e r
as much now as she d i d before, and she said, w e l l , she a c t u a l l y gets t o see
him more because we l i v e r i g h t there and he works r i g h t there and we're a l l
together,*' said Mrs. C l i n t o n .
11
1
1
�1-21
First Lady on Radio, TV as Visit Ends
• Policies: She defends
husband's compromise on gays
in military and makes a final
pitch for health care reform.
By DOUGLAS P SHU IT
TIMES STAFF WRITER
First Lady Hillary Rodham Clinion
wrapped up her iwo-day visit lo Los
Angeles on Tuesday by defending her
husband's compromise policy on homosexuals in the military, renewing a commitment from the While House to help
California workers displaced by miliury
cutbacks, and. of course, talking about the
need io reform the health care system.
Ws. Clinion, who heads a White House
task force on health care reform and talked
about little else during public appearances
here, got off the subject when radio talk
show host Michael Jackson asked whether
disaster relief costs associated with flooding in the Midwest would cut into the
federal government's help to California.
" I don't think so," Mrs. Clinion said. "The
problems in California are of a structural
nature, and so when we look at California
and what needs lo be done, we have to take
a long-ierm approach."
She added thai cuts in defense spending
have "to be matched with a conversion
plan and funds coming in to help those
workers who will be otherwise displaced."
During a 30-minute interview with
Jackson on KABC radio. Mrs. Clinton
defended her husband's policy on homoSfxuals in the military. The nyv policy
eases restrictions barring homosexuals
from service but continues lo allow military authorities lo investigate and discharge gay men and lesbians for misconduct, including public displays of
same-sex affection.
The First Lady called ihe policy on
homosexuals "a step forward." Asked
whether she would be satisfied with that
answer if she were gay, Mrs. Clinton said.
"If I knew anything about how government
works, and how difficult change is, I would
be ecstatic."
On still another subject. Mrs. Clinton
called for stronger control of illegal immigration. Calling immigrants "a great source
of strength for this country," she drew a
distinction between legal and illegal immigrants and said she would like to see
Plcuc M« FrttST LADY, B4
Reuim
First Lady Hillary Rodham Clinton speaks with hosts Gary Collins and
Sarah Pureed on the "Home Show," which is taped in Bortank, Calif.
FIRST LADY: L.A. Visit
Continued from Bl
"our laws [against illegal immigration) enforced or changed so they
can be better enforced."
Mrs. Clinton also appeared on
ABC television's national "Home
Show." where she discussed health
care reform and family life in the
White House.
Since ihe President's inauguration in January, Mrs. Clinton has
been occupied with drafting a
health reform package that would
provide basic medical benefits to
the 40 million Americans who lack
health coverage. She said the plan
also will try to cap the sharply
rising costs of the health care
delivery system. Individuals, governments, insurers and employers
will spend more than $900 billion
on health care in 1993. a figure that
has been growing by about $100
billion a year.
Mrs. Clinton told the television
audience thai the unveiling of the
White House plan, which was initially supposed to have been released in May. had been put off
until at least September because
President Clinton has been concentraUng on the federal budget,
his deficit reduction plan and a tax
incyase packag^
'
"Trying to bring anything else as
important as health care into the
middle of that just didn't seem
possible." Mrs. Clinton said. "Everybody wanted to keep their focus
on trying to get a reasonable
budget that actually would bring
down the deficit So we are all
waiting for that to get finished and
-s soon as it is we are going to come
with health care."
Mrs. Clinton also talked about
motherly differences she had with
her daughter. Chelsea, 13. over
clothes and pierced ears. "Sometimes I'm just amazed at what ihey
wear to school." she said.
Mrs. Clinton has been traveling
the country to sell health care
reform, and this waa her first visit
to Los Angeles as First Lady
without the President. She left
Tuesday afternoon for Little Rock.
Ark.
She made four public appearances here, each tightly controlled.
She declined interviews with the
media other than the ones she
granted Jackson and the "Home
Show." She did not take any calls
on Jackson's call-in talk show, but
did answer three questions from
members of the audience of the
"Home Show."
�>2i-r^
PM-AR--Hillary-Ark,220
F i r s t Lady Stops in Arkansas En Route to Washington
mf 2tpradtvfon
LITTLE ROCK (AP) H i l l a r y Rodham Clinton says she plans to spend a couple
)f days i n Arkansas to take a break and take care of business.
Mrs. Clinton's j e t a r r i v e d a t Central F l y i n g Service a t the L i t t l e Rock
l i r p o r t about 7:30 p.m. Tuesday, a spokeswoman f o r the charter f l i g h t company
;aid.
She was accompanied by her 13-year-old daughter, Chelsea, L i t t l e Rock
-.elevision s t a t i o n KATV reported.
The Clintons were en route from C a l i f o r n i a t o Washington.
" I ' m j u s t home f o r a l i t t l e break,'' Mrs. C l i n t o n said i n a b r i e f
.elephone conversation w i t h a reporter who c a l l e d the L i t t l e Rock home of her
mother, Dorothy Rodham.
Mrs. C l i n t o n said she was i n Arkansas f o r " a couple of days, j u s t t o take
:are of some business.''
She declined t o provide any f u r t h e r d e t a i l s o f her v i s i t , or her schedule
luring her time i n L i t t l e Rock.
The s t a t i o n reported t h a t a woman t r a v e l i n g w i t h the f i r s t lady said Mrs.
:linton planned t o speak a t Arkansas Children's H o s p i t a l a t L i t t l e Rock on
hursday. C r i s t i n Chase, a spokeswoman f o r the h o s p i t a l , declined t o confirm
:hat r e p o r t .
A message l e f t w i t h the White House press o f f i c e was not immediately
•eturned.
�"AM-MO—Hillary Clinton,0225
"First Lady to Address Missouri Health-Care Bill-Signing By TV
JEFFERSON CITY, Mo. (AP) Ceremonies to enact Missouri's health-care
legislation w i l l have a v i s i t o r via s a t e l l i t e : f i r s t lady Hillary Rodham
Clinton.
Gov. Mel Carnahan's office on Tuesday announced Mrs. Clinton's
participation in the July l ceremony in Jefferson City.
She i s to participate from Washington, and plans to speak to the ceremony
by closed-circuit television, said Carnahan spokesman Chris Sifford.
The s a t e l l i t e w i l l allow two-way conversation between Mrs. Clinton, the
governor and ceremony participants.
""She wanted to get involved. I t ' s the kind of thing they're looking at on
the national l e v e l , ' ' he said.
Mrs. Clinton praised the Missouri legislation during a Friday appearance
before the nation's Democratic governors, which Carnahan attended.
The governor also accompanied Mrs. Clinton on the return f l i g h t from
Vermont to Washington, and they discussed the Missouri b i l l further, Sifford
said.
""She obviously has health care as her focus and we have been keeping her
posted on the status of our health-care reform b i l l , ' ' the spokesman said.
The legislation would provide care for an estimated 600,000 Missourians,
most of them women and children. I t i s to be financed by a tax increase on
tobacco products.
The 9:30 a.m. ceremony i s scheduled to be held in a television studio of
the state Department of Elementary and Secondary Education in Jefferson City,
Sifford said.
2
�Hillary's
secrecy
was legal
Ruling reversed
on health panel
By Karen Riley
-7*r
President Clinton's health care
task force did not have to meet in
public just because it was headed by
first lady Hillary Rodham Clinton, a
federal appeals court ruled yesterday, reversing a lower-court decision.
But the three-judge panel opened
the way for the public to scrutinize
the secret recommendations the
SU member "working Rroup" prepared for the task force and the president from January until May.
The ruling also endorsed the expansion of the first lady's role from
the ceremonial functions of the past"
to a policy position the president
rntoht otherwise assign to a White
House aide.
In a unanimous decision, the US.
Court of Appeals for the D C. Circuit
ruled that the open-meeting requirements of the Federal Advisory Committee Act (FACA) did not apply to
Mrs. Clinton's task force. But the
court said those requirements may
apply to the working group, which it
called more a "horde than a committee."
"We simply have insufficient material in the record to determine the
character of the working group and
its members," Circuit Judge Laurence H. Silberman wrote, sending
that issue to U.S. District Judge
Royce Lamberth for reconsider-,
ation.
Kent Masterson Brown, attorney
for the plaintiffs who filed suit in
February to open the task force to
public view, said he was thrilled by
the ruling because it achieves his initial objective: getting a glimpse into
the dealings of the shadowy working
group.
•
"This court properly recognized
that the working group is where all'
the work was done," he said. .
The plaintiffs are the Association
of American Physicians and Surgeons Inc., the American Council for
Health Care Reform, and the National Legal & Policy Center.
M r Brown said he will move
quickly, as the appeals court ordered, to take depositions from all of
the people instrumental to the working groups, from its director, senior
White House aide Ira Magaziner,
down. He will try to determine who
was involved, what tasks they per-
see HILLARY, page AS
,LARY
: /
From page A l
^
formed and what recommendations
they made.
White House spokeswoman Dee
Dee Myers said in a statement that
the decision "confirms that the task
force operated in full compliance
with the law."
FACA, enacted in 1972. requires a
presidential advisory committee to
meet in public if it includes anyone
who is not a full-time federal officer
or employee.
Judge Lambenh ruled in March
that Mrs. Clinton is neither a "fulltime federal officer or federal employee," making the 13-member task
force of Cabinet officers and senior
White House aides subject to FACA's
open-meeting requirements. Meetings with the president to formulate
policy could remain closed, he said.
But Judge Lamberth considered
the working group to be task force
staff and therefore not subject to
public disclosure.
The task force disbanded May 30
after sending its recommendations
to President Clinton. From the day
Mr. Clinton appointed the task force
in January, the administration refused to make public its inner deliberations. It even declined to release
the names of the working group
members to shield them from lobbyists.
But politicians and public interest
groups feared that the working
group was stacked with policy experts beholden to certain groups.
A bipartisan group of House leaders and several public interest
groups, including the Reporters
Committee for Freedom of the
Press, filed briefs with the appellate
court in support of the plaintiffs.
In its ruling yesterday, the appellate court called Mrs. Clinton a de
facto government worker.
"Congress itself has recognized
that the president's spouse acts as
the functional equivalent of an assistant to the president," the court said.
Lawmakers authorize money for the
first lady's office and provide her
with a substantial staff of government employees.
"We see no reason why a president could not use his or her spouse
to carry out a task that the president
might delegate to one of his White
House aides," the appeals court said.
"It is reasonable, therefore, to con-
strue [the law) as treating the presidential spouse as a de facto officer
or employee."
The court indicated that the working group may be subject to FACA
because it had dozens of members
from the private sector.
Although most of the working
group came from federal agencies
and Congress, it included 81 persons
designated "special government employees" for the duration of the task
force, plus consultants.
Yesterday's decision also appeared to narrow the scope of the
Anti-Nepotism Act, enacted after
President Kennedy named his
brother Robert attorney general, experts said yesterday!
"We doubt that Congress intended
to include the White House or the
Executive Office of the President" in
the law, the court said. "So for example, a president would be barred
from appointing his brother as attorney general, but perhaps not as a
White House special assistant."
Pennsylvania Rep. Bill dinger,
ranking Republican on the House
Government Operations Committee,
said the ruling "tells me that FACA
needs to be looked at and revised and
tightened."
�Health Task Force
Qosed Doors Backei
Ruling Could Lead to Release of Paper*.
By Michael York
WutatfUn Pnt Sufl WnUr
A U.S. Court of Appeals panel
yesterday ruled the White House
legally was not required to hold
open meetings of the now-disbanded health care task force headed by Hillary Rodham Clinton.
The three-judge panel suggested
that the essential work of the task
force was done by subgroups of
more than 500 people, and it sent
the case back to the trial judge with
a legal road map that could lead to
release of thousands of documents
compiled by the task force staff.
The task force, which was
charged with developing a proposal
for national health care refonn, was
disbanded May 30, but the White
House is delaying release of the
legislative package.
HILLARY RODHAM CLINTON'^, .
Yesterday's decision—written by
Appeals Judge Laurence H. Silber- .. her legal status is a key issrie ^j?
man for the panel that included appeals judges James L Buckley and "confirms that the task force oper*Stephen F. Williams—was based on ated in full compliance with the law.* •
how the judges, all Reagan adminKent Masterson Brown, a Lex*istration appointees, viewed tbe ington, Ky., lawyer who represents
legal status of Hillary Clinton.
the health care groups, hailed yes-. r
Because Congress has for years terday's decision. The real stuff; ia^
authorized presidents to hire aides in the working groups . . . and new^
for their spouses, Silberman wrote, we're given the green light on tfuM
Hillary Clinton is a "de facto (fed- issue," he said. "All the [task foro^j
eral] officer or employee." And be- documents were generated and ajL/
cause federal law requires only the proposals were made by theJ
those advisory committees that working groups, and now we caa^
contain private citizens to hold open proceed [to get them released},,*
meetings, Silberman said, the Clin- We're really thrilled to death."
ton administration's task force is
Silberman said in his opinion that,
exempt from the law.
the lower court must reconsider the
Silberman conceded that the issue of whether the worlqqy *
court was'liberally construing one group's material must be made pulf
law ia order to avoid ruling that an- Uc because it is unclear whether-die
other law—the advisory committee •i group includes private citizens.
act—is unconstitutional.
The Clinton administration argifntf
The case started in late February in court that only government epfj
when two health care groups aod a ployees were among those who *
public interest organization sued served on the working groups,.but,.
Hillary Clinton, asking the court to Silberman said that assertion is opeiig
order that the task force's iqeetingf to question., (X the. hundreds of p£>r,
be open, to the public.
.,
pie involved, Silberman said, some
Muck oL Silberman'a opdncfi wsa were classified as "special govern*.
directed at the so-called woritin£ ment^mptoyeesT while others W9e\
groups, {he 30 subgroups that pro- termed "consultants." Silberman said.
vided research, drafting and policy it is now up to the lower court to ae*'
assistance to the task force.
cide whether those classifications art
The White House yesterday issued accurate and whether the advisory
a statement that said the deciswn committee law applies.
4
c
�USA TODAY • WEDNESDAY. JUNE 23. 1993
HEALTH-CARE
REFORM
First
lady
swaying
the
skeptics
Health plan's still out, but
she's winning rave reviews
By Judy Keen and Judi Hasson/ only 34% of Americans apUSA TODAY
/ prove of the way the president
is handling health care — but
Rep. Jim Cooper doesn't 51% have confidence the first
think much ol the way the lady will produce a good plan.
While he has struggled to
White House's tardy healthcare reforms are shaping up. find his equilibrium, she has:
• Consulted often with ConCooper, a Tennessee Democrat, thought President Qinton gress, including Republicans.
"She's made herself accessiwas gambling when he asked
Hillary Rodham Ginton to lead ble and she comes out among
the high-stakes effort to rein- us," says Sen. Alan Simpson, RWyo. "When you do that in this
vent American health care.
But now, ask Cooper about town, you succeed. It's when
Hillary Clinton's political skills you play big shot and cloister
and he disgorges a stream of yourself away and pretend
compliments: "extraordinarily you're going to be coming
able, almost visionary, a fantas- down off the mountain with satic negotiator, sharp as a tack." cred tablets that you do not"
When she took on the admin• Fulfilled the public's deistration's most formidable mand for villains in the health
task, there was as much skepti- cost mess by hammering doccism as applause. There were tore and drug manufacturers.
questions about a flrst lady's
• Managed to praise those
appropriate policy role and ac- same groups in a bid to win
ceptable clout quotient
their support
The toughest part — pushing • Won public support with
the unfinished plan through her own star power in dozens
Congress — is still to come, and of appearances. Today she's at
her popularity has plunged a Washington think tank.
with her husband's. But she
She's confounded some who
has, at least so far, outdone him doubted that her experience as
in maneuvering the capital's a corporate lawyer qualified
political minefields.
her for the job — and she's
An ABC News/Washington neatly avoided being saddled
Post poll this week showed with much blame for delays.
Hillary more
liked than Bill
Percentage of adults who
say they have a favorable'
opinion of the Clintons:
> s /
Bill Clinton
Hillary Rodham Clinton
fl
65%67%63%
Jan. 31
61%
April 24
June 6
Sourca: USA TODAY/
CNN/Gallup Polls
By Elys A. McLean. USA TODAY
Harriett Woods, president of
the National Women's Political
Caucus, says the view of Hillary Qinton has evolved "dramatically and positively from
'How could she possibly take
this on?' to 'How did she manage to do so much?'"
Deborah Steelman, a Republican health-care specialist,
says Hillary Qinton has deftly
created a "win-win situation: If
it's a good proposal, she gets
the credit If it's bad, she's battled the special interests and
they got the best of her — what
can one woman do?"
But thefirstlady still has op-
portunities to fail:
• She'll have to employ
more caglness than she's needed so far to get enough support
in Congress to pass reforms.
Members charmed by her
salesmanship may balk at voting for new taxes.
Today she gets a preview of
the coining battle when she
meets with House Democrats
who advocate a Canadianstyle, government-run health
system. They're threatening to
abandon the White House plan.
• If the oft-delayed plan
fails to emerge this year or
runs into legtelative trouble,
she may yet be blamed.
Budget director Leon Panetta reiterated Tuesday that a
health plan will wait until budget battles are over — which
could delay the plan until fall
• The public may like-her
personally, but if they reject reforms' price tag and likely limits on their health-care options,
they'll hold her responsible.
In truth, although broad outlines are in place, it is President Qinton who will make the
key, politicallyriskydecisions:
What kind of taxes will be
levied to cover 37 million uninsured and guarantee everyone
a minimum package of benefits? How quickly will small
businesses have to begin offering health coverage? Will abortions be covered?
There have been missteps.
The flrst lady's about-face on
blaming doctors for healthcare costs reminded some of
her husband's penchant for
telling everybody what they
want to hear. Some were startled by the secrecy of her task
force's deliberations.
But early criticism that she's
been given too much power
has waned. Instead, some political analysts have lately lamented that she's been so preoccupied with health care that
she's had no time to advise the
president on other issues.
"All the same people who
criticized Hillary three months
ago are now saying, 'Why
hasn't she done more?'" says
Susan Estrich, a Democratic
political commentator.
Those who know Hillary
Qinton say questions about
how much power she should
wield are of little concern to
her. Lisa Caputo, her spokeswoman, says the first lady
views herself merely as "a citizen representative."
White House allies say the
flrst lady has earned a shot at
welfare refonn and other policy tasks.
"There are a thousand lobbyists with a thousand reasons
why (health care) can't
change," says James Carville, a
Qinton political adviser. "And
there's Hillary saying we can.
That makes it about even."
But those who objected to
By Tad Malttas. AP
TOUGH TASK: Hilary Rodham Clinton has been called 'a fantastic negotiator, sharp as a tack' for her health-care reform WOT*.
her assignment still wonder if
she has too much authority —
and even If she's being used by
the president
"The reason she was there
was because the White House
felt it would be a Shield against
criticism," says conservative
Phyllis Schlafly. " I think people resent that too."
Lewis Gould, who teaches a
course on flrst ladles at the
University of Texas, says Hillary Clinton has already
"stretched the possibilities. ...
The next two or three will occupy the ground that a pathfinder like her lays out"
• Democrats'revolt,1A
�OF
F I C E
O F
N E W S
ITTPA
L Y S I S
MORNING
NEWS
SUMMARY
Room 160 OEOB, Ext 7151
HEALTH CARE —
A U.S. Court of Appeals ruled that H i l l a r v Rodham
Clinton i s a "de facto (federal) o f f i c e r or employee" and that
the health care task force i s thus not required to hold open
meetings. (WP) The court also said the lower court must
reconsider whether the task force working group's material must
be made public because i t i s unclear whether the group included
private c i t i z e n s . (WP) The Administration argued that only
government employees served on the working groups. (WP) The
Washington Times says, " President Clinton's health care task
force did not have to meet in public j u s t because i t was headed
by f i r s t lady H i l l a r y Rodham Clinton..."
Rep. d i n g e r (R-Pa.),
said the ruling " t e l l s me that FACA needs to be looked at and
revised and tightened." (WT) "The decision on Mrs. Clinton's
status represents a victory for the Administration and may remove
a potential obstacle i f the President wants to appoint h i s wife
to head other advisorv groups." (NYT All
USA Today reports on i t s front page that H i l l a r y Rodham
Clinton w i l l v i s i t Capitol H i l l today to "quell a revolt" among
House Democrats who want a Canadian-style health svstem. An aide
to Rep. McDermott (D-Wash.). said. "Almost half the Democrats
needed to pass the plan are committed to single-paver." (USA
Today)
Two doctors write i n today's Journal of the American Medical
Association that H i l l a r y Rodham Clinton i s "talking the right
language" by emphasizing that people need improved access to
basic primary care. (USA Today) Doctors S t a r f i e l d and Simpson
say national leadership i s needed to rebuild the nation's primary
care " i n f r a s t r u c t u r e " weakened by over-reliance on higher-cost
specialty care. (USA Today) USA Today also reports that Sen.
Chaffee's (R-RI) o f f i c e says the Senator i s drafting a health
care plan that would include a minimum benefits package, require
insurers to cover everyone, reform malpractice laws, and
subsidize coverage for the poor. Sen. Chaffee has ruled out a
payroll tax but not other levies to finance the plan. (USA Today)
USA Today describes H i l l a r y Rodham Clinton's success i n
winning respect from the public and lawmakers but says "The
toughest part — pushing the unfinished plan through Congress —
i s s t i l l to come, and her popularity has plunged with her
husband's."
�NV
Court Rules That First Lady
Is 'De Facto' Federal Official
By ROBERT PEAR
Sptcial to Tf* N*w Yort Timet
WASHINGTON, June 22 - Ruling obstacle if the President wants to apthat Hillary Rodham Clinton was a full point his wife to head other advisory
time Government official, a Federal groups. She has, for instance, been
appeals court today approved the se- mentioned as a possible leader of the
crecy of her task force on health care Administration's effort to overhaul the
and essentially acquiesced in Mrs. welfare system.
Clinton's ambitious views about the
But the rationale of the ruling is not
role and powers of the First Lady.
limited to Mrs. Clinton. It would seem
The ruling, by the United States to permit any Presidential spouse to
Court of Appeals for the District of engage in official and semiofficial acColumbia, came in a case filed by tivities of a type normally preformed
doctors and others seeking to force the by Government employees.
panel, the Task Force on National
Mrs. Clinton is more powerful than
Health Care Reform, to conduct its many of her predecessors, and she is
business in public.
certainly more open in exerciefng that
power. Herrolehas been a matter~bf
Redefines Role of First Lady
debate since early 1992, when Mr. Clin
The judges ruled that the secrecy ton boasted of her talents, saying "Vote
was legal, but the practical effect of thefor one, get one free."
ruling is uncertain, because the task
'Oe Facto Officer or Employee'
force and its staff of more than 500,
which did most of the work, were dis- The appeals court acknowledged
banded last month. The court sent the that it was stretching the definition of
case back to a Federal district judge to "officer or employee" of the Governdetermine whether the staff might ment to include Mrs. Clinton in her role
have to make its voluminous records as First Lady. But it said such a
and working papers public.
strained Interpretation of the law was
The decision on Mrs. Clinton's statusnecessary to avoid the difficult constirepresents a victory for the Administration and may remove a potential
Continued on Page A19, Column I
The appellate court said there wai
"a longstanding tradition of public
service oy First Ladles — including, wi
tutional problems that would arise if
are tokt Sarah Polk, Edith Wilson, El
she had no official status.
eanor Roosevelt, Rosalynn Carter anc
Moreover, it said, "Congress itself
Nancy Reagan — who have acted (al
has recognized that the President's
belt in the background) as adviser
spouse acts as the functional equivaand personal representaUves of theii
lent of an assistant to the President"
husbands."
mittee
Act,
such
panels,
when
not
comThe court added: "We see no reasonposed wholly of Government officials, The court added: "We are not confi
why a President could not use his or must conduct their meetings in public dent that this traditional perception c
her spouse to carry out a task that theand must make their work papers the President's wife, as a virtual exter
sion of her husband, is widely heli
President might delegate to one of his available to the public
White House aides." Therefore, the The appeals court rejected Judge today. Aa thu very case suggests, i
not even be a fair portrayal o
judges said, it is reasonable to treat the
Lamberth's logic and said that the may Qinton.
who certainly is perform
President's spouse as "a de facto offi- First Lady's status, though ambiguous, Mrs.
ing more openly than is typical of a
cer or employee" of the Government. qualified her as a Government officialFirst Lady."
Thus, it said, "the task force is a comIn March, Federal District Judge mittee wholly composed of Govern- Judge James L Buckley wrote a
Royce C. Lamberth ruled that Mrs. ment officials."
separate opinion asserting thai Mrs.
Clinton was not a Government official, The case was heard by a three-judgeClinton was not a Government officer
officer or employee. As a result, he panel of the appeals court Judge Lau- or employee But he concluded that the
said, the task force she headed was a rence H. Silberman wrote the main 1972 law was "unconstitutional as apFederal advisory committee. Under a opinion, and Judge Stephen F. Williamsplied to the task force," because it
1972 law, the Federal Advisory Com- concurred.
interfered excessively with the .PresI^
dent's right to receive confidentia
communications from his advisers.
Judge Buckley observed that Mrs
Ginton was greeted like a head of
sute, guarded by the Secret Service
and allowed to spend Federal money.
But he said. "She has been neither
appointed to nor confirmed in the position of First Lady, she has taken no
oath of office and she neither holds a
sututory office nor performs statutory
dutiea."
Continued From Page AJ
A redefined role
for the spouse of
the President.
•SufT Not Yet Defined
The three appellate judges were apr pointed
by President Ronald Reagan,
as was Judge Lamberth.
Mr. Clinton appointed the 12-member task force on Jan 23. in the hope
that it would help him prepare legislation for submission to Congress by Ma
1. The task force, which included six
Cabinet Secretaries and several White
House officials, held more than 20
meetings, at which It developed optloni
and recommendations for the President Mr. Clinton allowed the task force
to expire May 30. Aides have said he
now plans u offer a national plan to
control health cosu before the end ol
September.
The appeals court uid tt neede
more information to determine whet
er the suff of the task force waa su
ject to the 1972 law. The suff wi
organized into "working groups" th.
advised the White House on topics Ul
long-tenn care, price controls, ment
health care and prescription drugs.
The working groupa "seem more Ul
a horde than a committee," but tht
were created "with a good deal <
formality" and may, on closer exam
natkn, prove to be Federal advisor
committees, the appeals court said.
�^3-^
Hillary Clinton
to face critics
within party
By Judy Keen
USA TODAY
A I
n I
Hillary Rodham Ginton today tna to quell a revolt by
House Democrats who want a
Canadian-style health system.
As many as 84 members of
Congress — sponsors of a bill to
make the federal government
pay all health-care costs — will
participate in the showdown.
They'll tell thefirstlady they
have doubts about her approach, which still reUes on insurance, and warn their votes
are needed to pass any plaa
The conflict could portend
trouble for overdue reforms.
"Ifs a reality check.- says
Barry Ptatt, an aide to Rep.
Jim McDermotx. D-Wash.. author of the "slngle^yer bill
"Almost half the Democrats
needed to pass the plan are
committed to singlei»yer.
The White House never considered a Canadian plan, but
the idea keeps resurfacing. A
congressional study said such a
system could save $14 billion a
year, Clinton's plan would Initially increase spending.
Also, a federal appeals court
ruled Tuesday the health task
force dldnt have to meet publicly even though it was
chaired by the lint lady, 511
experts who devised reforms
may be subject to open meeting laws - which could lead to
release of their documenB. .
• Fir* lad/a ro*
�"bc-polls-comment-hillary ~(wap) (ATTN: E d i t o r i a l Page editors)
'Repeating to. correct keyword
'Importance of H i l l a r y Clinton's Standing (Washn)
*(c) 1993, The Washington Post=
WASHINGTON One key element of the health-care-refonn plan: H i l l a r y Rodham
Clinton's standing with the people.
"Her c r e d i b i l i t y w i l l be c r i t i c a l here,'' said Robert Blendon, chairman
of the department of public health at Harvard University. ~ ~ I f both of them
are weak, then t h i s effort has j u s t l o s t the wind from i t s s a i l s . '
(Recent polls suggest that H i l l a r y Clinton continues to be more popular
than her husband, though the percentage in Post-ABC News polls who say she
nas " t o o much influence'• over him has increased from 35 percent to a 48
percent p l u r a l i t y since February.)
Richard Morin
1
>
6*
�"BC-HI—Hillary-Hawaii,2nd Ld-Writethru,581
" F i r s t Lady Pitches For Tourism Rebound For Kauai
"EDS: UPDATES w i t h d e t a i l s on Maui v i s i t .
"By BRUCE DUNFORD= "Associated Press Writer=
POIPU, Hawaii (AP) F i r s t lady H i l l a r y Rodham C l i n t o n paid a quick v i s i t
Wednesday t o the once-again lush green i s l a n d of Kauai t o congratulate i t s
people and o f f i c i a l s on " t h e most remarkable and e f f i c i e n t response e f f o r t
t o a d i s a s t e r t h a t we have had i n our country.'
She spent Wednesday n i g h t on Maui, where she v i s i t e d a r u r a l health c l i n i c
i n the remote town of Hana. Mrs. C l i n t o n was expected t o remain on Maui u n t i l
r e t u r n i n g t o Washington on Sunday. She had no p u b l i c events scheduled f o r the
rest of her stay, aides said.
On Kauai, Mrs. C l i n t o n echoed Gov. John Waihee's p i t c h f o r t o u r i s t s from
around the world t o come t o the Garden Island's reopened r e s o r t s t o support
the island's economy as the r e b u i l d i n g boom slows.
Mrs. C l i n t o n went on a h e l i c o p t e r tour and was given a b r i e f i n g on the
recovery e f f o r t s from Hurricane I n i k i which swept over Kauai on Sept. 11,
1992 w i t h winds of up t o 165 mph, causing $2 b i l l i o n i n damage.
While the government agencies responded w e l l , ""the biggest story t h a t
comes out of the hurricane was what the people of t h i s i s l a n d d i d f o r
themselves and f o r each o t h e r , ' she t o l d more than 1,000 cheering residents
gathered i n a courtyard and adjacent ballroom at the Hyatt Regency r e s o r t a t
Poipu Beach, one of the h a r d e s t - h i t parts of the i s l a n d .
On Maui,'she toured the medical center w i t h s t a t e Health D i r e c t o r Jack
Lewin, and a doctor and nurse a t the f a c i l i t y . She also t a l k e d w i t h native
Hawaiians about t h e i r h e a l t h care needs.
Mrs. C l i n t o n said she was g r a t e f u l f o r the opportunity t o get a close-up
look a t a r u r a l h e a l t h f a c i l i t y , and praised the 15-member s t a f f form i t s
hard work and dedication.
E a r l i e r i n the day she toured Kauai's o l d sugar p l a n t a t i o n town of Koloa,
where she t a l k e d w i t h shop owners and walked along a roadside crowd of 500,
shaking hands and c h a t t i n g .
While watching a c o r r a l l e d group of r e p o r t e r s and photographers cover the
event c a r e f u l l y orchestrated by the White House s t a f f , Waihee said: " " I don't
t h i n k we can buy t h i s kind of p u b l i c i t y , ' ' r e f e r r i n g t o hopes of g e t t i n g word
out i n t e r n a t i o n a l l y t h a t Kauai i s back i n business.
At the h o t e l , she was t r e a t e d t o a hula performed a dozen g i r l s of the Na
Hula O Kaohikukapulani troupe as a group of e l d e r l y Hawaiians sang and played
" ' B e a u t i f u l Kauai'' on g u i t a r s and ukulele.
She was given a flower l e i by 9-year-old Chelsea Ann Kaluahine,
a member of the troupe.
" " I t i s the s p i r i t as much as the beauty t h a t surrounds us t h a t should
welcome people a l l over the world here,' Mrs. C l i n t o n said. ""The lesson of
t h i s island's response i s not j u s t t o l d i n how q u i c k l y roads were cleared,
u t i l i t y services restored, schools opened, businesses r e s t a r t e d , a l l those
t a n g i b l e pieces of evidence of about how you were able t o come together.''
""The story i s r e a l l y one of s p i r i t and community and I wish I could
bottle i t take i t a l l over our country. I wish the rest of our states could
have some sense of what t h i s state and t h i s island were able to achieve,••
she said.
""Your efforts here to deal with the heart as well as the hand, to help
each other, i s what I w i l l take back with me, not j u s t tomorrow, but with the
rest of my l i f e , ' Mrs. Clinton said.
1
1
1
1
�"BC-HEALTHCARE-EDITORIAL op-ed editors
"A dose of logic on H i l l a r y Clinton's health-care reform program
Knight-Ridder/Tribune News Service
(c)1993. The Orange County Register
The following e d i t o r i a l appeared recently in The Orange County Register.
XXX
F i r s t lady H i l l a r y Rodham Clinton's health-care reform program was
supposed to be ready in May. Now i t looks as though i t won't be released
u n t i l September, at the e a r l i e s t . That four-month (or more) delay i s a
foreshadowing of the long lines patients may have to wait i n f a r longer than
anything now endured should Clinton's ideas be enacted.
In Los Angeles t h i s week to give a couple of speeches, she intoned, " I n
our country, we have probably the finest health care available in the world
i f you can afford i t . ' • She ignored two prominent facts: F i r s t , 220 million
Americans can afford i t . And of the 30 million who don't have coverage, many
are only temporarily without insurance because they're between jobs. Second,
any problems in the system can be addressed by free-market solutions.
C l i n t o n t o l d some heart-rending s t o r i e s of people who were not t r e a t e d
w e l l by the current system. But C l i n t o n ignored the advice of Hippocrates:
" " F i r s t , do no harm.•' Whatever reform i s introduced, the 220 m i l l i o n
Americans c u r r e n t l y covered people who, by and large, l i k e the system
should not have t h e i r coverage reduced.
There's only one way to improve care: Reduce government controls. Instead
of putting price controls on drug companies, as Clinton has advocated, FDA
r e s t r i c t i o n s on drug development should be removed. Let the companies place
new life-saving drugs on the market as quickly as possible.
Overall, a plan such as that proposed by the Heritage Foundation could be
adopted, in which the health-care tax deduction would be shifted from the
company to the person. A person could take h i s health-care protection with
him throughout l i f e , including times between jobs.
I n Los Angeles, C l i n t o n promised, ""We want the decisions about h e a l t h
care t o be made by physicians, nurses, health care p r o f e s s i o n a l s not
government and insurance bureaucrats.'• But her expected p r i c e c o n t r o l s and
""mandated'' coverage would do the opposite, p l a c i n g h e a l t h care i n the
charge of government bureaucrats.
Now, i f the 511 bureaucrats operating in secret on Clinton's plan couldn't
meet this year's May deadline, why should anyone expect a massive,
federalized, bureaucratized medical system to provide better care?
Finally, there's the cost: between $100 b i l l i o n and $150 b i l l i o n . With the
economy poised for another decline, President Clinton's tax increases about
to be passed, and the d e f i c i t r i s i n g , there j u s t i s n ' t any money.
The only reforms t h a t could work market reforms are the l a s t t h i n g
Clinton wants t o t r y .
The Orange County Register
�PM-AR—Hillary-Ark, Ark B j t ^ S O
Mrs. Clinton Spends Quiet Day i n L i t t l e Rock
With AP Photo LR102 of J u l y 21
tp2Tnf f onf Is
LITTLE ROCK (AP) The president's wife kept a low p r o f i l e on the f i r s t day
>f what she said was mostly a personal v i s i t to Arkansas.
F i r s t lady H i l l a r y Rodham C l i n t o n and her daughter, Chelsea, 13, a r r i v e d
n L i t t l e Rock on Tuesday evening and were s t a y i n g w i t h Mrs. C l i n t o n ' s
other, Dorothy Rodham.
Mrs. Clinton made no p u b l i c appearances Wednesday. "^I'm j u s t home f o r a
i t t l e break,'' she had said the night before. Spokeswoman Lisa Caputo said
helsea v i s i t e d f r i e n d s Wednesday.
Today Mrs. Clinton planned to tour Arkansas Children's Hospital at L i t t l e
ock, and then speak to area health-care professionals i n the hospital's
uditorium, according to a news release from the White House press o f f i c e .
The release said the f i r s t lady would tour the hospital's r e h a b i l i t a t i o n
enter and the newborn intensive care unit.
The White House said Clinton would join h i s wife Friday at the L i t t l e Rock
uneral of Deputy White House Counsel Vince Foster, found dead Tuesday of an
pparently s e l f - i n f l i c t e d gunshot wound.
Ms. Caputo said the president spoke f o r Mrs. C l i n t o n i n lamenting Foster's
eath. Mrs. C l i n t o n and Foster were partners a t the Rose Law Finn i n L i t t l e
ock.
" H i s family has lost a loving husband and father, America has l o s t a
ifted and loyal public servant, and H i l l a r y and I have l o s t
true and trusted friend,'' the president said. "My deepest hope i s that
hatever drew Vince away from us t h i s evening, h i s soul w i l l receive the
race and salvation that h i s good l i f e and good works earned.''
;
�
Dublin Core
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Title
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Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
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William J. Clinton Presidential Library & Museum
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2006-0885-F
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Paper
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[Mrs. Clinton] [Loose]
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 2
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Box 24
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
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Clinton Presidential Records: White House Staff and Office Files
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William J. Clinton Presidential Library & Museum
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2/6/2015
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42-t-12093080-20060885F-Seg2-024-005-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/fff8c61c22151cb24580b5c250acc056.pdf
6f9f4f147b82262a7dcb581ec1eb83fb
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4787
FolderlD:
Folder Title:
[Miscellaneous] [loose]
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
4
1
��"Massachusetts General Hospital to cut 500 jobs
BOSTON (UPI) Massachusetts General Hospital Boston's largest private
employer and one of the nation's top medical centers announced plans
Thursday to cut some 500 jobs as part of a downsizing prompted by insurers'
demands for lower health-care costs.
Hospital o f f i c i a l s said they plan to lay off about 125 people by Oct.
1 and trim another 375 jobs through a t t r i t i o n .
MGH also plans to freeze i t s pay-raise rates and reduce weekend
differentials in a bid to save more than $25 million.
�"AM-MA—Tsongas-Health Care, Bjt,0460
"Tsongas Urges Openness in Health Care Reform Process
'With AP Photo
"By KEN GUGGENHEIM= 'Associated Press Writer=
BOSTON (AP) Hillary Rodham Clinton's health care reform efforts w i l l be
ioomed i f the task force she leads doesn't accept more input from the medical
community, former Sen. Paul Tsongas said Thursday.
Tsongas, the former presidential candidate who i s now spokesman for the
healthcare Leadership Council a coalition representing doctors, hospitals,
pharmaceuticals and related interests said medical professionals " f e e l they
are not part of the system' of designing a health care reform plan.
~~A11 these doctors around the country feel l i k e they're the enemy,''
Tsongas said to about 3 50 high-school students from across the country at the
National Youth Leadership Forum on Medicine.
The American Medical Association has complained t h a t i t lacks access t o
:he f i r s t lady's task force, which i s shaping the administration's health
policies.
" I n p o l i t i c s , lesson 101 i s i f you're going to have a fight, have i t over
substance, not over process,'' he said.
Tsongas spent most of the l&l/2-hour session fielding questions from the
students, who plan to pursue careers in medicine. During the ll-day
inference, the students w i l l prepare their own health care reform proposal
jnd submit i t to the White House.
Tsongas, who made health care reform a key issue while pursuing the
Democratic p r e s i d e n t i a l nomination l a s t year, pushed the case f o r a health
;are program t h a t r e l i e s on managed competition among doctors and medical
i n s t i t u t i o n s , instead of a r e g u l a t i o n - o r i e n t e d system modeled a f t e r the
Tanadian system.
Tsongas said the easy p a r t of a health care plan i s p r o v i d i n g access f o r
5veryone. The d i f f i c u l t p a r t w i l l be developing a plan t h a t i s f i n a n c i a l l y
responsible.
He told students that by 2010, they w i l l be paying about 25 percent of
zheir income in Social Security and Medicare taxes, plus an "enormous
imount of federal taxes to pay interest on the d e f i c i t .
"When you get these paychecks and you r e a l i z e what's happening, you're
joing t o be f u r i o u s , ' he said. *"You're going t o see i n t h i s country
renerational war between r e t i r e e s and workers.''
"We have to be f i s c a l l y responsible so your generation has a chance,
hich at this point i s in doubt,'• he said.
Tsongas told the students that his own bout with cancer made him aware of
he need of maintaining the United States' high quality of health care. I t
Iso made him recognize his responsibility to future generations.
"Your responsibility, like my responsibility, i s not j u s t to l i v e and
injoy, but to take what i s given to us by our ancestors and preserving i t so
'ou hand i t to your kids as something of value,'* he said.
1
11
1
�FRIDAY, JULY 23,19931 PAGE FS
EN ADELMAN
r
he element most missing
from today's health care
debate is how many of
America's ills (literally) are
ised^>y wayward values.
Rather than rehash the faults of
impersonal health care system, as
ryone now does, we should rephasize personal responsibility,
virtually no one is doing.
Think about the number and ex
t of U.S. health problems caused
willful personal behavior — parjlarly cigarette smoking, drug
I alcohol use, shootings, muggs, the spread of AIDS (at least to
ne degree) and domestic vioce. Add to these, of course, not
ing right and not exercising well.
Reforming values, changing pcrtal behavior, could do much more
Americans' health than any
Iggering of the "health care deli v• system."
is notion — that values and
mal responsibility need mote
lasis and organizational flow
less — struck mc when speakth the departing surgeon genDr. Antonia C. Novello.
in a small port town outside
Juan, Puerto Rico, her father
rly. Yet Dr Novcllo's mother,
I of the local school for .W
, instilled the right values.
Bo during her four years as I4lh
[geon general of the United
kes, Dr. Novello stressed values.
\ brought to prominence dnmes' violence, which had not prcjsly been deemed a ma jor U S
lie health problem
'It's the great unknown killer,*'
I said. "Every five years, in fad.
\rc women die of violent attacks
Ken Adelman is a nutunnillv xvnbfe<J columnist.
Where to begin health care reforms
by men Ihey know than U.S. soldiers
died during the whole Vietnam War.
No less drastic, and no less sad."
Aside from the high number of
deaths is Ihe high number of in jur
ies. Remarkably. American women
suffer more injuries from domestic
violence than from automobile acci-
dents, rapes and muggings combined.
This value based health problem
is hard to deled or treat, hence iis
long concealed history. Many if not
"most women wont speak about i l .
because they're ashamed.'' Dr.
Novello said "Thcy'ie especially
ashamed of being found out by their
community."
ll had been thought that victims
came mostly from poor communities, but thai no longer seems so Tl'.c
American Medical Association's two
spokeswomen on the issue ate middle ( lass and rich. One was uncov-
ered as a victim of domestic violence during her 14th visit to her
doctor, when she finally stopped
claiming she had fallen off the same
chair to get the same injuries.
Most women rationalize, figuring
that the man will only hit once, that
he didn't realize what he was doing,
that he was drunk or angry this one
time.
But it doesn't happen just that one
time. In fact, wife- and matebeatitigs are a contagious disease.
"Violence perpetuates violence,"
Dr. Novello says — not just with
these individuals but also through
the generations. "Children of violent
parents are much more likely to be,come violent spouses themselves.
When a child watches an abusive relationship, chances are that child
will become violent as an adult."
Most horrible are cases of
women beaten during pregnancy.
"Why does this happen?" Dr. Novello
wonders. "Because the man is
scared of having a child? And what
happens to the baby, both physiologically then and afterwards, and psychologically?"
These and other issues make
treatment of domestic violence difficult, even after detection.
Dr. Novello also concentrated on
another serious health problem
caused by bad values — early-age
drinking. She publicized how 90 percent of high school students drink
and that one-third of all high school
students go on binge drinking — i.e.
they bell at least five drinks in a row.
Believe it or not. "more than 10
percent of eighth graders go on
binge drinking They're 10 or 11
years old, for God's sake! Nearly a
fourth of these eighth graders are
already permanent drinkers."
That means that, by the time they
enter high school, they're already In
trouble. "The most binge drinking in
the U.S. is done by 16-yearold white
males in about 10th grade."
What can be done about this
health problem?
Change the values of these
youngsters and change their parents' values. Dr. Novello found that
parents often shrug and say, "Well. I
did it and, look, I turned out OK. Kids
will be kids. A little booze won't hurt
'em. Besides, thank heaven, Jimmy
doesn't do drugs."
What did Dr. Novello find distinctive about kids who don't drink, at
least excessively or in binges?
"They don't get mixed messages.
Parents of these kids tell them when,
where, and how much to drink — if
they let them drink at all. These parents know more abotit the consequences of drinking."
Besides making for better children, this makes for a better country.
It helps resolve a huge health problem. "For every 23 cents paid in
taxes for alcohol, Americans must
pay 48 cents in public health costs
and for the judicial system to investigate and prosecute."
Hillary Clinton and her band of
health reformers should stop talking
only about health systems. They
should start talking about individual
responsibility — not just with domestic violence and pre- and teenage drinking, but also on drug use,
cigarette smoking, shootings, irresponsible homosexual behavior, etc.
Therein lies the most-needed reform for Americans', and America's,
health
�-BC-FINANCE (SCHEDULED WEEKLY COLUMN)
"BUYING HEALTH CARE STOCKS AHEAD OF REFORM
By Linda Stern
WASHINGTON (Reuter) - Sad to say, but we Americans are no healthier than
we were l a s t year, and we're certainly not getting any younger.
But health care stocks — the darlings of Wall Street two years ago
because of an aging demographic — have moved so far out of favor over fears
of President Clinton's impending health care reform plan that many are now
shunned.
" I n v e s t o r s have been s e l l i n g v i r t u a l l y a l l health care stocks under worst
case scenario assumptions,'' said Arlington, Va.-based money manager Benjamin
Peress.
Not quite a l l investors. Professionals l i k e Peress and Cheryl Alexander,
senior portfolio manager of the Putnam Health Sciences Trust, have started
buying back stocks they dumped 18 months ago.
""I've become much more positive i n the l a s t three months,'• said
Alexander. "The fears of Washington reform are overblown by investors. I
don't think we w i l l end up with nationalized heatlh care or r i g i d price
controls.''
Alexander believes when Clinton unveils his plan, " a l o t of people w i l l
feel a lot b e t t e r ' and a r i s i n g tide of optimism w i l l l i f t a l l health care
stocks.
Peress believes health care reform w i l l be a boost to many of these
companies i f i t expands coverage and health care access to the roughly 15
percent of the population not currently adequately covered.
Meanwhile, many of these stocks are showing up on l i s t s of bargain priced,
so-called value stocks.
"Many are s e l l i n g at a 25 percent discount to the Standard and Poor's 500
l i s t , based on 1994 earnings estimates, and they have healthy cash flows. So
they are increasing dividends and buying back their own stocks.*•
These health care bargains exist, but spotting them i s not the cakewalk i t
was a few years ago when companies l i k e Merck, U.S. Surgical and Johnson &
Johnson showered earnings on anyone who happened to buy i n at any price.
Health care reform w i l l constrict the industry's p r o f i t margins and
price-hiking a b i l i t y and may limit some sales as well.
"""Some companies are starting to get squeezed already, ' • said Peress.
Added Alexander, ""Growth expectations have come down from the 18 percent a
year level to between 5 percent and 10 percent growth. That's reasonable and
decent. '
Prudent investors who don't expect earnings growth i n the high teens and
who are w i l l i n g to ride out the Washington r i s k can buy s e l e c t i v e l y . Here are
some t i p s .
— Look for big companies. Constriction and consolidation already i s
occuring in health care and w i l l continue. Those companies with the deepest
pockets w i l l best be able to employ economies of scale, pick up on one
product line when another i s i n the doldrums and generally ride out the
changes to come.
— Look for companies that are compatible with health care's new era.
Health maintenence organizations, pharmaceutical companies and home health
care equipment manufactuers could find themselves with more, not fewer,
customers.
— Find firms that w i l l pay you to wait. Most of these companies pay s o l i d
dividends and, with prices beaten back, the dividend yields may approach what
you'd get in a money market fund.
— Look for companies that already s e l l to managed care providers. They
have demonstrated their a b i l i t y to make a p r o f i t while holding down prices,
and they already have the supply lines to the customers of the future.
— I f you're daring, consider acquisition targets. Peress believes health
care reform w i l l r e s u l t i n more merger and acquisition a c t i v i t y than we've
seen in a while. The cash-rich big f i s h w i l l swallow the l i t t l e ,
1
1
�single-product f i s h . And the shareholders of both look to make money.
You can write Linda Stern at Reuters, Suite 410, 1333 H St., NW,
Washington, DC 20005. She w i l l answer your questions i n future columns,
although she regrets she cannot respond to each l e t t e r individually.
REUTER
�»4V
tt
What drives the healthcare discussion is not
iealth care, but the defi:it. ... And that reality
Joesn't go away.
5J
— Paul Tsongas
By Leslie Smitn. USA TODAY
Managed competition
is the only way to go
President Clinton is now expected to unveil his "managed competi•on" health-care reform plan this /ail. The goals of the plan are to
narantee coverage for everyone and to control costs through comperion among insurers. Paul Tsongas, as a presidential candidate and
ow as a spokesman for the Healthcare Leadership Council — repreenting such groups as insurers, providers, and pharmaceutical and
.?chno(ogical manufacturers - supports the managed-care ap-roach. His remarks were edited from an interview with USA TO;AYs editorial board.
Q: So far, health-care reform has been mostly talk. Is it ever really
oing to happen?
A- If vou ask yourself how is it ihat since Harry Truman health-care
-form has been talked about but nothing's ever happened, the reason
/that vou have so manv conflicting views. What's different abouttoday
nd what dnves the healthore discussion is not health care but the
eficit (because government s health costs are rising so fast). So people
siI coming to health care as a way of dealing with the deficit And that
eality doesn't go away.
Q Plenty of powerful interests - Including those you are repre»ntlne - still could lose a lot under some kinds of reform. Why
won't they stop It, as they
have In the past?
A: I think there was historicallv a view that anything that
would change a system would
blow people away — particu1990 employee enrollments:
larly a government-based sysr
ijan
ni employees
tern. Now a managed-care
and managed-competition
Unmanaged fee for service 5%
57%
model basically says the priManaged fee-for-service
vate
sector will survive. Not
HMOs
everybody within it will sur13%
PPOs'
vive, but those who are good
5%
Potnt-of-servtce plans
will survive. You now have
• insurefB
rovtew boards to del^"^*
within the provider communisbetw proceourw v rvvScafy n»CM-.ary; 2 NetvwxM of providBrs agree »
ty people who are comfortseivice lor M te* 3 M w * wflpioyee to
able that they can survive and
- X a p r o ^ e r M * ttm* medic* atwwon
compete on a managed-com-ewtod, ntner than onoa • y««r.
petition model.
Souro* Amencan Managed Can and
1
8
Vhere workers
let health care
1
1
/iew Association
JULY 22
'993
Q: How would It work?
A; First, the package would include portability of coverage (even if
you change jobs or lose your job). Secondly, pre-existing conditions
would not preclude you from coverage. Thirdly, malpractice reform.
Q: It also would keep Insurance companies In tbe health-care business. The people who want a government-run, single-payer system,
like Canada's, say that wastes people's money. Is that not true?
A: My concern about single-payer and the Canadian system... is that
Canadians buy insurance for access to American hospitals. I don't
know anybody in the United States who buys insurance to access into
the Canadian health system. So I think you can acknowledge the value
of the Canadian system, but also understand that it works in part because people can come here for procedures that they'd be on a waiting
list for or are simply not available in Canada.
Q: How would you like to see this system financed?
A: There are two sources of revenue for which there is consensus.
One, a sin-tax approach — cigarettes in particular, but alcohol as well.
And, secondly, limiting the deductibility of premiums above the basic
package (so people could be taxed on the value of some health-care
benefits).
Q: Is that enough?
A: Thefirstone gives you SIS billion; the second gives you (35 billion.
So, you have a $50 billion resource which is going to fund your access,
as well as the saving you get from malpractice reform and standardization of your forms so that every hospital and every provider uses the
same computer software.
Q: If reform Is going to happen, when will it happen?
A: I think there's a January-to-June window next year. Theoretically,
introduce it this September, have your national debate in the fall this
year, then in '94 begin the markup (writing up the legislation). If you
don't get it done by the early summer of "94 and people are campaigning, you won't get it done in "94 (because members of Congress up for
re-election won't vote for a tax increase to pay for health-care reform).
And whether you can get it done in '95, '96 becomes a problem.
Tsongas on other issues
Clinton's ups and downs; "Nobody ever went in with even speed. If
you've never served in Washington, you're going to make certain mistakes. But if I had won, we would have made mistakes, too."
Candidates and their health: (Tsongas has battled cancer, first discovered in 1984. He made his triumph over it a theme in his 1992 presidential bid, though later a new growth was found.) "Candidates are
simply going to have to put it out there and make it public. I'm not sure
there's ever going to be an easy answer to this one. The problem is that
you may have people who are not doctors looking at things who don't
know what they're looking at. So it tends to lend itself to misinterpretation. Certainly I will not be a candidate for president in '96. but were I
ever to run, then I would have no choice but to just throw it all out
there."
His run for presidency: "Obviously, I feel strongly about what I ran
on ... so my commitment to those thinp hasn't diminished at all. I'd
like to be president, and I'd love to get out there on these issues and try
to convince the American people, but on a personal level, israyfamily
better off today where we are? The answer is yes."
�TBE WASBWCTON POST
G)mprehensive Review
Links Five Maladies to
Agent Orange Exposure
AFTEREFFECTS OF VIETNAM
T
he Department of Veterans Affdin has added turn more diseases to t
list of illnesses that entitle affected Vietnam veterans to compensatio
fbr their exposure to Agent Orange, an herbicide used to defoliate the
Jungles of Vietnam.
Fhre diseases officially linked
to Agent Orange
•
2 Conditions Added to List for VA Benefits
^
By Bill McAllister
Waslnn^ipn Pr.M M ii
rt
Wmrr
/'
" \ j
The most comprehensive review
of herbicide rese.irch ever funded
by the federal government has
linked three cancers nnd two skin
disorders to Agent Orange, a defoliant used in the Vietnam War.
But the long-awaited study failed to
support claims that the chemical
may have caused numerous other
ailments, from birth defects to infertility.
The findings were released yesterday in a report by the National
Academy of Science's Institute of
Medicine.
Immediately afterward. Veterans
Affairs Secretary Jesse Brown
added Hodgkin's disease and a skinblistering condition known as porphyria cutanea tarda to the list of
three illnesses previously acknowledged as related to service in Vietnam: non-Hodgkin's lymphoma, soft
tissue sarcoma and a skin condition
called chloracne. The new designations enable veterans with thnse
ailments to receive compensatinn
and free medical care from the government.
The $995,000 study was authorized by Congress in hopes of rr».;iving more than two decades of i-motional debate over the health cfleets
of the 19 million gallons of herbicides that the U.S. military sprayed
over about 3.6 million acres of Vietnam from 1962 to 1971. Most of
the herbicides contained dioxin, a
carcinogenic substance that also
has been shown to cause birth defects in animals.
Researchers who conducted the
review conceded that their work
will not end the debate. The panel's
report found "limited/suggestive
evidence" that respiratory cancers,
prostate cancer and a bone disorder
called multiple myeloma may be
linked to exposure to herbicides.
Some veterans organizations demanded that Brown, a combat-injured Vietnam veteran, add those
three conditions to the government's list of recognized aliments.
Brown promised to decide that issue within 60 days.
Members of the NAS panel,
which reviewed 6,420 scientific articles on the hazards of herbicide
exposure, said at a news conference
yesterday that they deliberately
avoided making judgments about
which diseases should be included in
the official list.
They described themselves as
uncomfortable with the language of
the Agent Orange Act of 1991,
which requires the Department of
Veterans Affairs to compensate
Vietnam veterans for illnesses associated with exposure to the chemicals "if the credible evidence for
the association is equal to—or outweighs—the
credible
evidence
against the association."
If I were a Vietnam veteran, I
would look at this report as somewhat mixed," said Harold Fallon,
dean of the University of Alabama
Medical School and chairman of the
16-iiiember panel. He said it offered
tne optimistic news that a "relatively small" number of feared ailments
could be linked to exposure and that
some of the suspect cancers were
highly treatable. But the "pessimistic" news was "there is a lot we do
not know.r he said.
The committee said it found "inadequate/insufficient evidence" that
Agent Orange exposure increased
the risk of contracting numerous
cancers, birth defects, spontaneous
abortions, low birth weight and nervous, circulatory, respiratory and
other disorders. It found "limited/suggestive evidence of no association" with skin cancers, gastrointestinal cancers, bladder cancers
and brain tumors.
"This is not a coverup. This is
pushing the data as far as we could
go." said David Kriebel, a panel
member and an associate professor
of work environment at the University of Massachusetts. "We're as
frustrated as anyone."
Fallon told reporters that the
panel's "greatest problem" was a
lack of information on the extent to
Symptoms of possible
contamination
Soft tissue sarcoma
Rare cancer affecting
muscle or internal
connective tissue.
Depression, sleep
disorders
-
Non-Hodgkin's
lymphoma
Cancer affecting
lymph nodes,
spleen and liver.
•
Chloracne
Severe skin
disease similar to
teenage acne but
may involve cysts
and rashes.
Diseases added
yesterday
I* Porghyria cutanea
K
cr
Skin conditions
Cardiovascular
disorders
Respiratory problems
; — Liver disorders
Acute abdominal pain
Urinary tract disorders
. A metabolic liver
disorder that can
affect skin and hair.
•
Impaired sight
or hearing
Hodgkin's dlwase
Lymphoma cancer
causing anemia, •
weight loss, "itching
and enlargement or
lymph nodes... spleen and liver.,:
Weakness of
lower extremities
Under study for
possible benefits
Respiratory
cancers
Prostate cancer
Multiple myeloma
Numbness in
fingers and toes
SOURCE. KRT Graphics
B* JOHN ANDERSON—THE WASHINGTON POS'
which Vietnam veterans were exposed to the chemical. "We simply
do not know enough about the exposures of veterans to determine to
what degree they were or are at
risk," he said.
The committee assumed that
"most veterans" had relatively low
exposures, perhaps lower than the
exposures of some chemical and agriculture workers. It recommended
that the federal government create a
method of matching troop movements in Southeast Asia with spraying routes to determine which units
would have been at greatest risk.
Veterans groups and members of
Congress welcomed the findings, saying that the results had verified the
long-held fears of veterans that the
chemical had injured them.
"Vietnam vets were right all
along," said Rep. Lane Evans (D-IU.),
a leader in efforts to win compensation for the veterans. "Today should
be remembered as the day we finally
reversed the tide and started fulfilling our promise to Agent Orange vic-
THE VASHiNr.™ PQST
FDMSDAV. I n v
tims and their families," said Sen.
Thomas A. Daschle (D-S.D.).
John Hanson, a spokesman for the
American Legion, the nation's largest
veterans organization, said the group
was "cautiously optimistic" that the
government would move quickly to
undertake additional research. The
Vietnam Veterans of America called
for the U.S. government to fund research in Vietnam, where clear differences might be drawn between
the health of residents in the south,
which was sprayed, and the north,
which was not.
Despite all the controversy over
Agent Orange—a term derived
from the orange-striped barrels in
which the chemical was stored—
the VA has approved relatively few
claims for the three conditions previously related to the chemical.
The NAS committee reported
that as of September 1992, 76 veterans were receiving VA benefits
for chloracne, 399 for soft tissue
sarcoma and 695 for non-Hodgkins'
lymphoma.
1993
�WEDNESDAY, Jm
28,1993 A19
Robert /. Samuelson
The Day the
Health Crisis
Hit Home ^
The health care crisis hit home the other day.
We received a packet in the mail from our local
health maintenance organization urging us to
approve its takeover by Humana, a national
health care company. A "no" vote, we were
warned, might jeopardize "the security of your
health care coverage and your doctor relationship." That was put in bold type, just in case we
missed the point. Agree or face the consequences. Pow, right in the kisser.
The gritty reality about health care is that,
while everyone waits for President Clinton's
mega-reform, the system is changing beneath
us. This was my wake-up call. You may already
have gotten yours, but if not, it's coming two
weeks from now or two years from now. We're
all going to struggle with uncertainties and
changes that are, at best, inconvenient and. at
worst, temfying. Will we have to change doctors? Could our insurance coverage lapse? Will
our out-of-pocket costs explode?
What's driving all the changes is soaring
costs. To curb health spending, companies are
cajoling or coercing workers into new insurance
arrangements. The consulting firm KPMG/Peat
Marwick reports that about 38 percent of
insured workers must now join some type of
"managed care," such as HMOs. In 1988 this
was 11 percent. Recently, Empire Blue Cross
and Blue Shield—which insures 7.6 million
people in New York—said it might require
120,000 of itsriskiestpatients to join HMOs or
other managed-care groups. That worried the
state's insurance commissioner. "Often they
[the patients] feel they owe their lives to
particular doctors," he told the New York
Times, "and won't be able to survive in a
managed-care environment."
The personal imperative to keep control of
our own health care collides with the collective
imperative to stop rising health costs from
impoverishing us. Worse, it's hard to discuss
these issues calmly and intelligently, because
every confident generalization made in a policy
debate somehow seems to run afoul of someone's personal experience or, at a minimum,
requires an extensive footnote to reflect the
diversity of what actually happens in doctors'
offices, clinics and hospitals.
Consider my family's experience with HMOs.
They are promoted as a way to control costs.
Because HMOs are paid a flat annual fee per
patient, they have no reason (the theory goes)
to overuse tests or surgery to increase income.
On the other hand, HMO critics raise two fears:
First, people won't be able to pick their doctors
and will get lost in giant bureaucracies; and
second, HMOs ultimately control costs by
skimping on care. At Group Health Association
in Washington, D.C, we haven't found either
the good or bad stereotype to be true.
We like our doctors and, among GHA's staff,
had a choice. Because my wife once worked at
GHA, she had clear preferences. As for skimping, we have seen little evidence of i t Our
youngest son, John (now 3tt), had a bizarre
experience when he was a few months old. He
suddenly stopped breathing and lost color for
about 30 seconds—and then spontaneously recovered.
At GHA. John was examined by the attending
pediatrician (not our own). After questioning
my wife, he concluded that the incident was a
freak that probably wouldn't recur. At that
point, I expected to be sent home. No. A lung
specialist was summoned. Another exam. More
questions. Same diagnosis. Now. I thought, we
will be sent home. No. We were dispatched to a
local hospital, where John was hooked up to
monitors for overnight observation.
By contrast, GHA's economics are ugly. Its
costs are high. Its computer systems are old.
Legally, GHA is a nonprofit consumer cooperative (which is why members must approve the
takeover), and there's a long history of bitter
conflict between the doctors and the board of
trustees. The doctors are unionized and, by
contract, have an official work wee!:—gulp!—of
only 35 hours.
Potentially, GHA is in a death spiral. Its
patients are more middle-aged and costlier than
average. "At 45, your body begins to fall apart,
and you use more health services," says Robert
Pfotenhauer, GHA's chief executive. True
enough. Nationally, average health costs for
people 45 to 64 are almost twice as high as
those for people 18 to 44. (Those over 65 are
covered by Medicare.) High costs and premiums—family coverage now exceeds $5,000 a
year—are driving away younger members and
companies that want to cut health costs. Since
early 1992, GHA has lost 21,000 members,
nearly 15 percent of the total. It's barely
covering costs.
My wife and I voted for the Humana takeover. Perhaps GHA could (as critics of the
proposal argue) tum itself around, but that's not
a gamble we like. Humana promises a new
profit-sharing agreement with doctors that
would raise their productivity. Likewise, Humana has modem computer systems. Finally, it
has a strong practical reason to do well. Humana aims to be a national HMO leader. It
won't want to make a mess in Washington, in
front of Congress and the White House. About
40 percent of GHA members are federal workers.
Our small family drama captures the larger
problems erf health care. We must change our
system, but we're all afraid of change. It's
disruptive and uncertain. Can I be sure that a
more productive GHA won't become less personal? Nope. The uncertainty is inevitable, because almost anything that anyone says about
our health care system will be untrue for
someone. My generalizations about GHA don't
apply to all HMOs, for example. Some may be
oppressively bureaucratic. Others might be
highly efficient, even though possible cost savings are probably exaggerated. (The Congressional Budget Office recently estimated the
potential savings at 10 percent.)
Health care politics becomes a baffling mixture of personal anxieties and abstract policies.
This is not good news. Once President Clinton
proposes his refonn, we will all wonder What's
in it for me? If it and the alternatives seem too
threatening, there may be no consensus to do
anything. The status quo may seem more
comfortable and win by default But this, too,
would be a mirage. In health care the status quo
is dying. Either we will orchestrate change or
change will orchestrate itselL
CimNnrntkbc
THE VASHWCTTWI PQST WEP\ESD.U. In
v 28,1993
�LOS ANGELES TIMES / WASHINGTON EDITION
Nobel Laureate
Seen as Choice
for NH Chief
By THOMAS H. MAUGH II
TIMES M E D I C A L WRITER
A
Nobel Prize-winning microbiologist at UC San Francisco.
Dr. Harold E. Varmus. is expected
to be named the new director of the
National Institutes of Health. Clinton Administrauon sources said
Wednesday.
Officially. Varmus and one other
candidate are undergoing final vetting for the position, but sources in
Washington said that Varmus has
been offered the job and has accepted.
Varmus was the co-winner of
the 1989 Nobel Prize for medicine
and physiology with Dr. J. Michael
Bishop of UC San Francisco for the
discovery of oncogenes, genes that
cause cancer.
He will be the first Nobel laureate to be named head of the
prestigious NIH. where most of the
government's health and biological
research is conducted, and arguably the best-known scientist ever
to hold the post.
Most previous NIH directors,
such as Dr. Bernadine Healy. who
resigned from the post effective
June 30. have been noted more for
their administrative abilities than
for their scientific prowess. The
appointment of Varmus is viewed
by some as an attempt to re-esublish NIH as a scientifically solid
institution and free it from the
political imbroglios that dogged it
during the Reagan and Bush years.
The change in direction reflects
the Clinton Administration's break
with precedent by consulting .
widely within the scientific community during its search for a
director. "That allowed people who
undersund the scientific community to find the right person, which
has ceruinly not been the protocol
in the past." Bishop said. "It's a
fabulous appointment."
Varmus is on vacation in London
and could not be reached.
The NIH. with a 1993 budget of
$11.6 billion, is widely viewed as
the best biomedical research institution in the world. But it has been
embroiled in controversy recently
because of such problems as the
ban on fetal tissue research initiated by then-President Ronald Reagan and the government's failure
io undertake research on the abortion drug Rb 486.
The institutes have also suffered
from a brain drain of their best
scientists because of government
regulations that prohibit federal
employees from benefiting financially from the fruits of their
research.
Largely because of such controversies, the NIH was headed by an
acting director for 18 months during the George Bush Administration. Several prominent scientists
are said to have turned down the
director's post before the Clinton
Administration settled on Varmus.
"There is a bit of re-crafting to
be done in the directorship, in the
relation between NIH and the
federal government." Bishop said.
" . . . Harold has the intellect and
force of will (b get these things
done."
" I think it's great." added molecular biologist Peter Vogt of the
Scripps Clinic and Research Foundation. "We need scientific leader-,
ship of that distinction. . . . The
entire biomedical research community will applaud it."
Varmus. 53. is a medical docior
who also holds a master's degree in
17th-Ceniury literature. He and
Bishop gained recognition, as well
as many prestigious awards, for
their cancer studies, which began
with research on tumors in chickens. They discovered that certain
genes in healthy cells, called oncogenes, can be activated by chemicals and viruses to cause cancer.
That research triggered an immense outpouring of new discoveries in the genetics of cancer that
has led to new ways of detecting
the disease and to innovative treatments, including eene therapy.
THURSDAY. JULY 8. 1993
�THE WALL STREET JOURNAL THURSDAY. JULY 1. 1993
Rulings Support
The Fine Print
OTHealth Plans
Hy Em' \K[> KKI.SFNTIIAL
N -.:
• ",
, r : , r i,> Tn r
v i.1. .S i n i : H: r J i M K N A L
l-'aiienis are getting stuck with big
•:n.-itu-.il 'mils as courts increasingly enforce ihe tine print in their health-coverage
•plans.
Typically, patients in these cases have
failed to ^et preapproval for their medical
'•ace. a requirement
'it' many healthmaintenance
organizations and insurers. Sometimes
they have missed a
leadline by only a
few days. Other
times, a patient is
traveling when a
medical emergency
develops and fails to
seek consent for out-of-town treatment.
For patients facing dire health problems, these rules often seem like technicalities. But many courts don't see them that
way. Judges are ruling that the requirements are an important part of efforts by
insurers to control health costs. And they
are letting HMOs and other managed-care
' plans off the hook for medical tabs that run
to hundreds of thousands of dollars.
The decisions have caught some lawyers by surprise. In ordinary contract
cases, judges rarely rule against parties
simply because they have neglected to
abide by every detail in an agreement.
The cases have important implications
even for patients who aren't now members
of HMOs, because President Clinton's
health prnposals are hkely to encourage
;:;•.;••• \;a- :".'V.'s
join such or:;.in: :alivtii. "WKii cos; coKuiinmeiU inure of a:i
issue, people may find themselves plumb
out of luck if they haven't observed some of
those controls.'' says Joel Michaels, a
health-law specialist in Washington. The
cases "are basically acknowledging that to
properly manage health-care services.
Please Tum to Page B5, Column 3
:
More Court Rulings Are Enforcing
The Fine Print of HMOs, Insurers
Continued From Page Bl
these procedural provisions on the front
end are appropriate.''
Most of these cases involve HMOs,
which keep expenses and premiums down
by referring subscribers only to affiliated
phvsicians. who in turn are paid a flat fee
by the HMO.
In a case last year, a federal appeals
court rebuffed Charles McGee in his effort
to force his HMO to pay $358,000 for the
treatment of his daughter, who was severely injured in a car accident. The
daughter, recovering from a coma, was
treated at a hospital for neurological injuries in Gardner. Kan. A lower court, which
had ordered the HMO to pay him S76.000 for
two months of care and attorneys' fees, left
him with the tab for another 23 months.
Mr. McGee appealed the decision to the
10th U.S. Circuit Court of Appeals, which
upheld the payment for the first two
months. But the court ruled that Mr.
McGee had failed to seek authorization
every two months for continued care, as
required under his contract with Equicor
Health Plan, a unit of Equlcor-Equltable
HCA Corp. New York. "While it is readily
apparent ihat Mr. McGee sought the best
possible care for his daughter, he was still
obligated to work within the defined contractual borders of the HMO." the court
ruled.
"It doesn't seem fair," Mr. McGee said
in an interview. "It was a techniraiirv "
Lawyers for HMOs concede that the
results of the McGee case and others like it
are harsh, but they say strict procedural
rules are necessary if HMOs are to monitor
costs adequately. HMOs help cut medical
costs by determining whether proposed
treatments are necessary. But the question
is moot if a procedure is already done
and paid for. In addition, HMOs can't
easily evaUia'.e whether care is being
cleliv?;-,\! as che iply as posj-iblv if subscribers can freely choose doctors who
aren't part of the approved network.
Even in emergencies, courts have
shown little sympathy when HMOs deny
coverage because of a few days delay in
getting approval. In a 1991 case, for example, the South Carolina Supreme Court
threw out all but one of Walter Lightle's
claims against his HMO, Maxicare/HealthAmerica, Greenville, S.C.
Maxicare had refused to cover fully the
care for Mr. Lightle's wife after he allegedly waited five days too long to get
approval for her emergency treatment.
Mrs. Lightle was visiting her daughter
in Virginia when she was hospitalized with
respiratory problems. Maxicare required
that subscribers notify it within 48 hours of
any hospitalization for out-of-town emergency care. Mr. Lightle's remaining claim
against Maxicare was settled after Maxicare filed for bankruptcy-court protection,
according to his lawyer, Duke McCall.
Such cases as Mr. Lightle's are common, lawyers say, because HMO subscribers often find themselves needing
out-of-town emergency care and, in the
confusion, sometimes fail to follow all the
rules in their contracts. And -many patients who have recently joined HMOs are
accustomed to thinking in terms of traditional insurance, which ordinarily covers
care anywhere in the country.
Patients forget that HMOs aren't required to pay for treatment away from
home "simply because you found a doctor
you like someplace else or because you
were [visiting your parents] and Mom
could take care of you," says Madeleine
Estabrook, a health-law specialist at Lane
& Altman in Boston. An HMO h u the right
to tell a patient who is away from home
that once his condition has stabilized,
"he d better get back . . . or we're not
paying for anything else," Ms. Estabrook
says. Hospitals, nervous about getting reimbursed, typically encourage patients to
follow HMO pre-approval requirements.
But lawyers say that patients bear ultimate responsibility for making sure they
comply with all the rules.
Still, sticking with traditional insurance may not relieve patients of the burden
of such procedural niceties. Insurers typically play a much smaller role than HMOs
in managing their policyholders' care, but
recently they have started increasing their
preapproval requirements. Last month, a
federal appeals court in Chicago ruled that
an insurer didn't have to pay any of the
S500.000 in expenses associated with a
patient's heart transplant after doctors
failed to get the insurance company's
advance approval.
The court noted that doctors had no
option other than to do transplant surgery
because the patient would otherwise have
died on the operating table. Nonetheless,
the court said, "as the plan unambiguously
states, no benefits are payable without
prior approval."
�THE WALL STREET JOURNAL THURSDAY, JULY 8, 1993
Clinton Plans
To Pick Varmus
As Head of NIH
By MARILYN CHASE
And HILARY STOLT
Hiaff Rcporicrs nf T H E W ALL STRF.F.T J O L R S A L
President Clinton plans to nominate
Harold Varmus, a Nobel Prize-winning
microbiologist, to be director of the National Institutes of Health, administration
officials said.
If confirmed by the Senate, Dr.
Varmus. SU years old. would oversee a
budget of SIO.6 billion and the awarding of
grants for research probing- virtually all
human diseases.
A professor of microbiology and biochemistry at the University of California at
San Francisco, Dr. Varmus is better known
for his bench research than for his experience as an administrator. He has also
fought to keep basic research free of
political constraints.
In April, he helped to circulate a letter
with other scientists expressing concern
over plans to create an Office of AIDS
Research, contending that such an office
would wield discretionary power over
the funding of AIDS research and could
make NIH "a political battleground among
disease interest groups." As NIH director he would have to oversee that office,
recently created by Congress.
UCSF officials said Dr. Varmus is vacationing and doesn't plan to comment until
a formal appointment is announced.
Dr. Varmus shared the 1989 Nobel Prize
for medicine with longtime UCSF colleague J. Michael Bishop. The award acknowledged their work on viral oncogenes - the genetic seeds of cancer that are
found in viruses and in the genetic code of
all animals, from flies to fish to humans.
In making its award, the Nobel Committee cited the researchers' "discovery of
the cellular origins of retroviral oncogenes." These are special viruses that pass
their genetic information in a backward
manner.
The two scientists observed that the
Rous sarcoma virus, a virus that causes
cancer in chickens, is also found in normal
cells. Their discovery that even sinister
oncogenes sometimes play a role in normal cell growth and differentiation helped
scientists to understand the interplay between normal growth and malignancy.
And the discovery has offered doctors newfocal points for cancer research.
Since the Nobel Prize-winning work,
Drs. Varmus and Bishop have continued to
probe the role of oncogenes by creating
transgenic mice endowed with extra copies
of such genes.
He played a behind-the-scenes role in
helping name the AIDS virus - which had
been the subject of a semantic tug-of-war
between French researcher Luc Montagmer. who called it LAV. for lymphadenopathy associated virus, and U.S. re-
searcher Robert Gallo, who wanted to
name it HTLV-III. for human T-lymphotropic virus. The consensus name he helped
choose - human immunodeficiency virus,
or HlV-has stuck.
Meanwhile, conservative groups held a
news conference to denounce Joycelyn
Elders. Mr. Clinton's choice for surgeon
general. Dr. Elders, who was head of the
Arkansas Department of Health, has been
a supporter of abortion rights. She has set
up a program of school health clinics in Arkansas that dispense condoms in districts
where the local school board allowed it.
Donna Shalala, the secretary of health
and human services, issued a statement
strongly defending Dr. Elders. "Joycelyn
Elders has an outstanding reputation as a
forceful and realistic leader for public
health . . . Those who would portray Dr.
Elders as being radical or out of touch with
the desires of the American people are
distorting her record in an effort to prove
their claims." she said.
�THE WASBIMCTON POST
Tm«SDAV.Jiiv8,1993
1
High Death Rates
Linked to Lack of
Education, Income
In a related article in the Journal,
physician James C. Hurowitz of '
Cambridge, Mass., took up this
Education and income are among theme directly, arguing that niahy",'
the most important factors in de- conditions treated medically are tW'".
termining when a person will die, result of "excess" or "unmanageajfle' ~
according to a study published to- stress" caused by social conditions.^
day in the New England Journal of "Economic factors are critically^ ini-^'
Medicine.
portant in the prevention of illness,*"
Researchers found that Ameri- he wrote.
cans who are less educated or have
Thus, instead of depending oh rt-'.'
low incomes suffer substantially forms of the health care system:'
higher death rates, adjusted for alone, Hurowitz wrote, "over time,'
age, than those who are better educated or better off financially. And
although overall U.S. death rates
have declined substantially in the
past 30 years, the gap between socioeconomic groups has widened.
The study, by Gregory Pappas
and three others at the federal National Center for Health Statistics,
is one of several published in the
Journal today suggesting a strong
correlation between ill health and
—physician James C. Hurowitz
social deprivation or lack of educain the New England Journal of Medicine
tion.
"Access to health care is clearly resources should be reallocated
part of the problem," Pappas said, from the medical care system to
"but we also have to begin to appre- systems that support the prevenciate the importance of prevention." tion of illness—for example
His study suggested that "it may through the creation of meaningfu]
be that people of higher socioeco- jobs, and a resulting higher stannomic status have adopted healthy dard of living, or through a cleaner
lifestyles more rapidly," including environment."
increased exercise and reduced
The Pappas study found that
drinking and smoking.
while overall U.S. age-adjusted
Vincente Navarro, professor of death rates have declined since
public health and sociology at the 1960, they remain highest among
Johns Hopkins School of Public the less-educated and poor. In
Health, said that not only do poor 1986, white men age 25 to 64 with
people often have less access to annual incomes of less than $9,000
care, their diets are often inade- had an age-adjusted rate of 16
quate in both quality and amount. In deaths per 1,000 persons; those
addition, many live in overcrowded with $25,000 in income or more
housing where disease spreads had a rate of 2.4 per 1,000. Simimore readily and where insecurity, larly, white men with less than 12
tension and violence are more prev- years of school had a rate of 7.6
alent. He said poor neighborhoods deaths per 1,000—almost twice the
have higher rates of disease, drugs rate for those with 12 years or
and alcoholism, and stress can lead more. Similar differences were
directty to health problems such as found for women and blacks.
cardiovascular disorders.
Another Journal article, by Jick
Leroy Schwartz, pediatrician and M. Guralnik of the National Iflptipresident of Health Policy Interna- tute of Aging and others, found that
tional, said earlier studies suggest "at the age of 65, those with 12 or
that low-income and poorly educat- more years of education had an aced people may use health care (es- tive life expectancy that was 2.4 to
pecially preventive care) less, even 3.9 years longer than the values of
when it is available to them.
those with less education
Suchfindingshave led many ex- Among older blacks and whites, the
perts to conclude that some health level of education, a measure oHooutcomes are the result of social cioeconomic status, has a greater
and behavioral problems rather effect than race on total life expectancy and active life expectancy."
than strictly medical concerns.
By Spencer Rich
WMtoi/loo Pool SuM Writer
7
"Economic factors
are critically
important in the
prevention of
illness"
r
�"PM-Nurses-Health Reform, B j t , 7 9 0
"Nurses' Role Destined To Grow Under C l i n t o n H e a l t h Proposals
"By CHRISTOPHER CONNELL= "Associated Press W r i t e r =
WASHINGTON (AP)
When p a t i e n t s a t the Community H e a l t h Center are asked i f
they'd mind seeing a nurse p r a c t i t i o n e r i n s t e a d of a d o c t o r , t h e y u s u a l l y ask
j u s t one q u e s t i o n : Can she w r i t e p r e s c r i p t i o n s ?
" I f t h e answer i s yes, t h e y say f i n e , • • s a i d Veneta Masson, an advanced
p r a c t i c e nurse a t t h e church-sponsored c l i n i c i n a g r i t t y downtown Washington
neighborhood.
"We
take care of the range of problems people h a v e , ' she s a i d , from
c h i l d r e n w i t h c o l d s t o women needing m a t e r n i t y care t o o l d e r a d u l t s t r o u b l e d
by a r t h r i t i s , d i a b e t e s or h e a r t problems.
Nurses l i k e Masson are p l a y i n g new, expanded r o l e s i n t h e h e a l t h care
system, from crowded i n n e r - c i t y c l i n i c s t o d o c t o r s ' o f f i c e s t o r u r a l o u t p o s t s
where a nurse may be t h e o n l y p r o v i d e r i n town.
T h e i r r o l e i s d e s t i n e d t o grow even l a r g e r under t h e C l i n t o n
a d m i n i s t r a t i o n ' s goals f o r h e a l t h reform.
White House o f f i c i a l s say they w i l l t r y t o t e a r down b a r r i e r s t h a t now
r e s t r i c t what advanced p r a c t i c e nurses and o t h e r n o n - p h y s i c i a n c a r e - g i v e r s
may do.
One p o s s i b i l i t y : Changing t h e Medicare law t o a l l o w nurse p r a c t i t i o n e r s t o
b i l l d i r e c t l y f o r some s e r v i c e s .
But some d o c t o r s s t r o n g l y oppose a l l o w i n g nurses t o become independent
p r o v i d e r s and making m e d i c a l d e c i s i o n s on t h e i r own, i n s t e a d o f c a r r y i n g out
orders.
"'They ought t o p r a c t i c e under t h e s u p e r v i s i o n o f a p h y s i c i a n , ' ' s a i d Dr.
M. Roy Schwarz, who speaks f o r t h e American M e d i c a l A s s o c i a t i o n . Nurses
" h a v e had inadequate t r a i n i n g ' ' t o p r a c t i c e on t h e i r own.
"Our 5,000 years o f e x p e r i e n c e i n t r a i n i n g p h y s i c i a n s t e a c h us t h a t t h e r e
i s n ' t a s h o r t c u t t o a c q u i r i n g c l i n i c a l judgment. That j u s t takes year and
years o f t r a i n i n g , ' s a i d Schwarz, t h e AMA's s e n i o r v i c e p r e s i d e n t f o r
science and m e d i c a l e d u c a t i o n .
But Maria E. Salmon, d i r e c t o r o f t h e d i v i s i o n o f n u r s i n g i n t h e f e d e r a l
Bureau o f H e a l t h P r o f e s s i o n s , d i s a g r e e s and says r e s e a r c h has shown t h a t i n
the area o f p r i m a r y care nurses are ""as good or b e t t e r t h a n p h y s i c i a n s . ' *
"'The needs f a r surpass our c u r r e n t a b i l i t y t o meet them,•• s a i d Salmon,
who c o - c h a i r e d a White House Task Force on H e a l t h Reform subgroup t h a t
grappled w i t h how t o reshape t h e h e a l t h work f o r c e .
"We w i l l be l o o k i n g t o p r o v i d e s e r v i c e s a t t h e e a r l i e s t p o s s i b l e moment
i n the l e a s t expensive, most e f f e c t i v e way,•' she s a i d o f t h e t a s k f o r c e
effort.
C l a i r e M. Fagin, i n t e r i m p r e s i d e n t o f t h e U n i v e r s i t y o f Pennsylvania and
past p r e s i d e n t of t h e N a t i o n a l League f o r N u r s i n g , s a i d ""85 p e r c e n t o f the
problems t h a t people come i n w i t h can be handled by p r i m a r y care nurses.''
And, she added, t h e r e i s no way P r e s i d e n t C l i n t o n caM achieve u n i v e r s a l
coverage and slow m e d i c a l i n f l a t i o n " " w i t h o u t r e l a y i n g h e a v i l y ' ' on these
nurses t o assume some o f t h e d u t i e s now performed by d o c t o r s .
More than 1.8 m i l l i o n r e g i s t e r e d nurses work i n h o s p i t a l s , c l i n i c s ,
schools and o f f i c e s across America. They outnumber p h y s i c i a n s t h r e e - t o - o n e
but make b a r e l y o n e - q u a r t e r as much.
A nurse p r a c t i t i o n e r earns about $45,000 a year, w h i l e a s t a f f nurse makes
$36,000, a c c o r d i n g t o t h e American Nurses A s s o c i a t i o n .
" " I t i s not nurses who are earning hundreds of thousands of d o l l a r s ,
d r i v i n g around i n foreign c a r s and owning p a l a t i a l homes,'* s a i d V i r g i n i a
T r o t t e r B e t t s , p r e s i d e n t of the 200,OOO-member ANA.
Federal o f f i c i a l s estimate there are already 140,000 advanced p r a c t i c e
nurses, about a t h i r d of them with two years of t r a i n i n g beyond c o l l e g e .
I n some s t a t e s advanced nurses can w r i t e p r e s c r i p t i o n s , b u t i n o t h e r s t h e y
cannot p r e s c r i b e ""even t h e most common a n t i b i o t i c f o r an e a r a c h e ,
said
Barbara S a f r i e t , a s s o c i a t e dean o f Yale Law School.
1
1
11
T e a r i n g down t h e r e g u l a t o r y b a r r i e r s c o u l d lower h e a l t h c o s t s , s a i d
S a f r i e t , because i t c o s t s l e s s t o t r a i n a nurse and t h e y p r o v i d e e a r l i e r ,
l e s s i n v a s i v e t r e a t m e n t . " " I t ' s a cheaper k i n d o f care,'• she s a i d .
""We're n o t s a y i n g nurses s h o u l d do b r a i n s u r g e r y , ' ' s a i d P a t r i c i a Moccia,
e x e c u t i v e v i c e p r e s i d e n t o f t h e N a t i o n a l League f o r Nursing. But p h y s i c i a n s
are upset because " " t h e i r c o n t r o l o f h e a l t h c a r e and t h e i r revenue stream are
being t h r e a t e n e d . • •
.
.
Ms. Masson says she works with both a nurse p r a c t i t i o n e r and a part-time
p h y s i c i a n , and t h a t many doctors, e s p e c i a l l y younger ones, " are used to
working with nurse p r a c t i t i o n e r s . ... A l o t of p h y s i c i a n s p r e f e r to do more
specialized care.'
At the Community Health S e r v i c e s c l i n i c i n Ocala, F l a . , f i v e nurse
p r a c t i t i o n e r s s t a f f a non-profit f a c i l i t y t h a t handled 14,607 p a t i e n t s l a s t
year. Two l o c a l h o s p i t a l s helped open the c l i n i c to keep primary care
p a t i e n t s from clogging emergency rooms.
""We d e f i n i t e l y have a r o l e to o f f e r , " s a i d c l i n i c d i r e c t o r Susan
Stewart, who works under a physician-approved protocol.
1
�USA SNAPSHOTS*
A look at statistics that shape the nation
Health-care diagnosis
People ara more likely to say the nation rather than themselves - will benefit from
health-care reform. Who people say will
be better off:
AV
By Nlcfc aaiiflanalba. USA TOO*
Down to the grass roots:
Videos, buttons, T-shirts
The people who brought you Bill Clin• House parties, complete with videos
ton's winning presidential campaign are to stimulate discussion, to build support
turning their attention to selling his health- Group letter-writing sessions will be part of
care reforms.
the parties.
Once the plan is released, probably this
• "Action teams" of health-care profesfall, the Democratic National Committee sionals to publicly support reform.
and its offshoot, the National Health Care
• Bumper stickers, buttons and T-shirts
Campaign, will embark on a coast-to-coast with the slogan "Restore Peace of Mind —
blitz designed to nudge people into pressur- Support the Ginton Health Plan" for sale
ing their representatives in Congress to through a toll-free number.
vote for i t
• Ready-«>print ads will be distributed
The idea, says
to community orgaDNC spokeswoman
nizations for publiKiki Moore, is to
cation in their
"empower people
newsletters.
who support health• News confercare reform to be
ences, letters to the
heard above the
editor, demonstradin of all the presitions and calls to radent's opponents
dio talk shows are
who are going to
planned.
come out"
Besides building
the appearance of
Among
DNC
widespread public
plans for spawning
support, the White
grass-roots support
House and DNC
• Paid organizalso want to mute
ers in key states to
the impact of the
set up speakers' bumany orpnizations
reaus and orchesopposing reforms.
trate rallies and
By Oav« Martin. AP
door-to-door peti- TALKING REFORMS: Former U.S. senaA national sales
tion drives. Holly- tor Paul Tsongas, left, met with Ala. Gov. campaign, says
wood celebrities Jim Foteom on health-care measures.
Moore, is "the easiwill be featured at
est way to reach
the rallies, and a Washington "war room" lots of people all at once. This light is going
— similar to the Clinton campaign's fast- to be aggressive and heated."
response operation — will coordinate state
Other groups are getting ready to help
activities.
out with the sales job:
• The AFL-CIO has 287,000 members
• Recruiting activists from other organizations, such as retirees, to provide man- lined up to run phone banks and generate
power for conununity activities. Mailing} mail in support of Ointon.
and phone banks will prod people into par• The American Association of Retired
ticipating.
Persons has trained 1,400 members to talk
• High-tech teleconferences to train up Clinton's reforms.
- J u d y Keen
campaign organizers.
J W
MONDAY. JULY 12. 1993 • USA TODAY
�The Subtle Violence Against the Disabled
• Health care: Budget crises
offer one more 'excuse' to
mistreat people who are seen as a
problem; is euthanasia next?
By LAURA REMSON MITCHELL
It would be easy to dismiss the recent
repons of violence against people with
disabilities in Germany as an aberration,
the work of a small band of neo-Nazi
wackos. a uniquely German problem completely unrelated to the treatment of
disabled Americans. It would be easy to do
that—but it would be a dangerous mistake.
While physical violence against Americans with disabilities is more prevalent
than most of us may want to believe, much
of the problem for the disability community is subtler. Still, at least some of the
forces prompting the violence in Germany
exisi here. too. Perhaps most powerful of
these is the prevailing view that people
with disabilities are a 'problem" to be
solved rather than a resource to be tapped
in pursuit of solutions to the problems
facing all of us.
The "problem" was made clear in the
taunts of German teen-agers as they
attacked a 46-year-old amputee: "Under
Hitler you would have been gassed! You're
a waste of taxpayers' money!"
That view is increasingly evident in this
country as policy-makers respond to tight
budgets. The scenario might unfold this
way:
• Since health-care costs are skyrocketing, let's severely restrict, if not eliminate,
public and private coverage for "luxuries"
like equipment, rehabilitation services and
specialists who might really understand
what it takes to deal with a disability or
other chronic condition.
• Make it as difficult as possible for
people with disabiliUes to get the help they
need to live independently and suy out of
nursing homes.
• Decrease oversight of nursing homes in
order to reduce "regulatory burdens." At
the same time, cut payments to institutions
that serve patients who are on public
programs, so that even the most wellmeaning staffs will become demoralized
and behave accordingly. This should persuade a great many pauents to prefer some
other arrangement—like death.
• Make sure that programs for people
with disabilities are designed and run by
non-disabled "professionals" who regard
their role primarily as that of administrator/caretaker for helpless victims. Corollary: If people with disabilities are permitted to have any say at all. be sure they
know that they are expected to be humbly
grateful for anything they get.
• Finally, support "humane" efforts to
help people wtth disabilities to kill themselves when their lives become unbearable.
If all this sounds like the ravings of a
paranoid radical, think again.
Example: A draft of Medicare's new
supplier manual states: "Durable medical
equipment is covered when it is medically
necessary for use in a pauent s home.
Equipment and/or features that are needed
for use outside the home . . . will not be
covered."
That's a prison sentence for many of us
with disabiliUes. The landmark Americans
with Disabilities Act notwithstanding.
Medicare's approach segregates potentially
productive disabled people at home, even
though the right equipmenl would give
them access to the kind of educational,
social and employment opportunities they
need to be truly independent.
And private insuren and managed-care
plans often follow Medicare guidelines. All
of this has chilling implications for the way
in which national heallh-care reforms
might deal with our most basic needs.
Example: In the great California Budget
Showdown of 1992. Gov. Wilson initially
proposed a 20% cut in In-Home Supportive
Services, the sute program that provides
attendant care and other essential services.
Although disability rights advocates
managed to limit the reduction to 12%. the
action left many recipients reeling. Despite
paper assurances that the cuts wouldn't be
made if they endangered beneficiaries or
put them at risk of nursing-home placement, some counties gave out misleading
or false informalion about appeal rights.
(Ultimately, the sute obtained federal
funds to pay for restoring these services,
but the way the program will operate in
the future remains uncertain.)
The governor has proposed more cuts in
other programs critical to Califomians with
disabilities. Fiscal pressures already have
led officials to divert sute money away
from certain jointly funded disability programs and into the General Fund.
There's more—much more. Whether
intentional or not. parts of the scenario
described above already are in place.
That's why many of us in the disability
community are terrified by the prospect of
a growing "right to die" movement that
coincides with increasingly limited access
to the support services that help us to live.
More often than not, what makes living
with a disability unbearable isn't the
disability itself but the messages of helplessness and worthlessness thai go with I I
Those messages can kill.
Two weeks after the disabled man in
Germany was atucked. he committed
suicide. The note he left behind explains
why: "Under Hitler I would have surely
been gassed: maybe all these kids have a
point." He had bought the lie that disability
equals worthlessness.
Unless public officials, business leaders,
social service agencies and chariuble organizations s u n treating disabled people
as partners rather than as burdens, we will
continue to be in jeopardy—and not only in
Germany.
Laura Rerruon Mitchell, who hat multiple
sclerosis, is a Los Angeles-based policy
analyst, consultant and writer specializing
in disability and health-care issues.
LOS ANGELES TIMES / WASHINGTON EDITION
FRIDAY. JUNE 25. 199
�THE NEW yOKK TIMES NATIONAL
^eTtoh^me,
IsFoundin U.S.
By ROBERT PEAR
Special lo The New York Times
WASHINGTON, July 7 - The health
gap belween affluent, well-educated
people and the poor and poorly educated has greatly widened for three decades, the Government reporied today.
By 1986, ihe Government said, Americans with family income of less (han
$9,000 a year had a death rate more
than three times that of people with
family incomes of $25,000 or more.
The authors of the study devised a
special yardstick to summarize the inequality in death rates for people of
different incomes. This index of inequality more than doubled from 1960
to 1986, the latest years for which date
were available.
'Inequality of Death'
"Among various income groups, the
degree of inequality in mortality rates
more than doubled from 1960 to 1986,"
said Dr. Gregory Pappas, an epidemiologist at the National Center for
Health Statistics, who conducted the
study by analyzing data from more
than 13,000 death certificates. "The inequality in mortality rates among people of different educational levels also
increased over that period, but not so
markedly."
Dr. Pappas said that "people of higher socioeconomic status" may be living
lonuer because they live in healthier
neighborhoods and have rapidly adopted healthy patterns of behavior.
Healthy behavior includes exercise, a
low-fat diet and avoidance of smoking,
he said. Mortality also reflects deathsl
from violence, accidents and occupational injuries and diseases.
The data, being published today in
The New England Journal of Medicine,
show class differences in mortality
among adults 25 to 64 years old. In 1988
there were 16 deaths for every 1,000
white men with family income of less
than $9,000. By contrast, there were 2.4
deaths lor every 1,000 white men with
income of $25,000 or more.
By contrast, the Government reported that there were 19.5 deaths for every
1,000 black men in the lower income
group, as against 3.6 deaths in the
higher income group.
In an interview, Dr. Pappas said:
"The gap between the mortality rate
for blacks and the rate for whites has
widened over the last 10 years, and we
knew that was happening. But we found
that the class gap is also widening. The
disparity between the death rates of
high-income blacks and low-income
blacks has increased. So has the gap
between
highand
low-income
whites."
In an editorial, Dr. Marcia Angell,
executive editor of The New England
Journal of Medicine, said the new report demonstrated that "socioeconomic status is a powerful determinant of
health," and not simply because affluent people have better access to health
care.
"This gap in mortality between the
relatively advantaged and the disadvantaged Is very large — larger than
the gap due to many other well-known
risk factors, including cigarette smoking," Dr. Angell said. Indeed, smoking
is also related to social class: Government studies have shown that poorer
and less, educated people are more
S t u d
y
S h o w s H e a l t h
B e t w e e n
THURSDAY, JULY 8, 19931
Gh
W i d e n s
P
the Affluent and the Poor
Death rates are
the highest in
families that earn
less than $9,000.
likely to smoke.
The death rate for white men with
family income of less than $9,000 a year
was 6.7 times the rate for white men
with income of $25,000 or more. For
white women in the lower income
group, the death rate was 4.1 times that
of white women in the higher income
group.
Among poorer black men, the death
rate was 5.4 times the rate for black
men in the higher income group. The
death rate of poor black women was 3.3
times that of affluent black women.
'Falling Standard of Living'
Summarizing his research, Dr. Pappas said, "Poor or poorly educated
persons have higher death rates than
wealthier or belter educated persons,
and these differences increased from
1960 through 1986." Death rates are
generally considered to be important
indicators of the overall health of a
population, he said.
These changes should come as no
surprise, he said, noting reports of "increasing inequalities in income, education and housing and a falling standard
of living for a large segment of the"
United States population."
Medicaid, the Federal-state health
program, serves 30 million low-income
people, but it covers fewer than half of
those below the Government's official
poverty level ($14,343 for a family of
four in 1992).
While Medicaid has improved access
to health care for many low-income
people, it has not closed the health gap
between the poorest, least educated
people and the rest of the population,
Dr. Pappas said.
Even in Western countries where all
citizens have access to health care,
studies have found a growing disparity
in death rates for people of high and
low income or socioeconomic status.
This implies that universal access to
health care, one of the main goals of the .
health plan being devised by President
Clinton, may not eliminate such disparities in the United States.
Dr. Mervyn Susser, professor emeritus at the Columbia University School
of Public Health, said, "Britain's National Health Service has made medical care available to all people, but the
relative disparities in mortality rates
for rich and poor have actually increased over the last 20 years."
In Dr. Pappas's study, death rates:
declined for all population groups, but;
the decline was steeper for well-educated men and women than for those
with low levels of education.
Thus, the Government reported,
from 1960 to 1986, the death rate declined 50 percent for well-educated
white men, but only 15 percent for
poorly educated white men.
The population in general has higher
levels of education today than in 1960
so that in the study men were said to
have a high level of education if they
had one or more years of college in 1960
and four or more years of college in
1986. A low level of education was defined in 1960 as fewer than eight years
of schooling, and in 1986 as fewer than
11 years.
While basic data in the study were
obtained from more than 13,000 death
certificates, relatives completed questionnaires providing information about
the income and education of the people
who had died.
In a separate study, Dr. Jack M.
Guralnik of the National Institute on
Aging reported that education seemed
to be more important than race as a
factor influencing the life expectancy
of older blacks and whiles.
He examined data on es-year old
men and women in North Carolina. He
found that those with 12 or more years
of education could expect to live two to
four years longer, without disability,
than people of the same age and sex
who had less education.
"Education, a measure of socioeconomic status, has a very large impact
on how long people can live free of
disability," Dr. Guralnik said. "The
differences that we see in the active life
expectancy of blacks and whites can be
explained almost entirely by differences in socioeconomic status, as
measured by education and income."
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�"BC-Hispanic Health,490
•"Hispanics Say Clinton Best Hope They'll Be Helped
"BY TRICIA SERJU= "Associated Press Writer=
DETROIT (AP) Even though they feel underrepresented on President
Clinton's health care reform task force, Hispanic leaders say they believe
Clinton i s their best hope for addressing their health care concerns.
About 60 people l i s t e n e d t o h e a l t h experts at the National Council of La
Raza Convention here Tuesday.
Dr. Fernando T o r r e s - G i l , a s s i s t a n t secretary f o r aging a t the U.S.
Department of Health and Human Services, said the c u r r e n t h e a l t h system i s
broken. Reforming i t i s " m y s t i c a l and m y s t i f y i n g , ' ' he said.
" T h i s i s the best opportunity ( f o r Hispanics) i n t h i s century. I n the
next few months, we probably have our l a s t best chance f o r h e a l t h care
r e f o r m , ' Torres-Gil said.
According t o La Raza, the number of uninsured Hispanics increased 89
percent from 3.7 m i l l i o n i n 1981 t o 7 m i l l i o n i n 1991. By comparison, the
number of African-Americans without health insurance increased by 16 percent
and the number of uninsured whites increased by 13 percent over the same
period.
" ( H i s p a n i c s ) are i n a c r i s i s stage i n h e a l t h c a r e , ' said Dr. Aida
Giachello, a s s i s t a n t professor at the U n i v e r s i t y of I l l i n o i s - C h i c a g o .
" T r a d i t i o n a l l y , we have not been p a r t of the discussions about our
community. I f we are not part of those discussions now, (the government) w i l l
leave out those issues concerning the Latino community.•'
Giachello said many Hispanics are concerned that migrant workers and
i l l e g a l aliens may be l e f t out of a reformed health care system.
"A cjerm doesn't d i s c r i m i n a t e as t o whether you're a c i t i z e n or n o t , ' she
said.
Dr. Claudia Baquet, deputy a s s i s t a n t secretary f o r m i n o r i t y h e a l t h a t the
Health and Human Services Department, said u n i v e r s a l access should be d e a l t
with f i r s t . That includes b i l i n g u a l doctors who also are f a m i l i a r w i t h the
cultures of the people they t r e a t , she said.
"We have t o t h i n k beyond the physician's t r a d i t i o n a l r o l e i n an e t h n i c
community,'' Baquet said. " S t a t e s w i l l have the f l e x i b i l i t y t o e l e c t a
single-payer system, but they can include the r a c i a l mix of t h e i r service
area on the governing board.
"We know t h a t moving from the c u r r e n t system t o a reform system i s going
to take time, but t r a n s i t i o n resources must be applied as t o not exclude
minorities. ' •
In the past, the government has suggested putting a cap on the number of
physicians allowed in a new health care system. But Dr. Giro Sumaya,
associate dean of the University of Texas-San Antonio Health Science Center,
said that move would be devastating to Hispanics and other minorities.
" H i s p a n i c s already have diminished access t o s p e c i a l i s t s and primary care
p h y s i c i a n s , ' he said. "We should learn from our black colleagues a t
t r a d i t i o n a l l y black colleges about increasing the number of m i n o r i t y medical
professionals.
"Loans should be s t r u c t u r e d so many of our medical students go i n t o the
primary care f i e l d . We do not want t o reduce the pool of physicians being
t r a i n e d a t t h i s time.''
1
1
1
1
�1-2.6 -^3
4.
Donna Shalala
The Administration's Point Woman
at Health and Human Services
By DAVID LAUTER
W
WASHINGTON
hen President Bill Clinton announced last December his intention to
name Donna Shalala to head the government's largest civilian
bureaucracy—the Department of Health and Human Services—conservative activists chortled.
Dubbing her the "high priestess of political coPrectness" and threatening
to atuck her record as chancellor of the University of Wisconsin, the
conservatives predicted Shalala—a 52-year-old career public administrator and an associate of Hillary Rodham Clinton's at the Children's Defense
Fund—would become the center of the new Administration's liberal wing.
Shalala survived those atucks and won confirmation easily. But she soon
came under fire from within. White House aides accused her of involving them
in politically damaging arguments over, for example, admitting Haitians
infected with the HIV virus into the country. An early proposal to have the
government buy up the nation's supply of childhood vaccines and guarantee
immunizations for all came under atuck in Congress and had to be pulled back.
Some White House aides even predicted that Shalala would be the first of
Clinton's Cabinet to resign.
The critics underestimated her. A tough, experienced manager—she headed
New York's Hunter College and was assisunt secretary of Housing and Urban
Development in the Carter Administration before Uking the Wisconsin
job—Shalala is smart, indefatigable, well connected with the Clintons and not
a/raid to remind her opponents of any of those facts.
Nor has she turned out to be the uncompromising liberal that many
conservatives feared—and many liberal activists had hoped for. Instead,
Shalala has bluntly urged her former colleagues on the Democratic Party's left
to recognize the new realities of fiscal lightness and the need to reform
programs, such as welfare, that have lost public support.
In an interview as she headed West for a series of appearances highlighting
heallh-care reform and the needs of children—two favorite issues—Shalala
discussed the Administration's rocky start, her sense of today's political realities
and ihe priorities her department will pursue in such areas as welfare refonn.
�Beyond your line resporisibilr
Q UMHOB:
itiet, what do you see as your role in the
Administration?
Aniwer: I have long ties to the
women's community. I bring other constituencies—I also have lies lo minority
communities. And obviously, to the world
of world-class research universities. So I
can bring some constituencies that I'm
used to working with. I'm used to dealing
with the press. I'll be one of the spokespeople, one of the people who sells the
Administration's plans. Because I bring
stature to my job independent of the
Administration, I can help. I'm one of the
people they'll tum to to help.
The other thing is. I'm one of the
handful of people they have that actually
knows how to run something, that's an
experienced administrator.
My responsibilities are so wide-ranging, my long-term friendships with the
President and the First Lady are so deep,
that I'm going to have lots of opportunities. I spent most of my career running
big. complex places in which I've been
described as "energetic and skillful."
That's the way I'll end up at the end of
this Administration. It's not going to be
much different. That's what I do. And if
we can do enough of it. the President can
get reelected.
Q: Were you afraid coming in, that.
people would try to stereotype you?
A: They're not treating me like I'm the
house liberal. They're not assuming that I
represent some wing of the party.
I've spent my whole life with people
underestimating me |It'sl the best way to
come in. That stuff was over in a month.
David Lauter covers the White House for
The Times. He interviewed Donrw Shalala
in the secretary's office.
It began with that political correctness
stuff, but it disappeared afler my hearing.
You noticed that with everything that
everybody reported before my hearing,
none of it was there. The press got
hoodwinked. Everybody got snookered.
The right wing told them there was all
that stuff there, and it turned out there
was nothing there. Nothing.
Q: What are your priorities?
. A: Probably three things. One is to
make the department more user-friendly.
To bring back some of the credibility that
we really can do some things right. The
government is fully capable of delivering
services. Even complex services.
The second is prevention, earlier investment. And I include in that the
National Institutes of Health, immunization, a whole set of women's health
issues, AIDS, sex education, reducing the
number of kids that smoke, a whole slew
of things.
The third is independence—that we
have to rework our programs so what
they do is increase people's responsibilities for themselves, for their own lives;
empowering them to go out, get off the
public dole and go to work.
Q: Which is the hardest of those?
A: The independence.
q-.Why?
A: Because it's a fundamentally different way for government to think. It
involves people taking more responsibility for their lives, particularly low-income
people, that have been beaten down over
the years. It involves a change in culture.
Asking the government to help you for
short periods of time is different than
asking the government to take care of
you for the rest of your life.
Q: When you start trying to make that
ban or the gag rule or ignoring minorities.
I mean some of it waa Just plain symchange in orientation, obviously therms a
bolism that was wrong. Some of it waa
lot of suspicion that it's all just fancyjust dreadful. It wasn't our government
sounding language to justify cutbacks. How
do you get past that?
Q: Still, i f s one thing to know it
A: You've got to build up credibility.. fjtteBectuaOy It's another to see Congress
The fact is that unless we start doing , vote to cut $50 billion out of Medicare.
some of these things, there won't be any
A: That's right. That's a shock. But
benefits. The people who pay the bills are
people are getting some sense of the
fed up.
winds. The deficit thing, once adopted by
the Democrats, was going to drive policy.
Q: Whafs it like for you to be the person
That's precisely what happened.
who has to deliver that message—cutting
programs you've supported in the past?
Q: In that environment, it must be
A: The world changes . . . . We can't
difficult to propose things, even things you
afford as a nation—not because of money
know will save money in the long runbut because of our social fabric—to have
such as welfare reform—because there just
large numbers of people who are not
isn't room.
working. We have to mainstream everyA: That's correct, but it's a presidential
body. No matter what their circumstanc- priority. Remember, these are his domeses when they were growing up. Part of
tic priorities, which means he's willing to
that is knowing that after they're finished sacrifice other things to get them done.
with school, everybody in this country
Q: Are you sure?
gets up and goes to work.
A: Yeah. I am. I think he's dead serious
Q: Is there a sense in which—like only
about welfare reform. How much he's
Nixon could go to China—that people are
prepared to spend, how much front-end
more willing to accept that sort of message
stuff we're going to be able to do, how
from you than from a Republican?
much we're going to be able to help the
A: I don't have any sense of that. I think sutes with their jobs programs I can't tell
the message is tough, no matter who
you right now, but I do know he's dead
delivers it. I think anyone that thought
serious about welfare reform.
that we were coming in as a bunch of
Q: What principles guide you on that?
liberal Democrats to deliver more largescale social programs was nuts. I sure
A: We want to make work work. We
didn't expect it.
want to empower people so they take
responsibility for their own lives. We
Q: There was a lot of pent-up demand
want to help people become independent
out there. People felt for 12 years they had
of government. It's not a matter of getting
had to defer things that needed to be done—
people out of dependency, it's really to
A: I think so. but not necessarily for a empower them so they become independ- _
huge expansion of the role of government.
ent. so they take responsibility for their'
I know a lot of things that (Bush)
own futures.
Administration did were offensive.
Q. There's a trade-off in almost anything
Whether it was the fetal-tissue research
1
o
�1-20 -<te
you do in that ana.
A: Oh. the trade-off ia there. And more
importantly, it's that transition period
from welfare to work that is tricky. There
have been experiments in places like
Riverside, for example, that show you
how tough it is. And there is going to be
some toughness involved with how much
money you want to spend. Whether you
put money in on the front end as a way of
saving money in the long run. Whether
you have real prevention strategies that
reduce the number of teen-age pregnancies, and therefore, the number of dependent young mothers.
What do you want to say to kids about
expectations? If the way in which a young
woman becomes independent is by getting pregnant and having a baby, you've
got to take that idea out of her head.
I have a friend who says that we ought
to focus on above the waist, not below the
waist. Sex education has to do with what's
in people's head.
Q: Prevention hasn't been much of an
overriding idea for the last 12 years.
A: There have been no overriding ideas
of what government is doing over the last
12 years. You'd be hard pressed to
identify a set of themes. The government
has to limit itself to what it can do—the
areas where it can provide some leadership. One obvious area is prevention,
early investment.
Q: You've got this whole bureaucracy
thats used to a certain way of doing things.
How difficult is it to get all those people
thinking in your terms?
A: It's difficult. It's not that they
personally don't want to be responsive,
it's just that they've been doing something one way for a very long period of
time. But the other thing that's happening
is there aren't going to be a lot of jobs
around. They've got good jobs and they're
anxious to keep those jobs and to be
responsive.
I think many of them have been
waiting around for us. Not particularly
because they're Democrats, but because
people Like to do something. You've got to
start with the assumption that people like
to get up in the morning and go to an
interesting job.
Q: You had some problems early on.
Looking back, what, went wrong?
A: I have -to admit, in January and
February I was Dtan absolute fuzz. I had
no one on board, tt wasn't that I didn't
know what I wad doing, but we didn't
have all the pieces put together. We
didn't have our political pieces. I think it
was me and the chief of staff and the
assistant secretary for legislation. Out of
126,000 employees, there were probably
four of us in the department for more than
a month. And the difference between how
we would have handled one of those
issues then and now, it's night and day.
Q: How about the proposal to have the
government buy up vaccines to guarantee
immuniattums?
A: What we didn't anticipate is the
viciousness of the drug companies. It
wasn't Congress, it was the drug companies weighing in on a threat to their
profit Big profit.
The thing that you have to remember
about HHS is that there never ia going to
be a clear winner or clear losers. It's a
complicated agency with complicated
constituencies, and it's how we manage
our way thraugh that and get some thingi
done that people will, in the end. judge
our success or failure aa an Administration. No issue is ever going to be pure for
us. If I wanted something like that I
should have taken a smaller agency
where there were some more straight*
forward decisions, where you could Just
reverse a bunch of things the Bush
Administration did and walk away.
•
�FRHWJUY*, 1993
A3
Conservatives
Launch Fight
On Health Plan
By Dana Priest
W.!^ (tun POM St.nf Wr.tcr
l(
V
An ad hoc coalition of conservative organizations yesterday announced a campaign to denounce
the Clinton administration's health.
care overhaul plan and to build support for an alternative: medical savings accounts.
"We don't want a governmentmanaged system that will lead to
rationing," Donald Devine, former
director of the Office of Personnel
Management and chairman of the
American Conservative Union
(ACU), said at a news conference.
The savings account idea, favored by some conservative Republicans in Congress, would abolish
the employer-based system in
which most employees' insurance
costs are paid directly by their employer.
Instead, employers would voluntarily purchase only less expensive
catastrophic insurance coverage,
with high deductibles, for employees. Employers would also contribute money—34.500 under the coalition proposal—into each employee's tax-deductible health savings
account each year.
The individual would be responsible for how the money, in the account is spent. He or she could use
it to pay health care costs below the
deductible amount' in the catastrophic policy. At the end of each
year, any unused money in the account could be rolled over into the
next year's account and eventually
used to pay for long-term care. But
individuals could also take it out for
any other reason at the end of the
year.
People on Medicare and Medicaid
would also have the option of converting their government-financed
coverage into a medical savings account or private insurance.'
Proponents believe the plan
would, provide an incentive for people not to spend money on health
care unless it is absolutely necessary.
The coalition supporting the idea
is Citizens Against Rationing Health
and includes the ACU, United Seniors Association, The American
Legislative Exchange Council, made
up of state legislators, Citizens
United and Citizens for a Sound
Economy.
- »
�^3
THE WASHINCTOH POST
Groups to IVomote Clinton's Health Plan
By Dana Priest
More than a dozen groups, including the American
Association of Retired Persons, the AFL-CIO and the
Amencan Hospital Association, agreed yesterday to coordinate a nationwide campaign to promote the outlines
of President CUnton's health care reform package.
The Health Project, as the new nonprofit organization will be called, steps into the void created last
month when the Democratic National Committee announced it was dropping its plans to create a bipartisan
coabtion to do the same. The DNC still plans a grassroots media and educational campaign.
"The White House can't do it for legal reasons, the
DNC can't do it for partisan reasons," said John Rother,
AARP's legislative director, who was named the Health
Project's president for purposes of incorporation. "We
needed to create a space for what will obviously be a
large number of groups to talk to each other, to get this
thing moving."
The Health Project's goal is "to get health refonn enacted into law," said Rother. "We are groups that are
agreeing to work within the framework of what we agree
is the mainstream in Congress and the administration."
Although Clinton's plan is not slated to be unveiled
until mid-September, Rother said the groups are certain they can support the broad outlines of the plan,
which have been made public. They are free to work
individually on parts of the plan they do not support.
The project's initial budget is about $150,000 and its
other members include the American Academy of Family Physicians, the American Nurses Association, Families USA, the National Association of Social Workers
and two unions. Rother said the Project is also reaching
out industry associations and corporations.
The project was nurtured into existence by Sen. John
D. "Jay" Rockefeller IV (D-W.Va.), who invited Washington-based health carereformadvocates to meet at
his home after the DNC operation fell apart. "It was the
way to get the herd all together," said Rockefeller, who
has no role in the project.
�Widening Gap
Is Seen in Health
Of Rich, Poor
By RON WINSUW
S l o f J R c p o n c r o f T i l F . W A L L S T U K K T J.a.HNAi.
The health gap between privileged
and poor Americans has widened since
1960 even as life expectancy for all Americans has increased, a new study says.
A report by researchers at tlie National
Center for Health Statistics found that in
1986, the death rate for Amencans who
earned under $9,000 a year was three to
seven times higher than for those who
made more than $25,000. Additionally,
white men between 25 and 64 years old who
failed to graduate from high school died at
a rate of 7.6 per 1,000 versus 2.8 per 1.000
for white men the same age who graduated
from college.
These gaps increased from 237, to
more than 1007c since 1960. depending
on sex and race, the study found.
The study, along with several related articles that appear in today's New
England Journal of Medicine, reflect longstanding health disparities in U.S. society
associated not only with access to health
care, but with education ana income
Socioeconomic Status Is Indicator
"A person s socioecomic status is one of
the strongest predictors of health status."
said Gregory Pappas, an epidemiologist at
the center and principal author of the
study. The Clinton administration is preparing a sweeping health-reform proposal
that would increase access to care for
millions of uninsured and poorly insured
Americans.
"Access to health care is an important part of the problem," Dr. Pappas
said, "but prevention has to be emphasized."
Other experts worry that even if health
relorfh succeeds in expanding access, high
expectations won't be realized because
medical providers can't solve the myriad
social problems that provoke enonnous demands on the health system.
Similar Disparities in U.K.
In an editorial accompanying the report. Marcia Angell, the Journal s executive editor, points out that similar health
disparities exist among socioeconomic
groups in the United Kingdom, where a
national health system assures that essen
tially everyone has access to care.
A separate study byresearchersat the
National Institute of Aging and Duke and
Boston universities found that good health
and life expectancy among older black and
white Amencans was influenced more by
education level than by race.
The study showed, for instance, that
65-year-old men and women with 12 or
more years of education were likely to live
2.4 to 3.9 years longer without disability
than others of the same age and sex. but
less education.
t
i'.
I
!
�THE WALL STREET JOURNAL THURSDAY, JULY 8, 199
HEALTH
Battle of HMOs
For Military Job
Could Be Model
By GEORGE ANDERS
Staff Reporter of T H E W A L L STRFFT JOURNAL
A two-year battle for a giant military
contract is nearing the finish, but this time
none of the contestants make planes, ships
or tanks.
Instead, the bidders operate healthmaintenance organizations, and they are
competing for therightto handle medical
care for 800,000 military retirees and dependents in California and Hawaii. The
Defense Department values the five-year
contract at a total of S3.5 billion or more.
That makes it one of the most lucrative
pieces of business to come onto the HMO
market this year, analysts say.
The military award also could be a
sign of things to come. The White House
health-care proposal is expected to call for
large populations to band together and
shop for health care en masse, seeking
volume discounts from HMOs and other
medical providers. As a result, "we're
likely to see other big contracts awarded
this way." says Elie Reams, an HMO
analyst in Boston for AJex. Brown & Sons.
And the Finalists Are...
The two front-runners for the California-Hawaii contract are believed to be
Foundation Health Corp. and Aetna Life &
Casualty Co. The other two finalists-WellPoint Health Networks Inc. and QuaJ Med
Inc. - also are spending millions of dollars
in an attempt to win the business.
This intense competition is just what
the Pentagon wants. For the past year, it
has pressed the bidders to improve their
terms, culminating with the submission of
"best and final offers" last month. The
Pentagon hasn't set a date for announcing a winner. But Richard Sinkiewicz, a
military contract manager, says he hopes
a decision can be made by July 30.
Of all the finalists. Foundation has the
most at stake. It is the incumbent, having
handled the California-Hawaii business
since 1988. Foundation relies on this contract, awarded by the Civilian Health and
Military Program of the Uniformed Services, or Champus. for more than 40% of its
revenue. The contract accounts for nearly
as large a share of Foundation's operating
profit.
Slumping: Stock
Since Jan. 1, Foundation's stock has
slumped 23%, in part because of worries
that the contract won't be renewed. At its
closing price of $28.75 in New York Stock
Exchange trading yesterday, Foundation
stood at just 11 times analysts' estimates of
its_ per-share earnings this year. That
"Please Tum'to Page Bl Column 6 ' "
HMOs' Competition
For Military Contract
Could Serve as Mode
Continued fram Paqc Bl
low multiple reflects investors' "uncertainties" about the contract, says Alex.
Brown's Ms. Kearns.
Foundation officials sound optimistic.
"We feel we're in a strong position to ^yin.
although this is a competitive process."
says Steven Tough, president of Foundation s government division. "Our experience is our strength. We know the business
in every detail."
Aetna, however, is just as eager to be
seen as the worthy incumbent. For the past
five years it has been a major subcontractor to Foundation, handling doctor and
hospital networks for much of Southern
California, including San Diego, where
many military retirees live.
"We manage the largest portion of
Champus beneficiaries" in California,
says Robert Kaplan, an Aetna vice president. "We operate the service centers and
explain the system to people."
The California-Hawaii contract began
five years ago as a test program. Ordinarily. Champus directs some beneficiaries to
Veterans Administration hospitals, but
otherwise lets members choose their doctors and hospitals.
Hoping to restrain costs. Champus in
1988 let Foundation take charge of its
health programs in California and Hawaii.
In those two states, beneficiaries were
encouraged to join either an HMO or a
preferred-provider organization. Both of
those managed-care programs offered
members more extensive coverage in return for a commitment to use doctors and
hospitals within Foundation's network.
So far. Champus estimates, it has saved
more than $350 million through this approach. Of the 800.000 beneficiaries in
California and Hawaii. 232.000 have signed
up for the HMO option and 300.000 for the
more flexible preferred-provider program.
Most of the other Champus beneficiaries
have private insurance and seldom use
Champus. With these large blocks of members enrolled in its programs. Foundation
can save by purchasing medical care at a
discount from the doctors and hospitals in
its networks.
Other HMO operators, however, contend that they could do at least as well
running the program. Aetna is playing up
its size and financial strength. WellPoint,
in which Blue Cross of California holds a
stake of more than 80%. is emphasizing its
broad network of doctors throughout California. "We have a history of experience in
managed care." says Rebecca Kapustay, a
WellPoint official involved in the Champus
project. "And we ve got a fair amount of
government experience."
Champus has told the bidders they
must provide a standard benefit plan.
Selection will be based 607, on an assessment of which bidder provides the best
service, administration and other technical features, and 40% on price.
Though a low price alone won't be
enough to win the contract, a cut-rate bid
could have an edge. That's the strategy an
apparent long shot. Qual-Med. based in
Pueblo. Colo., seems to be relying on.
"We think our medical case-management system is very cost-effective." says
Kevin Murphy. Quai-Med s vice chairman.
"We could give the Department of Defense
tremendous cost savings." Mr. Murphy
says Foundation "will have to scramble to
hold onto their contract."
With all that competition, some ana
lysts wonder if the ultimate winner of the
Champus conlract will earn much of a
profit from it. or will be hard pressed io
cover costs. "That s a good question."
says Aetna s Mr. Kaplan.
�"PM-Border Health, 2nd Ld-Writethru,0360
'Border Health Conditions C a l l e d "Time Bomb'
\
~EDs: SUBS lead and 2nd graf to CORRECT American Health A s s o c i a t i o n to
American Medical A s s o c i a t i o n
"By MICHELLE MITTELSTADT= 'Associated Press Writer= WASHINGTON (AP) The p r e s i d e n t of the American Medical A s s o c i a t i o n says
health conditions along the U.S.-Mexican border are a time bomb waiting to
explode and t h a t e f f o r t s to combat the Third World d i s e a s e s found there are
long overdue.
The AMA and i t s head, Dr. Joseph Painter, endorsed l e g i s l a t i o n Wednesday
that would c r e a t e a b i n a t i o n a l health commission to coordinate disease
prevention e f f o r t s along the 2,000-mile border.
Without such a commission, health conditions w i l l not improve i n
a region marred by poverty, p o l l u t i o n and inadequate p u b l i c f a c i l i t i e s ,
Painter and s e v e r a l lawmakers s a i d a t a C a p i t o l news conference.
""The p u b l i c h e a l t h consequence of d r a s t i c population growth and poor
environmental conditions are s t a g g e r i n g ,
s a i d the b i l l ' s author, Rep. Ron
Coleman, D-Texas. Sen. J e f f Bingaman, D-N.M., i s sponsoring the measure i n
the Senate.
" " H e p a t i t i s i s three to four times more prevalent i n the border region
than i t i s i n the r e s t of the country,•• s a i d Coleman, who c h a i r s the
Congressional Border Caucus. ""Tuberculosis, s h i g e l l o s i s , r a b i e s and even
leprosy are r e a l p u b l i c health t h r e a t s i n the border region of our country. • '
Painter, whose organization four years ago i d e n t i f i e d the border area as a
" " v i r t u a l cesspool and breeding ground for i n f e c t i o u s d i s e a s e ,
s a i d the
i m p l i c a t i o n s are n a t i o n a l . He c a l l e d i t a " " t i c k i n g time bomb.''
Outbreaks of salmonella i n f e c t i o n s i n I l l i n o i s , Michigan, Minnesota, New
Jersey and s e v e r a l Canadian provinces i n 1991 were t r a c e d back t o produce
from the Rio Grande V a l l e y . S i m i l a r l y , an outbreak of measles i n Washington
s t a t e was traced back t o Mexico.
""We can already see v e s t i g e s of what i s happening with the r a t e s of
diseases such as h e p a t i t i s , dysentery, t u b e r c u l o s i s r i s i n g on our s i d e of the
border as w e l l as across the b o r d e r ,
P a i n t e r t o l d r e p o r t e r s . ""We can see
sporadic outbursts t h a t are occurring across t h i s nation of s i m i l a r d i s e a s e s
as people t r a v e l t o other p a r t s of the country and spread the d i s e a s e .
Said Rep. Bob F i l n e r , D - C a l i f . : ""This i s an American h e a l t h problem.''
Mexican o f f i c i a l s have yet t o endorse c r e a t i o n of a h e a l t h commission. But
Coleman, who has consulted with Mexican o f f i c i a l s , s a i d he expected them t o
embrace the idea.
1
11
1 1
11
1 1
�THt
NCW Y O R K T I M C S M A d A Z I N I / J U L Y 1 « . 1 9 * 3
The
close attention as Enthoven walked to the fireplace on a fall
morning in 1991. The word was, the professor had come up
with something startlingly new.
Enthoven, a professor in the Graduate School of Business at Stanford University, and Dr. Paul EUwood, founder
of the Jackson Hole Group and owner of the house with the
fireplace, were alarmed. Health-care costs had become
catastrophic. The United States spent $736 billion on health
care in 1991,13 percent of its gross national product — and.
even so, 35 million Americans had no health insurance and
another 20 million had only minimal coverage.
"This morning, I want to introduce Health Insurance
Purchasing Cooperatives, or H.I.P.C.'s [pronounced HIPicksj," Enthoven said. The audience groaned. Enthoven
smiled — he has a fondness for acronyms — and continued:
"H.I.P.C.'s will do wonderful things. They'll pool people who
work for small businesses into large groups, so individuals
will have the same economies of scale that large corporations have when they purchase health care. Best of all,
H.I.P.C.'s will allow the marketplace to drive down costs.
Consumers will be able to choose between different health
plans. That will force health plans to compete for clients.
One way they'll do that is by lowering prices."
Enthoven had expected H.I.P.C.'s to generate heated
opposition, to Incite outcries about socialized medicine. But
everyone in the room — from the C.E.O.'s of major clinics
and big insurance companies to the executive of a hotel
chain that employs large numbers of low-income people who
cannot get health insurance — fell in love with the idea.
"H.I.P.C.'s got everybody excited," Enthoven recalls. "We
knew if people across such a broad spectrum liked the idea,
we really had something."
H.I.P.C.'s were the final part of the reform concept that
has since become known as managed competition. Basically,
managed competition uses H.I.P.C.'s to group people into
collectives, and uses the Government to manage and help
finance the system. Managed competition
= ^ =
was embraced by both Bush and Clinton
during the campaign last falL Clinton was
AJaht Entbotitn
better able to articulate Enthoven's ideas
in the Presidential debates, which was one
saysv*
reason voters believed Clinton was more
"will continue to
likely than President Bush to change dobleed our
mestic policy. The new President promptly
economy white"
appointed Hillary Rodham Clinton to head
the Task Force on National Health Care
if we don't
Reform, which has been meeting ever
take on tbe
since, using Enthoven's ideas as part of its
"aristocmey of
blueprint
special interests"
Right now, Washington is in the calm
that have a
before what promises to be the biggest
cboktboUon
legislative storm since Social Security.
Enthoven's ideas threaten some of the
health tan.
most powerful institutions in th* country
— among them teaching hospitals and
insurance companies — but what role he
will play is unclear. He was not asked to join the task force.
Abandoned
Father o
Heal-Care
Reform
Prof. Alain Entan watches
and worries as Washn
igton messes
with managed competition.
m
By John Hubner
HE ROOM IS A SPECTACULAR PLACE FOR A
conference. Ceiling-to-floor windows look out
upon the Teton mountains and a densely forested
valley that runs down to Jackson Hole, Wyo. The
centerpiece is a big stone fireplace, with turquoise tile that creates an illusion of flowing
water. Alain Enthoven, a world-famous economist whose ideas helped England and the Netherlands reform their health systems, has periodically stood in front of that fireplace for almost 20 years
now, presenting ideas to improve the way health care is
delivered in America.
His informal audience is known as "the Jackson Hole
Group" and includes the heads of Blue Cross and Blue Shield
and the Mayo Clinic, the director of the Harvard Community
Health Plan and executives from Kaiser-Permanente, the
country's largest Health Maintenance Organizatloa. Hwy
call Enthoven "the professor," friendly acknowledgment
that he is their intellectual keystone. They paid particularly
John Hubner is a staff writer at West Magazine of The San
Jose Mercury News.
ALTHOUGH THERE IS GENERAL AGREEMENT THAT
the time for refonn has arrived — even deeply entrenched
interest groups like the American Medical Association are
on record favoring change — not everyone is sold on managed competition. In the House of Representatives, Richard
Gephardt (Democrat of Missouri) and Pete Stark (Democrat of California), looking north to Canada, have supported
a plan, variously known as "Canadian Style," "Single Ptiyer"
and "Medicare for All," under which the Government would
take over the administration of the health-care system, as it
does now with Medicare.
Democratic leaders in the Senate, among them Edward M. Kennedy, who has been working on health-care
reform for 30 years, have backed a number of plans,
including one popularly called "Play or Pay." Employers
who fail to offer a health plan that meets Federal standards would be required to pay a payroU tax of 7.3 percent to
finance "Americare," a plan that would cover the employed who couldn't afford health insurance, and the unemployed. Doctors and hospitals would operate under a pric-
�TM« NSW V O K K TIM>1 M A « A Z I N K / J U L Y I S .
ing system similar to the
one that exists under Medicare. Kennedy now feels
that a plan combining some
elements of play or pay, single payer and managed
competition will have the
best chance of acceptance.
The political right tends to
favor a third approach: Medical Spending Accounts,
which resemble Individual
Retirement Accounts. Under this plan, Americans
would make monthly contributions to a medical fund.
Whatever money was left
over at the end of the year
would be refunded, an incentive to be judicious about
visiting the doctor.
Enthoven finds all three approaches deficient. A Canadian-style
system
would
produce an inefficient bureaucracy. A play-or-pay
system would create adverse
selection against the Govern-.
ment: employers who pay low
wages and have high medical
costs would buy into Americare; employers who pay high
wages and have low medical
costs would opt out, resulting
in constantly increasing
budgets and annual shortfalls
in revenues. Incentive doesn't
work because the big costs
are associated with people
who are seriously ill: medical
"I.R.A.'s" are simply a continuation of the existing system.
Enthoven likens them to a
1964 Cadillac that gets seven
miles per gallon and belches
blue smoke.
At age 62, Enthoven is
very much the distinguished
professor, with thinning
gray hair and windburned
skin, the result of a passion
for skiing. Articulate and
imperturbable, he maintains that there really is no
viable alternative to managed competition; he's sure
Congress will adopt his plan
in the end. Managed competition is "a whole new
world," he says, "an Industrial Revolution in health
care." But he understands
that revolutions need not
happen all at once. "Our society is incremental," he
says. "Real change happens
a step at a time."
Enthoven majored in economics at Stanford, skied
and mountaineered in the Sierras and won a Rhodes
scholarship to New College,
Oxford. ("It was 'new' in
1379.") He returned to the
States to study for a Ph.D. in
economics at M.I.T. and met
his future wife, Rosemary
Fenech, a student at Radcliffe, on a blind date. After
earning his doctorate in
1956, he went to work for the
Rand Corporation in Santa
Monica, Calif.
system was built in 435 Congressional districts." Each
branch of the services was
developing competing missile systems; it would be
more cost-effective for one
service to develop one
system.
By the time Enthoven left
Washington in 1969, systems analysis was firmly
established in the Pentagon
and had spread to other
branches of Government.
"We permanently raised
the standards for policy
seats. It focused on strategy and how much is
enough in the choice of major weapons. Our efforts
made nuclear war a whole
lot less likely."
TOWARD THE END OF
his tenure in Washington,
Enthoven was invited to become a director of Georgetown University. He soon
found himself devoting
much of his time to a committee charged with building a major medical center
Dr. Paid EUwood (far left) and "the Jatkson Hole Group" have been meeting informally in bis
living room since the 1970's to find a way out of the health-cart quagmire.
Rand was pioneering a
multidisciplinary approach
to problems known as systems analysis. "Systems
analysis is a very delicate
flower," Enthoven says.
"Universities don't do it, and
most think tanks are still
filled with single-discipline
people doing single-disciplinary things and, consequently, having a narrow
perspective."
The Rand systems-analysis team put in a lot of effort
on defense issues and presented their results to policy
makers in Washington. "But
something was wrong,"
Enthoven says. "Maybe it
was the studies, maybe It
ALAIN ENTHOVEN'S FA- was the decision-making
ther was English and grew process. I figured I'd better
up in London; his mother get myself educated in the
was French and grew up in ways of Washington."
Paris. Enthoven's father
The opportunitv came in
came here to learn the 1961, when, under SecreAmerican side of the insur- tary of Defense Robert S.
ance business and decided to McNamara, he opened
stay. The family settled in what became the Office of
Seattle, where Alain, a prac- Systems Analysis. Enthoticing Catholic today, at- ven quickly discovered that
"the optimum weapons
tended Jesuit schools.
26
19(3
analysis," he claims. "Before McNamara, people
could argue on the basis of
the loosest generalities and
use the method of authority,
'I fought World War II —
take my word for it,' After
the McNamara era, what
passed for acceptable public-policy analysis had to be
a lot more rigorous and better documented." Enthoven's work on weapons-systems procurement earned
him a President's Award
for Distinguished Service
from John F. Kennedy.
Not everyone endorsed his
methods. "Systems analysis
has never worked," says
Representative Stark, the
leading critic of managed
competition in Congress and
co-author of the bill that
would have the Government
take control of health care.
"The Pentagon has never
gotten costs under control
Systems analysis gave us
$600 toilet seats."
Enthoven replies: "Systems analysis was not focused on the buying of toilet
at the school, and discovered that he was as fascinated by medicine as he
was by nuclear arms.
In 1969 Enthoven left the
Pentagon and joined Litton
Industries, a Beverly Hills,
Calif., conglomerate, as a
vice president Within two
years; he'd become president of Litton Medical
Products. He soon concluded that the medical system
in the United States was
doomed. "There was no incentive to cut costs," Enthoven says. "Why should doctors limit their fees, or hospitals seek more efficient,
cost-effective kinds of medical equipment, when they
can pass the costs on to insurance companies or the
Government?"
By 1973 Enthoven had
grown weary of life as a conglomerate executive. He
would be on a business trip,
tossing in a hotel bed in Germany and longing to be back
in California with his wife
and children. (The Enthovens have six children, four
�TH«N«W
boys and two girls, ages 23 ti
35.) When Arjay Millet
dean of the Graduate Schcx
of Business at Stanford, ol
fered him a tenured positior
Enthoven took it.
Two years earlier, he ha
attended a conference on national health care in Aspen,
Colo., "where a lot of people
were in a table-pounding
mode, dealing with problems
at the emotional level, demanding, 'We need national
healthore
insurance,
now!"' Enthoven tried, unsuccessfully, to explain why
that wouldn't work — the result would be the health-care
equivalent of a weapons
system that was built in 435
Congressional districts. One
day he decided to go to a 7
A.M. meeting in ski clothes
and hit the slopes the instant
it was over. He looked across
the room and saw another "
conferee in ski clothes. It was
Dr. Paul Ellwood; they started talking health care on the
way to the ski lift, and they
have never stopped.
A pediatric neurologist in
Minneapolis, Ellwood had
run a polio hospital until "I
was technologically unemployed by Jonas Salk." He
converted the hospital to a
rehabilitation center, but as
the staff got better at treating patients with broken
backs and necks, "we emptied half the beds and the
hospital began losing money." He thought, "There's
something crazy about incentive here." To fill the
beds, Ellwood admitted children with severe learning
disabilities. One night while
making his rounds, he found
the children crying and
pleading to go home. "I realized these children didn't
really need to be in the hospital,'' EUwood says. 'The.
only reason they were there
was because that's how their
bills were being paid" — insurance companies , would
pay for care only if the kids
were hospitalized.
In the early 70's, EUwood
began inviting health-care
professionals to meetings in
a condominium complex he
was developing in Jackson
Hole. Using an informal
method that resembled systems analysis, EUwood assigned study topics to people
from different areas of
health care, hoping they
"might have some insights
that would cause them to do
something different"
Enthoven and EUwood became collaborators. Because
he was researching how con(Conttnued on page 36)
:
V C K T I M t l M A d A l l N . /
Juuy
I
a
.
larly liked about KaiserPermanente was its cost(Continued from page 26) conscious approach to medicine. Representatives of
sumers make decisions Kaiser drive hard bargains
about health care, Enthoven with pharmaceutical comgenerally focused on the de- panies because they buy in
mand side. Ellwood was a huge quantities. In contrast
physician and an entrepre- to standard hospitals, which
neur, so he focused on the have a high percentage of
empty beds. Kaiser projects
supply side.
the number of hospital beds
WHILE HE WAS ON THE it needs before creating
Georgetown board, Entho- them. The H.M.O. does the
ven was involved in creat- same thing with medical
ing the university's Com- technology.
munity Health Plan, a
For instance, instead of
group-practice
Health purchasing a $2.5 million
Maintenance Organization.
The economic advantages
of an H.M.O., which delivered what Enthoven would
later call "value-for-dollar
medicine," had made a
deep impression. Eager to
learn more, he took a consulting position with Kaiser-Permanente in California in 1973.
Henry J. Kaiser co-founded the health plan named
after him during World
War II to serve his 200,000
mill and shipyard employees. The plan became available to the public in 1943
and today has 6.6 million
members in several states.
"Kaiser-Permanente is an
economizing culture," says
Scott Fleming, a retired
Kaiser executive from
whom Enthoven borrowed
many of the ideas for managed competition. "And
that's quite the opposite of magnetic resonance imager
traditional fee-for-service for each hospital. Kaiser
practice, where there is no studies its patient population
special reason for a physi- to determine where it's most
cian to economize, because needed; after it's installed, the
the more he does, whether machine runs late into the
it's needed or not, the more night It may seem harsh to
he gets paid."
make some patients undergo
To a large degree, Entho- a frightening test in the midven's ideas for reforming dle of the night but it's cheapnational health care are er to get them out of bed at 11
based on what he learned P.M. than to buy additional
from Kaiser-Permanente. . machines.
An H.M.O. like Kaiser is
The fact that an H.M.O.
built around a triage has a management strucsystem. Patients see pri- ture also appealed to Enthomary-care physicians, who ven's passion for rational
treat most illnesses but who systems. That structure alconsult with specialists or lows doctors to get together
refer patients to them when to discuss problems and
necessary. The ratio of spe- ways of solving them. One
cialists to primary-care result is more collegia! scruphysicians across the Unit- tiny, another is a set of docued States is three to one; mented practice protocols
Enthoven would like to see that has helped decrease the
a ratio of one to one. "In number of malpractice lawcardiovascular and other suits filed against Kaiser
kinds of medicine, high doctors — and the amount of
quality, high volume and defensive medicine they
low costs go hand in hand," practice.
he says. "There's a direct
In addition to consulting,
correlation between how doing research and writing
often you do an operation scholarly papers about
and how well you do it."
health care, Enthoven also
What Enthoven particu- accumulated hands-on expe-
ENTHOVEN
Enthoven's
ideas threaten
some ofthe
most powerful
institutions in
the country —
among them
insurance
companies.
I f f
rience as chairman of the
Faculty and Staff Health
Benefits Committee at Stanford, where the cost of
health care had doubled
over a five-year period in
the late ISSO's. For years,
Stanford had offered employees a choice of four
health plans. There was no
incentive for employees to
be cost-conscious; the university paid the entire cost
of the plan for individual
care. Why choose a Chevrolet when you could have the
Mercedes at no extra cost?
"Stanford got into trouble
for the same reasons the nation as a whole has," Enthoven says. "The American
public has grown up with the
idea that health care is all
free. There have been no rewards to employees for
choosing cost-effective care
and no financial penalty for
choosing the most expensive
plans. It's outrageous. It's
crazy."
Enthoven discovered another factor driving up the
cost of health care at Stanford: H.M.O.'s were "shadow
pricing." An H.M.O. could
make money by offering a
plan that would insure an
employee for, say, $99 a
month. But because the university was willing to pay
$150 for other plans, the
H.M.O.'s increased their
premiums to $133 a month.
The solution Enthoven developed at Stanford was to
have the university pay only
90 percent of the low-priced
plan's premium and to require employees to make a
$10 co-payment each time
they visited a doctor — to
emphasize that medical
care costs money..Employ-,
ees who opted for higherpriced plans had to pay the
differentiaL StanfohJ's em- .
ployees were unhappy — the
changes were widely viewed
as a "take back" by management — but cost increases
were cut sharply.
Nationally, health care
was getting more expensive
— Government expenditure
was up 11 percent for 199192. "Kaiser came in with a 2
percent increase in the cost
of its benefits package for
1991-92, and one of the other
H.M.O.'s had a 7 percent increase," notes Enthoven.
"But I warned our leaders
that health-care costs will
continue to rise until we apply incentives for cost-effective behavior to the system
as a whole."
It was clear to Enthoven
and Ellwood that something had to be done to re-
�T H I N t w V O « K T I M I , M A « A Z I N I / JULY 18.
form "the system as a
whole." From the hundreds
of physicians, hospital administrators, insurance executives and medical ethicists who had attended
meetings in Jackson Hole,
Ellwood and Enthoven
chose 20 to hammer out
what has become known as
managed competition.
Enthoven insists that any
national benefits package has
to be standard, so customers
know how to compare competing plans. "If we are trying
to create a market that motivates systematic efforts to
drive down costs, then we
have to make it a market in
which people are willing to
leave Plan A for Plan B to
save $10 in premiums," Enthoven says. "One way to do
that is a standard coverage
contract."
Enthoven's basic package
looks very much like a
standard H.M.O. plan. Patients would make a $10 copayment when they visit a
doctor and (unlike many
H.M.O.'s) a $50 to $100 payment for a hospital visit.
They would be entitled to 20
visits a year to a psychotherapist. Other than treatment
for eye injuries or inherited
abnormalities, vision care
would not be included. Dental care would also be excluded. "Most people can
budget for eyeglasses,"
Enthoven says. "I'm trying
to avoid killing this with
kindness."
Enthoven estimates that
such a package would cost
$30 billion a year, in addition
to the more than $900 billion
now being spent on health
care. He proposes to raise
$20 billion by putting a cap
on the tax deduction employers currently receive for
providing benefits and em.ployees receive by having
them. The cap will be
pegged to the cost of the
least expensive health plan
meeting Federal quality and
coverage standards in different regions of the country. "The tax break employees receive on benefits is
very expensive to the Federal Government," says
Enthoven. "It cost $70 billion
this year, and it is very unfair. A Detroit auto executive
gets a very generous package
of health benefits with the
most costly provider, and it's
all tax free. The self-employed farmer in Iowa, if he
can get health insurance, has
to pay for it with his own net
after-tax income. Ifs more
fair to give everybody a limited tax break."
For managed competition
to drive down costs while delivering quality medicine, everyone who is uninsured will
eventually have to join an
H.I.P C. On the supply side,
providers will be told they
cannot sell tax-deductible
health care unless they are
part of an accountable health
plan. Employers will eventually have to enroll their employees in an H.I.PC. to receive tax deductions on benefits. On the demand side, the
financially well-off who can
afford to pay for their own
coverage and young, healthy
people who think they can get
along without health insurance will be required to pay
a tax in lieu of a monthly
premium.
Managed competition has
been attacked from many
angles. The left tends to
think the Government's role
is too narrow to protect the
interests of consumers. The
right thinks managed competition gives the Government too large a role. Columnists have denounced
managed competition as a
plan hatched by the insurance industry to preserve its
role in health care. But when
asked about insurance over
lunch, Enthoven sweeps his
hand across the tablecloth
as if he is brushing away
crumbs and says, "The indemnity model is gone."
Small insurance companies
that cherry-pick healthy clients will be forced out of the
health business. Big insurers like Prudential and Aetna will stay in the health
field by creating and managing their own H.M.O.'s.
L
IKE MANY PLANS
created by economists to solve social
problems, managed
competition might
have . remained a
theoretical concept
had legislators in
Washington not been desperate to overhaul the health
system. A promising connection occurred during the
Bush years, when Enthoven
collaborated with Dr. Bill
Roper, a pediatrician from
Alabama and a Jackson
Hole regular, who was working in the White House to
reform health care. "In the
second year of our work, the
word came down that health
care is a Democratic issue.
If the American people want
health care, they'll vote for
Democrats, so we're not going to talk about health
care," Enthoven recalls.
"Roper became discouraged
I
9
93
and left the White House to benefits package and relies
head the Centers for Disease on budgets as well as compeControl in Atlanta. That was tition to control costs. But
the last I heard of it until the "budgets" sounds suspicious1991 Pennsylvania Senate ly like price controls. "I don't
race, when Harris Wofford know what to think of the
ran against Dick Thomburgh President," Enthoven says.
on the slogan, 'If a criminal "He baffles me. He's going to
has therightto see a lawyer, have to make a number of
Americans have a right to see gut-wrenching decisions. The
a doctor when they're sick.' task force has raised expectaThe Republicans were in an tions by including things in
extremely vulnerable posi- the basic package like dental
tion because they didn't have care. Somebody is going to
a plan, and there was panic. have to go back and get someThe plan they developed was thing we can afford. And
last-minute and half-hearted, they're going to have to deand the President obviously cide about price controls,
had no personal commitment which don't work."
to it. That was a serious misAccording to Cooper, the
take, because a solid health
plan would have given him a fight over health-care reform is shaping up as "a
domestic policy."
battle for the soul of the
Democrats, particularly Democratic Party." On one
conservative
Democrats, side are members of the
did indeed turn out to be Conservative Democratic
more receptive to Entho- Forum, who hate price conven's ideas than Republi- trols as much as Enthoven
cans were. Conservative does. Opposing them are
Democrats like Representa- Democrats like Pete Stark
tive Jim Cooper of Tennes- who want the Government
see were looking for an al- to manage health care and
ternative to a Canadian- impose price controls. "It's
style health plan, in which untested," Stark says of
the Government takes over managed compeution. "It's
health care. Cooper's aides kind of like buying Edward
read the Jackson Hole re- Teller's Star Wars."
port, and when Cooper saw
Cooper counters: "Manit, he recalls: "It was like aged competition is an excitlightning had struck. Here ing opportunity for Bill Clinwas this incredibly sophisti- ton to prove that he is a new
cated plan that puts the con- Democrat, not an L.B.J.
sumer in the driver's seat Democrat He has the opporand limits the role of Gov- tunity to lead the Democraternment." Cooper is still lob- ic Party into a very bright
bying on behalf of managed future, and he has the courcompetition.
age to make this work. He
Early this year, the 13- can't duck it — nobody in
member Task Force on Na- politics can."
tional Health Care Refonn
While the battle is taking
took Enthoven's ideas and shape, Enthoven is playing
went behind closed doors to host at brown-bag lunches
thrash out a health plan for for his students. Probably
America. Powerful lobbying sometime soon,, when* the
groups like the American health-care-reform package
Medical Association were reaches Congress's finance
left in the hall when the committees,. he will enter
doors closed — and so, sur- the battle. But whether that
prisingly, was Enthoven. happens or not the profes"I'm not feeling left out," he sor sees himself as presentinsists. "I'm sure when they ing an exam. Not toa classwant more of my views in room full of M.B.A. candiWashington, they'll ask,"
dates: this time, the profesHis colleague Paul Ell- sor is testing Government's
wood is characteristically ability to respond. "Manmore outspoken: "They're aged competition is a test of
afraid of Alain. Ht's just too whether our society can dedamn strong, he knows too velop rational and fair solumuch. He's a threat to any tions to a problem," Entholesser person who would like ven says. "Health-care policy is choked by an aristocrato be influential."
Enthoven's plan relies on cy of special interests. If we
competition to hold prices don't take these groups on
down and a uniform benefits and rein in costs, health care
package for which all Amer- will continue to bleed our
icans would eventually be el- economy white, our standigible. According to a White ard of living will continue to
House source, the latest ver- slide and we will never be
sion of the Clinton plan as- able to extend care to the
pires to a comprehensive millions who need it" •
�AU
REVIEW & OUTLOOK
Poor Health
With Hillary Rodham Clinton in survey is being done this year, to be
charge of nationalized medicine and out in 1994. that may speak to some of
Donna Shalala at HHS. it is proba- these areas.)
bly inevitable that class consciousWe did get from co-author Wilbur
ness is going to now pervade health Hadden the view that as inequality
care as it has economics. The New has grown, we have seen differences
England Journal of Medicine helped in exposure beyond the control of the
things along recently with its report individuals involved, such as a likelion the sociology of death rates. It's hood the black poor will live near
an intriguing subject, raising again toxic-waste dumps and therichwill
the issue of why things don't seem inhabit areas with better air quality.
to get better among the so-called
Gregory Pappas. the only medical
underclass.
doctor of the four, built on that idea,
The essence of the findings is that observing that the poor have more
the poor and the uneducated die dangerous jobs (is the 1986 sample as
younger. The NEJM study compared likely to have jobs as the one in 1960?)
mortality data in 1960 and in 1986 and and spend their lives surrounded by
saw recurrent correlations between multiple threats. He mentioned a
what a separate editorial in the publi- black woman, overweight with hypercation a bit tendentiously calls "privi- tension, who visited his office. Told
lege and health."
she should walk for exercise, she
Beyond the thought that the U.S. is replied. "Are you crazy? I'll get killed
a meritocracy, not 16th-century walking in my neighborhood!"
France, several other questions leap
It is easy to sympathize with lowto mind. The first is one we increas- income people who cannot feel safe on
ingly find ourselves asking as an ini- the streets outside their homes. But
tial screen to exercises such as this: preventive measures or healthful
Are the poor necessarily the same habits are not necessarily expensive
people at different points over a life- or difficult to follow, unless one's life
line? Therich?The study attempted is exceedingly disorganized. It is posto adjust for variations in the propor- sible to construct a meal plan that is
tional size of income groups, but we good for both the body and the pocketpersist in believing that these appar- book, though admittedly healthful
ent disparities are often muddied by items such as some fruits and vegeta;he considerable mobility factor in the bles can be expensive at the grocery.
American economy, as people move But it does not cost money to abstain
from certain activities that carry with
in and out of middle-rung status.
Moreover, income can be greatly a them an obviousriskof disease, nolactur of age; students and the re- tably cardiovascular disease and cantired, for example, can make little cer. Columbia University's Center on
money and still be comfortable. It Addiction and Substance Abuse has
matters whether patterns are lifelong just reported that SI of every $5 spent
or attend to transitory situations. Ap- by Medicaid is attributable to the
parently, we don't know the answer in abuse of tobacco, alcohol and drugs.
this case.
Still we have the NEJM contending
Then there is the important matter editorially: "The increased frequency
of behavior. In part, this gets us back of trauma and substance abuse
to the opening question: Are the poor among the poor cannot explain the inin the 1986 study people whose habits creased morbidity and mortality from
of life are comparable to the group in other costs. One can Imagine a host of
i960, or have we begun to look at an other influences-such as diet, stress,
underclass of extraordinary pathol- exposure to infectious agents or toxic
ogy, owing as much to isolation as to chemicals-that are related to socioepoverty? (The answer Is we know Ut- conomic status, but there is very little
tle about the earlier sample.) And if evidence to point to any of them as a
that behavior or habits have become major cause of the health difference
more unhealthful over the 26 years between the advantaged and the dis(or, alternatively, the habits of the advantaged." Perhaps it would be
non-poor have become more health- better simply to say, "There is insufful), perhaps we should more appro- ficient evidence, period" when It
priately be talking about behavior comes to explaining links between derather than income categories.
mography and health.
There are indeed some Interesting
We spoke with each of tbe four authors of the NEJM paper, and got questions here about why some peoplefrom them a sense that not much Is are healthier than others. But il studknown about the diet, exercise and let such as this become more fodder
drug-taking regimens ofthe samples. indebates over fairness, incomes and
Similarly about the sexual habits, in- "the privUeged," we are not likely to
. accomplish much that is useful for the
volvement with weapons and other
olent episodes. (However, a related least healthy among us.
�*AM-MA—Women's Health, Bjt,0500
'Doctors, Prosecutor C a l l Violence A Public Health Problem
"By DANIEL BEEGAN= 'Associated Press Writer=
BOSTON (AP) Violence must be treated as a public health problem, not just
as an issue for law enforcement, doctors and a prosecutor told a U.S. Senate
committee Monday.
Norfolk County D i s t r i c t Attorney William Delahunt told the Senate Labor
and Human Resources Committee that there i s a clear link between family
violence, such as battering and child abuse, and crime.
" I have no doubt i n excess of 90 percent of those inmates are the
products of family violence,'' Delahunt said, referring to the residents of
the state prison i n his d i s t r i c t . '•'Family violence i s the breeding ground
for crime.'
The committee, chaired by Sen. Edward M. Kennedy, D-Mass., i s considering
legislation to reauthorize federal programs on women's health issues. I t held
hearings Monday in Boston.
Kennedy also heard testimony from physicians and other advocates of
improved breast and c e r v i c a l cancer screening and on ways to better control
sexually transmitted diseases.
''Attention to the unique health problems affecting women i s much higher
today than i t was a few years ago, but we s t i l l have a long way to go,• he
said.
Dr. Deborah Prothrow-Stith, a former Massachusetts public health
commissioner and now assistant dean of the Harvard School of Public Health,
said traditional public health strategies can be used to combat violence.
Prothrow-Stith said she i s convinced violence i s a learned behavior and
can be prevented, much as lung cancer can be reduced by convincing people not
to smoke.
" T h i s isn't a natural, inevitable part of the human condition,'' she
said.
Prothrow-Stith said that while men are responsible for the majority of
violence, " o c c a s i o n a l l y we are the perpetrators.'*
Domestic violence, she said, i s as much a problem i n r u r a l areas and the
suburbs as i n the inner c i t y .
Dr. Claire Broome, acting director of the National Center for Injury
Prevention and Control of the Centers for Disease Control, said the CDC i s
helping finance research into the extent of violence and how to prevent i t .
In Massachusetts, the Department of Public Health has developed
a system in which hospital emergency departments w i l l report on gunshot
wounds and stabbings.
" F o r both males and females, cases involving arguments or abuse outnumber
those involving other crimes such as robbery or drug t r a f f i c k i n g , ' ' Dr.
Victoria Vespe Ozonoff, director of health resources s t a t i s t i c s for the
public health department, said.
Carole Sousa, director of the Boston-based Dating Violence Intervention
Project, outlined prevention methods, including counseling, intervention
groups for young offenders and prevention education.
One program she described pairs police o f f i c e r s and health educators to
teach violence prevention i n schools.
1
1
�2te!0asftm!*t0« ConesTUESDAY, JVLY 13, i w .
The limits of health care
^he American health care system is broken.
Health care costs are out of control. Thirtyseven million Americans are without coverage.
The emergency rooms are overflowing. .American children are unvaccinated. Amencan health insurers and drug companies are money-grubbing charlatans. Oh dear.
These are the cries that have been going up from
Hillary Rodham Clinton and her health care task force.
The main reason for whipping up a crisis atmosphere,
ol" course, is to justify the ambitious and, by all tokens,
vastly expensive overhaul of the American health care
system that Mrs. Clinton is working on. Whatever the
final details of the plan that is now being billed for
unveiling in September, it will be safe to expect massive
government involvement. That has pretty much
emerged as the Clinton administration's idea of government refonn.
But the vast majority of Americans are not unhappy
with the system they have now, and many rather dread
what Mrs. Clinton has in store for them. They know
that in some ways, they already have the best system
in the world: more freedom of choice, better access to
care, advanced treatments and second opinions.
In fact, the major problem with the health of Americans is not one that all the managed competition in the
world can address. How long and how well you live is
far more likely to be detennined by your level of educabon and income than by the type of health plan you
have. That's the inescapable conclusion to be drawn
from the study of U.S. mortality rates conducted by the
National Center for Health Statistics and released on
Wednesday in the New England Journal of Medicine.
According to the study, particularly on the male
side, the numbers are suggestive: In 1986, among people 25 to 64 years of age, there were 7.6 deaths per 1,000
white males with 0-11 years of schooling. By contrast,
for those who had finished high school, the number
T
dropped to 4.3. And for those who had finished four
years of college, the number dropped again to 2.8.
Black males had a higher mortality rate, but the
panem is clearly the same: 13.4 deaths per thousand
for those with 0-11 years of schooling, falling to 8 for
high school graduates, to 6 for those who finish college.
When income is the yardstick, differences are even
more pronounced. As these numbers indicate, class is
more important than race when it comes to mortality:
Out of 1,000 white males earning $9,000, the mortality
rate was 16. It was 19.5 for black males at the same
income level.
That drops to 5.7 for white males making between
$15,000 and $18,999; 9.8 for blacks. For those making
$25,000 or more, the figures are all the way down to
2.5 for white males and 3.6 for blacks.
Though death rates have been declining for all
groups over the past 30 years, they have declined more
dramatically for the better-off and bener-educated
than for those who are poor and less-educated. That
will not be a surprise to those who have watched the
spread of social disintegration throughout this country.
What is interesting to note, and what has generally
been ignored in the current health care debate, is that
precisely the same pattern of disparities exists in
places like Western Europe and Canada, where health
care is made universally available by the state.
As even Mrs. Clinton's policy wonks should understand, poverty and ignorance are not under the control
of a country's health care system, not even the most
ambitious one. Reducing poverty by creating jobs, encouraging two-parent families, freeing people from
welfare dependency, giving them a chance for a decent
education, fighting drugs, AIDS, crime and teen pregnancy, as well as all the other social pathologies —
that's what will make people live longer, and that's the
real challenge. What's more, it's not the job of health
care providers.
U.S. leads world
in health spending
By Karen Riley
THE VMSHIN3T0M TIMES
The United States continues to be
the world's big spender when it
comes to health care, according to an
annual review of health expenditures of the industrialized nations
released yesterday.
The study, published in the health
policy journal Health Affairs, found
that U.S. spending topped 13 2 percent of gross domestic product
(GDP) in 1991. the most recent year
for which data are available.
That far exceeded the average of
7 9 percent of gross domestic product for all 24 member countries of
the Organization for Economic Co
operation and Development (OECD)
in the same year. No other country
spent more than 10 percent of GDR
The United States led other na:
As the study points out, spending
in the United States outstripped
spending in Canada by 50 percent, in
Switzerland by 67 percent, in Germany by 73 percent, in France by 74
percent, in Japan by 119 percent and
in Britain by 175 percent.
The report also compares availability of medical services and
tions in per-person spending on
medical outcomes among the 24 nahealth care as well. In 1991. its per
tions. They found that the United
capita expenditure on health was States generally has fewer hospital
$2,868. compared with an OECD beds per thousand, low hospital adaverage of $1,305 per person.
mission rates, fewer days of care and
Canada spent $ 1,915 per capita, or 10 an average number of physicians.
percent of its GDP
Meanwhile, the nation's infant
"By international standards, the mortality
is fourth-highest
U.S. health care system is out of con- among the rate
24 nations and its lifetrol," conclude the authors, George expectancy rate
at birth is comparaSchieber and Leslie Greenwald of
tively
low.
Only
its life-expectancy
the U.S. Health Care Financing Ad- rate at age 80 ranks
the best
ministration and Jean-Pierre Poul- in the world, possiblyamong
reflecting both
lier of the OECD.
the widespread availability of techThe authors note that by devoting nology and the aggressive treatment
so much GDP to health care, the
of elderly patients.
United States may have less money
"Measures of health care use and
to invest and spend on the rest of its
health status do not provide convinceconomy compared with other couning evidence that the United States
tries.
has a superior health care system for
President Clinton has repeatedly
its larger expenditure levels." the auinvoked international comparisons
in pressing for health care reform. thors conclude.
�MORTON KONDRACKE
Can health refonn
be passed in '93?
P
resident Clinton deserves applause for danng to reform
America's cost-exploding
health care system, but he s
surely overreaching to expect that
Congress and the public can accomplish the task this year — and possibly even next year.
Mr. Clinton is still working on options, but administration and congressional sources indicate he is
likely to propose a plan that's complex, generous and politically difficult, involving $50 billion a year in
new government spending, a 9 percent payroll tax. mandates on all employers to provide insurance for
their employees, "temporary" price
controls and "global budgets" that
may lead to permanent price controls at the state level
In addition, tbe administration
plan is likely to eliminate and replace the existing workmen's compensation and the health element of
automobile insurance. The smallbusiness lobby, most Republicans,
and some conservative Democrats
probably will oppose the plan because of mandates and payroll taxes.
Big unions, whose members currently receive broad coverage in
their contracts, will squawk because, experts say, there is no way
the administration can pay for its
plan without taxing workers who receive lavish health benefits or can
limit costs withont reducing those
benefits.
A'.r "
Still. President Otaton claims he
has a "good shot" at getting the
health legislation thraugh Congress
this year, and officials are putting
out a timetable fbr 1993.
Mr. Clinton* measure is to be introduced, officials sax either just before or just after Oongress' August
recess, depending on when budget
reconciliation finally passes and on
whether Mr. Clinton thinks it wise to
spring his plan on the country when
it wants to be on vacation.
Whatever its timiag, the administration plans a -massive politicalpublic relations bhtz to launch the
proposal, complete with an Oval Office TV address, a speech to Congress, daily briefings on Capitol Hill,
and a cross-country selling tour by
the president and first lady.
Morton Kondracke is a senior editor for Roll Call and is a nationally
syndicated columnist.
president's proposal with rival
plans. Comminees could mark up
legislation before Thanksgiving,
and floor votes could come in December.
All this appears wildly optimistic, although most Democrats seem
to think that one widely anticipated
roadblock — jurisdictional disputes
among congressional committees —
will not develop.
Several committees have jurisdiction, including House Ways and
Means and Senate Finance on taxes.
House Energy and Commerce and
Senate Labor and Human Resources
on rules and benefits, and the Judiciary and Armed Services Committees of both houses on other parts of
the legislation.
John Danforth of Missouri,
avoid or break a filibuster.
Despite all this optimism, ti
ministration is just wrong to tl
can redo health care so fast.
Some members of Congres.
understand the subject in deta
most do not — and the public i
a clue about what "managed a
As the president indicated at his
ution" means.
press conference last week, the main
The Clinton administration •
wedge for markeung the proposal
to reassure people that the ?
will be the insecurity the public inment-guaranteed basic health
creasingly feels about the current
ance available to everyone w
system. Polls show 75 percent of the
furnish less coverage than mo
population is satisfied with its health
vate plans now provide. So. of:
coverage and care at the moment,
say the plan probably will mcl;
but 60 percent is "very concemed"
besides normal medical cover;
over whether coverage will be adesome dental coverage, mental i
quate five years from now. The Clincoverage, first steps toward
ton plan will guarantee that people
term care and payment for pre
will have health insurance, even if
But Democrats say in the House
tion drugs for Medicare patiei
they change (or lose) their jobs, and
the leadership can impose deadlines
regardless of their medical history.
for the completion of committee
This, however, will raise th
work. In the Senate, administration and necessitate higher taxes,
Administration officials claim
officials expect Democratic coming the plan more difficult tc
Congress can act swiftly because
minee chairmen to act with dispatch
Outside experts, say it's impc
many members have been through
to help Mr. Clinton and their party
to raise $50 billion a year th
the basics of health costs and the
so-called "sin" taxes and wi
inequities of access in numerous, achieve a banner public policy and
political victory.
profits taxes on health prov
commission studies and debates
say there will have to be
over Medicare and catastrophic inBecause Hillary Rodham Clinton They
on health benefits that exceed
surance.
has spent extensive time consulting
provided under basic coveragi
So. officials say. Congress could
Republicans. Democrats think they
such a tax will hit workers
hold two months of hearings in Sepcan win support from more than 10 unions have negotiated high-b
tember and October — simultaSenate GOP moderates, led by Sens. plans.
neously in House and Senate comJohn Chaffee of Rhode Island, Dave
The administration claur
mittees — devoted to comparing the
Durenberger of Minnesota, and
been misinterpreted on the p
tax — that its 9 percent propt
percent paid by corporations,
cent by workers) is designed
place existing corporate ex,
tures for health insurance, no;
added on.
The average business that
health insurance now spends 1
cent or 12 percent of its payr
coverage, and the big autoir.
spend 20 percent, so the admii
tion plan will represent a redu
However, employees of those
are likely to see the Clinton pla
threat, and small businesses nc
providing insurance will see i
burden.
Despite Mrs. Clinton's e
with Republicans, even modi
are likely to oppose employer
dates and price controls.
So, what's the administrauo:
posed to do? By all means, it s
put forward what it thinks is tiv
reasonable plan for the count
but it ought to be prepared i
less. And. less — in the form
price controls, no mandates, a
payroll taxes — might be betti
Some day. Bill Clinton's I
care reforms may rival Frank
Roosevelt's Social Security and
reforms as a milestone in Ami
"I thought I Md you not to g«t dd or injund till AFTER
social history But if he tries
too much change, he may tv
Ctlnton't haalth eara ratoraT
wait until after 1996 to get the c
�Rating of Hospitals Is Delayed
In an Effort for Stronger Data
tr
WASHINGTON. June 22 (AP) - Tlie he said " I think it's overly simplistic
head of the Federal agency that rates People perceive it as telling you mon
hospitals is holding up this year's list than it does. I think it doesn't adequate
on the ground that the methodology, ly adjust for tome of the problem:
based on deaths of Medicare patients, faced by inner-city public hospitals."
is flawed.
'Has Got to Be Good Data'
"I'd rather give out no data than
Mr.
Vladeck said he thought it was
crummy data," said the official, Bruce "a little
that 90 percent of the
C Vladeck of the Health Care Financ- hospitals"odd
that were identified as having Administration.
unusually high death rates tn the
Mr. Vladeck said in an interview on ing
last few years were in the inner cities.
Monday that the voluminous statistical The
House Is promising that as
reports published since 1986 have un- part White
of
iu
overhaul of the nation's
fairly singled out mner-city public hos- health-care system
consumers will get
pitals as having higher-than-predicted detailedreportcards
on the quality of
death rates among the elderly.
the health plans they will be choosing
Last year's 55-volume report identi- from.
fied 102 hospitals that were said to If youreallysubscribe to that princihave had unusually high death rates in ple, Mr. Vladeck said, "it has got to be
1990. The year before, 161 hospitals good data. If you don't believe In it
were cited.
yourself, I'd rather give out no data
Mr. vladeck, former president of the than crummy data."
United Hospital Fund, a New York
Speaking of Mr. Vladeck's decision
based charity andresearchorganiza- to withhold the data. Rich Wade, senior
tion, became head of the $230 billion vice president for communications of
agency on May 26. The agency runs the 5,000-mem ber American Hospiul
Medicare and Medicaid, the health in- Association, said: "Ifs a very wise
surance programs for the elderly and move. The last thing we need is another
the poor.
go-round of the way they first preMr. Vladeck said that he was all for sented mortality data.'
giving consumers good information on Mr. Vladeck discussed the delay in
the quality of care theyreceivebut that an interview with The Associated
the Medicare mortality data did not fit Press. He previously disclosed it to a
that bill.
health newsletter, Faulkner & Gray's
"f put a hold on thereleaseuntil we Medicine & Health, which is published
take a new look at the methodology," weekly in New York.
1
�V.JUNE 23. 1993
OPINIONLINE
Whet people are saying about heaWvcare reform
^^/'
Health: Are Ointon
changes too drastic?
JOAN BECK, columnist, in the Chicago Tribune: "Assume the
president and his wife remember when Congress passed the
... Medicare Catastrophic Coverage Act, and that the angry
elderly objected so much to paying more in taxes for a small
increase in benefits the law was repealed. Are the Clintons prepared torideout the storm they will generate with a plan that
will apparently cost most people more money ... and give
them less control and choice over their care? ... If the Clintons' plan really is DOA... there is still much the federal govemment can do to solve the most urgent health-care problems:
providing for the uninsured and holding costs down. ... We
need improvements, of course, but not the drastic changes the
Clintons are pushing."
SUZANNE FIELDS, syndicated columnist: "Hillary Rodham Ginton enjoys more reincarnations than Shirley
MacLaine. (Is this what they mean by
a healthore expert?) ... Hillary is
politically savvy, aware of what it
means to be thefirstlady, so she
chooses her words carefully. She's
doggedly preparing the rationale for
her health-care plan — whatever it
turns out to be, however much it costs
— in anticipation of the criticism that
will inevitably accompany the cry for
more taxes to pay for everything."
&1
FIELDS
JAMES P. PINKERTON, fellow at the Manhattan Institute's
Washington office, in the Los Angeles Times: "Mike Horowitz,
an official at the Offlce of Management and Budget in the Reagan years... now observing the charge of Clinton's wonk brigade ... describes the escalating spiral as a 'legal-medical
arms race.' Medicare spending quadrupled In the last 12 years
It may be hard to do worse than that, but the CUntonians are
making the same mistake the Republicans made: trying to interposetiiegovernment into 290 million doctor-patient relationships. Nobody's that smart"
JULIE ROVNER, writer, in The Washington Post: "Even if
we could squeeze out of the system all the waste and fraud and
inappropriate use and defensive medicine, the relentless
march of a statistically sicker population and the development
of more things we can do about sickness mean that sooner
rather than later we're going to have to pay more or wait longer, or, more likely, both.... The coming debate is sure to be
full of overstatements, oversimplifications and charges both
true and false.... But at its core there are really oaly two questions to keep in mind. How much medical care do we want and
are willing to pay for, and who should dedde?"
NEW YORK POST in an editorial: The Clinton health plan
... now seems slated for delivery in the summer or early fall at
the soonest That's no tragedy. In fact, it wouldn't be a terrible
thing if the administration were toreconsiderits entire approach to healthcarereform.From the start, the Clinton task
force has been headed in the wrong direction... A key problem... turns on the fact that the Ointon task force seems more
interested in fostering social egalitarianism than in improving
the quality of the health care available to most Americans."
* Politics of health reform, 6A
5
�r ^Oivmy,
WALTER WILLIAMS
I
ronically, one of the most difficult tasks is to persuade
Americans that liberty is morally superior to other alternatives Btrause of a history of gross
vmlations ot liberty, one would think
:[\l be an easy sell to black Amerleans. iiut disappointingly, black
Americans are just as contemptuous
ot' ihe principles of liberty as are
most others. But let's try a different
twist.
Choose areas of competition
where Americans beat the rest of
the world coming and going. One is
computer software; we are the software champs of the world. No matter where people buy their computers, they depend on brilliant
American minds to make and develop software programs. Now ask
yourself: What role does Congress
play in the software industry? Are
there licensing laws and regulations
that mandate who gets into the software industry and under what conditions? The answers are big fat nos.
So far as developing, testing and updating, you're on your own. Billions
upon billions of dollars are being
made by software companies. Most
started out on a shoestring with
• junk" (read "high-risk") bonds —
like Bill Gates, chief executive officer of Microsoft, who has made us
happier and happier at cheaper and
cheaper pnees.
Despite widespread educational
rot, Americans have managed to
walk away with most of the Nobel
Prizes and other awards for several
decades. Does that mean Americans
are inherently intellectually superior to the rest of the world? Forget
it! The main reason is that we have
virtually complete freedom in the
idea marketplace. In our idea market, the modus operandi is the
fastest-gun-in-the-West mentality —
an intellectual shootout. The way to
make a reputation in economics, for
example, is to prove Milton
Friedman, Paul Samuelson or, easier, John Kenneth Galbraith wrong
and be intellectually boisterous
about it. It's not the American intellectual habit to sit in silence, out
of respect, like the Japanese, when a
big gun says something wrong, or
out of fear, as in the former U.S.S.R.
We let it all hang out
Where there's freedom in. the
idea marketplace, right ideas force
out wrong ideas. It's the same when
there's freedom in the marketplace
for goods and services. Freedom in
the marketplace forces out inefficient producers and transfers those
resources into the hands of more efficient producers. Losses function to
weed out failures, and profits function to encourage success. Numer
ous client producers, through subsi-
Inventive
light of
liberty
dies and bailouts, prevent those
same resources from getting into
the hands of those who are more efficient. Our government policy is
backward — rewarding failure and
punishing success.
As if we needed more evidence of
L \ the superiority of liberty,
X X name countries whose citizens enjoy higher standards of living and human rights protections.
The task is easy. Just rank countries
according to the role the free market
plays in the allocation of resources.
Generally, you'll find the larger the
role played by the market, the richer
Generally, you'll find
the larger the role
played by the market,
the richer and freer
the citizenry. The
larger the role played
by government, the
more impoverished
and restricted the
citizenry. Then,
there's the open-gate
theory: When people
arefreeto leave a
country, to which
countries do they
run?
and freer the citizenry. The larger
the role played by government, the
more impoverished and restricted
the citizenry. Then, there's the opengate theory: When people are free to
leave a country, to which countries
do they run?
Our country is still the richest,
freest and most vibrant But with
politicians doing special bidding for
those who seek special favors, handouts and privileges, we wont be that
way much longer. Unless that's
changed, our grandchildren will be
Walter Williams, an economics like those of France and England —
professor at George Mason Univer- they will have to read history to leam
sity, is a nationally syndicated col- about our squandered greatness;
they won't live it.
umnist.
JUL*
IS,
�"AM-MA—Tsongas-Health Care, Bjt 0620
"Tsongas Touts His Brand of Health Care Reforms
"By EVE EPSTEIN= "Associated Press Writer=
BOSTON (AP) Former Democratic presidential candidate Paul Tsongas, one of
the best known c l i e n t s of the nation's health care system, i s keeping busy
touting his own version of how to f i x i t .
He believes h i s plan for health care reform i s in line with what Hillary
Rodham Clinton i s mapping out for her husband's administration, but he w i l l
be ready to challenge his old r i v a l i f the program does not have an emphasis
on private competition to make i t work.
Tsongas, 52, treated for a recurrence of cancer shortly after l a s t year's
presidential campaign, warned the nation cannot rely on health care cost
controls to cut the d e f i c i t .
" " I don't think i t i s conceivable that you w i l l get massive savings, ' he
said in a telephone interview from Washington, D.C. ""You have to balance the
budget in a l l the other areas and presume that health care does not make
things worse.
Tsongas also believes f a i l u r e to pass a health plan by June of next year
could jeopardize health care reforms for the remainder of President Clinton's
term.
" I f you miss the June target, I just don't see i t happening,'' he said.
"You're into the "94 campaign.*'
Mrs. Clinton, in charge of delivering the president's plan, has now set a
target date of September for i t s release.
Tsongas favors managed competition in the health care system as
a way to hold the line on costs, instead of a system driven by centralized
government control called a ""single payer'' plan. Mrs. Clinton expressed
skepticism about the single-payer method while v i s i t i n g Hawaii t h i s week, and
Tsongas dismissed rumors her plan might head in that direction.
" " I know there has been a push towards a more regulatory scheme and one
that was more expansive in terms of benefits,'' Tsongas said. ""But I think
those t r i a l balloons have been i l l - r e c e i v e d . '
Tsongas and President Clinton held similar views on health care during the
1992 campaign. ""My presumption has been that what they w i l l eventually come
up with w i l l be what he talked about in the campaign,'• Tsongas said.
Tsongas retired from the U.S. Senate in 1984 after he was diagnosed with
small-cell non-Hodgkins lymphoma, which affects the lymph glands. In November
of l a s t year, a growth removed from h i s abdomen was diagnosed as cancerous
and he underwent treatment.
When asked about h i s health now, Tsongas said: ""I'm doing fine.''
His experiences as a patient have shaped h i s views on health care. In
1986, he underwent a bone marrow transplant, a high-tech procedure that i s
s t i l l only done in large medical centers.
" " I talk about the importance of maintaining quality and innovation and
high technology since I am a l i v e because of i t , ' he said.
Some colleagues in the U.S. Senate urged Tsongas not to r e t i r e 10 years
ago so that he could keep his health care coverage. They feared he might be
rejected for health insurance because of his cancer diagnoses.
""That was a major issue when I l e f t the Senate, ' he said, adding that he
did receive health care coverage when he returned to h i s Boston law firm.
Tsongas, who returned t a h i s law practice after bowing out of the;
Democratic presidential primary, spends part of h i s time lecturing on health,
care as o f f i c i a l spokesman for the Healthcare Leadership Council, a
Washington-based group of 50 chief executive o f f i c e r s in the health care
industry. He also i s active in the Concord Coalition, a group he founded
with former New Hampshire Republican Sen. Warren Rudman,. which plans to
release i t s own a d e f i c i t - c u t t i n g plan t h i s f a l l .
/
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�WIILIAM RUSHER
M
s. Rodham Clinton and
her 500 little elves are
still hard at work, secretly devising the
health care plan that the Clinton administration intends to impose on
the American people.
We are not being allowed to watch
the process, presumably for the
same reason that Bismarck warned
sausage lovers against watching the
manufacture of sausage But the
Presidential Partner and various
others in the know have said enough
to make it clear that a huge new federal bureaucracy will be required to
administer the program, and it will
have to be paid for with upward of
$90 billion in new taxes — over and
above the quarter of a trillion the
Democratic Congress is already
preparing to impose on us at Mr
Clinton's behest. In the unimprovable words of PJ. O'Rourke, "If
you think health care is expensive
now, wait till you sec what it costs
when it's free."
All this is necessary (allegedly)
Wi//iam A. Rusher, a senior fellow
of the Claremont Institute, is a nationally syndicated columnist
t
-
7
Obvious
health
solution
because of the oft-repeated asser
tion that "37 million Americans"(out
of 250 million) "have no health insurance." When declaimed with a dying
fall on the last word, that statement
is easy to confuse with the very different — and totally false — proposition that 37 million Americans
have no health care.
As Fred Barnes pointed out in the
American Spectator recently. "Everybody gets health care in this
country — the poor, the uninsured,
everyone" Those without health insurance are treated free of charge
by hospital emergency rooms. Federal law. Mr. Barnes goes on, requires "medical screening of everyone requesting ^are at a hospital
emergency room. I f treatment is
needed, it must be provided." The
chief reason the uninsured get less
medical care per capita than average is that they are, overwhelmingly,
younger than average and therefore
need less.
But the socialized medicine fanatics have the bit in their teeth, and
the American people are going to get
a universal federal health care program whether they need or want one
or not. The only question left is what
kind.
Fortunately, there is one alternative that has been widely and successfully tested, that wouldn't require a huge new bureaucracy to
administer it, that wouldn't cost a
cent in new taxes, and that would
guarantee every American quality
health care by physicians of his or
her choice.
Proposed by the Heritage Foundation, it is based on the Federal Employees Health Benefits Program,
which already covers 9 million federal employees and retirees and
their dependents, including Bill, Hillary and Chelsea.
FEHBP allows those covered to
choose among different health
plans, with different premiums and
services tailored to their specific
needs. Competition among the pro-
viders keeps a downward pressure
on costs. Heritage proposes to apply
the same principle nationwide, by
converting the tax break employers
now receive for providing health
care, benefits into an individual
"medical tax credit," which could
then be spent by individuals on precisely the quantity and type of medical coverage they need.
The Heritage plan has won kind
words from some of America's noisiest liberals. Michael Kinsley of the
New Republic has called it "thp simplest, most promising, and in an important way, most progressive idea
for health care reform." Columnist
Clarence Page points out that
"there's no reason for liberals to feel
obligated to shy away from a program just because it encourages
poor people to think for themselves."
Morion Kondracke wrote that
"Why Washington doesn't adopt the
Heritage mqdel is a mystery." But
c'mon, Mort, you know Washington
better than that! How are the Democrats -going to get their vitamins
without tens of thousands of new
jobs to hand out, and tens of billions
of new dollars to spend, in administering a vast new health care bureaucracy? What are you trying to
do — spoil the game for everybody?
�rriA NU. 01/a^ajioo
f
h uo/11
From Boston Globe Page 1
Pioneers encourage tackling the tough
health-care choices
pvrsomd mi>r.er. After watching a \ndeotape of three
•-..•poth.-t.ici! health-care scenaiios, including the one
nbout the >0-year-old diabetic, the patticipants
'•alked op ^riiy about, their concerns.
Th? .>0-year-old man, a diabetic, dt-ve'.op^
.vlade'ine Corey. i')6. of Roslindaie, recalh?d when
garigi-ene. Ar-d heart pivbl^rns. Then his kidneys
•w
M-yev -ord mother was in a coma. The doctors.
faii. After he .bas been ho$pit<i:ised for r r w t4>ar! 4P'
said, tv d ho". " 'We wart you to tell us how T>r
days, the doctors talk wizh his famiiy about v.-hat to
you
want to .^o.'
do nvixt.
'I
sorted to cry," the tviealled. "F asked. 'What
^ifTiilar -cenan'cs play out in hospitals all across
about
q'.ia'.ity of .ifeV They said it would he no better,
the -ount'y, but thi; partteular h)-pothet(:3l case
maybe
'vorscatai-te-d a discussion about making difficult healthAfter
ss 'tin: with family members, Corey
care fiaeisions in an era OT liir.it^ci I'esoui-ces at a
told
the
y • s] ,-. wanted her mother to be as •
gathering at. St. George Orthodo.v Chiu'ch in West
comfort
.-.'
.
o!
•
-v j..:, sihV. but she didn't want her w
Roxbury last week.
be
put
or
nie-Mupptuxirquipment.
" I say 'tr him go natu'-ally." said Laurice
Tr uhis day, Oorw said. " I don't know if I .-hd the
Moussa'ly of Dedham. who, along with he.) husband,
rifht
thing. She lasted for a month after," 7ei!o\v
Fnxl and about 50 others, participated in the
viviu-ch
members i-poUe up to reassuj-e her, "You did
discussion after a luncheon at the church's seniov
the
right
thing.''
d-op-in colter.
Another
partidp.mt. 3ar Oeorge, 75. of West
But Tom Barbar of West Roxbury wanted f
Roxbuiy.
recalled
when '..s father was hospitalized
maktf sui'e :hat treatr.ent is not stopped jus''
^th
emphysema
^-.
other health p)obl(?ms at the
because of the expense. "You can't put th .• economics
age
of
90.
"He
ds
quite
well up until the age of SS.
above tht indnicual."
Then
thp
two
years,
he
sort of went downhill. In
As part or a growing gi-ass-coo* ., rr ivoment to
the
'
o
at
two
weeks
of
his
life,
he wanted to die."
nnd out how Amencans really ' ^ i iV u, -.eakh care,
The
doctors
asked
family
membei'S if they
a variety ofgi-oups are onr^yizir^ this kind of
wanted
life
support,
continued,
and they agreed they
discussion in churchc*. ^ranr;a. councils on agin;
did
not,
George
said.
"
I
actually
prayed that he
and other comr.xr.icy m* -t.ng places acros ^iew
would
die.
When
he
died,
I
waj*
sad
but relieved."
England and the re?* s the country. ^-.^ West
Difficult
decisions
anticipated
Roxbury taeetin-. .vas sponsor^ '.y Massachusetts
As health-care dollars become more limited,
Health De<-"' ^r.s, a private ..jnprofit group that
plans i •* each sessior' '..i the Greatei- Boston area ir health-care activists acknowledge that doing the
nght thing will nvolve some difficult decisions.
• r' .xt year.
Should expensive medical technology for the
Althcugh .ueetings in Massachusetts have been
extremely
sick e)(;er!y be restricted so that the
attend'" :i mainly by the elderly, many of whom have
money
could
be sysnt on providing vaccines to innpr •
gnx; mtoi-est in such questions.. Health Decisions
city
children?
Should organ transplants be limited to
organizcis meetings for young or old, those who have
people
who
can
pay for them?
jobs and those who arc unemployed, whatever their
Those
a7-e
the
kinds of questions thai health-care
race and background. The group hopes to expand to
reform
will
have
to
address - and that the grassother parts of Massachusetts.
roots
health-decisions
movement is hoping to help
Th" groups, past of an umbt ella organization
answer,
through
discussions
and ^estionnaires
called Amejican Healtli Decisions, have no
administered
afterward.
connection to the planne s working on President
If the discussion in West Roxbury is an
Clinton's health-cart refcrm proposal; which is
indication,
the issues will not be resolved easily.
expected to be announ-ed later this j'ear. But they
Henry
Crede,
69, of West Roxbuiy said he would
are foj-warding opi .rlons they gather to the
want
to
get
whatever
medical care he needed, with
administration, hoping to put the pai-ticipants' stamp
no
limitations.
If
eve.
co get the care they
' on change. Roben. . Boorstin, spokesman for the
needed,
"I'm
su)^
the
eountiy
wouldn't
go broke,"
Clintontaskforce, nys the task force has been
Crede
said.
"•Inundated" with n.aret al from the groups.
In Oregon, whei-e the movement began in 1582,
Care seen as prim- concern
people
place high value on things such as pievention.
For people i t -ndir.g the meeting at St. Geo'ge
quality
of life, cost-effectiveness and equity, said
Orthodox Chur c .i n " Vest Roxbury, health care is a
By DoloT'es Kong
GLOBI: STAVT'
:
:
,
5
r
:
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1 J
In Maine, lack of f a ding has led Maine Health
f aula McNeil, axecutiv- .-ii?ectoi- of Oregon Health
Decisions
to become hu gely inactive, but a state
Decisions, a pi-ivate n . • ..rofit group that ensures
bioethics
advisory
committee recently recommended
state residents have =. .iv. in health policy.
that
the
process
of
to .vn meetings be resurrectp-H,
Thesefindingsw >i: < ithered at 47 ccnmunity
according
to
Richard
I. Emmett, associate ^liector
rrGetings ai-ound th .•
McNeil said. Legislators
ci
the
Acadia
Institute,
a private, tonpr'/nt research
then used the infom- 'i .no guide their efforts in
gi-oup
tiiat
sponsored
Maine
Htalth Decisions. That
drafting the tontrove: ••••:.; i regon Health Plan,
advisory
committee-.'
s
r-»poti
har
been foiwarded to
wnich set out die rr.ei. .. procedures that Medicaid
the
Clinton
task
foi.ee.
.
•.
n
d
d
,cributed
thi-oughout
would pay for, McNei, &•'. Oregon Health Decisions
thfl
state.
Emmc-tt
aid
took r.o position on ihe ,;.she said, sejv.ng only 35
a Uiann-Vi for letting h- =. •: a tors learn of pecpie's Mary Strong, t.hai' Ionian <>f American Health
Decisions, said a R y,k Islanc r. jrse has expressed
vi.'U05 and opioior-e.
interest in .rarti-.^ a gra^t-/ov)t- organization in that
Vermont hoiding ir<>.nit-etinri
.:''.
.T.C.
In Vei-r.-.ont. V. • r •! • Fth.'cs N*efA\'o:-V: ii holding
Anc! '*.. Massachusetts. wwr> meetings on Cape
a second i'ound of t. - /•ttines, said Jean Maliary,
Cod ...,d the islands have showr. that people hava "a
president cf rhe or a • onprifir, o'fgan i 7.ati on.
, j ong desire to make their o .vr realth-care choices,
In
ry::d Vr '
• • was a fust •••ound called
inc.
not have them made for :.!xm by either tha
Vtnnoni H^airh I.,
is, bur. the discussiong
courts
or their physicians or >omeone else,"
tended to abst:- :' 'i -h health-cai-e refoj-n - .ow
according
tc Da^id B. Clarke, director of
3 national con cor., : discussions thar, be?../i in
Massachusetts
Health Care Decisions.
March - undw -.ne r Neighbor tc- N'..'ghbo)-: The
But w.-ien asked in a sun-.-y about tradeoffs that
Fur,i.r,-e of V? niont
• th Cai e - '.avc been mors
might have to be made, such as .jiving up some high:rr.medat<-. Ms!!-: ;'• ;.
"AVh-n ;-. u e
"y ; nfrcnted v.ith significant tech care so that prevention can be more available,
people most commonly respond zd "undecided,"
chanris in h ;'' rh •ra--.' she sa.d "ail of a sudden
Clarke said. "These are major odicy questions foi*
ic h;- : n ; ".1 k -.lift'e^nrc:. 'M '-y iiegin to talk
the counriy. I guess our experience is most people
a'.-var :r
'it,, pocketbo*' »•
;'a"ir. whether
have
neither had the chance to .iam about this or
th'-yV.: join? :>gev their sha 3. >vn:;i;:i.---h.i3!th cai-e
talk
about
this,"
is going to lo.'i the same. Po^-'i s-".'.iu.-;r nove
nervous ab'./.'. T}:e public is
,y btirnning to
set involved ar.-.! wak^n to tr«- n-V- -le is; a.;"
;
;
;
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�--a
Date: 07/14/93
Time: 17:28
Joint Effort Sought to Combat Border Health Problems
WASHINGTON (AP) The T h i r d World diseases found along t h e U.S.
border w i t h Mexico border w i l l be eradicated only i f the two
countries coordinate e f f o r t s t o improve h e a l t h conditions,
lawmakers and doctors said Wednesday.
And they suggested the best way t o cooperate i s through a
b i n a t i o n a l border h e a l t h commission comprised of f e d e r a l and s t a t e
health o f f i c i a l s , physicians and other experts from the United
States and Mexico.
Rep. Ron Coleman, D-Texas, has authored l e g i s l a t i o n c r e a t i n g a
permanent commission t h a t would develop s t r a t e g i e s t o improve
health c o n d i t i o n s i n a region marred by poverty, p o l l u t i o n and
inadequate i n f r a s t r u c t u r e . The measure i s being sponsored i n the
Senate by New Mexico Democrat J e f f Bingaman.
^The public health consequence of drastic population growth and
poor environmental conditions are staggering,'' Coleman said at a
Capitol news conference. *'Hepatitis is three to four times more
prevalent in the border region than it is in the rest of the
country. Tuberculosis, shigellosis, rabies and even leprosy are
real public health threats in the border region of our country.''
The American Medical Association
which four years ago
i d e n t i f i e d t h e border area a ' v i r t u a l cesspool and breeding ground
for infectious disease"
i s endorsing c r e a t i o n of a commission.
The AMA's president. Dr. Joseph Painter, said the current
situation i s a ''ticking time bomb"
and one with consequences
far beyond the border.
''We can already see vestiges of what i s happening with the
rates of diseases such as h e p a t i t i s , dysentery, tuberculosis r i s i n g
on our side of the border as well as across the border," Painter
told reporters. ''We can see sporadic outbursts that are occurring
across t h i s nation of similar diseases as people t r a v e l to other
parts of the country and spread the d i s e a s e . "
Said Rep. Bob F i l n e r , D-Calif.: ''This i s an American h e a l t h
problem.''
Texas Health Commissioner Dr. David Smith said that the medical
community alone cannot reverse the border's health woes. ^'We need
to have business at the table, we need to have u n i v e r s i t i e s and
o t h e r s , " he said. "Because i f we just play i n the health sandbox,
we won't f i x t h i s problem. We're too myopic."
APNP-07-14-93 1730EDT
x
�"PM-MA—Tsongas-Health Care, Bjt,0630
'Tsongas Touts His Brand of Health Care Reforms
"By EVE EPSTEIN= "Associated Press Writer=
BOSTON (AP) Former Democratic presidential candidate Paul Tsongas, one of
the best known c l i e n t s of the nation's health care system, i s touring the
country arguing for health care reform.
He believes h i s plan i s i n l i n e w i t h what H i l l a r y Rodham C l i n t o n i s
mapping out f o r her husband's a d m i n i s t r a t i o n , but he w i l l be ready t o
challenge h i s o l d r i v a l i f the program does not have an emphasis on p r i v a t e
competition t o make i t work.
Tsongas, 52, t r e a t e d f o r a recurrence of cancer s h o r t l y a f t e r l a s t year's
p r e s i d e n t i a l campaign, warned the nation cannot r e l y on health care cost
controls t o cut the d e f i c i t .
" I don't t h i n k i t i s conceivable t h a t you w i l l get massive savings, ' he
said i n a telephone interview from Washington, D.C. ~~You have t o balance the
budget i n a l l the other areas and presume t h a t health care does not make
things worse.''
Tsongas also believes f a i l u r e t o pass a health plan by June of next year
could jeopardize health care reforms f o r the remainder of President Clinton's
term.
" " I f you miss the June t a r g e t , I j u s t don't see i t happening,'' he said.
""You're i n t o the "94 campaign.'
Mrs. Clinton, in charge of delivering the president's plan, has now set a
target date of September for i t s release.
Tsongas favors managed competition in the health care system as
a way to hold the line on costs, instead of a system driven by centralized
government control called a ""single payer ' plan. Mrs. Clinton expressed
skepticism about the single-payer method while v i s i t i n g Hawaii t h i s week, and
Tsongas dismissed rumors her plan might head in that direction.
" " I know there has been a push towards a more regulatory scheme and one
that was more expansive in terms of benefits,'' Tsongas said. ""But I think
those t r i a l balloons have been i l l - r e c e i v e d . ' *
Tsongas and President Clinton held similar views on health care during the
1992 campaign. ""My presumption has been that what they w i l l eventually come
up with w i l l be what he talked about in the campaign,'' Tsongas said.
Tsongas retired from the U.S. Senate in 1984 after he was diagnosed with
small-cell non-Hodgkins lymphoma, which affects the lymph glands. In November
of l a s t year, a growth removed from his abdomen was diagnosed as cancerous
and he underwent treatment.
When asked about h i s health now, Tsongas said: ""I'm doing f i n e . '
His experiences as a patient have shaped his views on health care. In
1986, he underwent a bone marrow transplant, a high-tech procedure that i s
s t i l l only done in large medical centers.
" " I talk about the importance of maintaining quality and innovation and
high technology since I am alive because of i t , * • he said.
Some colleagues in the U.S. Senate urged Tsongas not to r e t i r e 10 years
ago so that he could keep his health care coverage. They feared he might be
rejected for health insurance because of his cancer diagnoses.
""That was a major issue when I l e f t the Senate, he said, adding that he
did receive health care coverage when he returned to h i s Boston law firm.
Tsongas, who returned to h i s law practice after bowing out of the
Democratic presidential primary, spends part of h i s time lecturing on health
care as o f f i c i a l spokesman for the Healthcare Leadership Council, a
Washington-based group of 50 chief executive o f f i c e r s in the health care
industry. He also i s active in the Concord Coalition, a group he founded
with former New Hampshire Republican Sen. Warren Rudman, which plans to
release i t s own a d e f i c i t - c u t t i n g plan t h i s f a l l .
1
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�"PM-IL—McDonnell-Strike,480
"Senator Bond Urges Union and Company To N e g o t i a t e
"vvvmg
ST. LOUIS (AP)
Sen. C h r i s t o p h e r Bond urged u n i o n m a c h i n i s t s and McDonnell
Douglas Corp. t o begin n e g o t i a t i o n s as t h e union's s t r i k e d e a d l i n e nears.
Bond spoke t o t h e McDonnell e x e c u t i v e s Monday a t t h e r e q u e s t o f t h e
I n t e r n a t i o n a l A s s o c i a t i o n o f M a c h i n i s t s D i s t r i c t 837 t o push f o r more
negotiations.
Despite Bond's p l e a s , n e g o t i a t i o n s remained a t a s t a n d s t i l l Tuesday. The
aerospace manufacturer s a i d no t a l k s are scheduled.
The company had s a i d e a r l i e r t h a t , j u s t l i k e i t s m a c h i n i s t s , i t was
preparing f o r a s t r i k e .
I n s t e a d of i n v i t i n g u n i o n l e a d e r s back t o t h e b a r g a i n i n g t a b l e , t h e
company s a i d i t would c u t o f f a l l pay and b e n e f i t s a t 12:01 a.m. F r i d a y t h e
time workers s e t f o r t h e i r w a l k o u t .
Members of I n t e r n a t i o n a l A s s o c i a t i o n o f M a c h i n i s t s D i s t r i c t 837 r e j e c t e d
McDonnell's l a t e s t c o n t r a c t p r o p o s a l on Sunday, t h e n v o t e d i n f a v o r o f
s t r i k i n g t h e company's o p e r a t i o n s on t h e n o r t h s i d e o f Lambert F i e l d .
C a s s e l l W i l l i a m s , p r e s i d e n t o f D i s t r i c t 837, s a i d a f t e r t h e meeting t h a t
union l e a d e r s were w i l l i n g t o resume t a l k s , but would w a i t f o r t h e company t o
make t h e next move.
W i l l i a m s , who i s s u e d a s t r i k e n o t i c e l a s t week i n t h e hope o f s p u r r i n g
c o n t r a c t n e g o t i a t i o n s toward a s e t t l e m e n t , s a i d McDonnell p r o b a b l y c o u l d
avoid a s t r i k e by m o d i f y i n g a h a n d f u l o f p o s i t i o n s i n i t s o f f e r .
But McDonnell o f f i c i a l s s a i d p r e v i o u s changes should have been enough t o
s a t i s f y t h e u n i o n , which r e p r e s e n t s about 7,500 o f t h e company's 25,000 l o c a l
workers.
I n l a s t - m i n u t e t a l k s F r i d a y and Saturday, McDonnell d e a l t w i t h a few
issues of main concern t o t h e u n i o n , and a l s o dropped some l e s s e r but s t i l l
ppir o uvb l e m a t i c i n i t i a t i v e s , s a i d company spokesman James Reed.
The company was l e d t o b e l i e v e t h a t these a c t i o n s r e s u l t e d i n an o f f e r
was s a t i s f a c t o r y t o t h e u n i o n , ' ' Reed s a i d ,
r k e r s v o t e d down t h e o f f e r Sunday by a r a t i o o f more t h a n 3 t o 1.
Among t h e b i g g e s t o b s t a c l e s t o a p p r o v a l were a p l a n f o r lump-sum bonuses
i n each year o f t h e c o n t r a c t i n s t e a d o f g e n e r a l wage i n c r e a s e s , and a
proposal t o merge v a r i o u s j o b c l a s s i f i c a t i o n s , which would a f f e c t s e n i o r i t y ,
pay and j o b assignments and t r a i n i n g , W i l l i a m s s a i d .
McDonnell p r o b a b l y c o u l d win s u p p o r t f o r lump-sum bonuses i n s t e a d o f wage
increases by b o o s t i n g i t s o f f e r above 4 p e r c e n t a n n u a l l y , W i l l i a m s s a i d .
McDonnell a l s o should i n c l u d e about 1,500 l o w e r - l e v e l workers i n t h e bonus
p l a n , he s a i d .
Union members a l s o o b j e c t t o McDonnell's p r o p o s a l t o r e q u i r e workers who
r e t i r e a f t e r Jan. 1, 1997, t o pay o n e - t h i r d o f t h e c o s t of t h e i r h e a l t h care,
Williams said.
One of t h e union's f i n a l areas of d i s c o n t e n t i s u n r e l a t e d t o t h e c o n t r a c t
proposal i t s e l f .
Union l e a d e r s want McDonnell t o r e s t o r e a l o s t day o f pay t o workers i t
d i s c i p l i n e d f o r c l o c k i n g out June 7 t o a t t e n d a r a l l y .
The union a l s o wants t h e company t o r e s c i n d warning l e t t e r s i t i s s u e d t o
those workers, W i l l i a m s s a i d .
¥WhiteHouse-A2-IL-0 6-16-9 3 10:01EST<
( v i a GenDos v516a)_
•
c
�
Dublin Core
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Health Care Task Force Records
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White House Health Care Task Force
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
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<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
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Paul Jamieson
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https://clinton.presidentiallibraries.us/files/original/4f0fe85f24450ea9c28a4d3db80c3e99.pdf
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1
�In Minneapolis, Steven Wetzel, executive director of the Business Health Care
* Action Group, a coalition of major emplovers, said a lower cost trend is sustainable only if health plans truly reduce use of
health-care services. "Premiums alone
don 't tell the whole story." he said. If plans
are bidding aggressively to win market
share, but fail, for instance, to reduce
excess hospital capacity, costs will inevitanse again, he maintained.
Studies Show Slowest Pace bly Peter
Reilly, an actuary at Milliman &
Robertson,
maintained that increased
In 20 Years; Some Say market penetration
of health maintenance
and other similar market
Trend May Not Last organizations
forces have done little to stem the tide of
health costs. An economic model he and his
By RON WINSLOW
colleague John Cookson developed shows
S t a f f Reporter of THF. W A L L S T H F E T J O U R N A L
that a decline in real national income
Medical costs in the U.S. are rising at during the recession in the early 1990s is
the lowest rate in two decades, new the major driver in moderating health
reports indicate, another sign that the costs. They maintain that there is a
health-care industry is managing to bring three-to-four-year lag between changes in
expenses under control.
income levels and similar changes in
Milliman & Robertson Inc., a consult- health-care spending. If that's the case.
ant and actuarial firm based in Radnor, Mr. Reilly says a renewed dose of healthPa., said health costs for the 12 months care inflation looms, since incomes have
ending last March rose just 2.5%, the \ improved since the recession,
lowest level in the 20 years it has tracked i
Many employers maintain that the
such expenditures.
(growing power of purchasers is driving
ABR Information Services Inc., Clear- .both a sharp drop in health-cost growth
water. Fla., said group health-insurance •rates and a restructuring of the system.
/"There's incredible competition out there
Cancer-Care Accord
in most markets," said Helen Darling,
Salick Health Care, in an unprecedented
manager of health-care strategy and proarrangement, agreed to provide eompregrams
at Xerox Corp., Stamford, Conn.,
henaive cancer care at a fixed price for
which offers a total of 204 health plans to its
nearly 100,000 memben of a Miamiemployees in the U.S.
based HMO. Article on page B3.
Employer demands for quality im• Baiter International forges a aeriea of
provement and cost reductions have,
novel hogpital-supply contract*, B3.
among other things, helped prompt a conpremiums it tracks in administering cer- solidation and reorganization of the
tain benefits for 12.000 employers have health-care system. But so much excess
been essentially •nat since the beginning of capacity remains, she said, that continued
the year and have risen less than 3.5% consolidation holds the possibility "that
since January 1993.
the rate of increase in health costs will stay
The findings are bolstered by several low if not absolutely flat for several
large employers that say they are winning years."
significant reductions in premiums from
In any event. Xerox itself is reaping
some health plans as they negotiate rates the benefits of its purchasing power in
for 1995.
markets across the U.S. Ms. Darling said
But some benefits consultants predict recent negotiations will mean an average
that health costs at most companies will increase in HMO premiums for Xerox
still be above the general annual inflation of 1.2% in 1995 over current rates. In many
rate, currently about 3%. "We're seeing individual cases, in Florida and Washingincreases for next year of about 6% to ton, D.C. for instance, premiums will drop
10%," said Robert Eicher, principal at more than 10%.
Foster Higgins, a benefits consultant in
Elsewhere, GTE Corp., expects 1995
New York.
rates for its managed health-care plans to
Moreover, whether market forces or increase 2% after a 3.5% rise this year,
other factors are chiefly responsible for the said Dwight McNeil, manager of healthmoderation in health costs is a matter of care information. And the Medica health
fierce debate, as is whether the trend will plan in Minnesota reduced its family rates
last. "It's a matter of some speculation as for Minnesota govemment employees for
to what happens next," said Richard Os- 1995 by 25% after a competitive bidding
tuw, a principal in the Cleveland office of process.
benefits consultant Towers Perrin and the
firm's chief actuary.
A recent Towers Perrin report said
growth in employer health-care costs this
year was about 6%, well below the 20-year
average. Mr. Ostuw believes that fear
of cost pressures from health-care reform
legislation is a major reason for the trend.
If Washington fails to act on health reform
and "that fear isremoved,"he argued, "it
will result in an uptick in health-care
inflation."
Medical Costs
Are Increasing
At a Low Rate
^
UJ
1
THE WALL STREET JOURNAL THTTRSDAY. JULY 14. 1994^
�James J. 1 Ionian
FYI from
I r a Magaziner
Health Care: Why We
Failed the Last Time /
I am the doctor who was at the
bedside when the last national health
proposal, put forth by the Carter administration, died. The time was May
1980 and the place the Senate Finance
Committee. I was the White House
representative for the Carter administration during the committees billdrafting session. The proposal died
quietly, with liule attention from the
media,' after a two-year "wasting illness" during which it shrank from a
large, relatively robust proposal to a
small, anemic shadow of its former
self.
The Carter plan began, under principles released in July of 1978, as a
proposal for a phase-in of universal
coverage. But the administration was
never certain of support for the increased taxes of employer mandates
necessary to make universal coverage
a reality. So the plan began to diminish
even before it was released in "draft
form" in January of 1979—to a proposal for a phase-in of coverage, with
each expansion conditional on certain
economic circumstances. This conditional phase-in was then diluted further, during congressional consultations, to one conditioned on further
congressional votes for implementation at each phase.
Finally, universality was left behind
in March of 1979 when the Carter
administrauon fell back to an attempt
to pass a phase-one-only bill that would
have achieved some modest expansion
of low-income coverage, along with a
diluted employer mandate of much
less expensive coverage, against only
catastrophically high health costs. The
proposal finally expired in May 1980
when the Finance Committeefailedto
reach agreement even on this anemic
remnant of the original proposal.
I write now in the hope that we can
leam some lessons from an autopsy of
this case that might lead to a different
outcome for the Clinton proposal.
There are important similarities between the Carter and Clinton plans
and their political context. Both proposals, at least at the outset, have
been quite broad in scope, calling for a
phase-in of universal coverage, and a
broad set of benefits, financed in good
part through an employer mandate,
with appropriate subsidies. There are
also some similarities in the political
setting with, in both instances, a Democratic president working with a Congress controlled by Democrats.
There are also, of course, important
differences. Substantively, the Clinton
proposal has a somewhat different administrative structure, relying on
state-based health alliances that foster
managed competition. There is a relatively large role for state flexibility.
The Carter plan had a larger federal
role, with employers having a choice of
obtaining private coverage, or obtaining coverage through a federally sponsored public backup program modeled
after Medicare.
As for the political setting, there are
at least two important differences.
First. President Clinton has placed
health insurance high on his agenda
from the earliest months of his administration. In the Carter administration,
health insurance took a back seat to
energy issues and welfare reform, to
name but two competing issues. Secondly, there appears to be somewhat
more cohesion among Democrats than
there was in 1979 and 1980. when
health insurance became an important
battleground in the struggle between
President Carter and Sen. Edward M.
Kennedy prior to the primary election
fights in 1980.
What lessons can be learned, then,
from the story of the ill-fated Carter
proposal' First we must establish the
cause of death. The Carter proposal
wasted away a little at a time, gradually growing smaller and smaller.
Why? Undoubtedly, division among the**
Democrats was a major factor; it pve
the administratioa little choice but to
attempt to build a more conservative
coalition around a much smaller proposal in the Finance Committee.
Equally important was the subordina- - I
tion of the goal of universal coverage ~
to other goals—among them avoiding
tax increases and employer mandates,,
which aroused the anger of the smallbusiness community.
_
Thefirstlesson, then, is to remember the importance of party cohesion.
A health insurance bill cannot be
passed by Democrats akme. It surely
cannot be passed with a badly fractured majority party. Democrats who
want health insurance to pass must not
allow the best to become the enemy of
the good and bog down the debate in
repeated tests of ideological purity.
Having said that, the second lesson
is that during the pull and tug of
congressional action, the moral compass to guide us through tbe health
insurance debate and lead to a successful conclusion must not be lost or--,
set aside. That moral compass is the
attainment, by a date certain, of universal coverage. Once this debate be- - I
gins to slide down the slippery slope-]
away from universal coverage,
through contingent universal coverage, on down to incremental expansions of coverage, it will suffer the
same death by degrees as the Carter
proposal
Although just about everyone in
Congress, of both parties, is ostensibly
in favor of the concept of universal
coverage, there is still a notable queasiness about the employer mandates
and taxes necessary to make universal
coverage real
_
In the quest to gain the broad bipartisan support that will be necessary to
pass legislation, there is the danger
that the goals of avoiding taxes and
mandates will again take precedence
over the goal of achieving universal
coverage—and we will again fail to
meet the maior rroral. t^t of this
cietoate.
_
There is a message here for memT
bers of Congress. You can negotiate
on the types and mix of taxes and
mandates, but a guaranteed date for
universal coverage must be nonnegoliable if we are to avoid tbe mistakes
of the past and seize this historic
opportunity. The test of history will be
simple: Is everybody covered?
1
The writer was associate director of
the White House domestic policy staff
in the Carter administration. He is
now dean of the medical school at the
University of Missouri-Kansas City.
�'No' to universal coverage/
Editor's note: What follows is the
latest "Memorandum to Republican Leaders" on health care from
the Project for the Republican
Future, whose chairman is William
Kristol The memo was released
yesterday.
federally mandated universal
health insurance coverage is a
bad idea. We know this bald
statement will make many in Washington (including some of our
friends) uncomfortable. But the
fact is that "universal coverage,"
as embodied in the Cbnton plan
and its many "lite" cousins, necessarily means the domination of our
health care system by government
and politics, and a degradation of
the quality of American medicine.
Republicans should not be intimidated by the president's incantation
of "universal coverage"; we should
be proud to oppose it.
Health care: the current political
situation Members of Congress
will return to Washington next week
facing two competing political
imperatives. On the one hand, there
has been a much-noted collapse of
public support for the Clinton
health care plan — because its regulatory and administrative provisions are confusing, and, more
importantly, because the radical
reform it proposes scares people
Public discomfort with a Clintonstyle overhaul shows up quite strikingly in recent polls; an American
Viewpoint national survey four
weeks ago. for example, found
respondents opposing untested new
health care arrangements and
instead favoring specificfixesto the
existing system — by a 79 to 19 percent margin. And congressmen are
hearing these views from voters
directly. Democrat Rick Boucher of
Virginia, for example, says, "[t]he
public here is not prepared for a
fundamental sweeping reform. As
of today, they favor narrow solutions to well-identified problems."
On the other hand, most polls
continue to show vague but general public support for the idea of
"universal coverage," and voters
offer that opinion to their representatives as well. "If you ask people, 'are you for guaranteed health
insurance!-' they say yes," Rep.
Boucher repons Which is whysuch a remarkable collection of
people in Washington now proclaim
their fundamental agreement on
the subject. Even Harry and Louise
are for universal coverage. The
White House has sent its spokesmen across the country these past
two weeks "to communicate with
the American people" about the
need for "guaranteed private insurance," and President Clinton will
make the same pitch in his weekly
radio address on Saturday. The only
remaining question, says Harvard's
Robert Blendon, is "how to pay for
it." Self-described "centrist" senators like John Chafee, Republican of
Rhode Island, concur; "the final nut
F
lican alternatives that do not establish a federal mandate for universal
insurance coverage, raise small and
specific objections to the Democratic bill, argue the merits of "universal access," and go for an up or
down vote. This option probably
loses.
There remains a principled third
way by which Republicans might
just win, and we recommend it,
though we caution that it requires
an unusual measure of political
courage. Republicans should mount
a vigorous public campaign for
serious and generous federal health
care reform — reform that solves
the specific problems of the greatest worry to most Americans while
preserving the essential quality and
current structure of American
medical care. Again, such reform
already enjoys overwhelming public support. And so as to attract
conservative, moderate and otherwise nervous Democratic legislators to such a reform position —
here's where the courage comes in
— Republicans should explicitly
oppose federally mandated universal health insurance coverage and
why the only meaningful congres- explain that opposition in detail.
sional action on health care these
Why federally mandated univerdays is taking place behind closed
doors among legislators deter- sal health insurance coverage is a
mined to achieve Bill Clinton's end, bad idea. Universal coverage has
federally mandated universal cov- some doubters in Washington, to
erage, through means that can be be sure. House Repubbcan Confer"sold" politically as a non-Clinton, ence Chairman Dick Armey of
"lite" alternative. And they also Tbxas, for example, calls universal
help explain why Republicans have coverage an impossible "mirage.''
lately (and shortsightedly, in our correctly pointing out that someview) assumed such a muted, where between 6 and 11 percent of
defensive, and compromising pos- Hawaiians still have no health
insurance, despite their state's
ture on health care.
In all likelihood, the next few "model" universal coverage
months will see congressional scheme (based on an employer
Democrats coalescing behind leg- mandate;. But the fact that univerislation that achieves "universal sal coverage probably cannot be
coverage" while at the same time achieved doesn't begin to explain
"addressing" past complaints what's wrong with it
against the administration's pro"Moderate" critics of the adminposal. As a practical matter of sub- istration's health plan like to comstantive policy, this bill will be a plain that it goes about the business
fraud; as we argue below, federally- of universal coverage the "wrong
mandated universal insurance cov- way." In fact, there is no other way.
erage cannot be achieved without a
Credit the president's men for careClinton-like government redesign
ful policy analysis: Universal covof the nation's health care system, erage necessarily involves the comand the new legislation will do just
plicated and
heavy-handed
that — though its provisions will be government intrusiveness that has
stretched out into "targets," or so undermined political support for
made "voluntary," or otherwise dis- the Clinton proposal. And any alterguised.
native universa] coverage arrangement that might escape comparable
The risk for Republicans. But
scrutiny and pass the Congress will
these disguises (and the mantra of
"universal coverage") will be pow- inevitably lead to versions of the
erful political tools for Democrats, Clinton bill's most famously obnoxand Republicans — if current cir- ious provisions.
cumstances aren't altered — may
Universa] coverage, as the presfind that we are left with only two ident understands it, makes health
options, neither of them attractive. care a federal entitlement. It's an
We can participate in the construc- entitlement that will have to be regtion of this legislation, hoping per- ulated — a lot. lb begin with, if the
haps to weaken or eliminate some federal government requires every
of its more onerous aspects, and individual or employer to purchase
somehow persuade ourselves that
health insurance, it must first deterwe have in the process damaged
mine precisely what kind of insurneither American medicine nor ance will legally satisfy the requireRepubbcan principle. That would
ment. In other words, the federal
be dishonest. Alternatively, we can government must create a list of
remain faithful to existing Repub- medical procedures to be covered
to crack," he says, is whether to use
an individual or employer mandate,
and he predicts that a bill providing
federally mandated health insurance will be on the president's desk
by August.
These fact — collapsing support
for the Clinton Bill, but continued
support for "universal coverage"
— explain much of the current
political situation. They explain
why almost no one in the capital
disputes the wisdom and virtue of
universa] coverage. They explain
Republicans should
not be intimidated by
the president's
incantation of
"universal coverage";
we should be proud to
oppose it.
011
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FK1DAV. APRIL 8. 1W
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Identifier
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2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
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Paper
Dublin Core
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[Media Information] [Loose]
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
Identifier
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2006-0885-F Segment 2
Is Part Of
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Box 24
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
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Preservation-Reproduction-Reference
Date Created
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2/6/2015
Source
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42-t-12093080-20060885F-Seg2-024-003-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/da1b26193c96034e07fcbc3a100d33cb.pdf
676d439706cded6809dc93cee176d397
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4787
FolderlD:
Folder Title:
[Media] [3] [loose]
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
4
1
�^
C6
u
Q
<JY
�DEPARTMENT OF HEALTH & HUMAN SERVICES
Office of the
Regional Director
Region VIII
Federal Office Building
19GJ Slout Street
Denver CO 80294
TELECOPIER COVER SHEET
£~Z12^94-
DATE
Pagos Transmitted:
Cover +
10
TO:
NAME
ORGANIZATION:
TELEPHONE NUMBER:
FAX NUMBER:
36Jf45%>~W5
1
FROM:
NAME:
Dr. Margaret cary
ORGANIZATION:
Regional D i r e c t o r
TELEPHONE NUMBER:
FAX NUMBER:
SUBJECT/REMARKS
844-3372
844-4545
dfVttSvLo
^Q/u A^C^eA^hu-J^r>
~M.a£0
10 "d
90:01 flRL
W-l\-m
�MARGARET CARY, M.D., MJUI., M.BJV. Program Co-Host
Margaret Cary has been President of Cary Communications International of Denver
since 1989, and has practiced medicine in Denver since 1983. She is on the clinical faculty of
the Family Medicine Department at the University of Colorado School of Medicine and is a
member of the Colorado Board of Medical Examiners. She is co-authoring a book, "How to
Talk With Your Doctor: A User-Friendly Guide to Physicians."
Dr. Gary's professional history includes positions as Medical Director of Rose Medical
Center at the Coliseum and at South Federal In Denver, Co-Director of the Emergency
Department of Mammoth Hospital in Mammoth Lakes, California, and on the clinical faculty
of the University of California, San Francisco, School of Medicine.
Dr, Cary is also very active on numerous boards and advisory committees. In 1991,
she participated in the "50 for Colorado" leadership program of the Colorado Association of
Commerce and Industry. In 1988-1989, Dr. Cary served on the Board of Directors for the
Alliance for Professional Women and was a founding member of the Colorado Women's
Leadership Coalition. Dr. Cary has been active as an advisor to the Colorado Foundation for
Medical Care, and a member of the Women in Medicine Task Force for the Colorado Medical
Society, and a member of the Physician's Advisory Council for Rose Medical Center. Dr.
Cary served on the National Board of Directors for the English-Speaking Union in the
United States in New York and on the Asian Art Association for the Denver Art Museum.
Dr. Cary has written and lectured on physician-patient communication, the changing
physician-patient relationship, patient treatment directives, licensing of Colorado physicians,
reform of the American health care system, and cultural difference in health care. Dr.
Gary's publications include pieces in "The Examiner" published by the Colorado Board of
Medical Examiners, "Colorado Medicine" journal of the Colorado Medical Society, "The
Advocate" newsletter of the Colorado Women's Bar Association, and "The Prism," the Alliance
of Professional Women newsletter.
THE HONORABLE RICHARD D. LAMM Panelist
Richard Lamm is a former governor of Colorado and currently Director of the Center
for Public Policy and Contemporary Issues as the University of Denver, where he is also a
professor.
JOHN J. MCGRATH, MJ>., M.PJ\- Panelist
Dr. McGrath is a consultant to The Colorado Trust, a senior fellow at the Center for
the New West in Denver, and was a health policy advisor as well as a member of the Health
Policy Advisory Group for the Clinton/Gore campaign.
CECIUS S. ROSE, MJ)., M.P.H. Panelist
Dr. Rose is an Assistant Professor, Departments of Medicine and Preventive Medicine
and Biometrics, University of Colorado School of Medicine and a staff physician at the
National Jewish Center for Immunology and Respiratory Medicine, Denver, Additionally,
Dr. Rose serves as President of Physicians for a National Health Program.
STEPHEN SCHMIDT Program producer
Stephen Schmidt has been producing television and film projects for over thirty
years. His credits include programs for CBS Television, Time-Life Broadcast, four feature
films and the very popular P.D.Q. Bach concerts and records, including "The Abduction of
Figaro" for Public Television.
�12
KBDI
P.O. BOX 1740
DENVER, CO 80201
(303) 458-1200
Biographies
UNDA FARKELL Program Co-Host
Linda Fan-ell has been an active participant in the broadcasting community on
both the local and national level for the past 17 years. As the prime news anchor, host
and producer of numerous news specials, series, telethons, and local fundraisers, she is
well known for her active community involvement. Throughout her broadcast career,
Linda has been an advocate for children at risk, and has concentrated on the Issuea of
children and families.
A veteran broadcaster, Linda has worked at affiliates of all three major television
networks; ABC, CBS, and NBC. She has also worked at two Independents in the capacity
of News Anchor and News Director. Linda has worked with commercial cable stations
and Public Television as well.
Linda has produced and hosted numerous news series and specials on children's
issues including those on prenatal care, teen pregnancy, children of alcoholics, children
with cancer, AND children of divorce, and for many years in Denver was the
Host/Producer of "WEDNESDAY'S CHILD", a weekly series dealing with children of
special needs who are waiting to be adopted.
Linda has received many prestigious awards in her broadcasting career. She has
been honored by American Women in Radio and Television as "Broadcaster of the Year,"
by B'Nai B'rith for her commitment and involvement in children's issues, by the Colorado
Child Protection Council for her media coverage of children's issues, and by numerous
organizations locally and nationally as a visible children's advocate.
Linda is sought after as a public speaker, mistress of ceremonies, and host of
events and telethons involved with children and families at risk, and various community
functions. Her leadership has led her to form her own business, "THE LINDA FARRELL
GROUP," where she is involved in video production of television specials and
documentary work on children and family issues, and other issues of critical importance
to the public at large.
01 "d
£i:oi nm n-z\-m
�The Health Care Puzzle
Page 2
The panelists Include: former Colorado Governor, Richard Lamm, now affiliated
with the University of Denver; John J . McGrath, M.D., a former member of the Clinton
campaign health policy advisory group; and Cocilc S, Rose, M.D., Assistant Professor,
University of Colorado School of Medicine, and President of Physicians for a National
Health Program. The panelists will be pushed to objectively analyze the difficult
decisions which will soon be debated in the legislature. The program's goal is to provide
the viewer with understandable information about the proposed plans, focusing on the
benefits and costs, both tangible and intangible, which will eventually directly affect the
individual and family. The discussion will also include suggestions as to how, when, and
where viewers can make their opinions known.
Designed to go beyond the confusion and generalities so often mentioned in daily
newscasts, T H E HEALTH CARE PUZZLE will introduce the audience to four health care
consumer groups outlined in the "Clinton" plans 1) a family with children; 2) a single
parent; 3) a senior couple; and 4) a single person, The co-anchors will lead the viewer
through typical health care scenarios with each unit.
In keeping with KBDI's original goals of service and access, the station has focused
its production and programming on difficult local, regional and national issues not being
addressed elsewhere. Stephen Schmidt, Out West Productions, has national credits in
both documentary and entertainment production.
Major funding for THE HEALTH CARE PUZZLE is being provided by TakeCare,
Rose Health Care Systems, Aetna Health Plans, FHP of Colorado, Inc., and The Children's
Hospital.
####
CONTACTS: TOM MILLS
JANE JACOBSON
(303) 458-1200
60'd
2i:oi nm w-z\-m
�12
KBDI
P.O. BOX 1740
DENVER, CO 80201
(303)458-1200
FOR IMMEDIATE R E L E A S E
T H E HEALTH CARE PUZZLE"
A KBDI-TV PRODUCTION ADDRESSING THE ISSUE OF
HEALTH CARE REFORM IN COLORADO AND ACROSS THE NATION
HOSTED BY LINDA F A R R E L L AND MARGARET CARY, M.D.
THURSDAY, JANUARY 13 AT 7:00pm & SUNDAY, JANUARY 16 AT 5:00pm
1/3/94, Denver - National health care reform is inevitable. The real question is,
what form will it take? Colorado residents are now asking themselves, "How will the
national plan and Governor Homer's 'ColoradoCare' affect my health care services, my
family and my bank account?" And, "Is there anything I can do to Influence future
legislation?"
These questions, and more, will be addressed in a KBDI-TV, one-hour special
presentation, T H E HEALTH CARE P U S L E / airing on Thursday, January 13th, at
7:00pm and again on Sunday, January 16, at 5:00pm. THE HEALTH CARE PUZZLE is a
co-production of KBDI-TV 12 and Stephen Schmidt, Out West Productions.
THE HEALTH CARE PUZZLE will specifically address how national and Colorado
health care proposals will directly affect the family. This public affairs panel discussion,
with video packages profiling separate families, will be co-anchored by Linda Farrell,
former news anchor for both Channels 4 and 7 in Denver, and Margaret Cary, M.D., a
practicing family physician and a member of the Colorado Board of Medical Examiners.
-more-
80'd
�<=>
B6
COMMUNITY^
Doctor finds
domino theory
of existence
fascinating
U.S. must recognize link
between poverty, health
care, director savs.
By Lois ML Colftna
Deserei Nev« hu.Tian services writer
Dr. Margaret Cary is fascinated
by "community" and tlie way lives,
programs aod problems interconnect.
It's a dcmuno theory of existence: Lack of health insurance
can be linked to poverty, which can
be linked to lack of education .. .
ffi
Pm interested in programs with a sense of
community
Dr. Margaret Cary
»»
CD
CD
6—
CD
I
CVI
I
>-
Sometimes the order is reversed, as when medical disaster
leads to poverty. Housing, the
economy and family structure all
join the mix m various combinations.
Tbe new regional director of the
U.S. Department of Health and
Human Services is the firsk to admit .she knows more about tbe
medical side of the equation. She
is a physician; her knowledge of issues like welfare reform and lowinoome bousing carries from lots of
reading, discussion and "trying to
stay informed."
Cary came to Utah Thursday lo
Dr. Margaret Cary chats w i t h Glen Bracken a t t h e Neighborhood House during her visit t o Salt Lake CH
attend a public health conference
and visit programs "to get a sense
of the sorts of things Utah has to
otfer." She chatted with senior citizens in day care at Neighborhood
House, then toured a Head Start
classroom.
"I'm interested in programs with
a sense of community," she said.
"Everything from pbysirian-patient communication, demand
management (when to see a doctor)
to women's and kids issues. I dont
see these as separate issues. Look
al health-care reform. I was spending a lot of time finding free care
for people without money. It's all
related."
Programs — and lhe people who
ran them — are begmnmg an era
of real cooperation, she said. In the
pasi, money has gone specifically
to one program or another, as if
Ihey didn't or couldn't be linked.
Recognizing those links and working together could stretch resources and improve results.
Bill and Hillary CUnton provided her wilh a favorite quote:
"It's insanity to do the same Uiing
over and over and espect different
results."
"We're Milling lo try something
different. My role is lo talk with
people, listen to Ihem and see what
their problems and ideas are,"
Cary said. She is also a liaison t
tween local and federal official
"taking the issues back to them
More than that, Cary wants t
seen as a resource. She pro mis
that people in her office will re
phcne calls. They'll get into the
community "so people undersl
what's going on.
On issues hke welfare, like p
vious administrations, there's:
push for reform. "Bui this adn
istration wants to talk about nc
just cutting people off. We war
provide education or skills so
people can do well."
�CO
CD
Health-care reform won't come ea
"I'm a trained technician, and
that's not a very good use of my
time. People would come to see
Denver earlier this year; and she
me, and in the back of their minds
expects it to be shown across the
was always the idea that if it was
country.
She has no illusions that health- something serious ihey could lose
their savings, lose their home.
care reform will be easy, but she
Even when I saw people forfree,I
says it's necessary.
couldn't do anything about the lab
"The admirable thing aboul
and X-ray costs. That's scary."
Clinton is that he's wiling to
Cary. who is single, moved to
negotiate the details," she says.
Colorado in 1983 !>ecause her fam"The only thing that is non-negoily is here, and she loves the state.
tiable is universal care, that can
never be taken away. As a doctor; I She has had practices at Rose and
Accord medical centers, and most
spent half my time on the phone
recently at Aurora Woman Care.
looking for health care ior people
She will continue to live in her
who couldn't afford it, not poor
Denver home, but will spend a lot
enough for Medicare not rich
of time iri Washington as the
enough to have health insurance.
DOCTOR from 80
,;< •.: l i t '
CD
CD
CD
I
CVI
I
><n
health-care debate unfolds.
One goal is to give at least one
speech in Spanish during her tenure
in govemment. She believes there
is a lot Ihat can be learned about
some of the traditional practices
found in the minority communities
in the western Uniied States.
"There are some amazing statistics on Latino health, for example," she says. "Latinos are healthier than the general population, and
they have a lower infant mortality
rate. I've heard a large pari ofthe
reason is the sense olfamilia, the
support, the human resources, the
sense of belonging- That's something we need to bring to all
Amerirans." I'-.'.-'-'j t \
�DR. GARY'S
RX FOR
HEALTH CARE
Health-care reform
will mean new responsibilities for consumers
and government, says
Margaret Cary, a Denver doctor recently
named head of the
western region of
Health and Human Services.
Or. Margaret Cary is one of 10 regional directors of the Department of Health and Human Services.
CONSUMERS' ROLE
• We are a nation
(prone to) lifestylerelated diseases — diseases that can be avoided. Wear your
scatbells, exercise, car
good food, don't, smoke,
get enough sleep. In
other words, do the
things your mother told
you to do.
• Cut your own medical
costs- If you ha^e a
cold, we can't treat it,
so you might wait a day
or two before seeing a
doctor.
• Make sure you can
talk to your doctor, and
that you understand
everything you are
told. If you don't understand, say so. ftke
notes, or bring someone with you.
• Keep abreast of
health-care news.
A DOCTOR IN THE HOUSE
Denver physician believes health-care reform
starts with patient education
By Alan Dumas
meant taking care of families," Cary says. "And I'll
miss my patients and the feeling I've made a difference in someone's life on a day-to-day basis. But the
trade-off is the chance to make a difference in a much
wo weeks afja Dr. Maojarct Cary spent a
bigger arena.
rypical day looking down palients' throats,
"Right now Health and Human Services is on centelling them tn say "Ahhhh," and asking
ter siagc nationally, with all the emphasis on healthr.hnm the color of their mucus.
To<1ay. the 42-year-old Denver doctor is om.- nf the care reform, and I will be able to look at policy and
nation's top puWit: hcnllh officials, charged with help- know whether it will work by the time it reaches the
ing o-'erhaul the multi-billion-dollax liealth-care indus- doctor and the patient in the office, where it matters."
Patient education will be one ofber biggest, prioritiy.
ties in her new job. She believes a patient who is well
Asked which is tlie better job, Cary. whn km-.*- ni.
informed and under;;Lands some basic principles about
-1 she ^-iirited to be a family doctor, pauses and
getting and staying well is the fastest and most costsays she'll pet back tn you.
effective way of controlling health-care costs.
President Clinton this week appointed Cary one nf
Cary, who xrew up in the Ray Arva during the '60s,
10 regional directors of the; Dr.parimcnt of Health and
says having someone her age in the White House
Human Services. Her district is headquartered in
rekindled her interest in politics.
Denver and includes
She worked on
Montana, Wvor
Clinton's campaign
rhe- nalior^i ant
doing everything from
as well as Lolnrado. In
chauffeuring Hiihiy
rhr histniyot'HHS,
in Colorado to writing
only two secretaries
position papers for
have been doctors, and
Pill.
Cary ii llic first ilucLor
But Gary's appointlo be » regional dircxment goes beyond
ror.
solitical payback. She
There are several
las a lifelong interest
reason? doctors a^oid
in public policy. In
ijovei nniem. Money is
addition to herM.D.,
one. Cary, whose new
she holds master's
job pays $97,000, innka
degrees in public
pay rur wlipn she
health and business
ao-.e.precl ir. Krustration
administralion. She
with bureaucracies is
co-pruduccd a proanother. Doctors arr
gram called The
iml<:pcndem souls.
Heullh Cure Puzzh for
Hut mostly, doctors
•'•.mt to treat patients. Cary and Richard O'Brien, regional director of the KBDI-Channel U in
"I've nNaya believed AdnnmsUalive Support Service, talk TO Ron Kc-lshaw,
rhai K-n-.c :i doctoi
lefi, ofVirtJinia.
See DOCTOR on 9D
Rihky Mivvtam Xucs SlaJJ Writtr
l
50'd
GOVERNMENT'S ROLE
• The most irnporr.ant
thing the government
can do is make :<iire the
air you breathe and the
water you drink is
clean.
• The government can
educate the public...
and make a significant
difference in behavior in
areas like AIDS prevention and smoking.
• The governmeni
should provide immunizations for children
and prenatal care for
women who can't afford
it.
• The governmenl
should provide, hearing
and sight screenings for
all children. I sat in the
front row at school and
squinted 'til 1 was 9,
when someone realized
I needed glasses. There
should be dental tare,
too.
• The government is
the health-care provider
of last resort for the
pour and disenfranchised, and this must
change. Good health
care should be available
to all.
60:01 nmfr6-21-m
�Rogional Director
Region VIII
Federal Office Building
MARGARET CARY, M D M B A M P H
0
JJnver' CO^80294
Margaret Cary, physician, business owner, ajid clinical instructor is the Regional Director ofthe
U.S. Department of Health and Human Services. Cary is the first physician appointed to this
position and oversees about 1,500 federal employees in Colorado, Montana, Utah, Wyoming,
and North and South Dakota. Local depaitmenls under her supervision include Social Security,
Medicare, Medicaid, the U.S. Public Health Service, Administration for Children and Families,
and Administration on Aging. Prior to her appointment, Cary had a private medical practice
in Denver, served as President of Cary Communications International, and taught clinical
medicine for the Family Medicine Depanment of the University of Colorado School of
Medicine.
Dr. Cary had been practicing medicine since 1978. She was appointed to the Colorado Board
of Medical Examiners by Governor Roy Romer in 1988 and served until 1994. She has worked
as a consultant to several businesses on health care issues in the workplace.
In her role as President of Cary Communications International, Dr. Cary was concerned with
physician-patient communication and relationships. She is co-authoring a book, How io Talk
With Your Doctor: A User-Friendly Guide to Physicians. In January 1994 Cary co-hosted "The
Health Care Puzzle," a naiionally-telcvised KBDI-TV coproduction addressing the issue of health
reform in the U.S. Her articles have appeared in such medical publications as Colorado
Medicine and The Examiner, as well as in professional association newsletters. She has spoken
on many occasions aboul the Clinton Health Plan, and served as an advisor on health care issues
to the President during his campaign. She has also spoken on physician-patient communication,
the changing physician-patient relationship, patient treatment directives, physician licensing, and
cultural differences in health care.
Dr. Cary received her bachelor's degree at the University of California at Santa Barbara in
1972, her master's of public health at the University of California at Los Angeles in 1974, and
her doctorate of medicine at Baylor College of Medicine in Houston in 1978. She completed
the family practice residency in Santa Rosa, California and is board-certified in family practice.
In 1989 she completed her master's in business administration and was named the Outstanding
MBA Graduate of the University of Colorado at Denver.
Dr. Cary has been active on numerous advisory committees and boards. She participated in the
"50 for Colorado" leadership program of the Colorado Association of Commerce and Industry
in 1991. She was a founding member of the Colorado Women's Leadership Coalition and
served on the Board of the Alliance of Professional Women in 1988-1989. She has been an
advisor to the Colorado Foundation for Medical Care, was a member of the Women in Medicine
Task Force for the Colorado Medical Society, and was a member of the Physician's Advisory
Council for Rose Medical Center. She served on the National Board of Directors for the
English-Speaking Union in the United States and on the board of the Asian Art Association for
the Denver Art Museum. Dr. Cary is a member of the Colorado Biotechnology/Medical
Technology Roundtable and the Denver Committee on Foreign Relations.
wrd
8o:oi nm n-z\-m
�Margaret Cary, MD MBA MPH
Regional Director, Region VIII
U.S. Department of Health and Human Services
1969 Stout Street
Denver, Colorado 80294
303 844-3372
Fax 303 844-4545
1.
Do we really need health care reform?
2.
Why does Washington D.C. think they have the lead in reforming health care?
3.
Why an employer mandate?
4.
Will I be able to choose my own doclor?
5.
Should abortion be covered?
6.
Why in the world does Clinton include so much bureaucracy?
7.
Will we have to ration health care?
8.
Why alliances?
9.
What is "managed competition" and how does it work?
10.
Why can't we solve the health care crisis by getting rid of "waste, fraud, and abuse?"
11.
How will those in rural areas be covered?
12.
Why should I pay for smokers (or drinkers, obese people, etc.)?
13.
Why does small business have to pay?
14.
How does the CHP deal with women's reproductive issues?
15.
How will academic health centers be affected?
eo'd
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�1
8. B ^ ^ E ' ^ i yipGow todM'dp yo^favj^, oassage i
- " - ^irth c a ^ f tan? J | r
::
•
'
Kcxky Mountain Ne-"!
Here's help unraveling
Clinton's health plan
Spedal report May 22,
TV debate May 23
will kick off barrage
of coverage on issue
Rixk) Mountain News Staff
The Clinton health care plan
is 1,364 pages long. Supporters
and critics have written many
thousands of pages more.
How will you judge whether
you want your representatives
in Washington to adopt or reject
this overhaul of the American
health care system?
It may help to read the Rocky
Mountain News and watch
Channel 6 in the days ahead.
On May 22, the News win run
a special report examining the
health care controversy. Then,
20'd
at 9 p.m. May 23, Channel 6
will broadcast a debate on the
Clinton plan moderated by former Colorado Gov. Dick Lamm.
Additional news articles,
opinion pieces, editorials and
letters-to-the-editor on health
care reform will run in the
Rocky Mountain News in the
days that follow.
Co-sponsoring this special effort is the University of Denver/University of Colorado
Consortium on Health. Ethics
and Policy.
We'd also like to know how
you view the health care debate. Please fill out the accompanying survey and mail it to:
Health Care Debate, 400 W.
Colfax Ave., Denver 80204.
The results will be reported
in the News on May 22. A phone
survey will immediately follow
the May 23 debate.
90:01 nm w-z\-m
�
Dublin Core
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Title
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Health Care Task Force Records
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White House Health Care Task Force
Is Part Of
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
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William J. Clinton Presidential Library & Museum
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2006-0885-F
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 2
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Box 24
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
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Clinton Presidential Records: White House Staff and Office Files
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2/6/2015
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42-t-12093080-20060885F-Seg2-024-002-2015
12093080
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https://clinton.presidentiallibraries.us/files/original/0a97034189ece0a67c649d9cdc82ec65.pdf
64d1e72f8f39ee489b61be546d620f5b
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Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
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Jamieson
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4787
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53
3
4
1
��- N Aa^LON A.L,. AiiEAJJtai
A New Generation
White House: What
Clinton's budget and
health-care plan could
mean for our kids
Bv H O W A R D F I N E M A N
AND RICH THOMAS
T IS BILL CLINTON S DESTIM TO PLAY
the role ot Babv-Boomer-in-Chiet.
Bom in 1946. the postwar generation's
inaugural year, he discovered politics
on his living-room television and
j found his heroes in Kennedy and King.
I Now he and his wife live a busy two-career
' life in the capital. He complains about
i Washingtons cynical culture, worries
about his daughter's schoolwork and battles his inflatable waistline.
But last week an array of numbers —in
his new budget and in a study of his healthcare plan —underscored somethiniz more
important about his generational role. He
needs to talk bluntly to the American family
about its finances: to tell seniors —and his
fellow boomers—that they must stop shifting fiscal burdens onto children and the
unborn. Ending generational selfishness
would redeem a watchword of his administration: responsibility. But it's not an agenda that presidents (or Congress) have seriously pursued.
So far Clinton has also shown signs of
squeamishness. Far from talking tough to
seniors when he unveiled a commission last
week to study entitlement spending, he
pledged to protect them. He is expected to
do the same at a seniors center in New
Jersey this week. Advisers have even suggested he assume the mantle ofthe late Tip
O'Neill as defender ofthe elderly. "They're
ready for a new champion." concludes adviser I'aul Beeala. In thr political season
now starting. Clinton will have to square
feel-good politics with long-term trends.
Yet Clinton has at least made a start.
€ven if he was prodded by President
George Bush's 1990 budget deal and by
Democratic " deficit hawks" in 1993. Last
year's budget agreement, though anathema
to Republicans, helped reassure the markets and keep interest rates low. It reduced
|
I
;
Thinking about tomorrow? C/mfon
m
1!
I
u ithyoungpatients. Hillury w ith seniors • i
90
�result. Clinton has room to maneuver. It's
easier for him to oppose a constitutional
amendment that would require a balanced
liederal budget. Debate on the measure begins in the Senate this week. Sen. Paul Simon of Illinois, its sponspr. thinks he mayhave the votes: polls show overwhelming
public support. But with "short term" defi1995's likely federal deficit to $165 bil- cits seemingly under control, opposition
lion—the smallest (when compared with won"! damage Clinton
the size oi the economy) since 1979. ClinStill, the president and his aides know
ton's new budget shows a Democratic pres- the deeper theme of generational fairness is
ident proposing remarkable austerity: elim- potent. In tact, they are making bold to
ination of 100 programs, cutbacks in 300 adopt it. The new budget asserts that the
others. Even the RepubLcan staff of the Sen- Clinton health-care reform plan would save
ate Budget Committee was forced to con- $58 billion over the next five years alone.
cede that Clinton had "shown courage."
Such numbers enabled budget director
That " courage' is paying otV politically. Leon Panetta to send Congress a 10-page
The economy is rolling along: the populari- essay in which the administration touts its
ty of Ross Perot, who ran as champion skin- intergenerational statesmanship. "We're
flint in 1992. is in decline. Few Americans reducing the burden on future generanow cite the debt as a leading concern. As a tions.'' Panetta declares.
But raising that claim is risky.
^^^™"
The burden on future generations remains scary even by the
administration's
own reckonThe Congressional Budget Office said that the White
ing.
According
to
White House
House had underestimated the cost of Clinton's
calculations,
the
accumulated
health-care plan. But a NEWSWEEK analysis found
federal
debt
is
expected
to pass
that both the CBO and Clinton ignored two new
$6
fn'llion
in
1999-and
interest
health-care entitlements that could swell the deficit.
payments on that debt will reEstimated Defldt
main an onerous 14 percent of
IN BILLIONS OF DOLLARS
the budget. Using a new branch
1999
1995 1996 1997 199b
of econometrics called generaClinton budget
sies S170 $188 S I M S181
tional accounting, the White
CBO
House estimated that kids in 13171
167
aoa 212 226
year-old Chelsea Clinton's genIM
235
286 270
NEWSWEEK estimate
181
eration will have to fork over
wiRcn: CLIKIOK i •utx.iT.coscamiuv.u. •uncrr orrict AND K r o w m MJUICU
the equivalent of 38 percent of
The Cost Keeps Climbing
their lifetime income to government - up
from 32 percent for those in her dad's cohort. Theoretically, the unborn will be
forced to contribute 66 percent of their lifetime income. "The grown-ups are still fiddling while their kids'-and their kids'
kids —future bums." declares Ion Cowan
ofthe lobby group Lead . . . or Leave. "It s
fiscal child abuse."
Reftl crisis: Clinton's budget is largely
mute about therealcrisis: entitlements. It is
brutal in holding down "discretionary"
spending on itemsfromweapons systems to
public housing. But the intergenerational
problem is the continued growth of existing
entitlement programs—not to mention the
eventual cost of new ones Clinton wants to
create. Entitlements-automatic, mandated payments to qualifying citizens for everythingfromsocial security to disability insurance—have risen steadily. They now
account for about half the budget.
Clinton has spoken eloquently about the
ruinous effects of soaring health-care
spending on both public and private budgets. But the claim that his plan would produce immediate savings to the government
was dismissed last week by the most credible of sources—the Congressional Budget
Office. In the long run. concluded CBO
Director Robert Reischauer. Clinton's plan
would indeed cover everyone and slow the
rise of health-care spending. But over the
next five years it would add some »70 billion in federal debt. That change alone
nearly wipes out Panetta's alleged "improvement" in generational accounting.
More important was Reischauer s overall characterization of the plan. White
�N-A-T: I O N - A L. A^ F F A L R»S«.House officials were relieved that he hadn't
used the "T word " — taxes —to describe its
mandated insurance premiums. But he did
use the "E word.'' The whole SI.2 trillion-ayear program, he said, was a new • entitlement": not really a private insurance
scheme but an exercise ol sovereien power' that must be listed in the budget, like
social security.
Vet according to NFWSWEF.K estimates,
even Reischauer was too kind to Clinton s
proposal tchart i. In addition to the sweeping
guarantee ol adequate health care lor all —
subsidized by taxes where necessan —
there are specific new entitlements: one to
subsidize 60 percent ot the health-care costs
of workers covered by early-retirement
health-care programs: another to prov ide
home health care for the elderly and disabled. The CBO didn't question White
House cost estimates for either. But together
the programs could show annual overruns
of S50 billion to S60 billion bv the year 2000.
Feu insiders believe Congress will pass
the early-retiree subsidy as it stands: it's too
naked a payotf to auto, steel and airline
companies that are stuck providing such
costly coverage under existing labor-union
contracts. But Congress might well pass
some lesser subsidy for all eariy retirees
— whether they have generous programs
now or not. Any such program would be
expensive. Clinton's idea, careful private
estimates show, would cost S13 billion a
year right away—and S25 billion annually
in a lew years.
Fiscal risk: Clinton s planners believe
they can shorten costly hospital stays and
save money by providing living assistance
and nursing help to the homebound. It's an
honest belief—but a huge fiscal risk. To
limit abuse, the Clinton plan would require
a doctor to certify that a patient met strict
standards of impairment. But such stand-
ards teno to be subjective. "It boils down to
A warrrj^eanednes^ test." says Susan Tanaka of ir.e Committee for a Responsible Federal B-jdcet. " The wanner the doctor v
heart, the more who pass the test." She anc
other? believe that such a program will cos:
doubie Clinton's estimate of S20 billion ;i
year by the year 2000.
The Clinton plan rests on a deeper faith:
that the government can somehow be both
warmheaned and hardheaded. The fiscal
track record to date isn't encouraging. Take
Medicare. Government experts first predicted that Medicare, enacted in 1965.
would cost SIO billion a year by 1990. The
real number turned out to be S107 billion.
Such numbers should make the president
and Congress cautious as they move ahead
on heaim-care reform. They might do well
to remember the theme song Bill Clinton
chose for his last campaign: ""Don't Slop
iThinkme About Tomorrowj."
•
j underwritten by the Health Ini curance Association of America. Theyfretabout beEWT GINGRICH
ing "forced" to buy
wanted to show
insurancefrom"gova group of senior
ernment monopocitizens how scary
lies." But under the
govemment-run
Clinton plan, health
health care can be. So
alliances would offer
he cued up a news clip
three choices, more
about Canada's systhan most people have
tem on a VCR and
today. The HIAA repwatched the audience,
resents hundreds of
members of the Amersmaller insurers,
ican Association for
which would be drivRetired Persons, reen out of business in
HUA's earnest Hanr He just
The DNCs usual suspects: 'They
coil in horror. Except
Clipton's plan. HIAA
don't need government monopolies to
said there was no recession. Now they
for intensive care and
has already spent $14
get health coverage for everyone'
say there is no health-care crisis.'
emergencies, the Tomillion on ads, and it's
ronto broadcaster exonly February.
life to an M.D. or an M.B.A.?"
plained, all hospitals would be style system. Health-care ads.
Democrats arefightingback
closed for several weeks. Chil- most designed tofrightenmore asks the American Medical As- with one ofthe most overthan enlighten, have been pro- sociadon. The message here is workedrebukesofthe Ws:
dren 4 and older with high feliferating. Last fall NEWSWEEK that medical care will be
ver should not be brought in
"They just don't get it." A new
usurped by government buunless they were convulsive or dissected some early spots
ad paid for by the Democratic
(Oct. 11, page 44): a sampling of reaucrats who care more about National Committee captures
lethargic. The reason for the
the latest scare tactics:
cost control than good care. The four Republican presidential
shutdown was budgetary.
Gingrich calls it "the most chill- • "Everything is at risk" is the AMA is running a series of print hopefuls (Bob Dole. Jack Kemp.
ads in major publications under Carroll Campbell and Dick
ing 30 seconds I have seen al- tag for a spot produced by the
Project for the Repubbcan Fu- the heading THIS IS THE MOmost since the nuclear-war
Cheney! declaring that there is
ture, a Washington think tank. MENT OF TRUTH. Doctors are
movies ofthe early '80s."
no health-care crisis. Dole and
The ad strings together quotes encouraged to hand out copies Campbell have backed off from
Gingrich, the House GOP
to tbeir patients. What the
for maximum shock: There
whip, ponders how effective
that claim, and many Republiads don't say is that medical
those seconds could be in an ad will be rationing"—The Wall
cans support some kind of
decisions are already often
Street Journal. "A giant social
opposing the president's
health-care reform. But that
made by insuren and hospital
experiment"—NEWSWEEK.
health-care bill. "Just say. 'Let
hasn't stopped the DNC from
admnustrators.
The ad was aimed at opinion
us show you government
labeling the opposition as out of
leaders inside the Beltway. "It • "We couldn't choose a plan
health care in the North'."
touch. Scare tactics are a lot
would take 520 million to take it that's not on their list" is LouNever mind that neither the
more etiective than droning
to the people," says media ad- ise's plaintive cry. She and
Clinton plan nor its major
recitations about the pros and
Harry are the gratingly Middle cons of managed competition.
viser Alex Castellanos. .
Democratic rival, the Cooper
plan, proposes a Canadian• "Would vou rather trust vour America couole featured in ad>
F l F ANOK C l . l F T
Scare Tactics and Sound Bites
NiI
22
N F M' « W F F K
r
^
FFBFUARVSI.ipq^
' >• « « '" * * v 5 t. i nn ,
• 1.
ft
�E. J. Dionne Jr.
decisions, in private hands. This would
come as no surprise but for all the exaggerated rhetoric about how the Democrats
favor "big government" and the Republicans "small government."
See Through
That Patter \J
When people complain about politics,
their grumpiness usually falls into one of
two categories. Either the angry voter will
assert that there are no differences between Republicans and Democrats and
that it doesn't matter whom we elect. Or
the cntic will denounce both parties for
being too "extreme" and "partisan" and
wonder why they can't get together to
solve common problems.
Occasionally, the same person will make
both of these critiques simultaneously,
which is not as irrational as it seems.
Those who say that the parlies are both
too similar and too extreme are usually
asserting that the public fights between
them are largely contrived as both sides
exaggerate their differences for shortterm gain at election time.
Once in office, the parties never behave
as differently from each other as they
promised they would. Thus did George
Bush run as a fiercely anti-government
candidate and then preside over a large
increase in government spending as a
share of the nation's economic output. Bill
Clinton promised all sorts of new programs and now finds himself cutting away
at federal spending simply to keep the
deficit below $200 billion.
It's rare that a government document
throws light on this sort of debate, but
there was much enlightenment in the annual Economic Report of the President
issued last week. The report is mostly the
work of the president's Council of Economic Advisers, chaired by Laura D'Anorea Tyson.
The report demonstrates that there are
real differences in the way Democrats and
Republicans .look at the economy and government's role in shaping it. Democrats
worry more than Republicans do about
growing economic inequality, which the
report calls "a threat to the social fabric
that has long bound Americans together."
Democrats see government as fostering,
not retarding, economic growth and as
improving, not limiting, the average person's standard of living. Whereas the Economic Reports issued by Republican presidents included detailed analyses of the
costs of government regulation, this one
includes a section on the urgency of government-led health care reform and praises government's efforts to clean up the
environment.
On the other hand, anybody who thinks
of Democrats as closet "socialists" ought
to read all the material in here about the
importance of free markets, competition,
"capital formation," business investment
and free trade. Offering an argument dear
to the hearts of those who see a global free
market as a good thing for the United
States, the report explicitly questions
whether freer world trade has driven
down American wages.
So, yes, it matters whether you elect
Democrats or Republicans. Democrats are
more willing than Republicans to put floors
under people's incomes and health care
sUndards. Where both sides favor "safety
nets," Democrats tend to favor bigger
ones. Democrats think government spending for job training and education will help
more people than cuts in the top tax rates
that Republicans championed. Democrats
think that government investment in new
roads or research can help the economy at
least as much as private investment in,
say, new office buildings. Republicans are
skeptical.
But Democrats and Republicans are operating within broadly similar world views
when it comes to the merits of keeping
mnsr nf rhp prnnnmv and most investmenL
The truth is that both parties are operating at the margins. The margins are
important, as anybody making more than
$250,000 a year will notice next April 15.
But the similarities are more important.
No matter how much small government
rhetoric they deploy, the Republicans
won't abolish Social Security, Medicare,
Medicaid or the defense budget, which
together account for most of federal
spending. No matter how much they wax
populist in their occasional rebukes to "big
business" or "the rich," the Democrats
aren't proposing confiscatory taxes or a
government takeover of GM, GE or IBM.
All this needs to be borne in mind during
the coming health care debate. The Republicans have been at sea in that debate
because their anti-government rhetoric
doesn't match what they are already for.
Through Medicare and other health programs, the government pays over 40 percent of the nation's health bills. That share
will grow as the population gets older. By
supporting Medicare, Republicans concede
upfront that government will play a huge
role in the health system. But only rarely
do you hear talk about "big government"
Republicans.
Moreover, almost everyone in the debate says the government should prohibit
insurance companies from turning people
down for health coverage just because
they have a "preexisting" medical condition. That's a good idea, and also more
"big government." Many who knock the
Clinton bill praise private insurance companies for doing better recently at holding
down medical costs—by using some of the
very techniques they attack Clinton for
proposing m his plan.
So beware of all the "big government"
and "free market" patter you'll be hearing
in the coming months. Almost nobody in
the debate is proposing a real free market
m health care. And nobody is suggesting
we go tht- Soviet route. As the Council of
Economu Advisers would tell you, that's
true on almost every' other political question, too.
�Deceptions Hinder Waste-Dump Debat^
1
THE
NEW YORK
TIMES,
TUESDAY. FE
BRUARY" "
4
To the Editor:
In "Not a Federal Repon'' (letier,
Feb. 1), on California's proposed
Ward Valley nuclear-waste dump,
Robert M. Hirsch, acting director of
the United States Geological Survey,
attempts to discredit three of his own
agency's most senior scientists.
The detailed report, prepared at
my request by Geological Survey experts with more than 40 years of
experience in the Ward Valley area,
identified numerous paths by which
Health Tinkering Is Not Reform
Representative Pete Stark, the California Democrat who heads a House subcommittee on health
policy, says that Congress ought to scrap the purchasing cooperatives, or alliances, that lie at the
core of the Administration's health care bill. The
Senate minority leader, Bob Dole, and another
Republican Senator, Phil Gramm of Texas, say that
Congress ought to gut the other institutional reforms proposed by the President as well — and
stick to small fixes. In the next few weeks Congress
will decide whether it will overhaul or merely tinker
with health care.
Tinkering is not enough. To see why, Imagine
that Congress takes the go-slow approach and does
little more than require insurance companies to
make their policies portable (workers can keep the
policy when they leave their current employer),
communiO' raled (the chronically ill pay the same
premiums as the healthy) and guaranteed (insurers are required to sell to applicants regardless of
preexisting medical conditions).
These small-fix insurance reforms are not enforceable if Congress leaves the current unregulated — and uncompetitive — market largely in place.
The Government would find it difficult, for example,
to check whether insurance companies were serving all potential applicants. Did the insurer recruit
only in Scarsdale? Did the insurer answer phone
calis from potential applicants in Harlem? Did the
insurer tailor its benefits package so that AIDS
patients would not apply?
Congress could, of course, enact 13 trillion
pages of rules to stop these practices. But a more
effective, less regulatory answer is to require most
individuals or their employers to buy coverage
through a cooperative, or alliance. The alliance, not
the insurers, would then make every policy equally
accessible to everyone in the region. The alliance is
also positioned to transfer money from insurers
who, through trickery or happenstance, do not enroll many AIDS patients to insurers who do; that is
the only effective way to force insurers to serve the
chronically ill.
Even the power of the alliances will probably
?
not stop insurers from all discrimination. So Congress will need to insist that insurers provide an
identical set of health benefits — known as a
standard benefits package — to every enrollee.
That way policies cannot be crafted to attract only
healthy applicants.
Minimal fixes would leave too many loopholes.
If each of us is guaranteed the chance to buy
coverage whenever we want at community rates,
none of us who have a choice about coverage — who
are not automatically insured through work — will
buy until we get sick. That would leave only the sick
to buy coverage — at what would have to be
prohibitively high premiums. Under such rules, 20something-year-old couples would wait till the wife
becomes pregnant before purchasing insurance.
Advocates of small-fix reform would almost
certainly have to allow insurers to exclude coverage for preexisting conditions for at least, say, nine
months. But that provision would leave millions of
Americans temporarily unable to get insurance and
would not stop many others from gambling that
they could do without insurance — knowing they
could always flee to the nearest emergency room
largely at public expense. The solution is to make
insurance mandatory, as President Clinton proposes, so that no one, when well, can skip paying
premiums.
Real portability is another fix that takes more
than a flick of the legislative pen. Congress may
promise workers that they can continue to buy their
old policy after they change jobs; but what good is
that promise if their new employer doesn't include
the old plan among available health-care options?
Again alliances are an answer. If people get coverage through alliances, rather than employers, they
would retain access to their old plans as long as they
continued to work in the same region.
Every American ought to have coverage that is
portable, community-rated and guaranteed — operating through a system that is fair, dependable and
free of loopholes. Alliances and a standard benefits
package look like the best road to those goals.
Anything less does not deserve to be called reform.
The Boat People: A Chapter Closes \/
They first floated into the world's consciousness in 1977, fishing boats crammed with desperate
men, women and children fleeing the hardships and
persecutions of a newly united Communist Vietnam They encountered pirate attacks at sea and
hostile receptions on nearby Asian shores. Still,
nearly a million of these "boat people" eventually
set sail, most in the late 1970's and early 1980's.
That chapter of history has now been officially
closed by the United Nations High Commissioner on
Refugees. The U.N.'s refugee arm declared last
week that fleeing Vietnamese would no longer be
automatically eligible for consideration as political
refugees; they will be judged on an individual basis
like other applicants. Most of the 60,000 boat people
remaining in Asian refugee camps can now be
legally sent back home.
That is unwelcome news to the affected Vietnamese. But sending them home is no more cruel
than leaving them to rot in refugee camps — if they
can be assured of freedom from reprisals on their
return. Asian countries, fearing unemployment and
ethnic conflict, will not admit them as residents.
And Western countries other than the United States
have been almost equally unwelcoming.
Though the world likes to pretend otherwise,
the treatment refugees receive always has a lot to
do with international politics and the current standing of their homeland. The Vietnamese exodus of
the late 1970's shocked a world that had been lulled
by Hanoi's rosy — and false — postwar picture of
liberation, peace and national recuperation. Vietnam is still a poor country and remains arbitrary in
its treatment of those suspected of political nonconformity. Yet It offers more hopeful economic prospects and less systematic repression.
It is also being officially welcomed back into
the community of nations that isolated it during the
long Indochina wars. Only this month, the U.S.
finally dropped its 19-year economic embargo. The
Association of Southeast Asian Nations, once virtually an anti-Vietnamese alliance, now weighs accepting Hanoi as an associate member.
International law defines a refugee fairly
strictly. Most people trying to escape poverty and
dictatorship do not qualify, only those who can
demonstrate a "well-founded fear of persecution "
International agencies like the U.N. High Commissioner on Refugees have a dual mandate: to protect
legitimate refugees and to organize their return
home after it becomes safe to go back. For Vietnam,
that moment now seems to have arrived.
radioactive materials could migrad
to the Colorado River, the principa
drinking water source for Southen
California, Arizona and Baja Califor
nia The repon also shows seriou>
inadequacies in the analyses per
formed by project proponents:
Mr. Hirsch attempts to diminish
the findings of the survey's specialists by arguing that their study was
not an official study and was not peerreviewed by the Geological Survey.
Mr. Hirsch does not mention lhal It
was he who forbade the experts from
performing the work as an official
Geological Survey study and he who
first agreed to, and then forbade, Geological Survey peer review.
He also states thai the findings by
ih Ward Valley experts are at odds
with a Geological Survey study in the
1980's. Thai study, however, a mapping exercise of the southwestern
United Stales, was q broad effort that
did not conclude that the Ward Valley
site, or any other, was safe It merely
identified broad areas requiring further site-specific investigation. Indeed, the Geological Survey has written that it "has not conducted any
studies in Ward Valley, California,"
regarding suitability for low-level radioactive waste disposal.
Mr. Hirsch seems committed to
squelching an objective analysis of
the proposed Ward Valley dump. This
issue will not be resolved until decision makers engage in an open, honest process that both insiills public
confidence and insures ihe safety of
Ihis generation and future generalions.
BARBARA BOXER
U.S. Senator from California
Washington. Feb. 16, 1994
�Why the cost savings from
managed care will never materialize
By Doug Bandow
president's centrally-planned system of command-and-control regulation will succeed where a series
of presidential campaigns against
government waste, fraud, and
abuse have failed? CEA member
Alan Blinder points to existing managed care systems: "The savings
we project are perfectly reasonable
when you recognize that health
care provided by HMOs is 15 percent cheaper than regular fee-forservice."
Alas, Mr. Blinder's optimism is
belied by more than just the latest
federal review of Medicare, fbr
more than a decade, employers,
private insurers, and the federal
government have been trying, with
Uttle success, to limit costs by
he Clinton administration
continues to press forward
with a health care program
that seems to offer everything for
everyone: quality medical attention
for more people at less cost, insurance policies with lower
deductibles and copayments, and
money — at least $58 billion at latest count — fbr deficit reduction.
These claims "are not debatable," at
least that's what Council of Economic Advisers chairwoman Laura
D'Andrea Tyson said before the
administration adjusted its original estimates. Now the revised forecasts, promises White House aide
Ira Magaziner, are accurate: "We've
discussed this thoroughly, and I
dont think there is disagreement
now on what the numbers should
be." Except by the Congressional
Budget Office, but that's another
story.
Alas, the administration's
announcement that it will no longer
press Medicare recipients to join
Health Maintenance Organizations
because doing so doesn't save
money suggests that even it may
have to again readjust its numbers.
After all, if the Reagan and Bush
administrations were wrong in
thinking that they could cut costs
by pushing the elderly into managed care, then the Clinton administration is likely to be no more
effective even if it succeeds in forcing the rest of us into similar organizations.
Yet administration officials claim
that their program will perfonn the
medical equivalent of cold fusion
precisely because they expect it to
sharply reduce medical costs that
have heretofore been sprinting
ahead at double digit rates. The
scheme is to simultaneously reduce
federal medical expenditures, particularly for Medicaid and "managing" care through a panoply
Medicare; generate higher federal of programs: HMOs, Preferredtax revenues, by cutting corporate Provider Organizations (PPOs),
insurance premiums, allowing professional standards review orgacompanies to pay higher salaries nizations, utilization review and
that, in turn, will result in increased more. In fact, according to the Conincome tax collections; allow Wash- gressional Budget Office, by 1990
ington to spend less on retiree the percentage of employees in one
health care benefits than do private form of managed care or another,
firms today; and make better off, in
the long-run, most of the 40 percent including fee-for-service plans with
of Americans who will be paying Utilization Review, was 95 percent,
upfrom59 percent just three years
higher premiums.
before. Yet a study released by the
In short, the presidenrt entire General Accounting Office in Octoprogram hinges on its ability to ber found "little empirical evicurb tbe growth in health care dence" that managed care cuts
expenditures. If such cuts do not costs, lb the contrary, despite all of
materialize, the result will be some these efforts, reports Dr. Joshua
combination of higher taxes, Wiener of the Brookings Instituincreased insurance premiums, tion, "costs are still going up at very
lower quality of care and explicit high rates.'*
rationing. And we will be worse off
Overall, managed care appears
than before we started.
to have lowered base costs, though
What evidence is there that the the amount is in dispute. Consider
HMOs, which benefit from the fact
that their members tend to be
Doug Bandow is a senior fellow at healthier than average. While
the Cato Institute. He is the author of HMOs are, in general, cheaper than
"Dangerous Medicine: A Critical other plans, they are by no means
Analysis of Clinton's Health Plan," uniformly less expensive Two
•published by the John Locke Foun-recent business surveys, one by
dation.
KPMG Peat Marwick in 1992, the
T
other a 1991 review published in
Health Affairs, found little difference in premiums and similar rates
of premium increaseforHMOs and
indemnity plans. And HMOs can be
more expensive. According to the
GAO, "Some firms havefoundthat
their total health care costs have
increased after implementing network-based managed care." The
consulting firm FosterHiggins
reports that 35 percent of corporations surveyed stated that their
HMO rates were higher than those
for traditionalfee-for-serviceplans.
Moreover, the cost advantage
begins to melt away when HMOs
are transformed into Point of Service (POS) plans, which offer more
physician choice; the latter generate barely half the savings, 7.9 percent compared to 14.7 percent (in
1991) over indemnity coverage. Yet
one of the administration's amendments to its original proposal was to
require that health alliances offer
POSs rather than simple HMOs.
Professional standards review
organizations, PPOs, utilization
review, and similar attempts to
restrict medical use have proved to
be of uncertain value as well. Studies of the former, for instance,
which are applied to Medicare and
Medicaid, have found anywhere
between zero and 18 percent reductions in different hospital services.
Some researchers believe that
PPOs, provider networks which
tend to impose lower copayments
on patients — just as the administration intends — may actually
raise utilization and therefore costs.
Study results have been equally
equivocal for utilization review,
with cost savings limited largely to
hospital inpatient care, particularly surgical services. At the same
time, costs often rise elsewhere.
Fbr instance, a 1989 repon by the
National Academy's Institute of
Medicine said, "savings on inpatient care have been partially offset
by increased spending for outpatient care and program administration."
Anyway, to the extent that managed care has reduced costs, it is
largely a one-time phenomenon.
While the expansion of managed
care may have cut the costs of some
individual plans immediately after
implementation, it has done little to
reduce system-wide costs and has
not halted medical cost inflation.
Stanley Wallack of Brandeis University's Bigel InstituteforHealth
Policy points to "the inability of :
managed care to control system '
costs, as health care expenditures
have continued toriserapidly with
the widespread adoption of managed care." A1988 studyfoundthat
utilization review had "a one-time
effect of reducing use and expenditures" that did not increase in the
future, a conclusion reaffirmed by
other researchers a year later. FbsterHigginsreportsthat the avenge
employee cost for HMOs jumped
13-5 percent in 1991 (and 15.7 percent in 1990); PPOs were 13.7 percent more expensive in 1991. Con-
For more than a
decade, employers,
private insurers, and
thefederal government
have been trying, with
Uttle success, to limit
costs by 'managing'
care through a panoply
ofprograms. Yet a
study released by the
General Accounting
Office in October
found 'little empirical
evidence' that managed
care cuts costs.
]
cluded the Institute of Medicine
"Although it probably has reducec
the level of expendirures for som
purchasers, uuhzation manage
ment — like most other cost con
tainment strategies — does no
appear to have altered the long
term rate of increase in health-can
costs. Employers who saw a short
term moderation in benefit expen
ditures are seeing a re mm to pre
vious trends." The GAO and CBC
have both come to a similar conclusion.
Why is this the case? One reasor.
is that most of the easy cost-cuttinf
was done long ago Warns the CBO,
for instance, "in the past managec
care succeeded largely in reducing
hospital use, but similar drops in tht
future are now less likely" because
admission rates and lengths of sta>
have already dropped substantially
Nor does managed care change tht
underlying incentive stnicture created by pervasive third-party pay
ment, the fact that three-fourths o:
medical bills are directly paid b}
someone other than the patient
Observes Dr Thomas Rice o:
UCLA's School of Public Health
HMOs' "record of accomplishmeni
[in curbing medical inflation] is nc
better than that of fee for-service
medicine, probably because HMOs
are not insulated from any of the
underlying causes of health care
cost inflation"
These many, often arbitrary,
attempts to control costs have, however, adversely affected care,
resulting in premature discharges,
unperformed procedures, and
inadequate attention The result is
not a good model for the administration's promise to further cut
costs without harming medical
quality. Warns a group of
researchers at the Johns Hopkins
University, "It is difficult to be sanguine, however, about the potential
for future savings to come without
any loss in quality of care."
The
administration
has
promised much wiih its health care
program. But everything depends
on the assumption that federalizing
medicine will cut costs. If costs do
not fall, the Clinton program will
collapse. Unforrunately, our experience with managed care suggests
that there would be little, if any savings from more managed care
through the administration's
Health Alliances Past cost savings
have been less than commonly .
thought, and most of what can be
easily saved already has been
saved with 95 percent of people
now covered by managed care. In
short. President Clinton is asking
the American people to take a
riverboat gamble on their medical
futures, with the odds lengthening^
everyday.
Oje Bfagfrington Cfangg MONMY. FEBRUARY 21,1994
�LARRY KING (RADIO)
Date:
Time:
Location:
WH Press Contact:
I.
February 7, 1994
5:00 PM -6:00 PM
10 minute discussion and then phone calls
415 OEOB
Dawn 66740
BACKGROUND
Organizations putting on ads King will open the show with
roughly 10 minutes of discussion with you about the
advertisement campaigns ofthe AMA, HIAA, and the PMA
(with the Coalition for Health Insurance Choices-serving as a
loose coalition), after which you will take phone calls. The
campaign has already been extensive and expensive; HIAA has
started a second round of infamous "Harry and Louise" 30
second radio and tv ads, produced by Goddard and 14 states.
The cost for this two month campaign is $3.5 million; last year,
HIAA spent $10.5 million on ads. Of note is that Prudential
and Aetna dropped their membership in the HIAA as a result of
the ads.
Your statements In speech at the VA, you said that the
accusation that the plan would limit choice was
"unconscionable...They are raising the choice issue when it is
really the health insurance practices ...that have limited the
choices of millions of Americans." [Reuters 11/2/93]
HRC involvement As you know, the First Lady attacked HIAA
and their head Bill Gradison in November for running
"misleading" spots. Watch out for a question that Mrs.
Clinton's $100,000 investment in Valuepartners I Fund, which
"has a stake in the dechne of health care stocks" [Orange County
Register 11/3/93]
The DNC campaign under Celeste is running a $3 million
campaign on health care with TV, a 15 minute video and other
paid media. The Kaiser Family Foundation and the League of
Women Voters have launched a $4.1 million print and television
campaign (generally favorable to us) to provide "basic
information" on health care issues.
�As you know, their ads focus on :
Limiting consumer choice
Limiting drug R&D
Setting physician fees
II.
ATTACHMENTS
-- "A Few Points to Remember about the HIAA"
-- HIAA Attack Ads "An Objective Analysis" (5 pages)
-- NYT "Ads are Potent Weapon in Health Care Struggle" 2/1/94
-- W. Post "Those Health Care Ads" 11/3/93
Key quotes:
"The health insurance industry has been cbnducting a
demagogic campaign against the administration's health
care plan..."
Newsweek "Go Ahead, Bust Some Chops"
Key quotes
"Hillary was right to rip their heads o f f .
"...She's right substantively: the industry has brought us
back from the brink of bankruptcy."
-- Transcripts of HIAA ads
- "Partners I F (30 Second TV)
» "Thanks - Better Way" (30 second TV)
-- "Harry and Louise Part I I F (30 second TV)
"Yes, But IT'(30 second TV)
-- "Better Way" (60 second radio)
-- Washington Times "The First Lady's Invective Against Our
Ads is Misplaced" by Bill Gradison
-- Rhetoric vs Reality response to CHIC ad [9/9/93]
-- Orange County Register Editorial on Mrs. Clinton's health
related investment. [11/3/93]
2
Paul W. Jamieson 2/7/94
1
This article included a box that accused HIAA of "Highlighting Fears About the Clinton
Health Plan".
War room rhetoric vs realitv attached.
2
1
�Political Memo
Ads Are Potent Weapon
In Health Care Struggle
By ROBIN TONER
trirm ie Ttm Htm Yort Timm
WASHINGTON. Jaa 31 - Do you
want your next life-or-death decision
to be made by "an M.D. or an
M.B.A.?"
Are you ready to put your family's
health insurance into the hands of
"these new, mandatory government
health alliances run by tens of thousands of new bureaucrats?" Are you
aware that research by the oftencnucized pharmaceutical companies
"provides the best hope for conquering diseases like cancer and dramatically reducing health costs?"
A burst of new adverusing from
insurers, doctors and other interest
groups is posing all these questions
and more as the struggle intensifies
to influence the course of health care
restructuring — primarily, so far.
raising questions and doubts about
parts of President Clinton's plan.
Already, the subject of these ads —
on radio, television and in publications — is down to the emotional
basics, dealing with illness ang death
and the aching vulnerability of the
patient And some politicians and political profeuionals are predicting
that the groups behind this campaign
will push the limits of modern political advertising in both cost and technique.
A Rough Campaign
" I think there will be a barrage of
cynical advertising like we have never seen," said Mandy Grunwald. the
media consultant for Mr. Clinton, who
is advising the Democratic National
Committee on us forthcoming health
care campaign. " I think it will be
tideous."
Kathleen Hall Jamieson, dean of
the Annenberg School of Communications at the University of Pennsylvania, said, "Public pobcy is now being
conducted the way we conduct campaigns for elective office — with all
the flaws."
At work in many of these ads. political professionals say. is the basic
imperative of election advertising:
The one who defines a candidate first
— in this case a health plan — wins.
And while the Administration has the
formidable communications advantage of the White House, its allies
complain there is no way ihey will be
able to match the volume and intensiiy of advertising by interest groups in
tre campaign to come.
The Health Insurance Association
of Amenta, which spent $10.5 million
advertising is trying to break that
last year on advertising and has a S3.3
link between change and greater semillion campaign under way this
curity, arguing that the cnanges un
month in more than a dozen cities,
der consideration could, in faci. jeophas drawn the most fire in recent
ardize the quality of health care, not
weeks from friends and allies of Mr.
improve it.
Clinton and his wife, Hillary.
This is put most starkly by the
Tw* Major DtaagrMmeau
television spot broadcast this week in
BUI Gradison, president of the assofive cities and on Cable News Nei
ciation, counters that the group enwork by the Project for the Republidorses the AdministraUon's goals but
can Future. This ad casts the Clinton
disagree with two major aspects of health plan as the true health care
its approach: requiring most people
crisis, concluding, "Ever.-ttv.nn Rood
to buy insurance through state health
about your health care is a risk.''
alliances, which will be quasi-governcennda Lake, a Democratic poll
mental en ti ties acting as middlemen
taker who has worked extensively on
between consumers and Insurance
the health care issue, savs opoonems
companies; and putting caps on the
have already won onv rjur.d in the
cost ol premiums.
early struggle to delme the issue.
"We got absolutely nowhere tn
"The first thing that was accom
meeting with the Administrauon."
Mr. Gradison said. "So our view is '. plished by the opposition was, 'You're
that the issue is now up to the Amerigoing to pay more,' " she said.
can people and their representatives
"We've jealty lost that ftaht."
in Congress, and that's who we're
Another theme of much of this ad
trying to reach with these ads."
vemsmg is that an army of bureauDespite polls showing a broad con- crats will intrude on the inumate
sensus (or some kind of change in the ,relationship of doctor and pauent.
country's health care system, there | "Government and insurance compaare many openings tor group* seek- ny administrators could end up detering to raise doubts, change key provi- mining which types of treatment are
sions of the various plans or general- appropriate for patients like you."
ly try to slow the momentum for a says the Amencan Medical Associacomprehensive overhaul. Bob Blen- tion ad running in newspapers.
don. an expert on public opinion and
Amid all this campaigning are
health at Harvard University, notes groups trying to talk about the posithat people are still divided over just
tive side of health care restructunng
what kind of plan is best. As a result,
The National Health Care Reform
they are open to a campaign like that
Project, a Washington coalition o(
run by the Health Insurance Associa- i consumers, labor, business, civic, eld
tion of Amenca, which Mr. Blendon erly and health professional groups.
summanzed as, "Clinton's got the
nght idea, but the wrong plan."
is running a radio and pnnt campaign
in M cities.
The insurance association's ads
often feature people talking sympaAdvising the Administration on the
thetically about the need for reform,
health care campaign is much of the
then reviewing the Clinton plan with
same core of advisers who were Dealarm and building to a closing plea:
hind Mr. Clinton's Presidential bid
"There's got to oe a better way."
Ms. Grunwald. Paul Begala. James
Ms Jamieson notes that the health
Carville and Stan Greenberg.
^
issue is like iew others in the anxiety
it engenders even without the spur of
And the Henry J. Kaiser Family
advertising "You have so little inforFoundation has announced that
mation about something you care so
along with the League of Women vot
deeply about." she said.
ers Education Fund, it was beginning
Not surprisinitly. a pnncipal theme
a UA million campaign — featuring
in the campaigns n a yearning for
securuy which the Clinton forces i television and print advertising and
about 60 town meetings — to try to
have incd to make the centerpiece of
provide "basic information rn the
their campaign, as in the slogans.
health care issue, like who the unin"Health care that's always there"
sured really are.
and "Health care that cjn never be
taken away ••
But some of the interest groups'
�THE AO CAMPAIGN
Highlighting Fears About the Clinton Health Plan
ON THE KNONi Two women are in an office
diecuesing Preetdertt Orton'a neetth cere plaa
They talk about thetr desire for reform but qiricWy
move on to tneir reservations and fears. The rising
muaic undereooreattteiralarm, and tteir deelre to
take action by *8«n(lng a meeaage* to Congress.
The graphic at the end says: 'For facts you need to
know — 1-800-285-HEALTH.
Twsacrr
Ubby: *l want Congress to pass health care
reform . . . "
Louise: "Make sure everyone is covered.*
Ubby: * . . . but not torca us to buy our insurance
from these mandatory Government 'health
alliances.' •
Louise: 'So we couldn't choose a plan that's not on
Iheir list even if if we think It's better for our
employees and their families."
Ubby: "Not according to this." (Holds up President's
health plan.)
Louise: "But Congress canfixthat — cover
everyone and let us pick the plan we want."
Ubby: "And they will, II we send them that
message*
Announcer "For the facts you need to send
Congress a message, call today.'
ACCURACY: The ad focuses on one of the most
confusing pans of the Clinton plan, the health
alliance, a quasi-govemmental entity intended to
pool the purchasing power offconsumersand small
companies ana thus !o::s health plans to compete
for their business. The ad is correct in saying that
most Americans would be required to enroll in an •
alliance and purchase their nealth insurance through
it; major exceptions mciude Ihe elderly covered by
Medicare and those who work for companies with
more than 5.000 employees.
But Admintstnalton officials emphasize, the
alliance is simply a middleman and people will still
l-rvi'-uxy Cbc.xirv. For.
be buying private insurance. And they reject the
implication of the ad that the alliance will restrict the
average person's ability to choose a health plan.
Administration officials assert that just the opposite
is true: the alliance will give more choices in health
coverage to people who now have decisions made
for them by their employers.
SCORECARD: The ad focuses on two political
vulnerabinties of the Clinton plan: the fear thatttwM
lead to huge new bureaucracies and ths fear that It
will limit consumers' choice. At the same time, the
ad is careful to present itself as favoring health ear*
change — just not the Clinton plan.
The Health Insurance Association of Amenca
wants alliances to be voluntary, enabling people to
continue to buy health coverage directty from
insurance companies. Analysts say many smaller
insurance companies In the insurance association
(ear they will lose out to the biggest companies in
tne new marketplace run by alliances.
Administration allies also assert that the insurance
industry simply wants to retain control of health care
— deciding whom to cover, how much to charge
and so on
ROBIN TONER
PRESIDENT SEEKING
MORE (ME RELIEF
Acknowledging Need
In authorizing the new exoenduures.'
Mr Clinton conceded that Gov Pete;
Wilson of California was right in argu- •
ing mat the Federal aid (or the earthqu.ne would fall (ar short o( me need
LiPi week. Mr. Clinton said he would
ask Congress for $6.6 billion in emergencv money, a request thai would
make ine earthquake the cosiliest nai-.
ural disaster ever (or Federal taxpay-.
eri Ine earthquake, which measured ,
6 6 in' ihe Richter scale o( ground mono:: Miieu -il people and miured 8.00u
Leon L. Fanetta. the director of the ,
Office of Management and Budget. <
saic; .v '.ne time that he expected the
ncuTt io grow and has said since that i
ine Federal Governmem should re-ex-;
amine the way u pavs (or disasier aid.
Wants to Add $1.5 Billion for'
Total of $9 Billion in Aid
By GWEN IFILL
:
S t w o i n o T V N p . Yorn r i m n
WASHINGTON. Jan j I - President
Clinion will ask lor at least $1.5 billion
m additional Federal aid for victims of
the Los Angeles earthquake. Admimsirauon officials said todav. raising the .
proposed Federal commitment
to!
earthquake relief to more than S9 bil- i
1
1
lion.
i
A.i l e a n SS billion ot ihai would be I
sought in a supplememal budget re1
Somehow, we've got io do a belter
tob m terms of preparing for disasters,
either bv setting aside some kind of
tunu io aeai wnn anaxers or loomne
Coneress must specifically waive
budget limits when it approves new
disaster assistance, and the white
House has acknowledged that the
eanhouake relief will add at least 13
nilliun to ihe deficit.
Although states must normally
match at least 25 percent of the Federal commumenr, the Clinton Admimst IMI ion has relaxed that commitment
ior eronomically distressed California,
reou'nng onlv a 10 percent match.
In
Midwest floods last summer
h;i- • ; "st the Government $4.6 billion
so :.. and hurricane damage aid in
I9^i surpassed $8 billion, but that figure takes into account both Hurricane
Anaicw. which struck Florida and Louisiana, and Hurricane Iniki. which
sirucl: the Hawaiian island of K a u a i
The T i m e s B o o k
fleWew.
every Sunday
�A FEW POINTS TO REMEMBER ABOUT...
HEALTH INSURANCE ASSOCIATION OF AMERICA
THF HIAA OFPOSED CREATIOS Ot- SfENCARE:
•
The HIAA opposed die creaiic-n ot Nfcdicne in th« ftuJ 1960s.
•
HIAA spokesman H. f rwis Rietz (representing HIAA anti the I.-.fr. Insurance
Association ot America) tesiifieil io rcgistev our opposition to H.R. WO fMedicnl
Tan? for rhe Ased] and aU simitar proposals ' (Rieu sutemcnt to Himse Ways and
Means Comnnltee on Mrdical Caro for the Aged. November 22, 1963)
•
I HAA. *po)cesman J. Hcnt) Smith entered a atateneni into the Congressional Record
t'rv die House Committee <>n Ways and Means thai.
"[The HIAA] has 'xrrn opposed tc this t>|w of legislation on the grounds that it
is jrmecesaary anrl undesirable m the Uglii MI the existing magnimile and
growth of voluntaiv health insurance, ciiuplnl with the evolution and potemiul
of govemmcai programs for those who nccrl help.* iSmith statement on
MedicafUirc for th?. Ayeit H.R. 1. House Cummlttee Ways and Means,
February 1. 1965)
THE HIAA IS FIGH77SG HEALTH CARE RtfORM TO PROTECT ITS OWS
PROHTS:
•
The HTAA is a trade association for coromercul hcaltii insurance coinpanies wliiL-h
write mote -ian 85% of the anion's health care and dixabiliry i»hcies that are
provided bv private insurance ujmpanies. HIAA has VtO corporate members
• Alnniui- of Federal FACi. 1W-1993)
HIAA-LED COALITION SPtNDISG MILLIOSS AUAlNST THE PRESIDENT'S
HEALTH CARF. PLAS:
•
According iu Adi-emmg Age (Ai)iil 26. 1993). Hl\.\ is the 'principal member" ol
the Coalitinti for Health Care Chmcej, which recently begau airing a $1.7 million ad
campaign m anack the President's r - ^
^ campaign rhf coalinonranin the
spring—cosiniu some $4 million—vas entirely tii^nccd" hy HIAA. {Advertising Age,
liU1
l a f l t
4.-26:'93)
HIU OPPOSET) BILL TO PROTECT SEMORS FROM 1NSURASCE ABUSES:
•
When Congress set out to protect wiiurs in 1979 by creatiug a natlowide sumdard
£Q:8T
£6/81-63
�foi supplemental Medicare insur.ince (Kilififs and providmi; piniilties for inMjr.nxr
^ilfs abuses of jeniorj. the HIAA oppi").<ctl ii. saying "We feel the iolutioc ;an
rcaclieO ai rhe state level...We ask you to help u*. allow the Sutes time to do the joh
(U.S. Congress House Committee on bitcrstate nnd Foreijn Commerce.
Subcommitice mi Health and the Envircnmcnt. Seium Citizens Health Insurance
Kcform Aa H.R ?n02 96ih Cong., is-, vesa.. 19791
HI4,1 IS CLOSELY TIED TO THE REPUBUCW PARTY:
•
HIA-A'i political action coniuiitufe <KIPAC) contributed 61
of ilic,S23I.OOO it
contributed to federal v-.audulauis in the 1992 eiectkra cycle to Republicans. (Federal
Election Commission dau, 1091-92;.
•
HIAA President Willis D. Ondiscn Is a former Republican memhr.r of Congress from
Ohio.
•
According to labile Citireivs Congress Watch publication. Govtinmrm Sen-ice for
Sate; How the Revolving Door hii\ been Spinning, Gradison "brought «f lea»i three
[CongressionatJ staffers wiJi him to work at HIAA." (W'atrman, Nancy. Gvwmment
Senicetor Sale: Her* ih* Reuilvmx Door has teen Spinning. Wasliington. DC:
Public Citizen Scptcmhei. 1993. Page li.)
HIA.A HAH AS ARMY OF LOBBYISTS READY TO DEFEAT REFORM:
•
HIAA has nineteen lobbyists, .uvurding to Washington Kepresemati\t's. 1993
�HIAA ATTACH ADS:
AN OBJECTIVE ANAL YSIS
BACKGROUND
"HIAA hardly represents the insurance industry as a whole. The group's
members control 35% ofthe health insurance market." [Los Angeles Times.
11/9/93]
"Virtually unopposed, the Health Insurance Association of America has
spent a staggering $10.5 million since April to air six ads attacking
President Clinton's plan." [Los .Angeles Times. 11/9/93]
HIAA's ADS PLAY FAST AND LOOSE WITH THE TRUTH
•
"The purpose of the ads showing Harry and Louise sitting at their kitchen
table bemoaning the Clinton proposal is not to foster factual discussion
about health-care reform. Instead, their goal is to make the public
anxious about Clinton's plan. [USA Today. 11/10/93]
•
"In general, the ads do not espouse a new plan. They simply raise vague
doubts about Clinton's -- and occasionally imply dire consequences not
f u l l y backed by fact." [Los Angeles Times. 11/9/93]
•
"In September, it [HIAA] began introducing the first of four Harry and
Louise ads. (One ran for only two days before being pulled because of
inaccuracies.)" [Los Angeles Times, 11/9/93]
•
"The opinion that the insurance industry is greedy is pretty common.
...Hold it right there, Louise. The Clinton plan doesn't limit health care; it
limits premium increases. This would not keep you from the care you
need. ...The HIAA is playing fast and loose..." fUSA Today. 11/3/93]
•
"The first [HIAA] ad asserts that the Clinton plan would require people 'to
pick from a few health care plans designed by government bureaucrats.'
That claim is not true -- the Clinton plan would allow private companies
to design health care plans and would give all workers the choice of a
traditional 'fee for service' plan." [Los .Angeles Times, 11/2/93]
•
"For most Americans the implication that under the Clinton plan, they
wiD face more red tape, receive fewer benefits and will have to pay for
services for their current plan is not true." [Newsday National Desk. 11/1/93]
�"The ads [contain] some inaccuracies." [Los Angeles Times. 11/9/93]
"It's [HIAA's] newest ad, for example, cites a provision in the Clinton plan
that would put a ceiling on insurance premium increases and vaguely
suggests that as a consequence, the plan could run out of money -- an
implication generally viewed as improbable." [Los Angeles Times. 11/9/93]
"The ads aren't really about anything at all,' said [Douglas] Bailey, the
former Republican political consultant." [Los Angeles Times. 11/9/93]
"While the veracity ofthe ads is debated, there is widespread agreement
among health experts and lawmakers that past practices of insurers have
fueled the current health care crisis. Insurers, especially the small and
medium-sized companies represented by HIAA, often deny coverage of
existing health problems, charge older consumers higher rates and drop
policies for small businesses whose employees run up high health costs."
[Washington Post. 11/4/93]
"A new insurance industry ad attacks the Clinton plan, saying that it
would limit choices of health insurance plans. That argument is true -the Clinton plan would, for example, prevent insurers from offering highdeductible plans that cover only 'catastrophic' illness. ...The Clinton plan
gives people at least three options to choose from an increase in choice
for most workers." [Los Angeles Times, 11/2/93]
"The Administration proposal provides that in most states everyone would
be offered the choice of at least three health care plans, including one of
traditional fee-for-service plans with no restrictions on choice of doctor."
[New York Times. 11/2/93]
"The Clinton proposal provides that a health alliance may borrow, on a
short term basis, from the Treasury if it meets a cash flow problem, and
then would raise its rates the next year. If a particular insurance plan, or
a cooperative plan run by doctors, went broke, the state authorities would
see that its bills are paid through reserves they establish, much as they
now require insurance companies to maintain reserves." [New York Times.
11/2/93]
"Its [HIAA's] advertisements raise broad and non-specific concerns about
the Clinton program." [Los Angeles Times, 11/10/93]
"Mrs. Clinton [shot] down the insidious message being bankrolled by the
Health Insurance Association of America...Mrs. Clinton focused on the
dishonest implication at the heart ofthe insurance association's televised
ads...The very concept of universal coverage constitutes a threat to the
�discretionary system that has been so profitable for the insurance
industry." [St. Petersburg Times. 11/3/93]
OTHER INSURERS ARE DISTANCING THEMSELVES FROM HIAA
•
"Four of the country's largest insurance companies -- Aetna, Cigna,
Travelers, and Metropolitan -- recently dropped out ofthe group [HIAA]
because they preferred not to participate in such aggressive opposition to
the Clinton plan. Blue Cross - Blue Shield is also not a member." [Los
Angeles Times, 11/9/93]
•
"Several insurers, meanwhile, are trying to distance themselves from the
controversial ads. A coalition made up ofthe nation's five largest insurers
is actively pointing out that its group had nothing to do with the ads. And
the president ofthe Blue Cross-Blue Shield Association wrote to Mrs.
Clinton yesterday, saying that while, 'it's unfortunate that the Health
Insurance Association of America has chosen to aggressively challenge
your health care reform initiative through national advertising...It is also
unfortunate that you have chosen to paint all insurers with the same
brush." [Wall Street Journal. 11/4/931
•
"A fifth member of that alliance, Prudential Insurance, is still in the
HIAA but refused to help pay for the ads. 'We thought they were far too
negative,' said Prudential spokesman Kevin Heine." [The Washington Times.
11/4/93]
•
"Now, a dramatically improved health care system is within our reach.
President and Mrs. Clinton are making a remarkable effort, and as new
legislation goes to Congress, we at Blue Cross and Blue Shield will work
hard for Its enactment."
Shield, 10/27/93]
["An Open Letter to the American People," Blue Cross/Blue
HIAA IS CLEARLY MOTIVATED BY PROFIT AND GREED
•
"The insurance industry TV ads seem to us to be aimed much more at
preserving the industry's own revenues." [Washington Post, 11/3/93]
•
"The $6.5-million the insurance industry is paying for its current
campaign is just a taste ofwhat the health care system's various special
interests will spend on advertising and lobbying in an effort to protect
their profits." [St. Petersburg Times, 11/3/93]
�"The ads, part of a multimedia blitz in 10 states, are intended to raise
doubts about sections of Clinton's plan considered most damaging to
insurers. The latest focus is on premium caps, or limits on annual
premium increases to hold down health care costs in the private sector.
The industry sees them as a threat to profits." (Washington Post. 11/4/93]
"If Clinton's plan becomes law, many HIAA members are expected to go
out of business because they are too small to be able to lower their costs
far enough to meet government-imposed standards." [Los Angeles Times
11/9/93]
"The association represents small and medium-size insurance firms that
many believe would be driven out ofthe health care underwriting
business by Clinton's proposal. Although it contends that it agrees with
many of Clinton's goals, it objects to his plan to impose limits on increases
in premium growth and to require people to purchase health coverage
from state-run alliances." [Los Angeles Times. 11/10/93]
"The health insurance industry has been conducting a demagogic
campaign against the administration's health care plan, and Mrs. Clinton
was right to fire back. She gave at least as good as the administration has
been getting. Maybe now the debate can revert to substance. The
insurers are like every other groups now living off the overstuffed health
care system - absolutely in favor of'reform' but not at their own expense.
Months ago they'tame out in favor ofhealth insurance for everyone, a
system in which 'all employers and individuals' would be required to buy
'an essential package,' and the government would subsidize those who
could not afford it. You bet their for that -- a guaranteed market. They
get less enthusiastic as the conversation moves toward regulating the
system to control Its COStS." [The Washington Post. 11/3/93]
"The current firestorm of controversy concerning consumer choice under
managed competition has been initiated by those who either fear change
or are genuinely opposed to managed competition. On the issue of choice;
case closed. Let's move on in a bipartisan effort to achieve health care
reform." [News Release. The Alliance for Managed Competition, 11/3/93]
MEMBERS OF CONGRESS DOUBT THE VERACITY OF THE ADS
•
'"Do you think you are bringing light or do you think you are bringing
heat to this issue?' [Senator] Kennedy demanded of Charles N. Kahn, III,
executive vice president ofthe Health Insurance Assn. of America." [Los
Angeles Times. 11/10/93]
�THE ASSOCIATION
•
ITSELF IS BACKING OFF
"Kahn said the current set of ads will run only through Thanksgiving.
After that, he said, 'we are going to reassess their usefulness.'" fLos Angeles
Times. 11/10/93]
�A26 TED<iESDOr. NOVEWEK 3.1993
THI f ASHIICTW POST
Sl)c asljinqton |Jo5t
AN
INDEPENDENT
NEWSPAPER
Those Health Care Ads
T
HE HEALTH insurance industry has been tbe amount that plans could raise their premiums
conducting a demagogic campaign against each year.
Members of the Heahh Insurance Association of
the administration's health care plan, and
Mrs. Clinton was right to fire back. She gave at America want to be free .to continue to sell
least as good as the administration has been insuranpe .outside Jhia regulatory apparatus, and
getting. Maybe now the debate can revert to they don't like the idea of premium caps. To begin
to win over public opinion, the association haa been
substance.
The insurers are like every other group now running a series of TV ads suggesting the Clinton
living off the overstuffed health care system—- .plan would limit "choice" to "a few health plans
absolutely in favor of "reform," but not at their designed by government bureaucrats" and possibly
own expense. Months ago they came out in favor create shortages' of health care as well Mrs?
of health insurance for everyone, a system "in' Clinton denounced thefintof these suggestxns as
which "all employers and individgals" would be'. "one of the great bes . . . 'ctattotly afoo( jn the
required to buy "an essential package," and the ""dbontry." She accused • the •todiistryof' having
government would subsidize those who could notTlffought us to the brink of tankruptcy because of
afford it. You bet they're for that—a guarantee^ .the way thaUhey havefinancedheahh care," said
market. They get less enthusiastic as the conver- -th* insu/Bttr companies "bke what is happening
sation moves toward regulating the system to today . . . like being able to exclude people from
coverage" and much more. . . .
control its costs.
In fact, a lot of people today don't have much
The administration would do the regulating choice in the health care they get. They're bound
mostly through state and local health alliances. in no small part by rules aet by the insurance
It's through these that most citizens would pick compaaiefi. Some would have a lot more choice
their health care plans. To get on the list of under the Clinton plan; it seems to ua few would
approved plans, an insurer or provider would have less. There could indeed come a time under
have to offer a generous standard bene6t pack- the plan when cosu bumped up against premium
age and couldn't turn people away because they and spending limits. That, of coune. is the whole
were already sick or likely to become so, as idea of having limits. The alternatives that the
insurers often do now. No ducking of risks and critics offer, including the insurance industry, are
insuring only the healthy. The ooty way plus pretty badly worn. There are plenty of legitimate
would have left to compete would be through wayi to cnfcdze and perhaps improve the Clinton
higher quality or lower cost; that's the theory. If plan. The insurance industry TV ads seem to us
the ^competition failed to hold down costs, the to be aimed much more at preserving the mdusadmiaistration would have in reserve limits on try'a own revenues.
<
-
c
�/
N A T I O N A L
A» » \ I Us
BETWEEN THE LINES
JONATHAN ALTER
Go Ahead, Bust Some Chops
HV\ I f Ul>^ H(H »SK"\K
' 1_T » \1 81 STISI. TRrVt'V HF cal wtea behind the Clinion plan was to divide the big healthdevcnliecl rapt.iin> ot industn a«. malflacton insurance companies trom the smaller ones The halt-do^en big
ol aveM vvejlth Tum-ol-ihe-^fniun Amencans bovs would back the plan because they stand to win one oi ihe
didni h.n r to I on I. up malftactors in thf die- sweetest shared monopolies ever: the smaller companies, which
lion;in ui know thji n me.Tns fnmmali." The wreak havoc on the system with mounds ot paperw ork and chern
presidenl \\ a>. cjllina thr countn s rich men a bunrh ol'crooks. picking (insuring only healthy people without pre-existing condiSince then nm-i presidenl - h>n e defined themselve> in pan bv the tions"!, would be driven out. But instead of backing the Clinion
enemie> they've mnde And ihe\ should be ludced lhal way. too. plan wholeheartedly, several ol the big insuren hav e w eighed in
1FK look on ereedv fieel e\erutne«: Georae Ru>h demoni/ed .
with the rest ot the industn by attacking premium caps and other
tljL burner* Bill Clinion. <o n.minl a polmcun in other respects, cost controls. A lew even helped undenxTite Ham- and Louise.
kiii-m »the mtport-.int e ot m.ikmc the ncht enemies onh abstractlv.
Clearer enemies might have also meant cleaner legislation The
noi instmctn ely. Hill.in Rodh.im Clinion undersiandf it betier. mad complexity of the Clinton bill sometimes seems like nothing
Her atuck
week on the heahh-msurance industn shatters yet more than an elaborate eflon to avoid the late the White House
another sill* tradition —the one resays would hav e aw aited anv smglequinnc Firsi Ladies lo speak onl\ in
pa>fr. Canadian-style plan II it
soothinc platiiude> It also «.en es as
were called a Big Government plan,
a model lor how her husbond should
it would tail, the Clintons reasoned
sharpen his rhetomBut that s exactly what it's being
Ihe attack was prompted by
called anyway So why not use this
Hiirn and Louise characters in a
i period ol compromise to throw some
" i milluMi .id camp.ucn sponsored
! obbyttts out of work by moving back
by the Health Insurance Association
toward simplicity One powerful
oi Amend I H I A . \ I . which repre, senator joked last week that the
scnt* .1 large chunk ol the nation's
^
l.)UO-page bill could be reduced to
JOIHI health insurers Harn is glad
^^^Hr
one sentence that simpiv deletes the
the presidenl is 'doina something
^^^^^^ ^1
words over 65 trom Medicare
jlx'ut he.iltli-eare relorm." but Lou^ ^ ^ ^ S ^ H
Ammo tax: Clinton
in the
isi- keep- complaining ihnt •'there's
sand' on health care is universal coveoi ic be H hetier uav " The Clinton
erage. That s good. But by sav ing so
IOITP* \Mjrked up an anihcial huthclearly that everything else is negoni-«« o\ei the-e ads Although one
tiable, he sends a message ot w eakroinmercial wroneh claimed that the Bluting htalth imurtrs: Are antmo makers next
ness One way to look strong again Clinion pLm limits choice, it wasn't
as well as do the nght thing - w ould
an> more misleadingthan the average election-year spot. Inlact.the
be to embrace Sen. Daniel Patnck Moynihan s efforts to tax ammuinaiMrv - openine saKoi were rather mild, considenng that H I . \ . \
nition to help pay lor health care. The revenue raised « ould be
member are literallv struggling lor survival.
small, but the payurt in political-courage points is potentiallv huge
But Hillarv « as sman to np their heads off. Although it earned Far from being a distraction from the Clinton health plan it's a
her .i bnel rebuke Irom Bob Dole iwho is he to talk about "enemie* chance to harness some ofthe passion surrounding crime to help it
list>"•'> and the new nickname 'Shnllary." her aura on Capitol Hill
This is one ot those issues that appear more nsky than thev realh
remains mostlv intact Alter all. she srightsubstantively: the induv are When House Speaker Tom Foley u i d last week that Muym
try /io brouchi u> to the brink ot bankruptcy." it does "like being han s bullet -rontroi proposal is remote trom the health-care de
able in exclude people trom coverage. because the more the* can bate, it was Foley who lnuked remote. Emerge no-room phv siriar
exclude the more moncv they can make." No other indu-tnali/c-d aero— the countn are enraged about new kinds of ammumtioi
conntry piit>. up w ith useless paper shulflers taking such u l.iixe i ui especially the Olm Corp.'s M-mm Black Talon, that not unlv r
oi their hdlth Imdcet- She - al-u ncht politicalls: he.ilth-inMir.inii- tliruuiih ti—ne . i - never Ixlore hut endanger surgeons liiugir
i'onip.inir» I'.nik v\( n l.m cr m polU thrtn mrmlvr- ol Conere*' or sticking vour tingers inio the wiuint) made hy the- hnllr ,irepurtor- Thev 're (low n there with ii>>rd-ear dcali-r» .ii-i-urrinK to exp.ind- anil lorm- r.i/or-sharp proiectiuns Cut- will cxpo-c uM..II Civenlion;. And h i n c h t i.K tic.il111 p i C - K H I l l - p o l l t . i k i NoodlKiriK mleclion- carru-d In the sliimtin^ victim iniimii
•
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ii
1
�CHIC23464
0 SECOND TV
"PARTNERS IT VERSION BR
TRANSdUFT
11/2/93
FADS UP FROM BLACK
1.
EXT. CAR- HARRY * LOUISE.
HARRY ii dropping LOUISE zt the office ia tbeir hmQy car, tn Americanmade gedan. LOUISE leam over to lightly Ion him goodbye end exits the car.
HARRY:
On Saturday?
LOUISE:
O*.
HARRY:
Have a great day.
LOUISE:
Bye.
HARRY:
Bye, Honey.
DISSOLVE TO
i
�CHIC.23444
50 SECOND TV
"PARTNERS IT
TRANSCRIPT
11A03
2.
INT OITICE.
A ilgfi on « wi&dow Hides by as we move into t lotll, seat offiee lohe. Tbt
sign read* LOUISE & UBBY COMPUTER CONSULTANTS. Loaiie perts
t YOUNG MAN woridng tt i computer termfnii u she ptitei ha deik.
UBBY, t bUek veaan eboat Louise'i age speaks to her pert&cr.
UBBY,SYNCi
Louise, Can we talk for e moment.,?
3.
Laoise ttepf Iato her ofBet Libhy moves to her desk.
UBBY, SYNC!
Fm with the Pnsident on health eve for
evNyoBc.Bot these details^.
UKbj ttU oo comer of hir dttL Louse xaorei la doee,
Thty both look it hook oa Preeldcari plan.
Lovise takti tht book aad open* to a corner tuned down.
SUPER:
Frtf idtftfi BUI Tltli VI-JL.
LOUISE, SVNO
like the national health care budget? The
government sets a ceiling on spending aad
1
teyt Muf t ft.
V
1
�CHIC-23460
30 SECOND TV
TARTNERSIT
TRANSCRIPT
ll/tflS
IJBBVSYNG
I
But, what if there'i not enough money...? I
mean, whit happens then?
LOUISE, SYNC
There's gotta be a better way, libby.
4.
GRAPHIC A BETTER WAY TO REFORM I-SOO-ISS-HEALTH
ANNOUNCER, VO:
There is a better way to reform. Call this toll
free munber for the facts.
FADE TO BLACK
�CHIC-2364
30 SZCOSDTV
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s i t at a ^ ^ S ^ r ^ S S l S ; ^ sister, broth«r-in-l«v
ASTHOR AND O J K ^
plater* of food ar* being
and their S ^ S ^ ^ S S S t e d carving tte turkey
and i s caxrymg tte
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at tte a««eabl«d faaxiy.
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2.
tealthy.
1SCLS OS DOftOTHX
DOBOSSXt
c a l l e d t h a t 800 mnober on TV.
3.
MUISB L00X8 *0 1 » » D »
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LOTJZSBt
And?
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s
.
idaa. ^
r
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"
jcacp «7«a if ytm
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^ « C A L
E^aryone'a covar^i?
gat
aide,
or
�Everyone7.
1SGLH OH LOUISE
LOTH SB I
Life* the Prasidcat v&nts.
3.
AHQLS OH UtTSUIt
ABSEUR:
And this plan i s baclced ty thousands of Aaaricams l i k e your
notter and aa... and onr insurance cospany.
9.
ANGLE ON DOSOTXT
OOXOSEZ:
Sounds IDca thara i s a b a t t e r way.
10.
AHOLS OH fflPPT
HAH2Z:
Sounds li3ce I ' a going to c a l l t h a t 800 tnnnber.
7222 TO BLACK
�10/27/93
*
i::C0
OT03 207 6313
HEALTH LIN'S
NXW HIAA AO: HARRY AND LOCTISB PART I I I
Vidfto op«n« with Harry coming inro kitcban and Louis*
leaning on countar. Disclalnar at bottoa of screen: "Paid Cor
by Coalition for Health Insurance Choices. Funding by Health
Insuranca Aaaociation of America". Harry kissing Louisa: "Find
mora you liXe in tha president's plan?" Louise reading "The
Prasident's Haalth Security Plan": "Yeah." Harry: "And?"
Louise shoving Harry tha book: "Wall, i t just doesn't hava th*
choice we want. Look at this — [chyronj "President's Plan Pag*
661 the government picks health plans, than va hava to pick a
plan <*rom their l i s t . That's t&e choice va get." Harry taking
the booJc: "*hat If va don't like their choices?" Louis*
throwing book on table: " I f i t ' s not on their l i s t . . . " Harry
folding his arms on his chest: "Wall, there's got to ba a better
way."
Fade to black scraan. Voice over: "Thera i s a batter way
to reform. Call this toll-free njaber for tha facts. Call
today."
Chyron: "A Batter Way To Refona" over "1-800-285HEALTH" over tha disclaimer.
2l
0 0 2
�HIAA.23464
30 SECOND TV
"YES BUT IT
10/04/93 1045h
FADE UP FROM BLACK
1.
INT. KITCHEN.
It is eariyraon&in*HARRY and LOUISE ere back as the kitchen
table. Breakfut diihee are ipread about and they are dressed tot work.
Harry ii reading the morning paper, Lodse il engrossed in the health
care reform book published by the New York Times.
HA&RY, SYNC:
I'm glad the President's doing
something about health care reform...
LOUISE, SYNC:
He'sright.We need it
HARRY, SYNC:
Some of tbeae details...
LouiM gesturea wtth the book.
LOUISE, SYNC:
Uk* a ntdooal limit on health care?
HARRY, SYNC:
Really.
2.
REVERSE ANGLE. OVERHEAD.
We see the book cover as Louise opens it to a page with a tuned down
comer, A Use hit been marked with a yelow high lighter.
�. ; SECOND TV
"'."SS BUT n"
10/04/93 104511
SUPER:
Rtfonn Plan Page 103.
LOUISE, OA*
The fovemme&t cape bow msch tbe
country can spend on all health care
i
and layt; "that's it!'
Barry looks ooaoerned.
HARRY, SYNC:
So what if our health plan runs out of
money?
Louise shrugs.
LOUISE, SYNC:
There's gotta be a better way.
3.
GRAPHIC. A BETTER WAY TO REFORM 1800 2&5-HEALTfL
ANNCR, V.O.
�iu,11.53
;5:.J
•BETTER WAY"
60 RADIO SPOT
WOMAN:
The Preiidem'j dfht. Amtrict wtatj hetltfa etre ccveraft that everyone hai and
everyone can keep,
ANNOUNCER:
But let'i be wre health care refonn jivw us the $ecurUy we want Thert'i a book
in the stores with all the details of tbe President^ proposal. There's a lot to
like, but also much to worry about Page 65 says everone in America would
choose from only those plans approved by the foversment.
WOMAN:
Wait, we can only choose one of the plans on their list?
ANNOUNCER:
And page 102 says the government will set a limit on what America can spend for
healthcare.
WOMAN:
So if my health care plan runs out of money I'm out of luck?
ANNOUNCER:
There is a better way to refonn. Insunnce everyone can get, everyone can aflbrd
and everyone can keep, even if they change jobs or lose their job. Por t better
way to health cart reform call 1400485-HEALTH. Call today. That's 1*800235-HBALTH. Oetthefhcts. 1.800-2«5-HEALTH. Sponsored by Coalition for
Health Insurance Choices. M^jor funding by Health Insurance Association of
America.
�COALITION FOR HEALTH INSURANCE CHOICES AD CAMPAIGN
More Facts - September 9, 1993
RHETORIC:
"This was covered under our old plan."
"Oh. yeah. Thar was a good one. wasn't it?" [Text From CHIC Ad)
REALITY:
The comprehensive benefits package is as good as those offered by many of the
Fonune 500 companies. And it includes some benefits that are rarely covered -particularly full coverage of over 70 preventive services, including Pap smears,
mammograms, and immunizations. .
No benefits that people have as of January 1. 1993 will be taken away or treated as
taxable income.
r
RHETORIC:
"The govemmenr may force us to pick from a few health plans designed by government
bureaucrats. " [Text from CHIC Ad]
REALITY:
The President's proposal builds on the employer-based system and remains rooted in
the private sector.
It will allow people to choose their own doctor and health plan - which, now. is more
and more being done by the employer. Today, only 28% of employers with fewer than
500 employees offer any choice ofhealth plan. (Foster Higgins 1992 benefits survey)
After reform. 100% of employees will have a choice ofhealth plan.
The health plans will be designed by people in the private sector, just as they are now.
Insurance companies, hospitals, and groups of doctors will likely run plans, as they do
today. And all qualified plans will be free to compete for patients in the marketplace.
�Thefirstlady's invective
against our ads is misplaced
ty Bill Oradtoon
O
n December 2.1992. tfc* bovd
of dirtcton of Ox Health
Iniurwict AiMCiition of
Ajnenct i HIAA) voted unuumoutly
to support p u u | ( of federtl Iefi5
Ution that would mike imivvntl
heilth cire coveri|e • reality.
Wiuun • dev. ranking memben of
ihe icon to-be-inaufurated Qui ton
tdministrttion. includuii Judith
Feder and Ceor|e Stephanopoulot.
pudbcly acknowledged the imporlance of the industry's in»ovau%«
nevi policies, and seemed uncondi•onail> pleased thai the industry
and the mcormng administration
had far mort in common or the subjec of health reform than anyone
nugh: hjvr previously thought
In the months that followed.
HIAA and the many companies for
wrucl: it carries the banner of responsible reform have not wavered
from the belief that every Amencan
should have affordable health insurance coverage that cannot be taken
awi> under any circumstances Yet.
in recen: ueefci several of the most
vijitle and vocal members of the
Cli.-.ior. »drr.in:s[riijons health care
reforrr. team hive attacked HIAA
ans ::s members, chiefly by eharacter.zir; .s — and frankly. 1 find this
ir.creeib.e — as opposed to reform,
i.- s-;?c::-.r.g the status quo. as
faN:'':'.i > system that permits
chern picking and the use of preex:s::.-.g cond::ion limitations to
i t - cevt-age None of these asser
:icr.t :s : r j e
F:rs: Lai Hillary Rodham Clmtor s facfja:!> groundless remarks
atjcu: heal:r. insurers.debwreddurir.; •'-t recen: annual meeting of the
AT.e::ia.- Academy of Pediatncs.
are :r.e :a!ts: manifestation of acornm-jr.ica::or.i strategy nfe with dis
icri.cr. a r ; inspired, at least in pan,
b> dales ?o:i results 1 know this because >»her, I met with senior White
Ho.st pohc;. advisor I n Magaziner
this past February, he candidly edmuted thai White House pollsters
had aJread> concluded that the ad
ministration s campaign to aell its
healtr care plan would be enhanced
b> attacks sn the insurance industry
Clean;, no ones position in the
debaie over health care refonn is in
am us* enhanced by scartershot accusations thai have no basis in fact.
The cynicism that underlies such
attacks is truK disturbing
The focus of the first lady's dia
tnbe against health insurers was a
teleMiion ad^enisement sponsored
B:: C'sd.-son is p ' t u d t m of l i e
He;.:': /rsyancr Association of
A r-:r-..-j
by the Coalition fer Health Imuran c« Choices and funded by HIAA
Thu ad (in fact, then have been two
•uch ads. and we apolofue for neithen focused on the question of per
aonal choice — in parecular choice
of health plan — under the Clinton
•dmimstnnon s approach to re
fenn.
A/ter a wortang draft of tbe Clwm plan began to circulate last August, it was clear to everyone that the
admimstnoon warned to drastically
limit the number ol haalth care
plans competing m the marketplace
Tbe limiting mechanism m queabon
was the monopotisoc (or "exclusive") health alliance, which would
alio* only a few plans to market
health inaurance products ie a given
region and unilaterally n r l u d e all
others We believed then, as w» be-
point-by-point niponae Ball of Mrs
Clinton's accuaauons against com
panics that market haalth insurance
products but one additional aspect
of her speech cannot be left un
addressed At one point, she slam. |
oted the use of utiluaoon review is :
as inaurance company -inspired con j
piracy ID keep docton from doing ,
their jobs And yet hter m her |
speech, she praised managed care. :
aayuig that "under a managed care :
fystem fer Medicaid. I had mothers :
•tiling me [that) b r the first nme
tbey had their ows doctor They had
a telephone number they could call j
They w e n ablate get good informa. ,
Don."
j
' The f i n t lady's ideologicalu contradictory stances puule me 1 think .
it s reasonable to say that Mrs Clm ;
ion knows what I and many others .
know about uulixauon review — that :
it's fundamental to managed care s
effectiveness Without it. what puts
the brakes on unneccssan care, on
the unnecessary costs from unwar
ranted tests and procedures'- Need- ,
less to say. it isnt tht insurance com
panics that denvt profits from
paying for unnceded care Instead
u s tht insurance companies that ire
called upon to pay for it
Real nform of the health care
system means that everyone — in
sunrs included — musi make seen
fices And everyone includes ever
those groups whose political anc
professional inclinations have/r.ir:
fested themselves time and again or
beve now. thai alliances are a good
Capitol Hill and in statehouset
idea but they shouldn't be monop
across the country, as opposed a:
olistic. and they shouldn't under any
en' turn to managed care and to ::s
circumstances have life-or-death
quality-enhancing and cost con
power over health plans Our two
taming elements Noi the I ear of
choice ' commercials reflected
which is utiliiauon review
these beliefs We wanted people to
Contrary to Mrs Clintons r-et
question the advisability of a system
one. the companies represeriec
under which govemmenial entities
HIAA support meanmgf ui reform, of
decided which plans consumers
tht nations health c a n system u
would haw access to.
•upponuniverial. continuous cover
It would seem that our ads were
agt for all Amenans under t pecs
even mort effective than «« might
age of comprehensix benef it •
have hoped. The administrauon
package tha: does include - in spue
blasted HIAA at every turn for proof M n . Clinton's comments to the
ducing them Yet ranking White
coeitnry — acroas the-board pre
House officials haw evidently taken
ventivt health c a n services
op
the ads simple but powerful mespose denial of coverage for presages to hean And 1 say this beexisting conditions Wc want even
cause the Clinton admuustntion r»
cently made last-minute changes u> body covered under the humane aus
ptces of a new n f o r m ed health cart
its health c a n reform bill, changes
system, one that will ulnmatetv pu:
thai would oblige alliances to accept
the health systems of all other mdus
even health plan that meets minitnalixed countnes to shame We car
mum federal standards, with some
do it. Wt Should do it But progress
limits As soor is we had the actual
toward the health care goals '-."•«'
legi station for the Clinton plan in our
HIAA shares with the edmjvu-a
hands, and saw that the White House
non
will only be promoted if political
had backed away from the idea of
rhetoric is abandoned in favor ol ar.
timiung choice by limiting the num
attitude of mutual respect 5u::
ber of plans that couid compete in a
upon a shared commitment to
given market. «« stopped running
together consiructiveh to mane
our "choice" ads Thev had clearly
A m e n d s health care system •ne
served their purpose
finest ui the worU
Space limitations don't permit a
:
Hilhry Rodham
Clinton^ factually
groundless remarks
are the latest
manifestation of a
communications
strategyrifewith
distortion.
(
�HIAA RADIO AD - OCTOBER 8, 1993
RHETORIC: "There's a book in the stores with all the details of the President's proposal "
REALITY:
This is an unauthorized publication of an early draft ofthe President's plan.
The plan has changed since that draft as a result of conversations with
members of Congress, outside groups, and the American people.
RHETORIC.
"Page 65 says everyone in A merica would choose from only those plans
approved by the government. "
REALITY:
Consumers can choose any plan that meets basic quality standards, offers a
comprehensive benefits package, and agrees to cover all who apply, regardless
of health status.
RHETORIC. "Page 102 say s the government will set a limit on what every one can spend for
health care "
REALITY:
There is no limit on how much people can spend on health care. It's not the
government's place to tell people what to do with their after-tax dollars.
There is a limit, however, on how much the insurance companies can raise
your premiums.
�BC-HEALTH-EDITORIAL op-ed editors
' •( •
Huckster H i l l a r y
Knight-Ridder/Tribune News Service
'c)l993, The Orange County Register
The following • d i t o r i a l appeared in The Orange County Register on
Wednesday, 11-3.
XXX
F i r s t Lady H i l l a r y Rodham Clinton's nostalgia-inducing attack on the
health-insurance industry ah, remember the v i s c e r a l l y a n t i - c a p i t a l i s t
rhetoric of the •60s radicals, back when Mrs. Clinton's p o l i t i c a l views were
formed and apparently set in stone? should remind us that when you
p o l i t i c i z e some aspect of l i f e , you set the stage for ill-tempered
confrontations and accusations. I f you want more finger-pointing and
ill-tempered accusations, you'll love the Cinton health plan.
But the accusation of greed and profiteering on the part of insurance
companies p a r t i c u l a r l y i s inappropriate coming from Mrs. Clinton. As Business
Weekpointed out in i t s Nov. 1 issue, the f i r s t lady has arranged her own
investment portfolio so as to profit, as the magazine put i t , "from the pain
her proposals are i n f l i c t i n g on health-care stocks, which have plummeted in
1993."
Mrs. Clinton has about $100,000 in Valuepartners I Fund, which has
a stake in the decline of health-care stocks. As Business Week put i t ,
*"Valuepartners i s a hedge fund, which means i t regularly shorts stocks. So
the more Clinton's proposals drive down health-care stock prices, the more
she prospers. And the fund was up 14 percent for the f i r s t eight months of
the year, says another investor in i t . This performance i s almost twice as
good as that of the S&P 500 index.••
Mrs. Clinton claims not to have known of the fund's health-care holdings
.1 the f i r s t couple f i l e d a financial disclosure. An aide said no conflict
c_ interest exists because she's a policy planner making broad proposals, not
a regulator with day-to-day power over individual firms.
That's disingenuous, at best. And Mrs. Clinton's attack on an industry
apparently provoked by some sectors of the industry having the effrontery to
pay for TV ads questioning the wisdom of a plan calculated to put many of them
out of business r a i s e s serious questions about her a b i l i t y to be
disinterested and dispassionate in shaping broad policy.
The f i r s t lady apparently has a v i s c e r a l , emotional d i s l i k e of insurance
companies. And she has positioned herself to profit when she uses her bully
pulpit to attack them.
A l l t h i s overheated rhetoric i s the predictable r e s u l t of any ambitious
attempt at further government control (and further p o l i t i c i z a t i o n ) of an
industry. The ads were sponsored by the Health Insurance Association of
America, which represents small- to medium-sized companies. Most analysts
believe that i f the Clinton plan i s adopted, the mandatory government
bargaining agents i t envisions w i l l favor a few large companies, forcing most
of the 1,500 smaller companies offering health insurance out of business;
indeed. President Clinton hinted that such a ^consolidation'* would be
desirable in h i s health-care speech. So these companies l i t e r a l l y are
fighting for their l i v e s .
And Mrs. Clinton i s fighting for her p o l i t i c a l l i f e , with polls showing
big declines in public support for the Clinton health-care mandates. So expect
more rhetorical o v e r k i l l .
Orange County Register
****
f i l e d by:KR-F(—)
on 11/03/93 at 08:05EST ****
**** printed by:WHPR(MMIL) on 11/03/93 at 09:15EST ****
�MICHAEL KINSLEY
DATE:
TIME:
PLACE:
PARTICIPANTS:
STAFF:
February 23, 1994
12:30 PM
3326 Treasury (Altman's office)
Roger Altman
Michael Kinsley
Paul and/or Christine
BACKGROUND
As you know, this is one of a series of meetings coming out of the First Lady's
office to influence and educate pundits who might be able to help our plan.
In this week's New Republic, Kinsley pretty much stays on our message,, beating
back the assertion that doctors will be thrown in jail for treating patients and
explaining the rationale behind the alliances. One point he raises that you might
want to take up with him is the supposed bureaucratic complexity involved in
community rating. He maintains that "the dirty secret of all those from Clinton on
right who oppose a Canadian-style single payer system is that insurance
'community rating'...essentially socializes health care costs and will require
tremendous new government involvement no matter how it is done." You could
make two points on this regard:
First: The Clinton plan involves minimal government intervention, alliances
have no regulatory powers, etc. Individual mandate bills would require a
much larger expansion of government powers.
Second: You might warn him against using the word "socialized" — the
President specifically rejected socialized medicine. Two thirds of health care
costs after reform will come from the private sector (businesses and
households) — just as they do today.
As you also know, Kinsley was one of our chief defenders on the McCaughey piece,
exploring the similarity of the utilization review requirement to current HMO's
(although I would not bring up the McCaughey situation unless asked). [By the
way, the unequivocal message from the war room is to do nothing on McCaughey
but have a surrogate, like Laura Quinn, challenge her.]
KEY MESSAGES
Lorrie M. suggested that you stick with the message of the Friday NY meetings:
Provide basic information about the plan and dispel the fears generated by the
opposition.
�It would be interesting to explore off the record how Kinsley thinks the fears and
misinformation about the plan have spread. Maybe throw a hypothetical question
at him: "If you were the White House health care communications director, what
would be the three things you would do to counter all of the fear and
misinformation on 1) choice of doctors and 2) bureaucracy?"
ATTACHMENTS
"Mad Social Scientists" by Kinsley in this weeks NR (2/28/94)
"Health Care Nonsense" by Kinsley in Post (1/27/94)
Response to McCaughey piece
Top 5 lies
�FROM WASHINGTON
it better than he did), the reason has to
do with the problem ofrisk-sharing.One
goal of every health reform plan, including the most conservative and "marketoriented," is to end the insurance industry practice of charging more to people
who are more likely to get sick, or are
already sick: older people and those with
"pre-existing conditions." Magaziner
calls this "discrimination," but it's really
just rational business practice unless forbidden by the government. The classic
purpose of private insurance of all sorts
is to insure against unknownrisks,not
against known ones. Absent government
regulation forcing all insurers to do the
same, charging bad risks the same as
goodrisksi* a recipe.for bankruptcy. .t But, "commuriitT' ratings as^it'i
callid^-jprdering insurance companies to charge everyone the
same for health insurance,
no matter what his or her
individualrisk—is&nbla^?|
simple matter,, though you
wouid'not know this from
some Republicans who
present it as a painless
cure-all. It requires not just
rules against price discrimination, which are fairly simple,
but rules to prevent insurance companies from discriminating against customers who are likely to prove expensive,
which are much more complex and hard
to enforce. Ordered by the government
to charge both of them the same, it will
be a remarkably saindy insurance company that is not tempted to make a
healthy potential customer feel more
welcome than a sick one.
his alliances are the best way to solve this
problem. But he isrightthat there is no
"simple" solution, and those who sav ihat
minor insurance reforms can straighten everything out are either ignorant
or dishonest. The.dirty secret of all.those^
from Clinton on nghrwho^ opgoje^,^
Canadian^tyie single-payer^ system^ is.
thatiftsurance^cq^
bouom-line .. reform newly^je^one/
Mwgpwurnmept involvement no nutter <
h«#Ttirdohe?
As for George Will's fifteen years in jail
for bribery, Magaziner savs this applies
only to outright insurance fraud. If a
Patient and a doctor collude to bill .in
insurance company for a procedure that
isn't covered, by purposely mislabeling it as one that is covere,d,^
aplicaced and intrusive:
they go to the slammer. F j f j ^
Why, for example, must virtually everytwp yearirseems a. bit, stiff
one join one of these "alliance" chingies?
but of ^course that's ^tlie
And what is this business George Will was
fashion these days.
going on about in S'rwsu/eek recendy? "It
would be illegal," Will wrote, "for doctors
It would not be "illegal
to accept money dirccdy from patients,
for doctors to accept monand there would be fifteen-year jail terms
ey dirccdy from patients.'
for people driven to bribery for care they
First, anyone would be free
feel they need but the government does
to go outside the system and
not deem necessary.'" Sounds scary.
pay any doctor any amount for
any service. Second, many insurAfter all, as the skeptics point out. a
ance plans would involve partial colarge majority of Americans currently
payments by patients, as they do now.
have health insurance thev're satisfied
What would be illegal is for docton to sav.
with. Without a clearer explanation than
"I'll treat you, but only if you pay me
has been supplied so far, it is perfecdy
more than the agreed-upon co-payment.
reasonable to wonder why this majority's
This is, fint of all. a matter once again of
current arrangements must be unsetded.
insurance fraud. If docton have agreed
Why isn't it enough simply to reform the
to accept a set fee schedule with a set coinsurance market so that people can't
payment, they should stick to it.
lose their coverage, and to create a much
smaller program to help the uninsured?
More generally, this rule addresses the
And even if insurance companies
Are the Clintons just mad social scien- don't discriminate, the luck of the draw problem of controlling costs in an industists, experimenting needlessly on the means that some of them will end up try where insurance coven all or most of
body politic?
with a worseriskpool than othen. That is the cost of individual services. For years
The answer is that the complications why "community rating" also requires Medicare paid 80 percent of a set docare inevitable. Perhaps not these exact complex procedures for assessing indi- tor's fee, but docton werefreeto charge
complications, but either these or others vidualrisks,and for redistributing funds patients more than just the remaining
among insurance companies to level the 20 percent Inevitably, the fact that fourthat would arguably be worse.
fifths of the basic charge was seemingly
Take those alliances. Their purpose is playing field.
twofold: to hold down health care costs
Magaziner maintains that if almost "free" enabled docton to charge a lot
through market compeution by giving everybody acquires insurance through more than they otherwise could if Medibuyers more leverage, and to help end these large regional alliances of his, the care weren't there. This becamtfjjfc±iuge
price discrimination against individuals task of equalizing insurance costs beand small businesses by putting them comes much simpler and requires less
into pools as large as the largest compa- intrusive regulation, not more. The gennies. But if the alliances are such a won- eral point is that largerriskpools equalderful idea, why must folks be forced ize costs automatically. If the alliances are
There are alternatives to managed
into them? Under the Clinton plan, only strictly voluntary, groups of low-risk competition, such as Senator Phil
companies with more than 5,000 employ- (younger, healthier) people will form Gramm's scheme to encourage people to
ees are exempt. Representative Jim outside of them and negotiate preferen- go without insurance for all but "catasCooper's plan exempts all companies tial rates. If there are hundreds of insur- trophic" medical expenses. But if you
with more than 100 employees. Most ance companies making separate ar- want basic medical insurance to survive,
rival plans simply allow companies and rangements with thousands of compa- and if you want more market discipline
other groups to form buying pools if they nies and millions of individuals, the task on cosu in the health care industry, rules
wish, and leave it at that. Why are Clin- of leveling the playingfieldamong cus- like this one are essential.
ton's mandatory?
tomers and companies becomes inNext question?
As explained by Clinton's health care finitely more complicated.
guru Ira Magaziner (and I'm explaining
Magaziner may berightor wrong that
Mad social scientists?
8 THE NEW REPUBLIC FEBRUARY n, 19M
t
�George F. WW
Michael Kinsley
Gatekeeper Moyn
Health Care Nonse]
Like the Ronua god Janus from
whom this month gets iu name, the
Clinton administntion is looking in two
directions. One is represented by iu
suddenly intense concern with dime,
the other by iu bizarre health care
refonn bill. The former repteaenu a
tendency that could consolidate a Democratic presidential era. The Utter
could transform Clinton's presidency
into a reprise of Carter's presidency, a
brief interiude in a Republican en.
Clinton's administration has not
been nearly as liberal in iU results—iU
aspirations are another matter—as
Congress has
restricted Ointon to
a watery liberalism.
i
i
any conservatives feared and some secretfy hoped. However, the health care
plan, with iU gargantuan bureaucraaes
rabonag everything frocn medicine to
medical students, is a caricature ol
coerave snd hubrisbc liberalism, and it
can crysuUtxe a lethal perception of
this presidency. But one man can save
ClintonfromClinton's pet project: SCIL
Pat Moymhan, chairman of the Finance
Committee.
To fathom the importance of Cbnton't sesxure of tbe crime issue, consider some history. Tbe Democratic Party, advocate ol an energetic federal
government, surrendered the presidency m January 1969. The Demoaau
reacquired it far only four yean ia
January 1977, and did so with a man
who ran against Washington and was
the most conservative Democrat elected president smoe Grover OeveUod in
1892. So when, last Januuy. the liberal
partyreoccupiedthe presidency after,
effectively, 24 yean, many conservatives antidpated a government extravagant in both asptfatioos and expenditures.
But Congress, by imposing spending
limiu as a price of passing Clinton's
budget, has restricted Omton to a
watery liberalism. And now, by his
embrace ol the crime issue, be has
awakened echoes of an old argument in
the Deroocntjc Party.
In 1970 two "Jackson Democnu"—
the label then referred to Sen. Henry
"Scoop* Jackson, around whom moderate Democnu nlbrrt puMiihed a
book to warn thetr party of a precipice
ahead. In The Real Majority' Richard
Scammon and Ben Wattenberg warned
that "social issues* such as crane were
acqianng a sahenry comparable to ecomtnic concerns, and that the phrase
Taw and order" should not be disdained
by liberals aa racist "code words.*
In February 1968. at the beginning
of the Niaon campaign that began the
en ci Republican victoriea in Gve ol aa
preudentuj elections, a Gallup poO had
A screed against the Clinton health bought and often insurance paid, with
asked "Is there any area around
here—that is. within a mile—where care refonn plan in last week's New regard to price. These monopoly pre
you would be afraid to walk alone at Republic suggests that one of the hor- provided both the incentive and
night'" The "yes" response was: men ton awaiting us if Bill and Hillary get capital for lavish drug research,
their way ia something called "utiliation form—any refonn—will reduce this
19 percent, women 5^) percent
Scammon and Wattenberg saw the review." This is a system whereby doc- search.
ton must get
social dynamite: i
The Wall Street Journal editorial p
clearance from fires a shot at the Clinton plan abn
Half of America's
some central au- every day. One recent salvo, tit
husbands had
T» t »
thority before per- "Price al Managed Care." waa ab
wives afraid to go
11
fonrang a test or how healthroamtenanceorganizati
out at night In
l|
treatment on a p^ harm theff pstimta by skimping
1992—11 federal
|
,
bent
testa. The article died without iron
crime bills lath so happens "near-docen malpractice spedabsts,"
er—the "yes" reJ 91 »
that the New Re- ol whom warned that inadequate test
sponse to Gal_
public's own ia rife at HMOs.
lup's question " • ^ J ^ * ^ * *
besttb cuv pbfl
Why do I aay "without irony? I
was: Men 29 perlot which I am a cause the WaO Street Journal has bt
cent, women 59
jfaryean against excess
percent
tensive "iititiiarinn
of medal malpncticf
A genention
review." Along deed ns^nctioe nlorm is the cent
has passed since
with heakh main- piece of the JoureaTa own health a
Scammon and
Wattenberg explained that the avenge tenance mgauiotjons, generic drag rfr vision. It has been the Journal's poshi
voter was saying he did not expect quiremenu and so on. ^ttihuOQn re- that—thanks to "malpnctice sped
politicians to solve all such probiems, view" is one of the devdopmenu rapidly iati*—we give too many tests, th
"But I do expect that )ny politician I spreading—far good or iB—wder our drivmg up costs. 01 coune maipract
lawsuiu occur only when the failure
vote for will Ar ON IW sid*.' Today current health care system, h is one give a teat turns out badly—when
TCSSOO
hdttb
cost
lofls&oo
fass
sfaitcd
Clinton is using the crime issue to send
MRI far a headache would have cauj
to middle America an "I'm on your so druniUafly, iflowng Chttod't critside" signal, the sort of signal his cam- ia to amrt that tbere • oo "aim."
infer Jminial style heahh care refor
CJiutoo's bctltb C M piflQ is fo
paign sent by using two issues that
aiiwikiteafitetfaue wiD mease.
^u^pp^trftj wbco tbc cuopu^pi coded* perfect But it is pointless to
the Chntan plan with tome
The deasion not to perform an M
Those two issues we^e the middle- version of the daasic American lyatem. even when there ia a one-in-i-cailli
clasa tax cut and "ending welfare as we in which yon can go to any doctor you
cbSBGB otfiodhofA tSBOOtt
in c£ft
know it,* meanmg a maximum ol two want who can perform any treatment health care rationing. Any health a
yean on welfare and,then a work he want*, order any test she wants, ayitett dffinea an appiopt'iate stands
requirement The patent insincerity ol presoribe any drug he waoti and fhary at care, if only through the tort la*
his tax promise haa increaaed the polit- whatever she wants, aO pad far by and any such standard weighs a
ical importance of his promise of wei- msunnce. That system ii <haappHnD^ agaawt dbaace ol aurceaa What ia ma
£w refonn* Hcocc the yr^p^^^nc^ of whatever we do. The ssportant compar- any retem of Amenca's system • be
the Moymhan factor.
isons are of Clinton's system with
^naifartHMMUt<d" or otherwise—»
Moynihan'a chairmanship makes him system as it actually wtB wort with no take a more stringent view of the co
a gatekeeper for both health care re- reform, and as it wiD work under rifil betiHit tiade off than the never-oew
form and welfare reform. So he is in a refonn pbna.
tand system we have now.
position to impoae sobriety on the for- The Cbntontes insist that their reEven wtthotft leftam, market fore
mer while insisting that the latter pro- form would reduce, not un icaae, cum- are already driving Americans by t
ceed. That is why Moyilihan is some- benome "uTibonoQ leviev" reQuir^ nrifinriB nto managed care arran),
thing that almost no Democrat in menu. Could be. But it is daractenabc itifnti Tree-maiket" style reforms t
Washington haa been for a genentioa: ot Clinton's sales tednique that ba ing puafaed by cooaervatrve Republic
He is dangerous to Republican presi- would rather insist that his modet'a tires wifl only speed this development So
dential aspintkms. If he can make never goflatthan point out that rival bold out managed care as a great bnt
health care reform less grandiose and models getflattires toa
boo ot the Clinton refonn plan ia absu
threatening, and can make welfare reConsemtrves and Republicans into
Take another example. There
form a (act he will be as disorienting been much «gF»*«« on the T t r ^ n
that there ia "no health care a m
to, and disarming ci. Republicans re- bow Onton's plan will afiect
Meanwhile, their own "mminutat" i
garding domestic policy as the end of research, especially the
farm plans would constitute the bigg
the Cold War haa been to Republicans new drugs. High drag prices, hi^i |
new sodal welfare program since ti
regardingforeignpolicy.
charged by teaching hnsptfabfarordi- Great Society, and the biggeat gom
There is nice symmetry in this. In nary medical services and special Medi- meat intrusion into the workings
1976, when Moymhanfintran for the care payments afl sutMifas nwdiral
private industry since Nino's wage ai
Senate, be wu a "Jackson DemocnC search, and afl wS be squeeted under price cuntiuta.
supporting Scoop Jackson in that year's the Omton plan. But afl wt be aqueead
The coma* debate is not about
primaries. Eighteen yean later, that under any reform to oootnl mrdk'il free market" vs. "soaata&Tforheal
good man's influence ia still felt
exists. In fact, the more 'taartatarieflt- care, or about wikmited freedom
As for Ointon. there is this seasonal ed" i d leas "gwennnent-mwiaterf* a choose your own doctor and treatme
thought as his radical health care pro- reform is, the more lisdy it is to root vs. rrginwtitatiop and nooning. It
about (IdTnrnt degrees and styles
posal undermines his program to coo- out these axfireet aubaidiea.
vmc* the public that liberalism is palatUnder the old tyatesu, drag compa- gu¥enuttent uivolvemeot in heslth car
able. It is commonfara politician to be met were i m to IDMC WIB wonopaKj and about the best way to impose hmi
pulled in two directions at once, but to profit! hfynnd tte Ifjpfimtg inonop^ on our lieallh care appetites that a
move in opposite directions sonuftap^vfits thev pateBts eotided them nevttabte n any event
neoualy mvnes compariaon with the to—because urillwi price MBHirtiUuu
Are we capabie of having tuch
familiar maak ol Janus, which is two- nor gtwenanent cuwtiuia impueed any debate?
iraiiaa< Docton prescribed, petifKa
faced.
©ISKUrVTWMrrl
M
|
t
�NO TRUTH:
TALKING POINTS ON "NO E X I T THE NEW REPUBLIC ARTICLE
The New Republic should be ashamed of itself. This is one ofthe clearest examples of
irresponsible journalism seen so far in the health care debate. Elizabeth
McCaughey's February Tth "No Exit" cover story -- touted by The New Republic as
"What The Clinton Plan Will Do For You" •- was full of lies, factual inaccuracies, and
willful distortions of the President's Health Security Act.
McCaughey's article is factually incorrect and obviously diminishes her credibility as
a journalist and the integrity of The New Republic editors that were willing to
publish an article full of inaccuracies and distortions. It's clear that the publication
made no attempt - even cursory - to check the facts in this biased article. For
example, in the 9 sentences ofthe first paragraph, 5 are direct lies, and 2 are dear
misrepresentations. Ms. McCaughey and The New Republic were obviously more
intent on scaring the American public than providing the "straight story" they claim.
And that is the real problem with this kind of irresponsible journalism - its
consequences extend far beyond the pages of a single article in a single magazine.
From now on, Ms. McCaughey's article becomes a legitimate source for opponents of
reform to use in a critique of the President's plan. They've got cover for their
criticisms of the Health Security Act. These lies and distortions feed on each other
and, unfortunately for those interested in a substantive debate on health care reform,
they can have a serious impact on the future ofhealth care in America.
Case in point: millions of Americans watched Bob Dole on television after the State of
the Union, making a number of points very similar to the lies in this article. I f
anyone asks him about his sources, he's covered by Ms. McCaughey. An advance copy
of the article was obviously given to the "Project for the Republican Future" which is
already running a TV ad citing it. For the next year, you can expect to hear everyone
from insurance industry executives to members of Congress to pharmaceutical
manufacturers refer to this article to back up their attacks. All because 1 writer was
willing to write and 1 magazine was willing to print lies and distortions.
New Republic writer Michael Kinsley further criticized the article asserting that: "It
is pointless to compare the Clinton plan with some idealized version of the classic
American system... The important comparisons are of Clinton's system with the
system as it actually will work with no reform, and as it will work under rival reform
plans." ["Health Care Nonsense", The Washington Post. 1/27/94]
The New Republic should retract the article -- or, at the very least, issue a public
statement that their article contained many distortions of the Clinton plan.
�NEW REPUBLIC ARTICLE: TOP LIES
LIE:
"Escaping the system and paying out-of-pocket to see a specialist for the tests
and treatment you think you need will be almost impossible.'
TRUTH: Under the Act, you can pay "out-of-pocket" for anything you want at any time,
to any physician or hospital willing to treat you.
LIE:
"Under the bill, a National Health Board... will decide how much the nation
can spend on health care beginning in 1996.
TRUTH: The Health Security Act makes no attempt to "decide how much the nation can
spend on health care" and specifically rejected the idea of global budgets or
price controls.
LIE:
"What most of us call fee-for-service (choose your own doctor) will be difficult to
buy."
TRUTH: To the contrary, the Act preserves fee-for-service arrangements by requiring
all alliances to offer at least 1 fee-for-service plan.
LIE:
"Price controls on doctors' fees and other regulations will push doctors.."
TRUTH: There are no price controls in the President's plan.
LIE:
The Act "... expressly includes futilization review] as a requirement for
doctors treating patients with fee for service insurance as well."
TRUTH: Utilization review is but one option they are expressly permitted, not required,
to do.
LIE:
"Doctors in training will be assigned to the coveted specialty programs based
partially on race and ethnicity...."
TRUTH: This is ridiculous. No physician or medical student is "assigned" to any
specialty or told what type of medicine they can practice.
LIE:
If a producer balks at paying the rebate, the Secretary can ^blacklist' the drug,
striking it from the list of medications eligible for Medicare reimbursement."
TRUTH: There's no blacklist. Contrary to the implication deliberately spread by
using quotations around the word - "blacklist" doesn't even appear in the bill.
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Analyzed below are all statements made in the "No Exit" article where the author
referenced a specific page in the Health Security Act. An analysis of this article
leads to this conclusion: not one statement she makes referencing a
particular page o f t h e text is entirely accurate. Some are distortions and
misleading portrayals of elements of the Act. Others are outright lies.
ARTICLE:
"The bill guarantees you a package of medical services but you can't
have them unless ihey are deemed 'necessary and appropriate.'"
FACT:
Very misleading. Today, insurers can decide that procedures,
treatments, etc., are inappropriate or unnecessary. No insurance plan
guarantees you the right to unnecessary or inappropriate care. To
imply that such decisions are made only by doctors and individuals
today is deliberately misleading, at best. Under reform, most such
decisions will be made by patients and their doctors. In fact, the
Health Security Act gives consumers more guidance and more rights
about what is necessary and appropriate.
In addition, the Act does not, as the statement implies, forbid a plan
from delivering services -- even if it does consider them not necessary
or inappropriate. I t says they may do so. And under the Act you have
clear means of immediate appeal should you feel you deserve different
or additional care -- a guarantee that rarely exists today.
Most importantly, the bill (page 15-16) specifically states that
"Nothing in this Act shall be construed as prohibiting the following: (1)
An individual from purchasing any health care services." There is
nothing in the Act to prohibit anv individual from going to anv doctor
and paying, with their own funds, for anv service. There are also no
restrictions on the purchase of supplemental insurance.
ARTICLE:
"That decision (whether or not care is necessary or appropriate) will be
made by the government, not by you or your doctor."
FACT:
Untrue. I f anything, the "necessary and appropriate" care provision in
the bill delegates authority to the medical profession rather than
imposing further government bureaucracy between the patient and the
doctor. For most people today, their insurance company, not their
doctor, has final authority over what is necessary, appropriate and
therefore reimbursable. Today, insurers can decide that procedures,
treatments, etc., are inappropriate or unnecessary. No insurance plan
guarantees you the right to unnecessary or inappropriate care.
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Page 2
Michael Kinsley criticized this article, saying: "It is pointless to
compare the Clinton plan with some idealized version ofthe classic
American system, in which you can go to any doctor you want, who can
perform any treatment he wants, order any test she wants, prescribe
any drug he wants, and charge whatever she wants, all paid for by
insurance." ["Health Care Nonsense", The Washington Poet. 1/27/94]
Under reform, most such decisions will be made by patients and their
doctors. The National Board has the authority to issue guidelines
relating to what is necessary and appropriate. The authority to issue
these guidelines does not infer that there are no options left to
physicians and patients, only that a benefits package guaranteed to all
Americans must be consistently defined across states.
Guidelines that are developed by the Board will be developed in an
open hearings process in which all interested parties can have input.
Regulations used by insurance companies today are developed by the
companies as those companies see fit.
ARTICLE:
"Escaping the system and paying out-of-pocket to see a specialist for the
tests and treatment you think you need will be almost impossible."
FACT:
This is a blatant lie. Under the Act, you can pay "out-of-pocket"
for anything you want at any time, to any physician or hospital
willing to treat you.
However, we should stress that, under reform, i t is very unlikely that
individuals will have to pay for such treatment. Every plan, even the
most structured HMO, must offer at the very least a point-of-service
option which enables you to go see a physician of your choice at any
time. In some plans you may have to pay somewhat more to do this,
but it is always an option, unlike today and unlike the alternative plan
(Cooper) endorsed by The New Republic.
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Page 3
ARTICLE:
"If you walk into a doctor's office and ask for treatment for an illness
you must show proof that you are enrolled in one ofthe health plans
offered by tlie government. The doctor can be paid only by the plan, not
by you."
FACT:
False. You do not have to be enrolled in a plan to be treated. If you go
to a doctor and are not enrolled in a plan, the doctor will treat you. You
will then be given information on available plans and you may choose
any plan you want. The plan you choose then pays the physician. The
purpose of this provision is to assist all individuals in enrolling in a
plan.
However, as noted above, an individual may pay any doctor
any price for any service outside the comprehensive package
of services offered as part of a plan. So i f an individual wants to
go to a doctor and pay the doctor they can.
ARTICLE:
"The bill requires the doctor to report your visit to a national data bank
containing the medical histories of all Americans."
FACT:
Not true. The veryfirstprovision of this section ofthe Act states: "The
information system must be consistent with privacy security standards
in the Act." Physicians may be required to submit data on outcomes,
treatments, etc. for the purpose of improving quality and assessing
treatments and outcomes. But the Act very specifically prevents
against tying this data to specific individuals.
Sections 5101 and 5102 spell out detailed protections that assure that
patient records and individual health data are strictly protected.
Therefore, the implication that an individual's medical records will be
in a national data bank and that those records can be accessed by all
kinds of other agencies, individuals, etc., is patently untrue.
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Page 4
ARTICLE:
If you work for a company with fewer than 5000 workers you "must
enroll in one ofthe limited number ofhealth plans offered by the
regional alliance where you live."
FACT:
Misleading. These individuals choose a health plan from the regional
alliance bargaining on their behalf. But i t is clearly misleading to
assume there w i l l be a l i m i t e d " number of plans offered by the
alliances. In contrast, the alliance is obliged to offer all plans
certified by the state, including at least one traditional "fee-for-service"
plan. The only exception is that an alliance may decide not to offer a
plan than charges 120% or more ofthe average premium cost in the
region.
For example, one of the real world models of an alliance - the
California Public Employees Retirement System -- offers its members a
choice of 24 different plans and individuals choose a personal
physician in the plan. And more than 2/3 of the members are so
satisfied with their plan that they would recommend it to a friend.
This is a big difference from today's system in which the great majority
of Americans face a very limited choice ofhealth plans. About 50% of
Americans insured through their employer have only one or two
options ofhealth plans. The great majority of Americans will have
more choice in the alliance system.
ARTICLE:
"Under the bill, a National Health Board... will decide how much the
nation can spend on health care beginning in 1996."
FACT:
This is untrue. The Health Security Act makes no attempt to "decide
how much the nation can spend on health care" and specifically
rejected the idea of global budgets or arbitrary price controls. The
National Board is only authorized to set the initial premium targets -•
the rates at which health insurance premiums (for the comprehensive
benefits package) ngt national health expenditures may increase from
year to year. These premium targets are important guarantee to
American taxpayers and businesses who are being asked to contribute
to their health care that their premiums will not continue to spiral out
of control, as they have done for years. There are no restrictions i n
the Act on the amount of money that may be spent by people
with their own funds for additional services or supplemental
insurance policies.
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Page 5
ARTICLE:
"The bill outlaws plans that would cause a region to exceed its budget
or that cost 20 percent more than the average plan."
FACT:
Wrong again. No plan is "outlawed." The premium limit does not
preclude any plan from participating. The alliance has the option (not
the requirement) to refuse to contract with a plan charging more than
20% over the average premium (so that people have a safeguard
against insurance company price inflation).
ARTICLE:
"Even the bill's authors anticipate that restricting the dollars available
for health care in the teeth of these trends will produce grave shortages;
the bill provides that when medical needs outpace the budget and
premium money runs low, state governments and insurers must make
^automatic, mandatory, nondiscretionary' reductions inpayments to
doctors nurses and hospitals to assure that expenditures will not exceed
budget."
FACT:
This is misleading. The author here is clearly implying that such
a mechanism exists i n the main proposal — i t does not. The
section the author is quoting from here refers to states that choose to
form single payer systems, not from the description ofthe primary
system advocated in the plan. Virtually all single payer systems work
in this manner, adjusting payments to providers to make certain
budgets are met.
Even with regard to single payer systems, there is absolutely no
indication in the plan that the bill's authors are anticipating "grave
shortages." This is responsible legislation; the plan merely spells out,
in this special case, the mechanism by which a single payer system
would meet targets i f expenditures were running ahead of anticipated
costs. To spell out such a mechanism is hardly an admission that
"grave shortages" are expected.
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Page 6
ARTICLE:
"Above a threshold level of quality, alliance officials will approve
health plans based on lowest cost, not highest quality."
FACT:
Not true. In contrast, the alliance is obliged to offer all plans certified
by the state, including at least one traditional "fee-for-service" plan.
The only exception is that an alliance may decide not to offer a plan
than charges 120% or more ofthe average premium cost in the region.
They are not required to do this however.
ARTICLE:
"What most of us call fee-for-service (choose your own doctor) will be
difficult to buy."
FACT:
Another lie. To the contrary, the Health Security Act preserves fee-forservice arrangements by requiring all alliances to offer at least one feefor-service plan. Today, more and more Americans cannot choose a fee
for service plan because their employers have chosen not to offer that
option. Recent reports have shown that"... a growing number of
employers have abandoned traditional indemnity [fee-for-service]plans
entirely. I n fact, more employers now offer managed care plans than
offer traditional indemnity plans." In fact, in 1988 , 89% of employers
offered fee-for-service plans but, by 1993, this number had dropped to
65%. ["1992 Health Care Benefits Survey', Foster Higgins, 1992; "Health Benefits
in 1993", KPMG Peat Marwick]
ARTICLE:
"Price controls on doctors' fees and other regulations will push
doctors.."
FACT:
Yet another lie. There are no price controls in the President's plan.
Price controls -- calling for government micro-management of every
health care service, doctor's fee, drug technology, and product -- were
considered and specifically rejected. The Health Security Act does have
-- as a backup mechanism for cost control -- a limit on how much
insurance premiums can increase every year. This is an important
guarantee. If employers are to be told they have the responsibility to
contribute to coverage -- and if the federal government is going to
provide discounts to small businesses and low-income individuals -then American businesses and families deserve the guarantee that
their premiums, and government spending, won't continue to rise
unchecked, [more]
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Page 7
Since, the federal government won't make market decisions on specific
prices; health plans will have to decide themselves how to become
more efficient in a way that won't drive consumers to another plan. As
Stephen Zuckerman and Jack Hadley, two leading health policy
analysts, wrote in support of the plan's premium limits, "it seems far
preferable that insurance companies that are responsible to their
subscribers make these decisions than having the federal government
involved in detailed price negotiations and review procedures with
individual hospitals and physicians." ["Clinton's Cost Controls Can Work",
Washington Post. 11/7/93]
ARTICLE:
"The bill limits what health plans can pay physicians and prohibits
patients from paying their doctors directly."
FACT:
False. Any health plan that pays physicians according to their own
contracts may pay those physicians anything they like. The bill only
tells most health plans what to pay physicians with whom i t has no
contract. These fees apply to fee-for-service plans and for charges
when individuals go out of the plans' network of doctors.
It is not clear why a patient would want to pay a doctor "directly," for
services that their insurance company is obligated to pay. I f the
implication is that individuals cannot go to any doctor and pay
for whatever they want, that is false. Their right to do so is
expressly protected.
ARTICLE:
"The Clinton bill calls utilization review a 'reasonable restriction'on
patient care and expressly includes it as a requirement for doctors
treating patients with fee for service insurance as well."
FACT:
This is a lie. The plan does not "require" fee for service insurers to use
utilization review. It says they may do so. The purpose is to define
what fee for service insurers -- who have no contracts with the
physicians they are paying -- may do in assessing charges.
Utilization review is one option they are expressly permitted,
not required, to do. [more]
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
PageS
In reality, the bill is just following common practice here,
acknowledging the typical practice of utilization review in fee for
service plans. If the author is implying that many Americans are
enrolled in plans where there is no review by the insurer, she is being
deliberately misleading. As Michael Kinsley said, "It so happens that
the New Republic's own fiealth care plan (of which I am a member) has
extensive "utilization review.'... Utilization review is one ofthe
developments rapidly spreading - for good or ill - under our current
health care system. It is one reason fiealth cost inflation has abated so
dramatically . . . " ["Heahh Care Nonsense", The Washington Post. 1/27/94]
ARTICLE:
"Some states recently have enacted laws to safeguard choices patients
want to make for themselves, such as which hospital or pharmacy to
use. HMOs protest that these laws hobble cost containment, and the
Clinton administration apparently agrees. The Clinton bill pre-empts
state laws protecting patient choice."
FACT:
Deliberately inaccurate. The Act guarantees all individuals full choice
by giving everyone the option many don't have today - access to a fee
for service plan in which they can choose any provider. The Act also
mandates that all HMO's and other managed care plans offer a pointof-service option in which individuals have a right to see any doctor
outside of their plan or its network. This, again, is far greater choice
than many individuals have today. In fact, current trends are towards
declining numbers of individuals in fee for service plans and therefore
fewer choice of doctors.
Most of the relevant laws that are being "pre-empted" are not geared to
protecting patient choice - which is fully protected and expanded in
the Act -- but to protect providersfiromprice competition and other
pressures of managed care organizations. The state laws the Act
overrides are those that bar managed care organizations from creating
their own networks -- for example, not allowing a managed care
network to refuse to admit a qualified physician into its network.
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Page 9
ARTICLE:
"Doctors in training will be assigned to the coveted specialty programs
based partially on race and ethnicity...."
FACT:
This is ridiculous. No physician or medical student is "assigned"
to any specialty or told what type of medicine they can
practice. The Act does make clear that funding of medical education
will put more emphasis on the widely-acknowledged need to train
primary, as opposed to specialty care physicians, and that attention
will be paid to the potential under-representation of minority groups.
ARTICLE:
"Under the Clinton bill you are entitled to a package of basic benefits,
but you can have them only when the are "medically necessary' and
"appropriate.' That decision will be made by the National Quality
Management Council, not be you or your doctor. The Council... will
establish "practice guidelines' to control "utilization' of health services."
FACT:
Another lie. You and your doctor will decide the type of care that you
need. The National Board has the authority to issue guidelines on
what may be necessary or appropriate. Its process of issuing any
guidelines will entail the fullest participation of all concemed.
Today, virtually all insurance plans can refuse to pay for services
deemed unnecessary and inappropriate, and i t is the insurance
company -- not the patient and physician - with the ultimate
authority. The decision-making process of insurers are not subject to
any public input or scrutiny. To imply that the new system will have
restrictions on what is necessary and appropriate, when the current
system does not, is anything but truthful.
There is nothing in the Act to suggest that the "practice
guidelines" referred to here will be mandatory or will control
anything. They are to assist plans, providers and others in providing
higher quality care. As the Act says, they "may be used by health care
providers to assist in determining how diseases, disorders, and other
health conditions can most effectively and appropriately by prevented,
diagnosed, treated and managed clinically."
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Page 10
ARTICLE:
"The Secretary of Health and Human Services has the power to set a
controlled price for every new drug, and to require the drug
manufacturer to pay a rebate to the federal government...
//a
producer balks at paying the rebate, the Secretary can "blacklist' the
drug, striking it from the list of medications eligible for Medicare
reimbursement."
FACT:
Very misleading. The word "blacklist," with quotation marks
around i t i n the statement, does not appear i n the bill. Putting
quotation marks around it implies i t is directly lifted from the text. In
this case, however, it obviously applies to the author's interpretation of
the text.
The Secretary can, in some circumstances, request a rebate on a drug
as a cost containment tool. This will apply only to those drugs
purchased in bulk by the federal government for the millions of
Medicare beneficiaries. Manufacturers are given process rights in
these negotiations as well. There is no "blacklist".
ARTICLE:
"Under the bill, the Secretary weighs the development costs and profit
margin for the single new drug, rather than the overall profitability of
investing in new cures."
FACT:
The statement refers to page 373 of the bill. The bottom of that page
and the next page list no less than 8 factors that must be considered
by the Secretary in negotiating a rebate in the Medicare drug program.
Clearly, there is no effort to exclude the consideration that many
efforts to produce new drugs cost a great deal and produce no profit to
drug manufacturers. Drug companies would certainly be given the
opportunity to raise these considerations and there is absolutely
nothing in the proposal would prevent the Secretary firom considering
that reality.
�llllllllllllllllllllllll
i liflll
7&7(.k<}<
II
ill
�What the Clinton plan will do for you.
No EXIT
By Elizabeth McCaughey
I
I'vou Ye noi worried abom tlie ('.lmi"n tw.ilih bill,
keep reading. If tlie bill passev MHI uill ii.ne in ^Mrle lor one ol (he lou-bud^ei healili (jl
»clci led
l)\ the i^ov ei'nnient. The 1 J^^ will pi I M H I ^ U :o un
goini; outside the -i\ ;tem to buv baMC lit-.ilili • ..wi.u{e
vou (hmk is better, even after \ou p.i\ tin' m.iml.uorv
premium (see the bill, page '244:. Tlie lull ^u.n .mtees
vtm .1 package of medical • ervice>. hm wm . .m t ha\e
them unle^s ihev are deemed "necc^an ' .md ".ippropnate I pages 90-911. That decision will (-.r made b\
the government, not
\ou and vour doi i, ,i F.M .ipmg
the -^vMem and paving out-of-pocket to M C .I -pi i MIIM
for the tests and treatment win th in k -.on , u-cd will lie
almost impossible. If vou walk into a dot mr > oil'u e and
ask lor treatment lor an illness, vou mu-i »h>iv\ pmot
that vou ate enrolled m one ot the health pl.niv <'tteted
bv the government (pages 139. 14'J). Tlie doctor can
be paid onlv bv the plan, not bv win i page J.'liii To
keep controls tight, the bill requires the doctor to
report vour visit to a national data bank containing the
medical histories of all Americans (page 'J3h).
If these facts surprise vou. it's because vou haven t
been given a straight storv about the Clinton health bill
Take two examples: on November 4. Leon Panetta. the
director of the Office of Management and Budget, testified to senators that the hill does not "set prices" and
"draw up rules tor allocating care", a month later Hillarv
Ri idham (Clinton assured a Boston audience that the govern ment will not limn what vou can pav vour dot. tor. Tlie
test of the bill proves these statements are untrue.
The administration also savs that the bill will not
lower the qualitv of your medical care or uke a*av
personal choices vou now make. This statement goes
right to the issues that matier most. Hov% true is u- To
help vou decide, here is a guide to the IJHl-page
Health Securitv Act.
No effort is made here to compare the Clinton bill
with the manv alternatives offered bv Republicans and
other Democrats or to assess the nature and t \teni of
the health care "crisis." The purpose is to an<.v»er one
question: L'nder the Clmton bill, if vou fx-conu- ill.
will vou be able to get the treatment vou need and
<
)
MrC.ar.HEV is John M Olm FManhattan Institute.
EUZ VUETH
low
. i i the
make choices about vour own health care.rkr Law Will Make You Get Health Care Through Vow
'Alliance.' L'nder the bill, unless vou get Medicare,
militarv benefit or veteran's benefits, or vou or \ou
>pouse work for a company with more than b.\W) cmplovees. vou must enroll in one of the limited number of health plans offered by the "regional alliance"
where vou live (page 15). Regional alliances are
government-run monopolies thai select health plain,
collect premiums from residents and their emplosen
and pav most of the money to HMOs and insuren II
vou fail to enroll, or the plan you choose is ovenufv
bribed, alliance officials will assign vou to one (page'*
144. 146). The goal is to curb health care spending bs
limiting what every .-Vmeriean is allowed to pav for
health insurance. Restricting how much people can
pav for insurance limits how much money ia in the pot
to take care of them when thev're sick.
The Health Can You Can Get WiU Bt LimtUd. L n
der the bill, a Nauonal Health Board—seven people appointed by the president—will decide how much
the nation can spend on health care beginning m
199b uhe baseline year). Based on that national bud
set. the board will set a budget for each region and J
ceiling on what the average health plan in the region
can cost. The bill outlaws plans that would causr •
region to exceed its budget or that cost over '.'0 pr'
cent more than the average plan. After 19%. mcrrx* .
m health plan premiums will be strictly limited b\ m
milatiou factor* based on the consumer price mdrv
i pages J56. 984-987. 990. 995).
Putting pnce controb on premiums to limn thr
amount of money in the health care system mighi
wring out waste during the fint year or two, but there
is no doubt it will cause hardship later on. Seveniv
-even million baby boomers will be reaching the age
when thev need more medical care. Increasing num
bers of teen pregnancies and low-birth-weight babir*
also will require more health care dollars—$158.w
on average for each severely underweight newborn
Even the bill's authors anticipate that restneung the
dollars available for health care in the teeth of thev
trends will produce grave shortages: the bill provides that when medical needs outpace the budget
and premium monev runs low. state government
(
FamiANY r. iwa THE NEW fttn-aui r
�and insurers must make "automatic, mandatorv
nondiscretionary reductions in pavments" to doctors,
nurses and hospitals to "assure that expenditures will
not exceed budget" (pages 113. 137).
Above a threshold level of qualitv, alliance officials
will approve health plans based on lowest cost, not
highest qualitv. to stav under the premium ceiling set
bv the Nauonal Health Board, explains Cara Walinsky
of the Heakh Care Advisorv Board and Governance
Committee, which advises 800 hospitals worldwide
That is whv Anthony L. Watson, chief execuuve of the
Health Insurance Plan (HIP) of Greater New York, is
optimistic. If the Clinton bill passes, "New York is
mine," he told The .Wew York Times. "I'm going to be
the lowest-cost plan." HIP. with a physician staff that is
57 percent foreign-trained, alreadv has what that
newspaper calls "the image of being the least desirable
health care opuon for city workers and others who
cannot afford anvthing more."
S
, ,
With the Docton You Use Sow Will Be Hard.
Deciding for yourself when to see a specialist or
get a second opinion and selecung the hospiul
vou think is best will be even harder The bill is
designed to push people into HMOs, which restrict
vour choice of physicians and hospitals, and use gatekeepers to curb the use of specialists, expensive tests
and costlv high-tech treaunents. What most of us call
fee-for-service (choose-your-own-doctor) insurance will
be difficult to buy. The ceiling on premiums and the
20 percent rule will eliminate most fee-for-service
plans, which tend to be more expensive than their
pre-paid counterparts. .Although the Clinton administration insists that Americans always will be able to
choose fee-for-service insurance, experts such as Dr
John Ludden. medical director of the Harvard Communirv Health Plan, sav that option will "vanish
quicklv "
Even where it is possible to buy fee-for-service insurance, it will be hard to find doctors practicing on that
basis. According to Walinsky, the Clinton proposal
contains "verv strong incentives" against fee-for-service
"on the consumer side but also on the provider side."
Price controls on docton' fees and other regulations
will push doctors to give up independent pracuce and
sign on with HMOs. We've been told that the government won't be putting price controls on docton. but
the bill limits what health plans can pay physicians and
prohibits pauents from paving their docton directlv.
Alliance officials post a schedule of fees, and it is illegal for doctors to take more (pages 134, 236).
In addition, alliance officials set yearlv limits on pavments to fee-for-service doctors in each field of
medicine, like cardiology or pulmonology. What if a flu
epidemic causes pulmonologists to see more pauents
with breathing problems than the region's budget
allows? The bill compels insurance plans to slash doctors' fees or cut off their payments entirely unul the
next vear "to assure that expenditures will not exceed
the budget" (page 137).
H\\f\ Un ihf jnh of R/uioning. I inter the ( '.lintou IMII iiutederal g.nernment uses price coriiroK . .n uw im;.::> t.
curb dollars paid into the health carr »\»ieu! I.::::.:i::^
how those dollars are spent is a job -hated b\ .liiiam c
officials, who budget pavments to doctori i aumdlmg fee-for-sersice sector, and HMO administrators, who
are expected to do the lion's share of health care
rationing. Is "rationing" too strong a word.- Not according to Ludden. whose HMO serves 570.000 people He
prediccs that "price controls on premiums will drive us
straight tn rationing at bedside." Princeton Pmtes-oi
Paul Surr. a kev designer of the Clinton plan, prefers K .
sa\ that premium caps will induce "a different frame of
mind" m both doctors and health care admmisiraior"The\ will have to manage under constraint.''
m
H
u
MOS alreadv have a track record of tighdv controlling a patient's access to• phvsicians. Ai
Kaiser Permanente. the first person a -uk
patient sees is the "advice nurse." who makes
the decision whether adoctor is needed. In HMOS. the
ratio of phv sicians to members averages 1 to S0O. about
hall the rauo of phvsicians to the general population
Specialise are parucularlv hard to sec.
Current HMO cosKutung methods alreadv are drawing criticism from Congress, government investigaton
and worried doctors. The Clinton bill's premium caps
will compel HMOS to use even more stringent methods
of limiting care, but the bill omits anv safeguards to
protect patients from abusive praciic.es.
For example, missing from the bill is anv effort to
put a stop to "the withhold." the pervasive IIMO pracuce of punishing doctors financiallv for providing care
thev believe their pauents need. Almost all large, forprofit HMOS. including those operated bv Aetna
Methfe. Oxford and Prudential (but not Cigna) withhold betvteen 10 percent and 2b percent of a doctor *
compensaiiuu until vear's end, and return it onlv it
the doctor hai met HMO targets for limiting patiem
tests, referrals to specialists and hospitalizations. Doc
tors report that targets are so siringeiu that HMI is
almost alwavs keep part of the withhold, which means
that what a doctor orders for a patient comes out oi
the doctor's own pocket at the end of the vear.
The withhold has caused a surge in dangerous "hallwav consuluuons." according to Dr. .-Man Jasper, a pulnionologisi and critical care specialist at St. Vincent *
Medical Center in Los .Angeles. Other doctors stop
Jasper m the hospital corridors, describe then
palient s breathing problem and seek a diagnosis, m
order to avoid referring the patient for a specials
consultauon and incurring points against the with
hold. The danger, savs Jasper, is that the other doctoi
might fail to mention a critically important aspect ol
the pauent s condition.
The withhold motivates primary care doctors to take
a "we II see how vou feel next week" or "let's trv this
fint" approach, even if it means additional worn ami
needless sufTering for the patient. At a Humana-owned
HMO in San Antonio, for example, a 40-vear-old woman
�wiih back pain wai toid bv the urmupenisi mat sne
needed an MRI. Bui her primarv care docior rejected
the specialist's request for the test, saving the patient
would have to trv something less expensive, and sent
her for acupuncture, followed bv months of hot packs
and phvsiotherapv. When nothing worked, the gatekeeper authorized the MRJ. which revealed that the
woman needed a lumbar dischetomv (disc removal),
as the orthopedist had suspected. The storv was
i elated bv the woman's surgeon. Dr. William V. Healev,
a clinical professor at the L'niversitv of Texas, who said
the lesson was that HMO cost-cutting incentives, such as
the withhold, fail to
account for the graver cost—the months
a patient is home
from work, worried
and in pain.
Another HMO costcutting strategy that
makes doctors and
patients worrv is the
utilization review—a
sick patient must wait
while the doctor telephones a utih/ation
review companv. describes the symptoms
and medical historv
to a nurse or clerk
seated at a computer
terminal and hopes
for an o K. to proceed with tests and
treatment.
Three
hundred
and fiftv utilization
review
companies
that claim to slash
health care costs sell
their
services
to
HMOS. hospitals
and
others at a rate of si
to S3 per patient
reviewed. It s a $7 bil11 R \ U I M . F»> V I N T I
lion industrv. Such
"cookbook medicine" ignores the non-average, abnormallv sick patient who may need more intense treatment than the computer program recommends It
also discounts the value of examining a patient, and
ignores the phvsician s judgment and expertise. Dr.
Jerome Groopman. head of oncology and hematology
at the New England Deaconess Hospiul in Boston,
savs. "It s an 800 number. Thev don't know me from
Adam!"
"Horror stones abound" about utilization review,
according to a 1993 report for the Nauonal \isociation of Atiornevs General. Doctors' treatment plans
are "rejected bv inadequatelv trained personnel."
according to the report, and utilization review compa-
nies retuse to give reasons tor their decisions, even to
doctors, because it is presumed doctors would Figure
out wavs to get around the review guidelines once
thev were known.
Even when doctors' recommendations are ultimatelv approved, it can take weeks longer to diagnose
and begin treating an HMO patient than a patient
with fee-for-seruce insurance. Jasper explains, because
of the successive delavs in getting each test approved. One HMO patient wuh coughing trouble was
given antibiotics by his primary care doctor, who
thought the problem was pneumonia. The patient lost
thirty-five
pounds
while waiting from
October 27 to December 24 for an O.K.
to see Dr. Jasper, then
to have a GAT scan
and lung biopsv. and
finally to learn that
the correct diagnosis
was a lung fungal
disease. Jasper said
he could have had a
fee-for-service pauent
on ana-fungal medicine within fourteen
days, instead of nine
weeks.
The Attorneys General report urges
state lawmakers to
look into curbing uulization review in
HMOs. In contrast the
Clinton bill calls utilization review a "reasonable restricuon'
on patient care and
expressly includes it
as a requirement for
docton treating patients with fee-for
service insurance
well (page 134)
K i K r •<» NEW H E P U B L I C
Tht
Govern mfn
Won t Protect You From HMO Abusts. If most Americans
are moved into HMOS, who will ensure that they get
good health care? The Clinton bill establishes two
national boards to develop quality standards and
depends on alliance officials in each state to enforce
them (pages 843-844). But history show that federal
and sute officials have failed to protect patients from
HMO abuses, even in small pilot programs.
In 1990 Florida newspapen printed lurid accounts
of abuses by Humana Medical Plan, an HMO paid to
care for the elderly under a small, experimental program to reduce Medicare costs. Congress ordered an
mvesugauon of Humana's performance, and Janet
Shiklcs. in charge of the probe for the General
FnnuAMVT.im
THE NEW REHJUJC
a
�Accounting Office testified about the companv s
failure to order appropriate diagnostic tests and failure to follow up on abnormal test results " Con^umirReports (August 1992) also investigated the shortcomings of the pilot Medicare-HMO program in Florida,
and concluded that government oversight was "lackadaisical."
A nationwide investigation for Congress drew
the same conclusion. Pointing out that onlv twentvone of fiftv-seven HMOs investigated received a passing grade, the late Senator John Heinz warned thai
the priority "has been to promote enrollment m HMOS
and we have not given equal priority to monitoring what happens" to people "after thev have
enrolled."
Far from protecting patients in HMOs, the Clinton
bill ties the hands of state lawmakers who want to pass
protective legislation. Some states recentlv have
enacted laws to safeguard choices patients want to
make for themselves, such as which hospital or pharmacv to use. HMOS protest that these laws hobble cost
containment, and the Clinton administration apparendv agrees. The Clinton bill pre-empts state laws pro
tecting patient choice (page 238).
Y
ou'// Get More Pnmary Care Than High-Tech
Medicine, and That's Mot Good News. Will pauents
get the care they need when gatekeepers limit
their access to specialists and high-tech
medicine, as the Clinton bill intends? The evidence
strongly suggests that low-tech care will not be good
enough. People with heart disease, for example, will
suffer, HMOS alreadv ration high-tech care to heart
attack patients, according to a study in The Sew England Journal of Medicine (December 1993). HMO pauents
hospitalized with coronary disease (myocardial infarction, unstable angina, angina pectoris or ischemic
heart disease) are 30 percent less likelv to be given
bvpass surgerv or a coronarv angioplasty (declogging
of the arteries) than similarly sick patients with fee-forservice insurance. Another recent study by Duke L'niversitv points to the consequences of such low-tech
care In the study, American heart atuck patients who
tended to be treated with three cosdv. high-tech procedures—catheterization (inserung a thin tube into the
heart for diagnosis), angioplasty and bypass surgerv —
recovered far better than Canadian heart atuck
patients, who had less access to the procedures. American patients, who were twice as likelv to undergo the
procedures, tended to have a better quality of life after
a heart atuck. Canadians suffered more recurring
pain, felt more depressed and were less able to go back
to work and pick up their old acuvities. Dr Robert
Califf savs the Duke studv may help people undersund
"the implications of reducing services in a health care
svsiem."
Is it true that we need less care bv specialists- Not
according to the National Institutes of Health, which
recently issued a warning that patients with manv common conditions should be treated routinelv bv a renal
'kidnevi specialist. According to the \ I H panel, primarv caie doctor- trequentlv are m eriooki i ig ;he e.ulv
-ign- oi kidnev tailure and are hanging ..n to p.iiirnitoo long. Patients should he reterred to -pru.ili-itor dialvsis sooner, said the MH. before it is too late to
save their lives. Twenrv-five percent of kidnev patients
v\ho don't receive dialvsis until it is an emergencv die
Dr C. Craig Tisher. chairman of the M H panel,
warned that patients with high blood pressure, diabetes, weight problems and metabolism abnormalities
should be regularK cared for bv a renal specialist, noi
onlv a primarv care doctor.
In the short run. the Clinton bill depends on HMOS
to limit access to specialists and high-tech care. As a
longer-term strategy to limit such care, the Clinton bill
seizes control of medical education and requires that
bv 1998. no more than 45 percent of noting doctors
be permitted to go on to advanced trnining in a specialtv Specialrv programs at leading medical schools
will be downsized. Doctors in training will be assigned
to the coveted specialty programs based paruallv on
race and ethnicitv. depending on how "underrepresenied" each racial or ethnic group is "in the field ol
medicine in general and in (lie various medical specialities' (pages 509. 514-515).
Restricting medical education bv government fiat
undoubtedlv will reduce the consumption of expensive, cutting-edge care. Doctors who are not trained in
sophisticated technology cannot use it. But preventing
doctors from learning about the most advanced medical procedures is a lethal wav to curb health care consumption Keeping doctors uninlormed could not
possiblv be an improvement.
•
•
nurntten Rationing Rules. L nder the Clinton
bill, vou are entitled to a package of basic benefits. but vou can have them onlv when thev
are "medically necessary" and "appropriate
That decision will be made bv the National Qualm
Management ( ouncil. not bv vou and vour docior. Thr
council (filteen presidential appointees) will establish
"practice guidelines" to control "utilization" of health
services ipages 91. a36, 848). These guidelines will
compel doctors to uniformly practice low-budget
medicine. "There needs to be some point of reference
for [health) plans to determine what is appropriate
care," Starr said. "There is an enormous amount ol
excessive, inappropriate care." In Surr s view, the bill
provides "high quality care." People who want access to
more are asking for a "neurotic" level of care. What is
most troubling about the practice guidelines is that
thev are not spelled out in the bill. Congress and thr
public are asked to approve the concept without knowing the content.
How rigorous will the sundard of "medically necev
sarv" and "appropriate" be? In other words, how much
rationing based on cost-effectiveness will we have to
endure- When a kidney transplant is needed, will ihr
paueni's age matter, as it does in Great Britain, where
older pauents are routinelv denied high-tech treatI
I
�pnirK
nis >
ists
to
nts
lie.
iel.
lia- _
ties
noi
IOS
J>
a
liat,-..
ors
.ed
on
^
iire- - -'•
Bsjor/' Sitrninir On. You Should Know.... The Clinton
inents.' Will patients with advanced \IDS be entitled to
bill will prevent people from buving the medical care
intensive carer Oregon's standard of appropriate care
thev need. Price controls on premiums will push most
for needv residents excludes high-tech, life-sustaining
Americans into HMOs and pressure HMOS into sharplv
procedures for advanced UDS cases, as well as for
cutting access to specialists and effective, high-tech
extremely premature babies and advanced cases of
cures.
Price controls on doctors fees and regulations
certain cancers. Groopmaa. yho treats cancer and
tving doctors hands will curb the care phvsicians can
UD** patients, worries that decisions now made bv the
give patients Price controls on new drugs will keep
patient, doctor and famt+v will be made b\ a council of
people over n5 trom getting the medication-! thai can
•omniscient hUreautrats". who "are-looking at two
help-fliem. Most important, government controls on
tilings: dollars a n i l
medicaf education will limit what future doctors know,
e
American
Medi- Manv wgatliBBoak
eostihg
lives and suffering no one can calculate.
iooFtHrs
aiid
insurericai Association, jpeciafi^Thcadimnistration often cites two stadsucs—Ameralreadv devise.what jta^alT^praqlce guidelines* to
ica's relaiivelv high infant mortalicv rate and its lower
-help physicians keep "abceat^ofc tbe most effiective
life expectancv—to support the need for the Clinton
ireatme^jLitdden-exDl^S^.thal "doctors appr-ecihealth bill. But these have almost nothing to do with
ate guidelines" wtteiMtlgfrjUfcTegbmmendatiuht, *faut
the qualitv of American medical care. Both statistics
not uiK«juhcj£Lbe.come matters of Ua."
refleci the epidemic of low-birth-weight babies born to
NUtuy ptrrsiciitftin^lto; treat j t i c n o f ' i mwe pnptilateenage and drug-addicted mothers, as well as the
tion-arr troublert: tRa jE^CIiiiton plan \ pracuce
largenumber of homicides in American cities and
^uidHrncs wiW prevent tfrem.frgtm trying new stn»tedrug-related deaths.
g t « m fii^.^e^erafe "p«teais. Jasper recalK tli^ he
learned -<^iid^ "<hF©u^4he^apes H>e* "iTur other-"
n fact, if vou are scnouslv ill, Jfe best place to be
"3^Ctorr w e c j ^ i & y i n ^ ^ ^ w ^ g c c e s s witfL irratif^fnrAT Uie United States. Among all indusmalpneijjmoosil^TlftllttuufilJiS WIK*eUwd -Uluesyt^fc-- ^
izftf nations, the United States has the highesi
adjunctive" coftK-este rowlsi. AfoiWaior% prac i ic»-^mnecure rates for stomach, cervical and uterine canlines would have stifled sucTi innov-atiou and -pwrcers, the second highest cure rate for breast cancer
ACyKfJJnsper from keeplft§-JSwtie»»*^lav. SimiJartyr
and is second to none in treating heart disease In
" l M' f o• u••^ U a r -•' _wip_v\ere ti\ing aenisol
bwrit+ui r e c a
othee countries that spend less, people who are sick
IGttaJ&Bf * U* trfSt-i
"rguidtinw'^i^tfcFftave-- g?t ItMt tsn.. arc less likely to survive and have a
ths. I
poorer quality of life after major illness. Consider
what
hapfMps in Canada, whose health care system
to-a
sRjw-movlflg
"hold chan
up as a model for the United Sutes. In
~jpown»acni
ical
technology is radoned to danger\ti*
els. The United States has 3.26 open_ v units per million people; Canada has
tSits per million. Cardiovascular disease is
CanadSViUmber one health problem, yet open-hean
sfirgerv^urfKs and catheterizadon equipment are kepi
m such short supply that the average wait for ur
and human services has the pov\er to set a congent
i not elective) surgery is eight weeks. The shock
trolled price for even new drug, and to requne the
mg
result
is that in Canada, a cardiac pauent is tm
drug manufacturer to pav a rebate to the federal govtimes
.
L
>
likelv
to die waiting in line for surgerv as .n
eriimeiit on each unit sold to Medicare patienu> at marthe
operaung
table.
In the United States, there n MO
ket price instead ofthe controlled price. If a producer
T
1
p^l
!'iat
cn---
f
LJ
-
lOt
itv
ie
-h
;h
.11
et
e
'e
•»f
.11
io
is
it
>e
balks at paving the rebate, the secretarv can "blacklist"
the drug, striking it trom the list of medications eligible
for .Medicare reOThurwmrrrUpMiM B65-379). The piop o s e c r t t f S M r o i t f f ^ B B W ^ ^ p a n e w drug inch a
Tacrine- C^^eatfiiflffittfer AhHeimer'sV from older
patients.
L'nder tfee _bi%^ .ft^Wgettitf y-^Cjl^
development costi aad-"pfdffir5@Shrjor rtre singje drug,
rather than the overtfcpfafitteiUp' ofeinxTsting in new
cures (page 37ST. BiotecR itivestorTpoint out that for
everv drug that reaches market, more than 1.000 others dead-end. with a 100. percenuioss for investors.
Limiting the price and profitabtHrr-of the one drug in
a thousand that succeeds will halt research into new
cures, including drugs for ovarian and hrea>i cancers
now in the pipehne...
5
l h t ;
wail
The choice is not between the Clinton bill and the
suius quo Members of Congress should read this bill
instead of reiving on what they hear, and then turn
their auenuon to alternatives sponsored bv Democnu
and Republicans. These alternauves provide urgenth
needed reform of the health insurance industry, oui
-tewing iu worst abuses, without taking important dectsions away from pauents and their docton and with
out depriving Americans of effecuve. high-tech
medical care when they are seriously ill. Congress al»>
should consider ways to provide insurance for thov
who cannot afford it, and level with the public about
what universal coverage will cost. Whatever the pner
uliimaielv. it will be less expensive than the conse
quences of the Clinion bill. •
pamMirr r. ISM THE NEW furi sut a
�The admission by.the ANC'S lo.ngume,^ndard^arec™
among-eoloreds._ihe,Rev.erend Allah. Boesi^tq^xi-ngi:
- an affair-withilTwhite reporter: ^ a s - . f u n f e P W g ^ ^
- mised its'
rep^tidn"?Acfimai)TOdjK^^^'^;^^
didate
fer^fi^^WKG^^j^^g^^
;
ropes.
h
admits, 7 h i s - i s ; « a M p s f e 1 p i « S S ^ a 5 r a ^ ^ ^
not f o r ^ ^ S i f c B S S t t b i n a S a * ^ ^
CK!
White House press office
t questioning the accuracy
je in TNR ("No Exit," Februilcome this opportunity to
;the White House about the
I did in my original article,
lescription of the bill—and
of their arguments—with
ivember 20,'l993, version. If
s challenge the accuracy of
[ope they will provide page
Naders can compare the eviIves.
challenge focused on this
:
In South Africa discussions of policy are rarely free
from questions of racial identity. During apartheid, the
people of the Cape were encouraged to believe that
because thev did not have a black majority, they would
not face the same political, social and moral reckoning
as the rest of the country. Through a labor system that
gave them preference over blacks, coloreds were encouraged jpjrfcfil superior to an^jiutuicrfroi^.the^
•e to settle for one of the lowby the government. The law
(utside the system to buy basic
better, even after vou pav the
bill, page 244) . The bill guarical services, but you can't have
"necessarv" and "appropriate"
j will be made by the govemoctor. Escaping the system and
specialist for the tests and treatjll be almost impossible. If you
wufK-nw. vi^w^ »
ind ask for treatment for an illness, vou must show proof that vou are enrolled in one of
the health plans offered bv the government (pages 139,
143) The docior can be paid only bv the plan, not by you
(page 236). To keep comrols tight, ihe bill requires the doctor io report vour visii io a national daia bank containing ihe
medical histories of all Americans (page 236).
The White House responded:
lis Act to prohibit any individ' ar and paying, with their own
jider the Act, you can pay 'out' :siepchififincfe'<
Sg you want at any lime, to any
-adif
jig to treat you." Price controls
For coioredtlea
iis wrong," according to the
.qred ij_
*io price controls—"
ri-re
pernic-iou^sjEeiic^pfH^!
statements from the White
elect^\iP>r^roi}il-g^^
111
proves
they are untrue.
would4^tutionaliz"ekln t h e i ^ ^ ^ f ^ ^ ^ A t f ^
jny
price
for
any servict you wan t ?
colored jazz p i a n i s t l t b d a ^ I b ^
gSo
buy
cosmetic
surgery, psyremih^iS^p^t^aj^^J^RKffil^pgP^^
""bvere'd services out-of-pocket,
from accepting payments
-'; identity crisis;"-—
»••-A^J-W^'^^S^^^^
basic kinds of medical care
t package. Below are the regPETER BEINAKTJS
^n^m^^itrnU^h^^^^
,
r a . I « M THE NEW REPUBLIC IT
i •
97
�The bill's authors anticipate that restricting dollars
available for health care will produce shortages: when"
medical needs outpace the budget and premium
monev runs low, state governments and insurers must
make 'automatic, mandatory, nondiscretionary reducuons in payments" to doctors, nurses and hospitals.to
"assure that expenditures will not exceed budget"
(pages 113, 137).
In a charge echoed bv Michael Weinstein of The Sew
York Times, the White House accused me of misleading
readers by "implying that such a mechanism exists in the
main proposal." The White House stated emphatically
that "it does not." The White House and Weinstein
argue that only under a single-payer svstem would payments to doctors and others be cut off if needs outpace the budget and premium monev runs low. They
expresslv charge me with quoting the single-payer regulations and misrepresenting them to be rules for the
"main" Clinton heakh proposal.
The text of the bill proves that the White House and
Weinstein are wrong. Cutting or delaying payments to
doctors, other health care workers and hospitals to stay
in budget is an integral mechanism in the administration's bill, and one of the two passages I quoted (page
137) is from the "main proposal." It provides that if
needs exceed budget and premium money runs low:
Sec. 1322(f)(2) PROSPECTIVE BLDGETING DESCRIBED ... the
plan shall reduce the amount of pavments otherwise made
io providers (through a withhold or delay in payments or
adjustments) in such a manner and bv such amounts as necessarv to assure that expenditures will not exceed budget.
The goi'emment will decide what is 'necessary" and "appropriate" care. The White House attacks as "wrong" and
"very misleading" my statement that "the bill guarantees
vou a package of medical services, but you can't have
them unless thev are deemed necessary' and 'appropriate.' " The administration also says it is "untrue" that
that decision will be made bv the government, not by
vou and vour doctor.
Let's look at the actual bill:
Sec. 1141. ESLCLISIOSS
(a) MEDICAL NECESSITY—The
comprehensive benefit package does not include
(1) an item or service that is not medically necessary or
appropriate: or,
(2) an item or service that the National Health Board may
determine is not medically necessary or appropriate in a regulation promulgated under section 1154 [pages 90-911.
Sec. 1 154. ESTABLISHMENT OF STANDARDS REGARDING MEDICAL
NECESSITV
The National Health Board may promulgate such regulations as mav be necessary to carry out section 1141 (<i) (2)
(relating to the exclusion of certain services that are not
medicallv necessary or appropriate).
The bill uses the word "regulations," not "recommendations," to describe the National Health Board's decisions. The bill also grants the National Health Board
power to change the preventive treatments guaranteed
in the benefit package and decide at what age and how
often you are entitled to tests and screenings, immunizations and check-ups (page 94). Regarding practice
guidelines, the bill makes it clear that the National Qual30 THE NEW REPUBLIC naRUARV 2S. 1M4
ity Management Council "wiljv develops measures of
"appropriateness of health care services- (page-839)
and "shall establish standards and procediires.for evaluating the clinical appropriateness of protocols used to
manage health service utilization" (page 848).
Racial quotas in medical training. The White House calls
such a suggestion "ridiculous," but the bill shows it is
true. Government will allocate graduate training positions at the nation's teaching hospitals based on race
and ethnicity. In determining how many training positions teaching hospitals will have, the National Council
on Graduate Medical Training will calculate the percentage of trainees at each teaching hospital "who are
members of racial or ethnic minority groups" and which
minority trainees are from groups "under-represented
in the field of medicine generally and in the various
medical specialties" (page 515).
P
rotecting consumen or HMOs? The White House
calls it "deliberately inaccurate" to say that the
bill pre-empts important state laws protecting
the ability of patients to choose the hospital thev
think is best and make other choices about their health
care. Here is what the bill provides:
Sec. 1407. PRE-EMmON OF CERTAIN STATE LAWS RELVTINC TO
HEALTH PLANS
(a) ... no state law shall apply ... if such law has the effect
of prohibiting or otherwise restricting plans from—
(1) ... limiting the number and type of health care
providen who participate in the plan:
(2) requiring enrollees to obtain health services (other
than emergency services) from participating providers or
from providen authorized by the plan:
(3) requiring enrollees to obtain a referral for treatment
bv a specialized physician or health institution
(6) requiring the use of single-source suppliers for pharmacy, medical equipment and other health products and
services.
Fee-for-service will be almost impossible lo buy. The White
House labels it wrong to predict that fee-for-service
insurance will be extremely hard to buy. They point to j
the provision that "in general, each regional alliance
shall include among its health plan offerings at least one
fee-for-service plan." But many doctors, hospital administrators and health insurance experts say confidentlv
that in practice, because ofthe broader provisions of the
bill, fee-for-service will seldom be available. I cited these
experts in my article. Here are their reasons:
(1) Regional alliances cannot permit the average premium paid in the region to exceed the ceiling imposed
by the National Health Board (pages 1,000-1.005). Feefor-service insurance, which allows patients to get a second opinion when they have doubts and see a specialist
when they feel they need one, generally costs more than
prepaid health plains that control patient access to medical care.
(2) Regional alliance officials are empowered to
exclude any plan that costs 20 percent more than the
average plan (page 132). They will have to apply the
20 percent rule virtually all thetime,in order to keep
total spending on health plans below the ceiling
imposed by the National Health Board. In order to offer
�Many Dop't Realize It's Clinton
Plan Thev Like '
By HOJUY STOUT
Staff JUportcr vf T m W /UA STmnr J oumiui.
YORK. Pa. - Jahan Bastitr doesn't tike
President Clinton's health-care plan. She
thinks It's too confusing:, too complex and
probably too expensive.
What about a plan that would guarantee a standard private healtb beneflu
packagetoall Americans, try to promote
competition in the medical industry, include some government regulation to keep
prices under control andrequireall employers to buy health insurance for their
workers with the promise r. ?overnrc?:.
subsidies to help the smallest companies.
"It sounds good," says Mrs. Basbir, a
43-year-old secretary and mother of seven.
"Employers may pick up a lot of the
burden, but If tbe employer can't afford It.
the government will subsidixe. So you're
going to have the employer, the governmem and the insurance companies worKing together."
Actually, that plan ii the Clinton plan,
riintnn 1$ losing the battle to define
Health-Care Satisfaction
1*1
Not
his own~fiealth-care bill. In tne cacophony
ol negative television ads and sniping by
fTTrirs_ foes are raising doubts aboiTt the THI ViLL STEER JOUXUL/MP MM wa
-n^inmnjiap fastpr man the nrpsidem and
ments. "If the White House had had access
""TnilaryRodham Clinton can eialain it. Congress didn't pass a plan this year.
to these people in York, what it would
- H W T g c r j E j p ( - l i n f n n s r g n r i ' t t h m n g h Thp
"The White House should find this bor. recognize is they have to be able to
contusion, the outlook for passage ol maior satisfying and sobering,' says Mr. Har: simplify their message, to say this is what
pWipntt of their bill is ip doubt
"Satisfying because the basic ideas which we're doing: A. B and C." he says. "They
A new Wall Street Journal/NBC News they ve drawn up are therightideas'" in have to be able to get out there and talk
poll shows that public support for-^w- the view of many people, he says. Bu: about it. day in and day out."
Clinton health plan" is eroding^Yet the, "sobering because they clearly have comEveryone in the York group also agrees
samepoll. conducted hv Republiran Rob- municated very little to the public, and ir. that health-care reform means coverage
ert Teeter and Democrat Peter H&rt. that respect have ceded too much to the for every American. No one in theroomis
showfthat bacnng lor the basic provisions interest groups."
willing to accept a compromise of anything
in the president's plan is strong!
To further test public sentiment in the less. "We've got to have universal health
Ifl M i poll. 45^ nf Ampnr«n<; nnw ^ay health-care debate, the Wall Street Journal care, whether you make a million bucks or
asked Mr. Hart to convene a small group of nothing," says Ms. Doll.
«h»yn£i|»«f 'fieriln"™r ""! "P "m
--'TTganuaa-fljiri 18^ in SpptemUr^ust people In York, a medlum-stzed city in the
In the Journal/NBC poll, 33% of AmeriaTteTThepresident outlined the plan in southern part of Pennsylvania. Everyone
cans rank universal coverage as the most
a televised address to Congress. in the group - including a woman whose important goal of health-care reform, the
Thirty-seven percent of those surveyed family lost Its health coverage when her highest for any of the suggested choices.
favoHhe Clinton program, downfrom3T~c husband lost his job and a union member Lower medical rates and capping costs
with a plan that "covers everything you placed second, with 18%.
' injanu^anfl sift.m September.
// BuTwhe.'- n'P'1 ^ ^isTirrw nf \b? can imagine" - believes the U.S. health
In contrast to the sentiments of the
. /1 ma'iorprovisions of the White House bill- svstem is badly broken and needs to people in York, though, the poll found some
.jffiilhmu irlpnU /ing u - 76gi of the recpoo. be overhauled to guarantee health cover- willingness to accept a bill that doesn't
^jlprn^say If hai «ith<r "a groat d«g| of age for everyone.
guarantee coverage for everyone. In the
" • ^ p ^ a r n "ymp appeal •• That is far
But no one expresses support for Mr. new poll. 43% of Americans say Mr. Clinton
"^oetter than th» response to descriptions of Clinton's sweeping proposal. In fact, no shouldrefuseto sign a bill that doesn't
one can explain it. "I think nobody in this guarantee universal coverage; 43% says he
four other congressional proposals:
room realizes where Clinton's coming from shouldn t refuse.
A description of a plan by Rhode Island with
plan, and it doesn't speak
When the people in York discuss their
Sen. John Chafee and other moderate clearly,his complains
Beatty, who own health care, they reflect the feeling
Republicans, which would require all indi- runs a local youth-careKeith
program.
among many Amencans about the precarividuals to obtain health coverage and
Yet
when
the
group
is read a descrip- ousness of medical coverage in the U.S.
provide financial assistance to low-income tion of the Clinton bill (without
today. Of the 12 people, seven have
people, appeals to 4STc of those surveyed. An as th? president's plant and identifyinc
of the fou: oeen without health insurance at some
plan by Democratic Rep. Jim Cooper o: otner leading proposals in Congress,
tm- time in the past five years. Another. Linda
Tennessee that has bipartisan backing and Clinton plan is the first choice of everyone
would require employers to offer - but not in the room. Referring to the unidentified Luther Baumer. who works part-time,
worries that she'll lose her coverage when
pay for-coverage for their workers and Clinton proposal, Mr. Beattv declares
r husD.md retires in the next year or two
seek to control prices throuen market With the plan you just presented, it
Either
1 ve got to get a fulltime job that
competition gets a 34^ approval rating. A speaks clearly. "
provides benefits or - we don't know what
plan by conservative GOP Sen. Phil
Most members of the group say they get we re going to do." she says.
Gramm of Texas that would allow people to their
information about health care from
Fred Bingaman. a customer service
set up tax-free savings accounts for medi- television
and newspapers. To many, the representative, receives coverage for his
cal expenses gets \T<. approval. And a most memorable
has been health- family through his employer inreturnfor a
government-run, taxpayer-funded svstem insurance-industrysource
strongly
$37.98 weekly contribution. He's satisfied
pushed by Rep. Jim McDermott of Wash- criticizing elementscommercials
of the Clinton plan,
ington and some other liberal Democrats including the famous "Harry and Louise" with his health coverage now, but figures
"I may not be in good shape tomorrow - or
appeals to 31%.
ads that depict an "ordinary couple" wor- an hour from now."
Forty percent of those surveyed sav rying about the White House bill.
While the people In York worry about
requiring employers to pay for their
the Pennsylvanians insist they
rising health costs, they all say they
workers' health coverage, a cornerstone ol don'Yet
t place much stock in such messages would pay something to ensure universal
the Clinton plan. Is the best way to achiev- Robin
a 44-year-old financial special coverage - if the system is fair. " I don t
universal health coverage. This compare- ist forDoll,
York County who has a Blue
pay now. but I'd be willing to pay an equal
with 22% who favor requiring individuals to Cross/Blue
Shield health plan paid for bv
purchase their own coverage, and 18% who her employer, says she sees critical adver- percentage as everyone else." says Mr.
Rentzel. the steelworkers representative.
back having the government collect money tisements from the health-insurance inthroueh taxes and use it to pav medic- dustry constantly." But. she declares,
Tht Atu Jtrett jourmi/NBC H n n a > » »«iMMOor. .
W K n o o t Itmnont m w r v i m 0* l.XO Mum conouOec
bills. Moreover, by 58% to 34%. Americans "they're in it to make billions, so who's
Pria«v mrou*i T U M W V tn rm Minis srwniuncni o>
say the government should set controls on going to believe them?"
* * m M»n M M v t T « t r .
Tht M f f l M W M O-aan f r o n ) U randnntfv a t o c M
health prices. The Clinton plan would place Nevertheless, the people In this group
»«og-tBH>c nwrm tn t r » a r \ \ \ i m i \ t \ U.S. E«t»i rwton »«>
in Droocrrwr to i f i ooovKtion HouMfteiai
caps on the annual increase in privat'- seem to be taking away the ads' message- rtsrrwntto
« f f i»ifCfc ov « mtwoa m«i M « < «" ifitonone nurrv
health insurance premiums. Plans Dein,, and are waiting for Mr. Clinton to respond otrt,
H U M i n o u u f s i M . «n M I M I awnc* of Mine inpushed by Republicans and some other more clearly about his plan. "I'd like to
OnfMult, | |
hMMMDv*!
Democrats wouldn't.
know
exactly
how
It's
going
to
work."
says
m t l t tna tamtit t n u t t m n . T h i r a u t t t « Iht i w Y t v
Surprisingly, despite the push for fast Debbie RudlsUl. a stationery-store salesm n mnwmti ty m w t M Mr M I tna t t x to t n w r t m t f itw
soil t c c u r t i f v r t f i t c n n r w a m t j nown ntnamvtti
action on health-care overhaul. Americans woman
no health coverage. "One day
Cfttncit art i t or K m»i M i l l tduiti w i n M n u u m m
by 60% to 35% say It would be acceptable if he says with
mt comintntii U.S. r*a o—r turvrMd. m t findingi tnuid
this, one day he says that."
amtr from m n t M I m u m ov i » mort m t n 14 o t r o m » Mnilltd numotr at aunMr. Hart says the administration could tnoot mmMr nr ti t inw tt of lat wn udlrtctton.
f f m u t m o t t . tor m n t , m t m t r o i n
leam a valuable lesson from such com
al trrgr wis J i o t r c t n i t o t oointv Tnt mtrgm ( v «n,
1
fp
X
u
<
Q
r
no
It
tuograuo oouM a t o m an m t Mtt of mtf grouo
<
Z
X
�and socialistic. But the Administration
is searching for a new way to sell its
ideas before Republican attacks take
firmer hold.
"Wffkt w e X alwfeys s l i d atawt t l *
afllancto — and we know we have nw
done a good job about conveying thia —
Is w« have certain objectives we are
trying to achieve there," Ira C Magaziner. the White Houae health policy
adviser, said in an interview. "We want
to try to give consumers choice. If
other people have other ideas, we've
always said that we are open to that"
But Mr. Magaziner and others criticized the approach proposed today.
The chief sponsors of the bill. Representatives J . Roy Rowland,
of Georgia, and Michael Bill!
publican of Florida, said the
posed Interim steps on which thWtt Was
bipartisan agreement. Most elements
of the proposal are Included in President Clinton's health plan and.in bills
offered by Senator John H. Chafee and
Ctrnton Defends Idea ofRegional Insurance Pool, but Offers to Bend
By G W E N I F I L L
ilMM » Th» Htm Yort Th
_
TON, March 3 — Moving
to a A n & s growing concerns about how
care plan would work, Presl
said today that one of Its
previsions — (he creation of
JJInsurance pools known as
ilHances — Is neither bureau
< rat|t m r unworkable.
Mr. Clinton also suggested that If
Itton continued to grow toward
of al nances, he would be will
ing l|taipport modifications, as long as
the) ttll guarantee that every citizen
wou receive health coverage.
" * aHUmce is not a government
bur htracy," Mr. Clinton said in an
lift* rta* on the television news progi^ " C B S i This Momlng." "It t a
btlf
t co-op of employees and empkr «.' That'i what It is. If people
don ike the alliances
Look, if you
waiVto make them smaller, you can
dfcin smaller, but you have to
size. You have to have aome
juaranteeftig that
Cbntm AdministraUon's heaMt
c a r K r t a n has come under assault In
as Congressional com
prepared to study it and
i n t f l f c .irttape have run advertise
It Senator Bob Dole, the
leader, and Representative
rk, the California Democrat
a critical health care subHave Identified alliances as
ton plan's weak link.
Project, a coalition of labor and health
policy organizations, today sprang Into
action.
The group Includes several organizations that have withheld endorsements
for the plan In recent weeks, including
the American Association of Retired
Persons and American Airlines.
New Advertising Campaign
Among the endorsements and at
tacks that have surrounded the Clinton
plan, these organizations have fallen
Intb a gray area: they will not embrace
every element of the plan, but they are
willing to support advertising that
commends the overall direction of Mr.
Clinton's proposal. The n e ^ commercials adopt much of the Administra
tion s campaign language, criticizing
Insurance companies as price gougers
Zahn. posed most of the qiiesttons, and
placed the President on the defensive.
He was forced to explain why his plan
will not deprive Americans of the bulk
of benefits that they have now.
"What we're trying to do is to gl^e
those smaller people piore bargaining
power." Mr. Clinton said of the allT
ances. "That's the only purpose of the
alliances. If we can fliii some other
way to do that, that's fine. In other
Mr. Cllntoni who has tried to remain words, they are not supposed to b*
largely above the day-to-day fray, was government, groups — they are co-ops
drawn into the argument today when of purchasers that are private."
he agreed to appear on the CBS proRetrieving Discarded Language
gram. Aides advised him that he would
answer general questions about the
By describing the alliances as cohealth care overhaul from viewers operatives, Mr. Clinton is reaching
rather than specific questions about it back (o a description that White House
from journalists. Instead, the pro- strategists initially rejected because
gram's hosts, Harry Smith and Paula they feared it sounded too bureaucratic
and emptiafetai m ^ p m n ' s cortimltment to providing "affordable private
insurance."
The g r o d ^ M w M by John Rqther of
the retirees' asMciatran, plans to spend
$750,000 to broadcast two advertisements over the next few weeks. Each
features footage of blue-collar workers
along with shoU dl Mr. Clinton speaking before d Joint session of Congress.
Repreaentatlvea Jim QaMer, Robert j j l
H. Michel and Jim MdtaniMtt
Unter tha new bill, Wbtkera cowM noi
be denied health Insusaaee baaauaeo*
medical probtama, and #»ey wo«ld be
assured of coverage what they rtioved
froknone job to another. Self-employed
people could, takf Federal tax deductions for IW percent 6f thtUr health
Insurance expensea, As against 25 percent under curreiW law: The Mil does 4
not require hwtirance companies to
charge the same premfUtn for all customers in a parttcillar regldn, a s some
other proposals would.
4
• Asked whether the biiDL nteeta President Clinton's demand for universal
coverage, Repreaentettve Rowland, a
ptiyaicjan, said that efforts to provide
universal"coveraae would continue for
several years.
"We are nt* fnfcklijg[ifi? fcudfhltoeii
about how many people" wouM be covered by the bill, Mr. Rowland said.
1
Miw PfeAaore Offered
Xiod in the Houae today, 15 Deiriocralfc and IS Republicans offered a bill
to rfagulate the health tnsuranoe mar
ket.and make other changes Intended
to provide coverage to millions more
people. Sponsors said the measure
l^oUM improve the health care system
it would not provide universal
officials dismissed
THB
NEW
YORK
TIMES,
FRIDAY,
MARCH
4, 1994
�Truth Lands in Intensive Care Unit as New Ads
Seek to Demonize Clintons Health-Reform Plan
9
By R K K WARTZMAN
Sio;;' Reporter 0/ T H E W VM. S T R ^ R T J-K.-RV \ L
WASHINGTON - The baby's scream is
anguished, the mother's voice desperate.
Please.'' she pleads into the phone, as she
seeks help for her sick child.
We re sorry, the government healthcare center is now closed,'' says the recording at the other end of the line.
"However, if this is an emergency, you
may call 1-S00-Govemment." Her baby
still wailing, she tries it, only to be greeted
by another recording: "We're sorry, all
health care representatives are busy now.
Please stay on the line and our first
available . . . "
"Why did they let the government take
over?" she asks plaintively. " I need my
family doctor back."
Tlie only problem with the radio spot,
produced by a Washington-based group
called Americans for Tax Reform, is that it
isn't true. Neither the Clinton health-care
bill nor any of the alternatives on Capitol
Hill would force people to call for government approval before visiting a doctor or
rushing to the hospital. "It scares people,
and that irritates the dickens out of
me. " says Democratic Rep. Jim Slattery, a
critical vote on the House Energy and
Commerce Committee whose eastern
Kansas district was a target of the ad.
Battle Heating Up
Such fear-mongering is rampant as
Congress moves forward on compromise
health-care legislation. The complexity of
the Clinton proposal and the fact that the
issue affects every American have resulted
in a flood of alarmist propaganda that
makes Harry and Louise, the health-insurance industry's fictitious Clinton critics,
look like Ozzie and Harriet.
Some of the horror stories stem from
ideological differences. Many of the groups
twisting the facts are hard-line conservatives, bent on stopping any government
presence in health care. But clearly there
are other motives as well. Some groups, in
issuing direct-mail warnings about healthcare reform, are soliciting money to help
their cause.
Americans for Tax Reform, which
claims 60.000 members, makes no apologies for the 1-800-Govemment ad. "Is it
frightening? Yes. Do I think we overstate
the case? No." insists Grover Norquist, the
president of the group, which is perhaps
best known for asking lawmakers to sign a
pledge opposing all income-tax increases.
Yet even some of the toughest critics of
the Clinton health-care proposal, upon
hearing the ad, condemn it. " I think it's
unnecessary to use scare tactics," says the
Manhattan
Institute's
Elizabeth
McCaughey, whose own attack on the
Clinton plan in The New Republic magazine was denounced by the White House
and its allies.
Ms. McCaughey, who defends her critique by noting that it cites specific passages in the Clinton bill, finds all sides of
the debate guilty of playing to people's
emotions. That, she says, includes the
administration and its supporters, who
eagerly recount stories about people who
lose their health insurance, get sick and
are then financially wiped out. "That's a
kind of scare tactic, too." she says.
Still, some groups have taken the terrifying images to a different level, serving
up wholly fictional accounts of people
denied the most basic care by a heartless
bureaucracy.
Citizens for a Sound Economy, a conservative group that gets about half of its
$8 million budget from corporate and foundation sponsors and half from individuals
who send in contributions averaging about
S20, has also run radio ads in key congressional districts featuring a distraught
mother on the phone. This time, she's
trying to visit "Dr. Murray" so her son's
earache can be treated.
-SET'"
«£R)«M
How Mrs. QBtfon's H r a k h Care
R e f o r m p b m wiB aOect > W !
Rrad M b f t t r . k r m 4 d b r <tar i i m
fa^nr-
crive. Brifetv me — Y e w Hfc — \<nw hi wMi.
m vi t t v
y r a r k v m l nnr*
hr ( r w H y
^ ^ m l I*
b p u k « u n hi V <
I
I .-uufcl l u u - i . u n >uur >
|M> o
Ig! IO you i n n m
- m> voud
HcrikCacT^Farxtann
Freadacnttcfcooit your t^i ptnmd dtctartoba
Maud
oafertlM CWin Pha for Mk on ntm
CS* ibavt ii juil M t of tilt link knowa, but
fntfntniim proviiiom hidden it tilt Preudml'i
j « r t t httRh n r t rfform pita. Thnt pro>iiiom i r t
lummirtud it tht American Cotim. il i new
contumtr'i (uid*book. Health Ctirt Reform 19*4.
The Octioni. \ i icon 111 rtcnvt your btllw. I'll
kno» you're inltmlfd, and rinh voo vour tree
jaidtbook on htallh cart rfform.
U t e j a i a d l A J k m n n t e n l Kti. a i m
«tofmm you tnm <*Kxm% gwn tfcaar
American Council for Health Care Reform s direct mail literature
"You will not see Dr. Murray," the
United Seniors was founded by conser"government gatekeeper" replies. "Dr. vative direct-mail pioneer Richard ViJohnson will see your son next week. . . . guerie. though he is no longer associated
Under health reform all Americans, and with it. The organization is under criminal
that includes you and your son, will have to investigation by the Postal iispection
go through government health alliances Service and the Federal Bureau of Investiwith gatekeepers like me. We will decide gation, according to postal inspector Larry
who, when, or even if you need to see a Fryer. The association, which says it
doctor."
hasn't heard from any federal investigaBrent Bahler of Citizens for a Sound tors since October, complains it's the vicEconomy claims that "what we're present- tim of a political witch hunt. "It's frustrating is a likely outcome" if legislation like ing," says United Seniors spokesman Stethe Clinton bill is passed. But that's impos- ven Allen, a former Senate aide.
sible. None of the health-care proposals on
Another of the big canards about the
the table, including the president's, has a Clinton plan is that people face "5-year's
"government gatekeeper."
in jail if you buy extra care," as the
Some opponents of the Clinton bill American Council for Health Care Reform,
worry that such spurious claims could an Arlington, Va.. group, puts it in a
backfire. "It becomes all too easy to fault
direct-mail package it has sent out to
anyone who has legitimate criticism."
says Pam Bailey, president of the Health- millions of people. The council, which
according to tax records had revenue of
care Leadership Council, a coalition of
S302.259 in 1993, was founded 11 years ago
medical industry representatives that is
to get the government out of health care.
lobbying against the Clinton plan.
"We aren't being alarmist," says the
Sometimes, the fabrications are bom of
group's Christopher Manion. "We think
real concerns. Many experts worry that
the Clinton bill is alarming."
the Clinton bill, with its regional insurBut in fact, while there is an antibribance-buying pools and a National Health
Board to oversee the system, would give ery provision in the Clinton proposal, the
bill explicitly says that people are free to
too much power to the government.
purchase "any health care services" they
Moreover, many believe the Clinton
plan would hasten the already fast-grow- want out of their own pockets.
"I don't see anybody going to jail on a
ing trend of "managed care," where a
liver-transplant rap." says John Sheils. a
person's choice of doctors is limited and
vice president at health-care consulting
physician "gatekeepers" often decide
whether a certain treatment is appropri- firm Lewin-VHI Inc. "They're trying tc
ate. Some analysts caution that because of scare little old ladies."
strict health-care spending caps in the
Clinton bill, rationing is possible.
The groups taking the hardest line
against the Clinton plan tend to oppose the
president's goal of guaranteeing comprehensive health coverage for every American. Many favor instead a more limited
scheme that includes tax-free savings accounts from which people could pay their
medical expenses.
Under Investigation
Americans for Tax Refonn, for one, is
in a coalition called Citizens Against Rationing Health that backs such an approach. Another member is the United
Seniors Association, which says it is a
free-market advocate for older Americans,
but which was accused by lawmakers
during a 1992 congressional hearing of
preying on the elderly for their money.
THE WALL STREET JOURNAL FRIDAY, APRIL 29, 1994
�
Dublin Core
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Health Care Task Force Records
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White House Health Care Task Force
Is Part Of
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
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William J. Clinton Presidential Library & Museum
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2006-0885-F
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 2
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Box 24
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
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Clinton Presidential Records: White House Staff and Office Files
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2/6/2015
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42-t-12093080-20060885F-Seg2-024-001-2015
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https://clinton.presidentiallibraries.us/files/original/14b4c562a6bfef100cd2a7eeceb2207e.pdf
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FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
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OA/ID Number:
4787
FolderlD:
Folder Title:
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53
3
4
1
�Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
AND TYPE
DATE
SUBJECT/TITLE
RESTRICTION
001. list
re: Background Briefings on Health Care (partial) (1 page)
n.d.
P6/b(6)
002. list
re: Health Reporters (1 page)
n.d.
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4787
FOLDER TITLE:
[Media] [1] [Loose]
2006-0885-F
ip2730
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b)]
PI National Security Classified Information |(a)(l)of the PRA]
P2 Relating to the appointment to Federal office 1(a)(2) ofthe PRA]
P3 Release would violate a Federal statute |(aX3) ofthe PRA]
P4 Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) ofthe PRA]
P5 Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(a)(6) of the PRA]
b(l) National security classified information |(bXl) ofthe FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency |(bX2) ofthe FOIA)
b(3) Release would violate a Federal statute i(bX3) ofthe FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) ofthe FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) ofthe FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) ofthe FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells |(bX9) ofthe FOIA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
��F.,1
JflN 27 '34 a5:i5Ph THE hEU REPUBLIC
Cassandra's law
/ / % T o Exit," the cririque of Qin\
ton's heal* reform plan bv
Elizabeth McCaughey that
appeared lait week in these
pages, borrows its title from Sartre's
play Hun Clos. Sartre'«drama is almost
as grim as McCaughtry 's viiion of the
plan. Happily, both sie largely fictional accounts, although one might
argue that Sartre's biilliantly imaginedfictionU in many ways truer to
life than McCaughey's horror story ii
to the world of "Clin ionized' medical
practice.
Vircuaily none ofher stark claimi
about the bill U indisputably correct.
There is, of course, a grain of truth in
the worry that the provisions of the
Clinton bill would ccmplicate the lives
of patients, professionals and payers.
(We count ourselves among those worried by the bill's complexity and workability.) But that graii is obscured by
McCaughey's hyperbole. In the spir't
of restrained deconsiructionism, just
reconsider her more outlandish assertions.
McCaughey claims the law win prevent youfromgoing outside the system to buy basic health coverage you
prefer, even after you pay the mandatory premium. But &• e bill explicitly
permits citizens to choose physicians
and to pay extra for such coverage if
they so desire, McCaughey's language
illustrates an extremt ly casual use of
the rhetoric of legal < (impulsion when
the reality is a more complex one of
relative pricss and th :ir impact on the
kind of insurance plan Amencan*
might choose were the Clinton bill to
be enacted.
Or again, McCaughey assumes
patients will be forced to enter HMOs.
But neither physidans nor paaenta
could possibly be fort ed into HMOS by
a bill that requires ea:h alliance to
offer at least one fee-foMervice plan.
This fact is indisputahlcfroma simple
reading of the pages McCaughey cites.
The role of HMOS in tlie Clinton plan
is, of course, open to a number of
interpretations, none of which is set.
ded by the language of the bill itself.
But what McCaughey presents is a
crude anti-HMO tract, offering anecdotes as evidence tha; HMO economics
regularly produces m:dical nightmares.
In fact, of course, the quality of care
in American medicine varies enoi^
mously both for HMO uid fee-for-
N
so
THE NEW RBPUBUC
peanoAKv M, IW*
service medicine. The better HMOs
offer service that's at least the match
of good fee-for-service practice. The
worst HMOS rival the worst traditional
care. It's true the Clinton bill rewards
less expensive HMOs, but its impact on
the qualitv of .American medical care
is unlikely to have the draconian
effects McCaujfhey predicti. Interestinglv, most insured Americans (some
70 perceni) are already in one or
another form of managed care and
the effect of that dispersion has been
to weaken the controls that managed
care has nanaged. So, for instance,
•taff-mcdel HMOS represent a small
proportion of managed care and the
direction of development has been to
make most HMO-style bodies more like
fee-for-service medical care than the
much touted model of Kaiser Permanente. Moreover, the growth of utilization review a neither restricted to
HMOs nor more intrusive in such settings Utilization review does hassle \
Amencan patients and physicians, but
is cofcplecely independent ofthe HMO
form of practice, whether Clintonsuppcrted or not,
plan's requirement of fee-for-service
options can be legitimately interpreted as supporting wider choice
than many now have. To be sure,
other reforms could widen that
choice, but the McCaughey appeal to
a world of unlimited medical choice is
surely anachronistic and misleading.
If anything, the "necessary and
appropriate care provision in the bill
delegates authority to the medical profession, rather than interposing further government bureaucracy between
patient and physician. For most Americans today, it is the insurance company,
not the doctor, that hasfinalau thority
over what is necessary, appropriate and
reimbursable. They invoke uolixaoon
review, deny pavment if they think your
doctor chargea too much or determine thataueatmcntwas "experimental. " The world McCaughey invoke*—
in which patients go to doctors, have
anything they want and the insurance
company pays it all without question—
vanished yean ago.
Other aspects of "No Exit" merely
secure McCaughey's place a* the Cassandra of Clinton plan critics. In Ca»sandra's world, all attempts at cost control have wholly perverse eOecn; they
deny or delay needed care; stifle drug
development; drive physicians into
hallway diagnoses to outwit wicked utilization reviewers; and so on. Ever,
more oddly, global budgetary controls
in this horrid world merely Increase
intrusive micromanagement by audacious fools in accounting departmcn ts.
In every real-world case of overall budgetary control, of course, just the
opposite has been the case.
By now the plot of this dark comedy
should be all too clear. McCaughey *
dystopia of what the Clinton pUn w-ii:
mean is profoundly linked co her
imagined Utopia of what health care
in this country now is. Most Americans know better. They know thai
costs are rising too fast that choices
are already being limited; that too
many people go without care at all.
When Cassandra whispers some
dreaded "what if?" in their ears, they
will surely listen to the replies of those
who are prepared to consider, "as
compared to what?"
McCaughey describes the Clinton
plan as a rigid set of restrictions on the
doctors Americans can consult, the
scope of msurancc they can purchase
and the services they can receive. She
builds up her specter with a condnuing set of inaccuracies. Is it technically
correct that the Clinton bill would
force one to "settle for one of the lowbudget plans selected by the government?" Well, no. In fact, the tnll specifically sates that "nothing in this Act
shall be construed as prohibiting...
an individual from purchasing any
health care services" (pages 15,16). It
is tr JC the Clinton reform would highlight which plans are more expensive
than ethers. In that sense, it provides
incentives to choose lowercost plans.
But a good deal of the bill's complexity is designed to countervail the dangers of sclccuve enrollment, reductions of benefits and the like that such
economies entail.
Likewise, McCaughey distorts the
impact the Clinton bill would have on
American choices of specialist care.
Seeing a specialist for needed care will
be, fbr most people, no more difficult
than it is today, and fbr many it will be
THEODORE R. MAAXOK
easier. For those without insurance,
andjElutvl MASHAW
the expansion of choice is obvious.
Moreover, since more and more
THEODOBE R. MAUIOR is professor of
employ en are dropping so-called
public policy and management and
indemnity plans (with completely free JEftKY L MASHAW is professor of law
choice of physician), the Clinton
and organization at Vile.
�THE WHITE
HOUSE
WA S H I N G TO N
�THE
WHITE
HOUSE
WASH IN GTO N
*.—»
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001. list
SUBJECT/TITLE
DATE
re: Background Briefings on Health Care (partial) (1 page)
n.d.
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4787
FOLDER TITLE:
[Media] [1] [Loose]
2006-0885-F
)p2730
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)|
Freedom of Information Act - [5 U.S.C. SS2(b)|
PI
P2
P3
P4
b(l) National security classified information |(bXl) of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) ofthe FOIA]
b(3) Release would violate a Federal statute |(bX3) ofthe FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) ofthe FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions [(b)(8) ofthe FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells |(bX9) ofthe FOIA]
National Security Classified Information [(a)(1) ofthe PRA|
Relating to the appointment to Federal office [(aX2) ofthe PRA|
Release would violate a Federal statute 1(a)(3) ofthe PRA]
Release would disclose trade secrets or confidential commercial or
financial information [(a)(4) of the PRA]
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors [a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(a)(6) of the PRA|
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�Background Briefings on Health Care
Saturday, February 12-12 noon - Dailies and wires
Nancy Benac - AP •
Ken Bazinet - UPI ^
Gene Gibbons - Reuters t/
Carl Johnston - Dow Jones ^ \
Tina Stage - Bloomberg
Ann Devroy, Ruth Marcus - Washington Post
Gwen Ifill-NYT *
David Lauter, Paul Richter Times \y
ffidyKeen - USA Today ^ / ^ J
•—__
SeffBImbaum, Mike Frisby - Wall Street Journal
Jack Farrel, Mike Kranish - Boston Globe^j^
Frank Murray - Washington Times
Susan Page - Newsday
Karen Ball - NY Daijy News.
Carl Cannon- Sun^Steve Daley- Chicago Tribune CSM- (left message)
Dallas Morning News 662- 7575 Anne Reifenberg will be covering health care. Carl wants
her to go - DOB|||^||p6/(b)(6)|^
Jiearst- Stuart Powell (not in yet, web) ^
"~
jfettstotrunromcie -UTeg McDormeH-ffeft message on voice mail)
tfetistuirPusl - KdrtryTCeiliy (left message on vOlcenmil)
:
Gbx. Julia Malonc
Saturday, February 12 - 1 p.m. - TV and Radio
Mark Halperin - ABC \/
Rita Braver, Bill Plante or Dottie Lynch - CBS
Jim M., Andrea Mitchell - NBC
CNN ^
Niles Latham - FOX u
>
Mike McKee - Conus
ABC Radio '
CBS Radio
Mutual/NBC
\
American Urban Radio Network
UPI Radio
AP Radio ;
o«3
�Standard News ^
Unistar
c/
Voice of America
Maura Liasson - NPR
�7- ^
l& <
7- 7^ / ?
fc&c-
y<LJ£
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
002. list
DATE
SUBJECT/TITLE
n.d.
re: Health Reporters (1 page)
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4787
FOLDER TITLE:
[Media] [1] [Loose]
2006-0885-F
.ip2730
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)|
Freedom of Information Act - |S U.S.C. 552(h)]
PI
P2
P3
P4
b(l) National security classified information |(bXl) of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency |(bX2) of the FOIA]
b(3) Release would violate a Federal statute |(bX3) ofthe FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) ofthe FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) ofthe FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIA)
b(9) Release would disclose geological or geophysical information
concerning wells |(bX9) of the FOIA]
National Security Classified Information 1(a)(1) of the PRA]
Relating to the appointment to Federal office 1(a)(2) of the PRA]
Release would violate a Federal statute |(aX3) of the PRA|
Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) ofthe PRA]
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |aXS) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�Susan Dentzer
phone: 955-2000
fax: 955-2049
<>
/
USA Today
Judy Hasson
phone: (703)276-6430 ;
fax: (703)247-3290
Judi Keen
phone: (703)276-3608
fax: (703)247-3290
Wall Street Journal
Hilary Stout
phone: 862-9233
fax: 862-9266
Rick Wartzman
phone: 862-9284
fax: 862-9266
Washington Post
Dana Priest
phone: 334-6566
fax: 456-5560
i/data/healthcare/reporter.doc
02/12/94
)
�L,A. Times
Ed Chen
phone: 861-9253
fax: 887-1050
National Journal
Julie Kosterlitz
phone: 857-1415
fax: 833-8069
New York Times
Adam Clymer
phone: 862-0377
fax: 862-0340
Robert Pear
phone: 862-0344
fax: 862-0340
Newsday
Marilyn Milloy
phone: 626-8472
fax: 393-7043
Newsweek
Mary Hager
phone: 626-2062
fax: 626-2011
Reuters
Jackie Frank ~ on maternity leave
instead call Donna Smith
phone: 898-8492
fax: 898-8383
Time
Dick Thompson
phone: 861-4054
fax: 833-5911
US Mews & World Report
Matt Cooper
phone: 955-2638
fax: 955-2045
i/data/healthcare/reporter.doc
02/12/94
�Health Reporters
AP
Chris Connel
phone: 828-6447
fax: 828-6472
Baltimore Sun
John Fairhall
phone: 416-0262
fax: 872-9327
Congr^sionQl Quarterly
Alissa Rubin
phone: 887-8577
fax: 785-8784
Dqllas Morning News
Robert Dodge
phone: 662-7582
fax: 662-7590
Gannet
Betsy Neus
phone: (703)276-5800
fax: (703) 558-3813
Health A ffairs
John Iglehart
phone: (301)983-9735
fax: (301)983-8215
Inside Health Reform
Phoebe Eliopoulos
phone: 775-9008
fax: 331-9542
Knight-Ridder
Ricardo Alonso-Zaldivar
phone: 383-6030
fax: 383-6075
i/data/healthcarc/rcporter.doc
02/12/94
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
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2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
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Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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[Media] [1] [Loose]
Creator
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
Identifier
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2006-0885-F Segment 2
Is Part Of
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Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
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William J. Clinton Presidential Library & Museum
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Adobe Acrobat Document
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Preservation-Reproduction-Reference
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2/6/2015
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42-t-12093080-20060885F-Seg2-023-014-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/8db4ff4e141094a9875a74e4570b81fd.pdf
143f0b50cf86f5b7025b3bdb965089a1
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Scries/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4787
FolderlD:
Folder Title:
[Magaziner] [loose]
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
4
1
��9 The chairman of a .
Housesubcommittee ridicules the national
•health care "plan as a fairy .
tale unicorn drearried up ,'
by. big-headed geniuses in
th6 White Houses
By KAREN BALL
Associated Press
BELITTLING: Ca'ifornia Rep: Pete Stark, center, says Ira Magaziner, Mr. Clinton's top adviser on national health care, sprinkles "fairy dust" on problems.
WASHINGTON — Rep. Pete
Stark dismisses Ira Magaziner,
the top White House adviser on
health- care, as a "nut" who
sprinkles "fairy dust" on problems.
Managed competition —" a
cornerstone of the Clinton administration's developing -health
care plan — is
like a unicorn,
Stark says. "A
beautiful animal in fairyland, but unseen
on
earth.",
MAGAZINER
^
^
is fulf 6f big-headed geniuses.
"They think they are so
bloody smart," complained the
11-term' lawmaker from California. "Politically, they're as naive
as all get-out."
. All of Stark's wisecracks and
needling and put-downs would
TumforTARK,PageA-i9
PHOTOCOPY
PRESERVATION
�• nuvlLicNQE. JOURNAL-BULLETIN
FROM PAGE OP^i
• what the President's trying to do."
Dingell said when asked about
Stark. "If ybii ask' me what I think
chairmen ought to do, I say wait to
Continued from Page One •
see the President's plan before pickbe standard fare for a Republican.
ing fights and castigating." . <•
Out Stark's a Democrat. Not just
Some view Stark as a loose canany Democrat, but the chairman of non. A few weeks ago, he called
the House Ways and Means health
southern lawmakers "crackers;"
subcommittee, a panel that normaland in 1990, he had to apologize
ly would have substantial jurisdicwhen he labeled Louis Sullivan, the
tion oyer whatever plan Mr. Clinton
Bush administration's only. black'
proposes to revamp the nation's
Cabinet officer, a "disgrace .to his
healthcare.
race." .
' •.
But he's become such a pain to
On health care, Stark advocates a
the White House — he recently de"single payer" plan in which the
nounced part of Mr. Clinton's plan
government would pay all health
in advance — thar White House adbills, eliminating private health invisers are keeping their, fingers
surance. But given the minimal pocrossed that House Ways and Means , litical support for such-, a plan, he
Chairman Dan Rostehkowski steers says he's open to Mr. Clinton's ideas.
the bill away- from Stark's subcomHe.denies he's a troublemaker. mittee. •
'
"No. I'm a soldier," Stark said.
"But I want a bill that's real. Details,
A spokesman for Rostenkowski
details. Where's the details? I'm saysaid the Illinois Democrat,, who^has
pledged to do,whatever it takes to. ing .empincal, absolute, scoreable'
get Mr. Clinton's plan through Con-' costs. Not some''voluntary, mishmash."- "'•
'
gress, will hot decide where to. assien the bill until after the President
prop6^i
.; ^
•• ..;
: • • S t a r k ' s complaints
',
',,
^
complains that the. White
White House mum
•
f
yet. to.decide how to pay
White House officials declined to
or.Hhe 37 million' uninsured and
return stark's darts publicly. They
keeps insisting that much- of the
attribute them mostly to philosophic money can come from administra:
cal differences..Stark would prefer
tive savings..He says Clinton off!-'
a government-run system:.
H, h
f
e regulatory
„ .
Ci'Pton loyalists say some
Democrats in .Congress are:'so used clubs and, that the-White House
to throwmg bncks at a Republican . promises generous benefits to all
White House; they don't know how ; hut-wants .to let states write the
.
*
*
to accommodate a president of their pons.',
own party:
". • ,
And he's annoyed the White
House is writing its own bill: He told
Magaziner said he does not take
Hillary Rodham Clinton to "give us
itark s behttlements personally,specifications and guidelines and let
us do what we're'paid , to do, and
"We have some differences. I
think at the end of the day we'll
thats legislate" o r at least follow
wind up supporting the same bill "
Congress suggestions. "
Magaziner said.
Clinton's aides think they're dealing with a small state legislature
Many Democratic chairmen in
used to caving in to the executive
Congress have been better troopers
branch "because they have to get
for the President, including House
home and tend to their feed store Stark said.
t-nergy and Commerce Committee
Chairman John Dingell of Michigan
"This is the best of the .best. .
h ^ h t T ' h — i - s a y 8 i n They re not just going to sit down
and accept some set of tablets that
" I gain nothing by tearing down
gets chiseled on the Mount "
1
:
1
t
a r k
H o u
f
0
s
h a s
(
S a r e
t h e r
r 5 i d b f
t o u
h
1
u
PHOTOCOPY
PRESERVATION
�"AM-IL-^Health Reform, Bjt,440
^
"Clinton Administration Promotes Health Reform Program
"AP Photo CX103
"hmstfce
"By HERBERT G. McCANN= "Associated Press Writer=
ROSEMONT, 111. (AP) Although the C l i n t o n a d m i n i s t r a t i o n has not formally
unveiled i t s h e a l t h reform package, i t t r i e d Saturday t o win over a l i b e r a l
advocacy group t h a t supports a d i f f e r e n t form of health care.
Appearing at C i t i z e n Action's annual meeting, White House health p o l i c y
adviser I r a Magaziner said the organization should back the administration's
e f f o r t s t o reform the health care system.
~~We need t o work together because we have a chance t o get reform,'
Magaziner said, p o i n t i n g out t h a t almost every president since Theodore
Roosevelt has t r i e d and f a i l e d t o reform the nation's health care system.
"^The p u b l i c i s demanding reform, and we have a president and f i r s t lady
who are going out on a limb saying we are going t o have reform.''
C i t i z e n Action advocates a health-care system of n a t i o n a l insurance
finances by taxes, c a l l e d a single-payer plan. The C l i n t o n a d m i n i s t r a t i o n i s
advocating a blend of market forces and government r e g u l a t i o n c a l l e d managed
competition.
Magaziner t o l d members of C i t i z e n Action t h a t the a d m i n i s t r a t i o n r e j e c t e d
the single-payer plan because i t concluded a system financed by taxes would
subject the money t o annual budget b a t t l e s i n Congress and create more
bureaucracy.
That contention brought boos and hisses from many of 500 people l i s t e n i n g .
Magaziner o u t l i n e d the p r i n c i p a l s of the administration's reform package.
The plan would cover every American and would o f f e r comprehensive b e n e f i t s
to pay f o r whatever procedures necessary f o r good h e a l t h , he said.
I t also would allow everyone t o choose a personal physician and e s t a b l i s h
a board t h a t would negotiate prices and ensure good care. And r u r a l areas and
inner c i t i e s w i l l have adeguate numbers of physicians and h o s p i t a l s t o ensure
a v a i l a b i l i t y of good h e a l t h services, he said.
Magaziner said the C l i n t o n plan also would reduce bureaucracy and deal
w i t h c r i s i s i n long-term health care, promoting at-home services.
He said states t h a t want t o e s t a b l i s h a single-payer plan would be able t o
do so. But the state's plan would have t o operate w i t h i n the budget
established under the C l i n t o n plan.
" I f we can't make i t (health care) more a f f o r d a b l e and l i m i t costs, then
we would have f a i l e d , ' • Magaziner said.
Steve McLuckie, a Missouri l e g i s l a t o r , said Magaziner's presence at the
conference i n d i c a t e d the a d m i n i s t r a t i o n i s i n t e r e s t e d i n the group's
viewpoint.
"We're not i n t o t a l agreement, but I am o p t i m i s t i c about what the f i n a l
(administration) plan w i l l have a f t e r hearing him,'' McLuckie said.
Cathy Hurwit, a Washington l o b b y i s t f o r C i t i z e n Action, said the
organization has been given unprecedented access t o government o f f i c i a l s
working on h e a l t h care reform.
1
�SUNDAY, JULY 18,1993
THE WASHINCTON POST
Amid Hisses, Clinton Aide Hears Call for Another Kind of Health Care
By Dana Priest
l Port Sufl Writer
CHICAGO, July 17—Top White
House health care adviser Ira Magaziner was a half hour into pitching
the administration's health plan today when the hissing began.
"We need each other. We can't
do it without you and you can't do it
-without us," he told hundreds of
immunity activists who favor a
^different approach to reforming the
health care system.
Magaziner cautioned the members
"""BTCitizen Action, who want a system
in which the government pays for all
health care: "In the world we're living in in Washington, there are a
whole lot of people who don't want
J»ealth reform" in any form.
"Well, get rid of them!" retorted a
gravel-voiced man in the audience.
Magaziner was not in Washington, where top presidential advisers
are treated with deference. He was
at the annual conference of the largest and most liberal grass-roots network. Citizen Action boasts 3 million members.
Considered fringe by the past
two Republican adminstrations.
groups like Citizen Action that support a government-financed national health care system slowly seem
to be joining the mainstream. But
they have not adopted middle-of-the
road rhetoric or goals, as today's
» meeting made clear.
^
They want universal coverage.
5 They want a comprehensive, guar% anteed set of benefits for all Anier5 icans. They want to cut out the insurance companies and rein in,
through government regulation,
doctors' salaries and the profits of
the entire health industry.
8 "People are not afraid of the term
socialized medicine, exrent mnvN-
5 **'
ing health care organizations that
offer their services to consumers,
there are supporters of a singlepayer system in Washington.
As of last week, about a third of
the 258 House Democrats, including
four of the six subcommittee chairmen of the House Ways and Means
Committee, had endorsed the socalled American Health Security Act,
which would create a single-payer
health care system. There are five
cosponsors in the Senate.
About 15 percent of those responding to a recent American Association of Retired Persons member survey said they favor a singlepayer plan, according to AARP.
The administration is increasingly aware that the very complexity of
its plan may give single-payer ad-
vocates a natural edge in the upcoming battle of rhetoric.
"The fancier, the weirder, it
looks, the more they are going to
lose the minds, and eventually the
hearts, of people and that's a big
advantage for us," said Jeff Eagan,
director of Citizen Action in jfNjjs-'
consin. "Single-payer is something
people can get their arms around."
Today's conference was . spon- r
sored jointly by Citizen Action and ,
the Midwest Academy, a community organizing group.
."•
•
Citizen Action board memberssaid that within days after the administration unveils its plan, the
group will decide whetherlto support it. If Citizens Action backs the
administration, its canvassers willwalk the streets with petitions and
Although the Clinton administra, tion appears to be headed toward a
system that would create compet-
1
educational materials. It also could
choose to support parts of the plan
while pushing Congress to enact a
bill closer to its heart.
The American Health Security
Act would sever the link between
employment and health insurance.
A single payer—the federal government—would collect taxes to pay
for health care for all Americans
and set doctor, hospital and other
health provider fees. The delivery
of health care would stay in private
hands, but the government would
control price increases.
The program would be financed
through a 7.9 percent payroll tax on
employers, a 6.45 percent rise in corporate income taxes for businesses
with more than $75,000 in profits
and personal income tax hikes.
Under the Clinton plan, due out in
mid-September, states would be free
to , establish single-payer systems,
and the federal government would
set a national health spending budget
and regulate the rate of increase of
premium prices that consumers
would pay health care provider organizations.
But the Clinton plan parts company with the single-payer system
in several ways. Employers would
pay at least part of an employee's
health care premiums and insurance
companies would keep a role, albeit
a different one.
Insurers no longer could exclude
people with preexisting illnesses and
would have to offer a government-set
standard benefit package to everyone
in a region at about the same price.
Whether this will be enough for
single-payer advocates is hard to
tell, judging from the mood here.
"Why is this administration not willing to take on the big insurance
companies?" asked Allan Watts.
"What you're saying is the way
you want to take them on is the
only way to take them On," Magaziner shot back. The White House
plan will cut out abusive insurance
practices and require insurers to
play by new rules, he said.
"Get it out of your system," he
said as the hissing grew louder.
"But at the end of the day, when
you'refinishedhissing at me, you'll
see" that there is more in common
between Citizen Action and the administration than there is divergence.
/
�BOSTON GLOBE
JUL-13-93 7UE
Magaziner faces heat on health care's course
Approach faulted, lost chance feared
lost the advantage, some health care experts say.
Before May, he could have pushed some kind of.
overhaul
plan through Congress in a single, dramatic
Cl.C' 3i; STAl-T
step. Now, many Democrats believe the bill can only
be passed in modest increments, and will require
WASHINGTON - Tha-e was a moment last
painstaking negotiations with Capitol Hill's
winter, ;is a newly inaugurated President. Clinton
U-iun.phantiy announced a task foi-co to i-:-vamp the committee barons.
ration's hcaiih care system in 100 days, when almost
Indeed, obsT-jcles, to Clinton's reform efforts pil?
anything seamed possible.
up by the day, and now include:
• Polls that show Ajrr.ericans, who largely
But today, numerous advocates of health care
overhaul i?ai that moment may have come and gone. approved of Clinton's position on health care just
Polls i eveaJ waning confidence in Clinton's ability to two months ago, now disapprove of it A Nev.-Vweek
change the WOO billion-a-year health care sector; the poll, conducted June 30-Ju.ly 1, found only 37 percent
supported the president's handling of the issue wai- chesto of industiy opponents ai-e giving; and
ihe plan's release date has been repeatedly delayed down from 53 percent in April. Meanwhile, 4*5
percent say they now disapprove, up sharplyfrom;>1
fvcri May to July to September.
percent
in April.
The lightning rod for advocates' anger is Ira C.
•
Opponents
who say that the delay in releasing
Magasiner. tlie former Froviden^e activist-tumedthe
plan
has
bought
them much-needed time to plot
tusi-iocs consul tan c, and :he health care task foix;e
strategy.
"In
the
early
days, there was still a lot of
he n'w-er/.aB'. Advocates say the task force and its
euphoria
about
the
president
and his strength," said
huge working groups led "to the delay in the
Tcn
y
Hill,
a
spokesman
for
the
National Federation
wmhistration's health plan, with endless studies of
of
Independent
Business,
which
has sent out three
mir;.'!• issues, hile confusir.g the public about how
mailings
opposing
the
Clinton
plan
to its GOOO
. OO
Climor. would guiu-aniee affordable, quality health
membet-s
since
the
beginning
of
May.
"Since
then, he
c-;H'c^-age for all.
has
shown
he
does
not
have
a
steamrollirg
agenda."
"The task force process was needlessly
• Some congressional Democrats who criticize
comniieatiid, needlessly slow and needlessly
the
plan as overly complex and disdain th» man who
•^.e/r'c-^nt," said Arnold S. Rehnan, emcn'tus editor
helped
design i t Askcjd recently about Magaziner,
of tho New England Journal of Medicine, and a
Houss
Ways and Means Committee chaii-mon Dan
memher of a panel of health professionals that
Rostenkowski
of Illinois., said: " I don't even bother
•.pvn-wu:! the task foite's wor'r. Magaziner is "vei-y
with
Magaziner."
.smai i." Reln-an said, but ''to do it this way was
.vm -y."
Did it need to ho this way? The answer, many
•'• ncse. views w$re echoed in inteivie^vs in recent here say., is no.
When Clinton announced the task folte on Jan.
wei/i-s 'vith top policy players, administ. otion
'25, he appointed his wife,. Hillary Rodham Clinton. jo
offKis's, and eongressional Democj-ats, most Of
head it. She turned to Magaziner, a senior White
w:v.;:^ die r ot want to be quoted by name.
House policy aide, to orchestrate the cffoil
Ti' he; sure, even Magazincr's harshcai critics
Magaziner's vision wastobring neariy 500
iwr.lt they would be hard-pi-e^sed to •formulate a
rJar. :<i-.- overhauling the entire health cave system in people - from world-renowned health experts to
inexperienced congressional staff members •A r.\-. ncr of months. And some clitics acknowledge
together, ?weai them to secrecy, ar.d set them to
that ;«vir most serious complaints are Joss about
work around the clock.
\'.-UL--.iner than the "man-aged competition"
The-: combination of size and secrecy, some
ar:;-!f<tch the admiristration has embraced.
authorities
say. was Magaziners first big mistake.
'•"•M: approach involves combining nuvket
"They
mamigcd
to get the worst of both worlds,"
ri'scipl ne and government controls n wy;;s that have
.«a-:d
Robo
t.
J.
Ricndon.
a Harvard School of Public
re AY: Deen tried before.
Health
profossor.
"They
tried
to do it secretly to gat
I'.-T Magaziner's pait, souixws famfiiav with his
tne
speed,
but
brought
in
so
many
people that wo;-d
\ lev. - <i\y re is cunf.dent that come Scpu.-mber, when
was
bound
to
leak
out."
tH! imWde-t fir.iUly u-.-.veils his health plan. Clinton
As ii result newspapers ran k-aked stories, many
w; ' :•»• i.b!e to recapture the political mo.rcrtum for
eironetms.
about the administration's apvroach.
(.•'.•,-••> siiinghoalthcarc.
raising
public
cvpectations.
K.;i c-ven if Clinton regains the initiative, he h;is
By Pelar G. Gossdin
and Elizabeth Nfluffer
T
1
1v
:
;
1
;
�BOSTON GLOBE
JUL-13-93 TUE
'''I find peoplo who -think uiey are going to g^'t
Cadillac coverage and no: pay for it" said Rep.
Joseph P. Kenne dy !Jd, Democrat of Massachusetts,
whose views about how to refoim health care differ
from the administration'.3. "When they announce the
plan ... w2 may have a collecb've sense of
disappointment."
".\U we reaiiy see is press leaks, and some are
very disturei-ig." said Rep. Jim Cooper', Democrat of
Tennessee, who until recently sided with the
administration's appi each.
Putting policy over politics
But halts were not Magazinev's only probiem. In
issuing maithing O'.-rfers to the task for.-.o he made J
second mistaks, one that has continued to plague the
White House effort.
Participants were told to "define the best policy,
and well worry about the politics later," Arnold
Epstein, rm internist at Brigham and Women's
Hospital in Boston and task force working group
member, told reporters recently.
To Washington veterans, such an approach
seems wildly naive. Political coalition-building, they
suy. was more important than policy-making. Time
spent wth congressional staff members or the task
force might have been more wisely devoted to
brokering d<-als with Congress.
".Supposo the time was spent talking to
Rostenkowski.." Calii'oj-nia Rep. Pete "Stark. Teddy
K-imody. Tr. might have been better spent," said
Joseph CY.ifano, fcrmcr head of the thenDopartmert of Health. Education and Welfare under
P'.-osidcnt L.yririon B. Johnson, and an architect of
:r,<: 1?65 Medicaid and Medicaid insurance
programs.
W'orse yet. some etfpcits say, Magaziner and the
task force do not appear to have come up with any
• r.vjakthi-oughs >, solving the probiem of rising
ru-:aith care ctwte.
• l think the options that came out 01" the
deiibevation were pretty much appai'er.t t) anyone
who undej-stood the health cai« system at the
. beginning." said Relman. "Wliile there ve'.x. '
undoubted iy refinements and expansion of options,
' tho basic Meas haven't changed."
Such.c.iticiyr/. may seem unfaii, givon the
co'mpicyity of u; > issue. Hut it so rescml^les concerns
voiced about Ma^a-imerin many of his pilous
T.ubiic policy e:T"rts that critics ai-e left w'»p.de\ing if
the admir.stra'Jon picked the right man to 'cad the
rraith care effo:t.
Rhode Island rc<;()rd
For exumpie. in 1&S4. Mtigaziner led a leam of
stvtj-il hundred people in devising an i-.fhistriai
policy tbv Rhode Island. The proposal was rejected
by the voters, many of whom later told poll.•iters they
had found lUtx.' complicated to understnii.
!P. \ W\. he vnd another group of ISC p.:op'.c
unvoiled ;i plan <
:.•> reo: ganize Rhode I-slmui's health
car'.: sysU-m br ir.e elderly. Although tiv i-ix.posa):
l
1
has generated enthusiasm, it is still far from being
implemented.
Some administ'-ation aides acknowledge tliat the
health overhaul efforts have not gone as smcotJ\ly as
planned. But they t-ace the problem not. to the fask
force, but to the White House's decision to delay
i eiease of tlie pian until Congress approves its
budget package.
Magaziner has not gj'anted on-the-record
interviews to the media about health cars. But a
source familiar with his thinking, when asked about,
criticisms ofthe task force, said Magaziner
recognizes "there is going to be increased anxiety
out in the health care reform community" in the next
two months. "Ir, this period, eveiybody will imagine
their worst nightmare," the source said.
The source said Magaziner believes the task
force's extensive research will strengthen the
administration's hand, not weaken it, when the plan
gets to Congress. The plan will have "good
substantive value and fom the core for political
consensus," the source said,'adding that policy
papei-s ^rill help administration officials counter
opponents' objections.
Pushing thinking ahead
?vlany in Washington agree that Clinton and
Magaziner could pull off one of the great social
policy cr.ups of the century. Experts in some fields
say Magaziner already has accomplished much,
haring pushed ahead thinking in their specialities by
as much ii:- a decade.
Dericcratic Sen. Jay Rockefeller of West
Virginia, a key health cai e player, praised the task
forces working? as ''the best process I've ever seen
done in public policy."
But not everybody holds Magazine! and the task
force n such high esteem.
" I wonder if we have been led down the prinuvse
path." sn-'d lyjuric M. Fiynn, executive director of
the National Alliance for the Mentally III. "Wc: were
conseiovisly encouraged to believe by the
administration that we would s»e real equity for
mental health pai-ients. Nov;, wc are being
encouraged, to believe that's not possible.
Stark, chairman of the' House Ways and Means .
subcommittee on health, recently labeled Magaziner
a "nut" and described task force membei-s as
noliticiilly "naive as all get out"
Rosu .T. kowski. chainnan of the Ways a n.d Means
CommilUio, was equally uncharitable. Should a task
'oife-crginocred bill fail to attract enough votes in
Congvv.-s, he said he will 'just scuttle the whole
(.hirgand "Tile a whole new bill."
As for Magaziner? "He'll come up here just like
anybody c'sc andtestifybefore uuv committee." t-aid
RosterJ-owski. "A: t-h.at point in time we'll ses how
viiluab'( '•c is."
:
�Magaziner faces heat on health care's course
Approach faulted, lost chance feared
By Petal- G. Gossdin
and Elizabeth Neuffer
WASHINGTON - There was a rncment last
winter, as a newly inaugurated Pi-esident. Clinton
triunphantiy announced a task force to i-jvamp the
nation's health care system in 100 days, when almost
anything seemed possible.
But today, numei-ous advocates cf health care
overhaul ftai that moment may have come and gone.
Polls leveaJ waning confidence in Clinton's ability to
change the $*00 billion-a-year health cave sector; the
wai- chesrs of industiy opponents are growing; and
the plan's release date has been repeatedly delayed
from May to July to September.
The lightning red for advocates' anger is Ira C
Magasir.cr. tlie foimer Providence activigt-tumedfcusiness consultar.:, and the h.ealtfi cai-e task force
he <w.?;v:aw. Advocates say the task force and its
huge • ••oi Icing groups led to the delay in the
tidmhistration's health plan, with cndlew studies of
miner issues, while confusing the public about how
Clinton wou'id guai antee affordable, quality health
enrage for all.
•'The task force process was needlessly
oomniicated. needlessly slow and needlessly
mef-'eient," said Arnold S. Relman, emeritus editor
ofthe New England Journal of Medicine, and a
mcmncr of a panel of health professionals that
ly.v'-x-w ud the task force's work. Magaziner is "vei-y
small" Relman said, but ''to do it this way was
>-!•(>•*."
•'•'hese.'views were echoed in intervi^vs ir. i-ecent
weiks 'rith top policy players, administroticn
ofSciM's. and congressional Democrats, most of
W:K>:*I did r ot vv-ant tc be quoted by name'
T;< hv:; sure, even Magazincr's harshest critics
anr.it they would be hard-prcssed to formulate &
Hun :<
' •••• ovci-ha-oling the entirc health care system in
ii r..-.
of months. And some critics acknowledge
that th^ir most serious complainu are Jess about
Miuuriner than the "managed competition"
apvifach the administration has embraced.
'.'"he. approach involves combining market
d:.srinl»c and govei-nment controls n ways that have
revcr -teen tried before.
r- r Magaziner's pait, sources famiiiav with his
\ icv..«<iiy re is confident that come Sepiember, when
t:jo;iir!>-ider:t firsOly ur veils hi.s hcaith plan, Clinton
Mil • "' {.We to recapture the -olitica; mo.rcrtum for
(.•'•.::•>. .-uirgheaith care.
N.;; sven if Clinton i'egains the initiative, ho has
:
!
;
lost the advantage, some health caie experts say.
Before May, he could have pushed some kind of
overhaul plan through Congress in a single, d) amatic
step. Now, many Democrats believe the bill can only
be passed in modest inci-ements, and will i-equire
painstaking negotiations with Capitol Hill's
committee barons.
Indeed, obstacles to Clinton's reform effoits pile
up by the day, and now include:
• Polls that show Americans, who largely
approved of Clinton's position on health care just
two months ago, now disapprove of it. A. Newsweek
poll, conducted June SO-JuJy 1, found only 37 percent
supported the president's handling of the issue down ircm 53 percent in Apz-iL Meanwhile, 46
percent say they now disapprove, up shai-plyfrom31
percent in April
• Opponents who say that the delay in releasing
the plan has bought them much-needed time to plot
strategy. "In the early days, there was still a lot of
euphoria about the president and his strength," said
Tcn y Hill, a spokesman for the National Federation
of Independent Business, which has sent out three
mailings opposing the Clinton plan to its GOOO
. OO
membei-s since the beginning of May. "Since then, he
has shown he does not have a steamrolling agerda."
• Some congressional Democrats who criticize
the plan as overly complex and disdain the man who
helped design i t Asked recently about Magaziner,
House Ways and Means Committee chainr.on Dan
Rostenkowski of Illinois, said: " I don't even bother
with Magaziner."
Did it need to he this way? The answer, many
here say. is no.
When Clinton announced the task force on Jan.
'25, he appointed his wife,. Hillary Rodham Clinton, to
head it. She tai-ned to Magaziner, a senior White '
Hcuse policy aide, to orchesb ate the effort
Magimner's vision was to bring ncaily 500
people - frcm world-renowned health experts to
inexperienced congrcssional staff members together, swear them to secrecy, and set them to
work aimtnd the clock.
The combination of size and secrocy, some
juthorilies say. was Magaziners first big mistake.
"Thoy mamigcd to get the worst of both worlds,"
said Robot J. Bicndon. a Harvard School of Public
Health n ofessor. Thc^y Cried to do it secretly to gat
the speed, but brought in so many people thatwoi-d
was bound to leak out."
As ii result newspapers ran leaked stones, many
eironceus, about the administration e apyvouch,
raising public ovpoctations.
�THE WASHINGTON POST
A 4 SUNDAY, J m 18,1993
Amid Hisses, Clinton Aide Hears Call for Another Kind of Health Care
By Dana Priest
Wutaftso r o t Sua WnUJ
i
CHICAGO. July 17—Top White
House health care adviser Ira Magaziner was a half hour into pitching
the administration's health plan today when the hissing began.
"We need each other. We can't
do it without you and you can't do it
without us," he told hundreds of
community activists who favor a
different approach to reforming the
health care system.
Magaziner cautioned the members
of Citizen Action, who want a system
- in which the government pays for all
health care: "In the world we're living in in Washington, there are a
whole lot of people who don't want
health reform" in any form.
"Well, get rid of them!" retorted a
gravel-voiced man in the audience.
jfMagaziner was not in Washington, where top presidential advisers
are treated with deference. He was
at the annual conference of the largest and most liberal grass-roots network. Citizen Action boasts 3 million members.
Considered fringe by the past
two Republican administrations,
groups like Citizen Action that support a government-financed national health care system slowly seem
to be joining the mainstream. But
they have not adopted middle-of-the
road rhetoric or goals, as today's
meeting made clear.
They want universal coverage.
They want a comprehensive, guaranteed set of benefits for all Americans. They want to cut out the insurance companies and rein in.
through government regulation,
doctors' salaries and the profits of
the entire health industry.
"People are not afraid of the term
socialized medicine, except maybe
inside the Beltway," Linda Lowe
told Magaziner. "They say the S
word out here."
Although the Clinton administration appears to be headed toward a
system that would create compel-
ing health care organizations that
offer their services to consumers,
there are supporters of a singlepayer system in Washington.
As of last week, about a third of
the 258 House Democrats, including
four of the six subcommittee chairmen of the House Ways and Means
Committee, had endorsed the socalled American Health Security Act,
which would create a single-payer
health care system. There are five
cosponsors in the Senate.
About 15 percent of those responding to a recent American Association of Retired Persons member survey said they favor a singlepayer plan, according to AARP.
The administration is increasingly aware that the very complexity of
its plan may give single-payer ad-
vocates a natural edge in the upcoming battle of rhetoric.
"The fancier, the weirder it
looks, the more they are going to
lose the minds, and eventually the
hearts, of people and that's a big
advantage for us," said Jeff Eagan.
director of Citizen Action in Wisconsin. "Single-payer is something
people can get their arms around."
Today's conference was sponsored jointly by Citizen Action and
the Midwest Academy, a community organizing group.
Citizen Action board members
said that within days after the administration unveils its plan, the
group will decide whether to support it. If Citizen Action backs the
administration, its canvassers will
walk the streets with petitions and
educational materials. It also could
Under the Clinton plan, due out in
choose to support parts of the plan mid-September, states would be free
while pushing Congress to enact a to establish single-payer systems,
bill more to its liking.
and the federal government would
The American Health Security set a national health spending budget
Act would sever the link between and regulate the rate of increase of
employment and health insurance. premium prices that consumers
A single payer—the federal govern- would pay health care provider orment—would collect taxes to pay ganizations.
for health care for all Americans
But the Clinton plan parts comand set doctor, hospital and other pany with the single-payer system
health provider fees. The delivery in several ways. Employers would
of health care would stay in private pay at least part of an employee's
hands, but the government would health care premiums and insurance
control price increases.
companies would keep a role, albeit
The program would be financed a different one.
through a 7.9 percent payroll tax on - Insurers no longer could exclude
employers, a 6.45 percent rise in cor- people with preexisting illnesses and
porate income taxes for businesses would have to offer a government-set
with more than $75,000 in profits standard benefit package to everyone
and personal income tax hikes.
in a region at about the same price.
THERE ARE SEVERAL
THOUSAND REASONS WHY
JOHNS HOPKINS HOSPITAL
WAS NAMED
"BEST OF THE BEST"
FOR THE THIRD YEAR
IN A ROW.
Whether this will be enough for
single-payer advocates is hard to
tell, judging from the mood here.
"Why is this administration not willing to take on the big insurance
companies?" asked Allan Watts.
"What you're saying is the way
you want to lake them on is the
only way to take them on," Magaziner shot back. The White House
plan will cut out abusive insurance
practices and require insurers to
play by new rules, he said.
"Get it out of your system," he
said as the hissing grew louder.
"But at the end of the day, when
you're finished hissing at me. you'll
see" that there is more in common
between Citizen Action and the administration than there is divergence.
A
M
U.S. News &
World Report \
has recognizedTlie Johns Hopkins Hospital as the
nation's best hospital tor the third
consecutive year. Such honors
are the direct result of superb
performance by thousands of
dedicated employees who make
TV: Pena, Panetta,
Sens. Kerrey, Coats
\
up The Johns Hopkins Medical
�Agi^OOO
A Project of Interfaith Health Care Ministries, Inc
PROVIDENCE SUNDAY JOURNAL; December 1,1991
Bureaucracy thwarts quality health care for elderl
After 2-year study, panel
prescribes sweeping changes
By GINA MAORIS
Joumtl-Bulleilo Sn« Writer
Rhode Island residents spent-about $2.5 billion
on health care last year, but only $1.2 billion —
less than 50 cents on the dollar — went directly to
heal the sick.
The rest was eaten up by administrative costs,
including such h'dden expenses as the fact that
hospital nurses may spend half their time on duty
filling out forms.
Those are symptoms of a health care system
hopelessly mired in bureaucracy.
An extensive network of private citizens
known as Aging 2000 has reached that conclusion
in a 435-page report on care for the elderly in
Rhode Island.
The committee of 150. working under the auspices of the Interfaith Health Care Ministries,
spent two years examining every facet of life affeting the elderly, not only the convoked health
care system but considerations such as social opportunitles and transportation.
It proposes nothing less than a revolution in
the way those services are organized.
"One problem with reform in the VS. is that
it is piecemeal." said Ira Magaziner, president of
SJS. a corporate-strategy consulting firm and
chief spokesman for Aging 2000.
"We're trying to do something more systemic
We think systemic change Is necessary."
In January, Aging 2000 will begin negotiating
with agencies in the public and private sectors so that it can put its
proposed reforms into place. Many
of these agencies are already familiar with Aging 2000, because professionals on their staffs belong to
the committee.
Magaziner said initial planning
will take two years, although he
foresees a "5-to- 10-year process of
change."
Aging 2000 would join the latest
in high technology with old-fashioned values such as trust between doctor and patient In a multi-faceted
system that gives the elderly broad
choice in the way their services are
delivered.
The goal is Independence
The keystone of the concept is to
help people maintain their independence while living in their homes
and communities — where surveys
show they want to remain as long
as possible.
Aging 2000 began with two
broad goals: improving the overall
quality of care and emphasizing services that can prevent the elderly
�A PRESCRIPTION FOR CHANGE
from deteriorating mentally, emotionally and physically.
Implicit in those goals is a need to
control the staggering cosu of
health care, which ate up 12 percent
of the gross national product last
year.
The largest consumers of health
care are people over 65. In Rhode Island the elderly account for 38 cents
of every public and private healthcare dollar — or 59 cents if one considers public financing alone.
The current system is driven
largely by Medicare and Medicaid,
federal health insurance programs
earmarked for the old or disabled
and for the poor, respectively. Medicaid pays for about 50 percent of
nursing home costs nationally.
Since these programs were first
enacted about 25 years ago, they
have become stuck in a regulatory
bureaucracy that — while well intentioned — has created new problems to replace those it solves and
has added to the costs it has tried to
contain.
The villain: poor organization
Aging 2000 offers an analysis of
the fiscal problem that suggests
"the real villain" is not expensive
technology or extraordinary treatment for extreme medical conditions but something much more diffuse — the way health care is organized.
"Through the detailed cost analysis performed by Aging 2000, we
have met the drivers of health care
costs, and they are a multitude of reimbursement-driven rules, regulations and traditions that create administrative costs and poor work
organization," the report says.
If Aging 2000 can reduce administrative costs by 10 percent, the report says, it will mean an annual
savings of $250 million in the Rhode
Island health care system.
A tale of defensive medicine
The report illustrates much of
what is wrong with the existing
system of care through a series of
anecdotes scattered throughout the
text.
In one story, a nursing home sent
a 90-year-old woman terminally ill
with cancer to a hospital because
she was bleeding internally.
The doctors in the emergency
room were unanimously opposed to
surgery to stop the bleeding, because if the woman didnt die on the
operating table, she would die in a
few more weeks.
But the hospital administrator, after trying in vain to reach the woman's son in California, ordered the
surgery anyway. The woman died a
week later, without regaining consciousness. Her hospital bill totaled
$15,000.
When he was asked why he decided to operate, the administrator
said he wanted to protect the hospital.
The son might be the suing
kind," he said.
In another example, an elderly
man who had been hospitalized for
respiratory distress became anxious
at the prospect of being discharged
because he could not afford the portable oxygen the staff wanted to
send home with him.
Medicare wouldn't pay for it because at discharge time, the level of
oxygen in his blood was normal.
At home, the man worked himself into such a condition that within
four days he was back in the hospital
In an interview, a home health
nurse said, "There's a way around
this, though. If you take the patient
for a brisk walk up and down the
halls for a while, you can get the oxygen levels where they need to be
for coverage."
In yet another case that emerged
from more than 1,000 interviews
conducted by Aging 2000 researchers, an 80-year-old nursing home
patient prone to indigestion developed chest pains — sometimes a
mask for digestive distress.
�A PRESCRIPTION FOR CHANGE
The patient, Mrs. J., went to the
hospital that night because the nursing home doctor could not come to
her.
And because the hospital didn't
have Mrs. J's records. It ordered a
battery of tests. To be on the safe
side, it held her until all the results
were in and her records from ths
nursing home arrived.
Mrs. J. remained in the hospital
three days before she returned to
the nursing home. The diagnosis: indigestion. The bill, including the ambulance trip, totaled $4,200.
Mrs. J's case was a classic illustration of an unnecessary visit to the
emergency room and a poor flow of
information from one health care
provider to another — factors Aging 2000 aims to address.
The 90-year-old cancer patient
was a pawn in the game of defensive medidne practiced by officials
afraid of being sued.
And the man who was having
trouble breathing was a victim of a
Medicare reimbursement policy that
encourages costly institutional care
and is reluctant to pay for care in
the home.
A choice of three programs
Aging 2000 would start with a
clean slate and invite the elderly to
choose one of three distinct programs designed to ensure quality
caie, to control costs, and to be sensitive to consumers.
One program would rely on advocates to guide an individual through
the maze of services, offering advice, but not supplanting the role of
family members.
Another, based in existing community health centers, would resemble a health maintenance organization that arraages for comprehensive care did pays for it.
The third, using senior citizen
centers as hubs, would emphasize
preventive medidne and assistance
to elderly people who want to remain in their homes as long as possible.
All programs would be voluntary
and require no increase in the
amouht of taxpayer dollars now
spent on health care.
Partidpants would cany their
medical records and other pertinent
information in computerized "smart
cards" that could be read and updated by each medical provider.
Similar to the bank cards with
coded magnetic strips that allow
computers to conduct bank transactions, "smart cards" would be embedded with microchips, which can
be loaded with more information.
To foster trust between patient
and doctor and discourage litigation,
Aging 2000 would assume malpractice insurance for physidans working with the elderly in its programs.
Major insurers take a closer look
The three major private insurers
in the state, as well as hospitals such
as Rhode Island and Miriam, have
expressed interest in participating
in formal planning.
Insurers are drawn to different
aspects of Aging 2000. For instance,
Harvard Community Health Plan of
New England says it is most interested in the health maintenance organization.
Ocean State Physicians Health
Plan says it would like to explore
the advocate plan.
And Blue Cross of Rhode Island,
which says it supports the general
direction of Aging 2000 but does not
endorse every item, shows a spedal
interest in the "sman card."
So far, the research project has
cost about $500,000, which was
provided by SJS.
'One problem with reform
in the U.S. is that it is
piecemeal. We're trying
to do something more
systemic'
IRA MAGAZINER
Spokesman for Aging 2000
�A PRESCRIPTION FOR CHANGE
Magaziner said that when he
started the consulting firm a few
years ago. he intended to use profits
tofinanceresearch that would produce "fresh ideas" for the public
good.
Grass-roots quality control
He said he selected health care —
specifically care of the elderly —
because It is one of the most important issues in the country today.
On the surface the three programs may appear different, but all
of them would depend on the same
types of underpinnings.
To free themselves from cumbersome paperwork and redirect their
energies. Aging 2000 projects would
have to obtain the federal government's permission to waive existing
regulations governing Medicaid and
Medicare. Nationally, there is ample
precedent for such waivers.
In place of monitoring by an extensive external bureaucracy, Aging
2000 projects would create their
own grass-roots quality control
Front-line workers and their managers would be given a say — and
presumably gain a sense of personal
pride — in keeping quality high and
costs low.
There would be greater efficiency through better coordination of
services and the continuity that
comes from consistent relationships
between consumers and caregivers.
The resulting savings would be reinvested in direct care.
Aging 2000 strongly opposes rationing health care dollars. The
committee's proposals are based on
explicit ethical principles that emphasize care, respect for elders and
therightsof individuals.
"Those who argue for systematic
rationing claim that society must
deny services to some in order to extend services to others," the report
says.
"We believe that correcting inefficiencies in the health care system
could conserve and redirect resources in a way that would render
such choices unnecessary."
Where health
care dollar goes
Of the $2.5 billion spent
overall on health care in
Rhode Island last year, only
$1.2 billion was spent on
direct care. The rest was
spent on indirect care, such
as administration,
regulation, bookkeeping,
etc. A breakdown of total
operating costs shows the
percent spent on each at
these facilities:
Hospital
r K '.\,:.:>.
r
Direct care .fcdfreci carei
470
P h y s i c i a n ' s office
Nursing home
Direct care
610
Home health agency
Direct
care
> indirect cafe|
450
SOURCE: Aging 2000
�Agi^OOO
A Project of Interfaith Health Care Ministries, Inc.
MODERN HEALTHCARE Magazine; December 16, 1991
THE WEEK IN HEALTHCARE
Healthcare refonn
Comprehensive plan offered for R.I. seniors
A group of public and private volunteers has created a comprehensive
plan for improving healthcare delivery
for Rhode Island's 150,000 senior citizens.
The group's recommendations,
based on two years of research, are
broadly supported by providers,
payers and consumer advocates. The
plan, known as Aging 2000, calls for
the creation of three models of healthcare delivery.
The "advocate model" would allow
consumers to choose their own healthcare providers, using a program adviser. The "total-care model" would
offer a continuum of care through a
single managed-care organization. The
last, the "home-care model" would
provide healthcare services for senior
citizens who want to use the existing
healthcare system and remain in their
own homes as long as possible.
Participation in Aging 2000 would
be voluntary.
Savings generated through the elimination of administrative systems and
improved systems of care would be
used to improve healthcare delivery.
Architects of the plan said no new
public money would be needed.
Interfaith Health Care Ministries,
a coalition representing various religious denominations, hospitals and
Brown University, would supervise
the plan's implementation.
The report was financed by SJS, a
strategy consulting firm, which contributed $500,000 in money and services. Aging 2000 also received a
grant of $500,000 from the Hartford
Foundation, New York; the money
will be used to provide technical assistance to providers that want to
participate in the project.—Karen
Pallarito
�Agi^OOO
A Project of Interfaith Health Care Ministries, Inc.
THE PROVIDENCE JOURNAL; December s, 1991
Advocates
hail plan on
long-term care
for the elderly
By GINA MACRIS
Journal-Bullciln Stiff Writer
PROVIDENCE — A blueprint for
changes in long-term care of the elderly is an idea whose time has
come, in part because it reflects the
consensus of a broad cross-section
of providers and advocates of the elderly in Rhode Island.
That summed up the reaction at a
breakfast meeting yesterday at
which some 150 volunteer members
of the Aging 2000 committee received copies of the 435-page report
on long-term care for the elderly.
The report, the result of two
years' research, outlines strategies
to lessen a costly, burdensome bureaucracy and presents a broad array of services designed to preserve
individuals' health and independence as long as possible.
"It's fabulous. It's one of the best
models to come out of any state,"
said Thomas Romeo, a member of
Aging 2000 and director of the state
Depanment of Mental Health, Retardation and Hospitals.
"The public hospitals can and will
be helpful in implementing this project," said Romeo, whose department cares for chronically ill elderly
and disabled people at the General
Hospital and Zambarano Hospital.
Alluding to Governor Sundlun's
announcement that state government must begin another round of
belt-tightening almost immediately,
Romeo said that "difficult budgetary times can enhance this model
. . . by becoming a catalyst for
change."
One of the people who served on
Aging 2000 with Romeo is a woman
who admits she's sometimes a thorn
in the director's side. She's Roberta
Hawkins who, as executive director
of the Alliance for Better Nursing
Home Care, is an advocate for some
of the patients in Romeo's care.
For Hawkins. Aging 2000 means
that a great many people with different perspectives about the care of
the elderly were able to work together for two years and put aside
their "turf issues" to a great degree
so they could see the "broad perspective."
"If there's not enough housing
and transportation, they don't get to
the doctor. Their health goes down,
and they need home health care and
eventually nursing home care,"
Hawkins said.
"It all connects, and that's why
we all connect," she said, referring
to the 150 people who have joined
Aging 2000 in the last two years.
"It's a good sign for systemic
change" in the future, she said, noting that a chief aim of Aging 2000 is
to lessen the reliance on nursing
homes for the elderly.
Reduce bureaucracy
The Aging 2000 plan will seek
permission from the federal and
state governments to pool public
t
health care dollars into innovative
programs designed to reduce bureaucracy.
Edward Zesk, senior vice president of the Hospital Association of
Rhode Island, suggested that the report overstates the cost of administration — 53 cents of the health care
dollar.
But it is a point well taken that
fragmented organization of health
care "adds an extraordinary amount
of cost." he said.
In light of a variety of proposals
now in Congress calling for sweeping reform of the entire health care
system, Zesk said, he questioned
only whether Aging 2000 projects
aimed specifically at the elderly will
be "aggressive enough and broad
enough."
Meanwhile. Ira Magaziner. president of SJS Inc.. the corporate strategy-consulting firm that has f i nanced Aging 2000 so far. formallv
presented the repon to Emil Flaubert, president of the Interfaith
Health Care Ministries, the sponsor
of the project.
Interfaith will assume direct supervision of a two-year implementation phase that begins in Januarv.
It will focus on health care providers and their willingness to put various aspects of the plan into place.
Major insurers, hospitals, and
other agencies have already expressed Interest in participating in
the coming talks.
Interfaith is seeking financing
from private foundations to finance
implementation.
�Ag^aooo'
A Project of Interfaith Health Care Ministries, Inc.
PROVIDENCE BUSINESS NEWS; December 9, 1991
Providence
ABUSINESS
healthy beginningmm
When Ira Magaziner says, "No institution or
group is gettingrichtreating the elderly," he neatly
summarizes why the Aging 2000 project exists. If
some groups were happy with the US health-care
system and some were not, that would be one
matter—a matter of one group jealous of another's
turf. But no one is happy with the way health care
is delivered in America today—except anarchists,
perhaps.
As a primer on health care today, Aging 2000 is
the most penetrating, fair and lucidly written
document that we know of. We're struck by its
basic impulse, which is a return to the basics of
health care. There's a reaffirmation of the value of
home care, family care and of the personal touch
between doctor and patient
But it also oflfers some very modern remedies,
such as the recommendation to give consumers a
high-technology information card, and its 1990slike suggestion that hospitals and other facilities
give their workers more decision-making responsibilities in their daily lines of work.
Sure, it is an ambitious project That alone will
frighten people, and some may reject it because
some of its recommendations are similar to past,
failed enterprises. But did past endeavors fail
because the idea was bad or because its implementation was faulty? The failed Primary Prevention
Center project (seepage 15), also employed a
computerized patient information system. The
project failed, but that may have been due more to
underfunding than to any faulty vision.
Another reason may be timing. A few years
ago—maybe only a year ago—there was not the
consensus that exists now about the need tofixthe
health-care system. Today, everyone agrees that
health care is failing us, so the question today isn't
whether we can refonn health care; it's whether we
can afford not to.
�Agii^ooo
A Ppject of Interfaith Health Care Ministries, Inc.
PROVIDENCE BUSINESS NEWS; December 9,1991
Brave new world?
Aging 2000 prescribes ambitious remedies
for state's sickly health-care system
By F r a n k F o r t i n
PBN editor
Is the Aging 2000 report a
blueprint for the future, or another
dust-gathering volume on the
nation's seemingly intractable
health-care morass?
Only the passage of years will
determine that for sure. But the
people who wrote the report are
confident that the study .will be a
turning point in the struggle to
provide good health care in Rhode
Island fairly and inexpensively.
The ambitious study tries to
find out what ails the state'shealtbcare system and how it can'be
fixed. The project consumed
nearly two years of sweat,
$600,000 in both cash and in-kind
contributions, and the guidance of
160 representatives from every
major sector of the health-care
system.
The report focuses on treating
Rhode Island's elderly, because
even though senior citizens are
just 15 percent of the state's
population, they account for more
than half of the state's hospital
days. The committee reasoned that
if health care can be delivered
better to the elderly, then the rest
of the state can benefit
Ira Magaziner, who conceived
the idea of the study and whose
consulting firm, SJS, did much of
the research and helped write the
report, said, "The elderly are the
most significant part ofthe healthcare system. . . . They are the
model for chronic degenerative
illnesses, the fastest-growing part
Inside
Aging2o
00
A special
report
• Three solutions: The
Aging 2000 health-care
models. Page 11.
• Why are medical costs
soaring? Pag* 11.
• Creating an ethics-based
health -care system. Page
12.
• Why doctors know so little
about aging. Page 12.
• How the "smart card"
could revolutionize health
care. Page 15.
• Bringing quality techniques
to the hospital ward.
Page 17.
of health care."
That the state's health-care
system needs fixing was not debated. The dispute is over how do
to i t The report approaches the
solution from two perspectives.
First,fromthe philosophical side.
Aging 2000 suggests that much of
health care's recovery lies in going back to its roots.
This means more personalized
care of patients, a system which
first addresses the needs of patients
and later worries about everyone
else (today it's the other way
around). And it suggests that the
best provider ofhealth care for the
elderly may be the family, even in
an age of far-flung or dysfunctional families. These impulses
once drove the health-care system
but have become lost in the late
20th century.
How can this be done? The
435-pagereport'sfocal point is its
recommendation that health-care
providers, insurers and elderly
consumers form a series of experimental consortia which deliver
health care in a streamlined fashion. Consumers would choose
from three basic types of consortia, giving consumers some choice
over how they will be treated.
Some resemble today's healtb(See Study on page 6)
�Study
(Continued from page 1)
care system, some do not.
Committee members say they discovered no one is happy with the way health
care is delivered today—not hospitals,
doctors, insurers, patients nor anyone else
in the system. Attempts to correct flaws
have proven ineffective, creating a deep
frustration over health care's high costs, its
uneven quality, poor accessibility and fuzzy
ethics.
"There are no villains here," said
Magaziner. "It's just that we have created a
system which is frustrating to those who
work in it and to those who are consumers
ofit."
For businesses, the most common complaint is the high cost ofhealth care, which
is reflected in insurance premiums. So why
is health care so expensive?
The report deflates some common
theories. "The real villain inrisinghealthcare costs is not expansive technology, nor
tests, nor extreme medical events," according to the study. Capital equipment
consumes only 2 percent of all health-care
costs in the state and extraordinary care of
catastrophically ill patients accounts for
only 6 percent of costs.
The "villain," according to the report, is
the health-care system's bureaucracy. Only
half of all health-care dollars are spent on
direct patient care, according to the report.
The rest is spent on a paper trail in which
reports and data are unnecessarily collected,
time and again. Cut those costs and you free
up money for something else.
The Aging 2000 committee also concluded that over-utilization of health-care
services also drives up medical costs—
over-utilization caused by duplicative tests,
fear of litigation, poor flow of information
about patients and unnecessary emergency
room visits, among others.
Qimlity of care is sliding, also. The
Aging 2000 committee said consumers and
providers of care don't like what's happening in the system because many patients
rarely see the same doctor twice for their
ailment. The mechanism of health-care financing also prevents the elderly from being cared for in the setting they most pre-
fer—their own home.
How did the system get this bad? Because health-care professionals and public
policy makers have tried to micro-manage
health care, putting one balance here and
other there, to correct flaws in the system.
And as health care gets more complicated,
ethical questions—and solutions—become
murkier and costlier.
The study
'Americans are paying
more and getting less
value for their money
than citizens in other
developed countries.'
"The whole history of Medicare has
been one band-aid after another," Magaziner
said. "Now we have a patient with a thousand band-aids, so many that the patient
can't move anymore."
Magaziner and SJS conceived the idea
of Aging 2000 and in late 1989 asked the
Interfaith Health Care Ministries to be its
sponsor.
The Interfaith Health Care Ministries is
a 15-year-old group which provides (among
other things) religious counseling in many
of the state's hospitals. It is sponsored by
the Roman Catholic Diocese, the Rhode
Island Council of Churches, the Board of
Rabbis, the Brown University Medical
School and seven hospitals. Magaziner said
the group was chosen because it represents
a broad range of faiths and groups, and is
seen as noncontroversial and nonpartisan.
Initially, the Aging 2000 committee
consisted ofa dozen people who met weekly
over afreelunch at the Brown Faculfy Club
to discuss the week's findings. Magaziner
permitted anyone to participate who wanted
to, and soon the group mushroomed to 160.
" I first thought it was because of the free
lunch," he quipped.
Several members of the Aging 2000
(Continued on next page)
�(Continued from previous page)
committee admit to approaching the project
with some trepidation. Roberta M. Hawkins,
executive director of Alliance for Better
Nursing Home Care, an advocacy group,
said, "When Irafirstput this together, I was
really concemed about how the different
groups would work with one another."
Put another way, would each sector of
the health-care system be so afraid of protecting its turf that no substantive changes
could be proposed? For example, would
insurers be worried only about cost and not
fret about quality? Would doctors give short
shrift to affordability?
Most committee members say the opposite occurred. They believe the laborious,
two-year process of meeting, talking, writing and editing squeezed a consensus out of
disparate groups. Even today, discussing it,
some members express a delighted surprise
that it worked.
Magaziner attributes the development
to his observation that no area ofhealth care
was getting rich on the current system.
"There was a profound sense that the sys- I
tern isn't working and that people knew that
things had to be done in a different way. No
institution or group is making money
treating the elderlyrightnow."
Jane Mackenzie, president ofthe Visiting
Nurse Association of Rhode Island, said,
"Plenty of turf issues were staked out (at
first), but in the final analysis, the need to
come to a solution was really paramount in
having people recognize that we have to get
on with it" Mackenzie added that a strong
spirit of compromise helped to create the
consensus.
Magaziner first thought the project
would consume less than a year's time, but
the issues were so complex that it took
twice as long to complete. The 160 committee members were soon divided into nine
groups, each of which focused on a single
subject area and met with staff members
three times to discuss research results.
Afterthose meetings, the nine groups came
up with a consensus on the critical problems.
Tlie 160 members then met in February
of this year toreviewfindingsand discuss
potential solutions. William Nisi, executive director of the Interfaith Health Care
Ministries, believes that this meeting, a
two-day retreat at the Newport Marriott,
was the turning point in forging a consensus
view of the problems.
The report's first draft was circulated to
comminee members in May, who reviewed
it and suggested revisions. A second draft
was written in August and a final draft
completed in October.
Magaziner concedes that there is not
universal agreement on everything in the
report, even the final draft. "If you ask
whether people would write every word in
thereportas it is written, the answer is
obviously no," he said. "But all of them
agree with its general conclusions and
recommendations."
On Jan. 1, the implementation of the
study will be entrusted to the Interfaith
Health Care Ministries. Rev. David Ames,
the Episcopal chaplain at Brown University
and a board member of Hospice Care of
Rhode Island and Planned Parenthood, was
named last week to chair the nine-member
Aging 2000 committee, four of whom will
be board members of Interfaith Health Care
Ministries. The group also will appoint an
independent advisory committee on ethics.
Aging 2000 will be funded by grants
from nonprofit foundations. Magaziner said
Aging 2000 has applied for grants from
three separate foundations, and that approval
from at least two of them will be needed to
fund the program for two years. He said he
hopes to hear from the first foundation
within the next week, andfromanother in a
few months.
During that two-year period. Aging2000
will work with health-care providers, insurers and others to put together, the consortia
that are critical to implementing the project's
recommendations. It also will begin seeking regulatory waivers from the federal
government to establish its new information system.
Despite the project's lofty goals and
comprehensive research, many health-care
veterans are withholding their complete
endorsement of the project—partly because
many similar projects have become footnotes, or worse. Even one of Magaziner's
most-celebrated projects for economic development, the 1983 Greenhouse Compact,
didn't make it past the concept stage.
But that hasn't prevented its boosters
from dreaming about the project's effect
Magaziner expects the plan to begin slowly,
as people leam about it and become comfortable with it. But only half-jokingly, he
said. The worst thing that could happen to
us is for 50,000 people to sign up in the first.
year. We couldn't handle it"
Q
�Magaziner: "There was a profound sense that the system isn't working and that
people knew that things had to be done in a different way."
The Aging 2000 report blames financing mechanisms for discouraging home health
care for the elderly.
�Agi^OOO
A Project of Interfaith Health Care Ministries, Inc
PROVIDENCE BUSINESS NEWS; December 9,1991
IN THIS SECTION
A special report
• Ethics: Laying d o w n t f o u n d a t i o n .
FaB* 12.
• Communication: U p g r a d i n g tachoology,
fag* IB.
• Quality: Using businass practicas.
raga 17.
Providence
D e c e m b e r s . 1991
Number Twenty-One
BUSINESS NEWS
O 1991 P r o v i d e n c e B u s i n e s s N e w s I n c
Model care: What makes sense?
By M i c h a l l a H i r a c h
S«««wrlt»r
long-tctm c a n , social programs and education ts well.
Clients who choae to remain in their homes could arrange
acrvices l i b meal delivehes and Qurses through these
Aginp :0O0'» •ccounts or wane, ovcrcpcndini and
confusion endemic to our medicjl sysem lead to one big
question: what now?
Fommaiely. thia query isn't riietorical. A f m f 2000
maps—albeit in an intemionalty vague sort of way—three
paths toward better cart for Rhode Island's elderly.
Starting in January, reptesentativa TttKn hospitah. insuren. mini ng hnmcs and consumer groups get lo sit down
and argue whether one. two, three—or none—of Aging
JOOO's proposed morfels will wort m real lire.
The Hrq rrxxjc! aligns a prafeuional advocate to cadi
elderly client. The adiucalea, tnmtd in geromolojy and
social woHi. would supplement roles which often b i t on
unwilling family m^mben or overtwrdened nursing jtafT—
aiwweTingqueflions.hiringahouseie»per.chosinganunmg
home, amnging hospital discharges. Advocata would
need lo be well-paid so Ihey will stay with clients over the
years.
The second model is like a one-stop health maintenance
organiation. only inore so. It proposes health centen that
would not only provide immediate medical attention, but
That idea—that the elderly a n happier and healhier i r
they can remain tt home—dn ves the ihird model. A m i worlt
o f visiting nuncs, meal ddivercn, mobile medical vans,
home repairers, physician groups that make house calls and
othen w w l d adapt clients'
existing homes to their
changing medical and social needs. Thb model also
would expand atsring senior centen to prov idc tap*
in medical scrncea.
All three models would
incut put ate certain philosophical and technological
aspens or Aging 2000—a
statewide tn formation lyvtem with "sman cards" that
contain patient Tiles on
computer chips, total quality management, and geriat; s,
nc training for all provid- FnmconctptforoaWysvW
cn—and rafuiresignificant take i
S
n
u
Cedenl wai ven rrom current Medtcarc regulations to make
them coat-eirccttve. To further cut costs, a self-insured
malpractice pool would cover all participating physietans.
^"82000
Three m o d e l s
Aging 2000 mastermind I n Magaziner said the modeb
win evotve from sis planning group* o-er a two-yew
p<anro«| process. Ideally, he would like ts see one version
o f each model actually impkinemed. The insunss wiD
team up willingly wiih hospital and nw ting hone- 3
pilot programs, he said. "AH providen are temg money an
the ctdcriy. They don't have any n«xj.a<ioa ts stick with
the status quo."
But is it possible to redesign the status quo knd remain
solvent at the same time? The insulin «ho would ba
puning their revenues on the line—have promised to-tfiacuss the mndcls and their practical applications. Beyond
talk, Ihey are making no farther commiltmou.
"A lot ofthe models are starting with a base that's not
all that diffcmit from the Medicate HMO nsk
Sea M o d . * on paga I S
�Models
IContinuad from paga 11)
said John Oorman, auinanl vice president
of research and development Tor Blue Cross
& Blue Shield of Rhode Islsnd. "There's •
lot of experience there which indicates thai
doesn't always work in every case."
A
in
8 g2000
Three models
'No one model of
health care
delivery will
satisfy every
consumer.'
Under ariskconlnct, the federal Health
Care Financing Administration (HCFA)
pays HMOs s set Tee Tor every patient they
treat, regardless of what the patient requires. Tlie alternative, a cost contract, reimburses HMOs after Ihey treat patients.
The risk model is, as its name implies,
riskier business for Ihe HMOs but carries a
greater profit potential.
The Blue Cross afTiliale, HMO Rhode
Island, also Is examining AgiAg ZOOO'l
recommendations. "The questioK is, What'*
new and different in Ira'i thinking thsl'l
not called for in Ihe way HMOs are ordinarily run?" u i d President Michael
GethardU T h e problem for us getting involved is what would be innovative and
differenl, yet not extremely risky from a
financial poinl of view." HMO Rhode Island does not have a Medicare conlnct, but
periodically considers obtaining one. "If
Aging 2000 can help us cut through (he
bureaucracy, thai would be a plus. But we
would have to find something that was
unique and not simply replicate things that
have already been done."
Aging lOOO's advocate model seems lo
77ia aaeond modal proposes haalth eantan that vmuldnot only pro vlda bnmatBata
madkal attantlon. but long-tarm eara. aodalpngrama and adoeathtt a* watt.
fit best with Blue Cross's practical and
philosophical business stnxtttre, Gorman
said. Whether Blue Cross decides lo proceed depends on the costs. "Is there going
lo be thai much money freed up from your
medical side through more elTicient organization?" he asked.
"We are always looking fora better way
of doing things. We don't know if Ihis is
necessarily Ihe better way—but I don't
have a better idea myself," said Gorman.
facilities. "We are already very close lo the
kinds of recommendations you sec in a
social HMO." she said.
Ocean Stale Physicians lleallh Plan
would like lo experiment with the advocate
model. "Essentially Ihe advocate model
describes Ihe way we currently work with
our senior population," said President Blair
R. Sullcnlmp. T h e major change would be
that if Aging 2000 were able lo come up
wiih additional dollars and resources, we
could perhaps provide greater social services
Breaking even
lo those seniors in some of their lifestyle
Harvard Community Health Plan nf I issues," he said.
New England already is reimbursed through
While Ocean Stale is not now losing
a cost conlract. This means Ihe IIMO breaks money on its elderly clients, those cosls are
even when it Ireals elderly clicnls. who
climbing. Sullenlrpp snid. Ocean Stnlc
make up about 4 percent of its clients.
Physicians Health Plan currenlly is reim"We're not looking so much at the cost,"
bursed through a risk conlract with HCFA.
said spokeswoman Lee RaioU. "For us it's
"It'sonly going to consume a greater portion
another way of validating our system."
of our total health-care lesouico." he said.
Raiola, who served on the Aging 2000
like the other insuren. Ocean Stale
staff for nearly a year before joining
wants to find better, more efttdent ways of
Harvard, said Aging 2000's total-care
caring for the elderly and hopes Aging 2000
model won't be much of a stretch for
leads to some of those ways. "SA far our
Harvard. The HMO already has its own commit!emenl is purely philoeophtcal,"
buildings, personnel, laboralories and a
Sullentrop said. "It's all theoryrightnow.
computer network. Members pay a flat fee,
We have • lot of work to do lo transfer that
which covers all their treatment in Harvard
concept and theory to
reality."
Q
�Now more than ever, it costs to care
, By W a y n * F o r r a t t
Staff writer
Heilth cinptnonnelit
patlant fllta.
Unnecessarily high administrative costs and a system
that promotes the overuse of medical services are two
reasoni why Rhode Island spent J2.5 billion on health care
last year.
And, unless the system improves, the 1990 bill will look
like a bargain in the coming years.
Those findings—and more—are contained in the "Cost
of Caring" segment of the Aging 2000 report. The report
analyzed Ihe internal cost structures of 13 health-care
facilities in the state: three hospitals, three nursing homes,
six physicians' offices and one home-health agency.
Of Ihe J2.3 billion spent last year, only S1.2 billion—or
47 cents of every SI —wis spent for direcl-patient care. The
rest w u divided among administrators, regulators and
bookkeepert, and among nurses and doctors for lime they
devoted to administrative duties.
Adminismtive and indirect-care costs est up 53 cents of
every SI local hospitals collect
South County Hotpftalupdata
A
ln
g g2000
C o s t of c a r i n g
"It's hard for anyone lo imagine the complexity that has
grown because of ihis multifaceted reimburscnent system
that we have in health care today," Baron said. "We have
as many systems as people have insunnce camen in ihis
stale."
The report also ciled the fear of litigation, annecetury
emergency room visits, reimbursement pulkiri Ihat promole tnslttuttonal care, and poor infocmalion Bow between
providen as major factors for the escalating cost of health
(See Costa on page 181
Where it's spent
Costs
Percent ofhealth system costs
in Rhode Island during 1990
IContinuad Irom paga »V
cart in Rhode Island.
Because Ihe doctor does noi want to risk
a lawsuit, the lack of adequate medical
information on a patient forces the doctor to
call for tests Ihat have been done before.
"Doctors are concemed that ihey may
be second-guessed someday by a lawyer
who will ask Ihem in court, "Why didn'l
you do this?" " said Dr. Tom Wachlel,
physician-in-charge of Rhode Island
Hospital's geriatric division. "There is a
tendency to do more than what is called for
by simple medical judgement"
Wachlel added that doctors who are
asked by colleagues to.consul! on a patient
may feel obligated to suggest "something
else lo do, nlher than just say, 'You've
done everything. I have nothing to ofTer.'
Most doctors can always think of some
stone ihat has no! been overturned."
Part of Ihe Aging 2000 study involved
observing firsthand Ihe minute-by-minute
tasks performed by nurses, aides, technicians and other workera at various institutions.
The report found Ihat less than 50 percent of nursing time in an average medical
unit actually involved hands-on care for
patients. The m Jjority of Ihe lime was spent
communicating with colleagues, updating
medical charts and fiU'mgout as many as IS
differenl forms on any given day.
Edward J. Caron, who headed the Aging
2000 cost analysis, said there was a form at
one hospital that was used only to verify
that t whole series of other forms had been
filled oul.
(Continued on next page)
Sleven D. Baron, presidcnl of Miriim Hospilal,sees the
battle against bureaucracy and rtgnblory papcrarorit every
day. Much of (hose cosls, he said, arc because each govesnmenlI fprogram and each third-parly hcallh-can insurer has
iwn unique set of verification and teaafcunetnent
its own
crileria.
Million*
of d o l l a r a
Physlclana
Dentists
654
Farcant
of c o s t s .
26
131
6
145
Insurars & HMOs
99
Non-physlctan practltlonara
49
Privata and public ambulanca c o m p a n l a *
24
Community haalth cantors
13
Medicaid admlnlatration
12
m
SelMnsurad firms
•.•r.?.vj*-.-
Hosplca c a r *
3
i
(?.L'ii"-^:S-I:i7V.wri-?i'i;"
Total
* i.»JS than 1 parcant
Sourca: Aging 2000
$2529
100
�(Continued Irom previous page)
"We don't w i n ! to jump to Ihe conclusion that because 50 percent of what (nurses)
are doing is fom-fllling activity that all of
it should be thrown away," Caron said. " I d
just a matter ofwhat part relates to practicing
defensive medicine and what part is quality
control."
Karen Beauchesne, vice president for
patient csre and chief of nursing at Roger
Williams Hospiul, said (here is increased
demand for documentation because patients
who stay in hospitals today are sicker than
hospitalized patients were in the past The
healthier patients now are treated on an
outpatient basis or at home.
The sicker the patiem, the more paperwork required, and Ihe patient's "chart becomes (he main communication loot"
among (he care given. Beauchesne snid
Roger Williams has been working (o
streamline its paperwork by using checklists
on patients'charlsand noting only patients'
problems.
While the Aging 2000 report concedes
that paperwork is essential to proper patient
care and accurate third-party payments lo
providen, it concludes that the flow of
information is "excessively complex or
disjointed."
Ira Magaziner, president of S J S , which
researched and helped write Aging 2000,
said Ihe "huge, fat books of handwritten
stttfTthat get passed around lo people as (he
main medical record" stifles efficient
communication among care given.
"If you don't have the information in the
right place in a factory, you might get 20
minutes ofbad production,"said Magaziner.
"Here, if you don't have the right information in place, people may die. Yet, the
information systems in Ihis industry are
antiquated."
Caron said health-care officials now
must work to streamline the paperwork
process by determining what share of information nurses give (o colleagues is repetitive. Eliminating some ofthe paperwork
will depend on how much "wiggle room"
state and federal agencies that certify healthcare facilities give providen to omit some
procedures, he added.
South County Hospital was one ofthe
sites chosen for the lime and cost surveys.
Elizabeth Edelman, South County's vice
Hospitals' costs
Pare ant
ot budget
KBSHJffrSilTTTW
Admlnlatration
ntHfl'MHMIfiifi
Opvratlng room
tBjnar gaHB^rtitWn
Intanalva c a r *
Tatting
6
Tharaplaa
J
mirWaJTrtW^ssrBwrorawM
Rasaarch grants
Sonrr Ac**
6
Baron: 'It '$ hard (or anyone to Imiglno
tht complixftY that hat grown.'
president o f nursing, said there are instances
where paperwork could be reduced, but she
did not say there is too much of it
"If you're involved in a negligence suit,
there's never loo much paperwork,"
Edelman added, "and if you're looking at
the quality of care, (here's never too much
paperwork."
South County sends its patients home
with a list of do's and don'Is lo speed their
recovery. "I would consider (hat essential
paperwork to make sure the patient knows
what is going on," Edelman said.
Caron said Aging 2000 observe™ saw a
"tremendous sense of dedication" among
the nurses where the titne surveys were
taken, "ll just floored us, throughout Ihis
process," he added, "to see (he frustration
level of people who really do care about
their patients but sometimes felt they had
one hand tied behind their back because
they were following a rigid set of procedures
(hat look away from their ability to give
proper care."
Roger Williams' Beauchesne agreed,
adding that paperwork "is probably the area
of least job satisfaction for the nurses. They
would prefer to be st the patient's bedside
in 99 percent of the cases, as opposed to
doing their documentation."
Miriam's Baron said il is likely that a
hospital's administrative expenses wilt be
greater than those of other businesses, but
health-care cosls "are much higher than
Ihey need lo be. That is money we're wasting
that could be used to provide even better
care—or not spending it at all—depending
on society's decision on that."
Baron said the Aging 2000 recommendation for a "smart card" that would carry a
patient's medical history and eliminate repetitive tests will help reduce health-care
costs.
"Nobody should be blamed for all these
wrongs, nor should anybody take credit for
finding a solution," Baron said. "We have
to work together to achieve higher value for
the dollar we spend on health care."
If improvements lo Rhode Island's
health-care system shaved 10 percent off
expenses, it would mean $250 million in
savings. "Ifpropcrly done," Magaziner said,
"you could create greater consumer satisfaction, better quality and lower cosls by
reallocating resources toward better home
care."
Q
�Ethics set the foundation for good health care
stales, "many c w u u i i m s and cart givers
are left with uneasy f c t l i n p about the values which underlie Ihe way our health-care
system actually operates."
The committee starts by rejecting Ihe
notion that rationing ought to be considered.
It laid Ihat everyone is entitled lo adequate
health care, "regardless of age. race, religion,
ethnic background, degreeo'frailty or level
o f income." .
By F r a n k F o r t i n
PBN editor
Committee memben o f A g i n g 2000
h i v e strongly rejected suggestions ( h i t
health care should be rationed, saying Ihat
the savings realized by eliminating wasleful bureaucracy should make rationing
henllh care unnecessary.
The conimitlec also afTirmed the right
o f elderly palicnls and llieir families lo
ilctcniiinc whni licallhcarelhcy will receive,
ami snid thai a hnnd o f t n u l must he e v
lahlished again between patient and physician.
C o m m i l l e e members portrayed the
report's section on medical ethics as a
rccommendalion lo "redirect the healthcare system back lo the values that remain
at its core."
The c o m m i t l e e ' i finil o f five reeoromcmlalinrw covered medical elhica. It w u
a deliberate choice, because the report's
authors believe that a common ethical
ground underpins everything else that the
report discuxses—cost, quallly and access.
" I I was a very important consensusbuilding piece," according lo gerontologist
Dr. M a n h a Fretwell, a commitlet member.
The commillee found lhal Ihe currenl
American health-care system is " i n a stale
o f ethical l u r m o i l . " A l l seclors o f the system are mired in a quagmire o f ethical
problems. Virtually all participants in the
health-care system feel Ihe strain.
Doctors try to provide people o f all
ages, genders, races, incomes and health
condilions with equal access to health care,
but they cannot.
Hospitals grapple with access questions, loo, while striving to keep their fiscal
house o f cards from collapsing.
I n s o r e n frequently decide who gets
what kind o f treatment. The decisions are
based on matten such as cost, a ireatmenl't
promise o f success and Ihe financial wellbeing ofthe community at large. Frequently,
an insurer's decisions put it al odds with
hcallh-care providers and families.
Individuals—as well as their family
members—have become more responsible
than ever for mnking hcallh-care decisions.
Dul they also find themselves confronled
by difTicult decisions they never have had
lo make be fore. Also, changes in Ihe patient-
Aging 2000
Ethics
Fimtly mtmbtt
support tyalwn.
play « phrotal tola In taring
Via report aald.
doctor relatiorahip have made i l a litigious
retaltonship which not only spawns expensive lawauili hut also promotes unnecessary testing and • wasteful paper trail.
N u r s i n g homes frequently are forced
lo choose between a patient's autonomy
and his or her well-being.
,
Courts aometimes become the arbiter
lor ona anoihtr
and naad a Strang
o f ethical disputes which cannot be reaolved. A t (he conclusion i f such a legal
process, one party can become bitterly disappointed at the outcome.
According to the Aging 2000 commillee, the problem underlying each n f these
c o n f l k u i i the absence o f clear, guiding
ethical principles. " A s a result," Ihe report
'People looking for clear
ethical principles—ones
that will resolve the
impasses—will not find
them easily.'
It added, "Even i f one allows for an
ethical argument that would deny certain
treatment because o f its c a u m i v t c o n to
society, Ihis argument is only worthy o f
consideration after all other avenues have
been exhausted." The comrmtlcc said its
findings on the wastefulness o f the bealthcare bureaucracy ought to provide enough
money lo make rationing unnecessary.
W i l l i a m Nisi, executive director o f t h e
Interfaith Health Care Ministries, b extremely eomfortable with thai conclusion.
Nisi said those who discussed the rationing
option "tended to back into it as a necessity."
Nisi continued, " B u t that doesn't need
to be ihe case, l l ' i far better lo have a healthcare system that people can me for what
Ihey need and w a n t "
The committee also recommended ihat
Ihe health-care system be placed " i n the
hands o f c o n s u m e n . " This means that
consumers must be given enough information about the process o f aging, about
the services available l o thern and Ihe
remificationa o f their deciaions.
The committee wrote,"Doctors, nuncs,
social workers and other providen must
(See Ethics on paga 141
Haalth p r o f a t a l o n a l t analyza aamplat In tha l a b o r a t o r y .
Ethics
IContinuad from paga 121
take the lime l o answer questions and respond to concerns expressed by clients and
their families." The report acknowledged
that some elderly become too i l l , demented
or con fused to make decision for themselves.
In Ihat case, hcallh-care providers "must
turn lo the family."
The A g i n g 2000 committee concluded
that another barrier to ethical health-care
decisions has been the disintegration o f t h e
relationship between physician and patient.
In an earlier time, the physician and Ihe
palient had a much closer bond, "much like
Ihe bond between clergy and parishioner."
This fostered a paternalistic relalionship
between doctor and patient, in which Ihe
doctor's advice was rarely questioned.
That is rarely Ihe case today. The Aging
2000 comminee said Ihe doctor and patient
have become increasingly estranged in
today's system because o f lechnolngical
advances, regulation and the trend o f physkian specialization. In this impersonal
envirnnment
I n n ! h a i evannraled-
thus
lawsuits and a slew o f expensive, unnecessary tests.
T o correct (his. Ihe commillee said,
physicians must have more facc-tn-facc
conlnct with their patients, which'makes h
easier to build trust.
The committee recommended Ihe establishment o f a community-based ethics
committee which could be consulled on
questions o f ethics. T h e committee would
fiinctkm not as judge or a jury lo secondguess providen but as an advisory board to
promote bener understanding and wiser
decisions," the report staled.
The report also said Ihat the Aging 2000
models for elder care w i l l eslablish iniemal
grievance and review processes lo resolve
problems before they get lo the court system.
The committee's final recommemhlion
on ethics—and one o f its most important—
was to strongly support the role o f the
family in care giving.
T h e first and most important social
unit is the family," Ihe report staled " A s
memben o f families, wc leam societal obligations. We are taken care o f when we are
young, and w c , in turn, lake care of our
parents when they grow o l d . " The commillee said home-based health care, adult day
r~mn> trwl n f h * *
i r w w , »,IMWM r a n h » l n
�Health-care rules choke creativity, inflate costs
By L a d l e B r o b e r g
Stall writer
Rhode Island's heallh-care industry
could save money with better management
strategies, henllh enre workers who are
liberated from age-old policies and procedures Ihat squelch creative juices. And
freedom from some restraints could bolster
Ihe quality of health care delivered lo Ihe
elderly.
^2000
Costs
regulations and reporting requirements.
Magaziner said Ihe waivers are likely,
since the federal Health Care Financing
Administration (HCFA) "is looking for answers and is open lo experimentation."
Tlie report is by no means a directive for
Ihe industry. Bui il does provide loose
guidelines for change. Following the theories developed by T Q M pioneer W. Edwards Deming and others in the 1940s and
1950s, the report suggests lhal nurses should
have more responsibility and that doctors
should make better use of nurses' expertise.
Now, doctors are in the front, and a nurse's
knowledge about the palient is hardly used
al all.
The report also slressea teamwork and
(See Quality on page 201
SlMra Houta 'a Lois Guortln: "Quaflfy /a ovoryona'a
rmtpontlbllltf.'
The quality care
system suffers
from rigid rules
and regulations
that
Quality
IContinuad from page 17)
narrowly
define jobs and
procedures.'
These are some of Ihe findings of Ihe
long-awailed Aging 2000 report prepared
by Ira Magaziner and SJS Inc.. his consulting company.
"For every possible problem, there has
been a rule or regulation created. . . . The
burden of regulation is so great, it inhibits
people from being creative," said Christine
Heenan, an SJS associate.
Collectively, the stale's health-care system funnels about SI.3 billion into administration and indirect-care tasks, such as
finding a patient 'J file. Thai is 53 percent of
all health care costs in the stale. The percentage is higher than ihe administrative
costs in other industries and countries, the
report said.
The report suggests (hat the state could
reduce these cosls by 10 percent and turn
the savings (about S250 million) back into
the system for better home care, greater
continuity o f care and preventative care.
To increase savings and quality care,
one report recommendation held that hospitals and other health-care facilities could
adopt high-powered management techniques that stress collaboration and continuous improvement.
The techniques don't differ from those
usedby manufacturers and other businesses.
Oflen referred to as Total Quality Management (TOM), the techniques stress ihe
empowerment ofthe front-line worker. In
industry, this is often the production-line
worker. In healthcare, il often means nurses.
The concept isn "l ent irely new to health
care. The llnspital Aasrrciation o f Rhode
Island has offered Ihe idea lo its member
hospitals, and some o f Ihem have used It.
Magaziner and his associates hope to
involve hospitals and other heallh-care facilities in special model programs lhal use
these techniques. He said thai Aging 2000
units could be opened in participating facilities. Bui lo reduce administrative and
indirect care-giving tasks—a tenet crucial
lo Ihe Aging 2000 philosophy—the models
would need waivers from federal, state and
private insurers. The waivers would excmol Asinc 2000 oroerams from some
the reduction of paperwork. "They should
all sit down and say, 'How can we do
Ihis belter, or more efficiently,'" Heenan
uid.
Some facilities have started moving in
this direction. For three years, Miriam Hospital has been using an extensive casemanagement program for most of its highrisk patients, usually people with serious
heart conditions. Nurses, trained as case
managers, oversee the patients' care until
they leave the hospital. The managers lend
to follow diagnostic-related group (ORG)
formulas developed by the federal government for Medicare and Medicaid programs.
DRGs focus on specific treatments for specific illnesses so thai patients generally
leave the hospital sooner.
Focus expanded
"Before we used to just focus on Ihe
process, but now we focus on Ihe process
andtheoulcome'saidJeanelleSMatrone.
vice president for nursing at Miriam.
Case managers often try to improve the
quality o f care that their patients receive,
another feature of T Q M . Recently, some
case managers were able to get surgeons to
agree that cardiac patients didn't need to
wear special circulation stockings because
they bunch up and inhibit circulation. This
change not only made patients more comfortable, i l also helped the hospital save
some money.
To improve information flow, another
systemic problem, the hospital began a reporting program for parients called the "Silent Report." The report is broken down so
that each shift nurse can jot down strange or
unusual happenings. It ia passed on to the
next shift of nurses.so Ihat they know the
situation instantly. Before, one shift would
have to gel informal updates astliepieviuus
shift was leaving. That task often was very
time-consuming, Matrone said.
Program launched
Steere House-Home for (he Aged, now
on Rhode Island Hospital's eampus,
launched a special quality-assurance program in response to the Omnibus Reconciliation Act of 1987, which required nursing-home facilities to have these programs
in place. Steere House's program bonowed
a lot from Deming, said Lois S. Guertin,
quality assurance and admissions .coordinator. "Quality ia everyone's responsibility," she taid.
Guertin frequently surveys employees,
doctors and fsmilies about currenl policies
or ways to make things operate more
smoothly. Guertin also visits prospective
patients and makes sure that (heir files
come with Ihem. " I will often retrieve the
paperwork myself. The hospitals are often
good sbout giving Xeroxed copies, but
sometimes we get more information than
Ihe hospitals," she said.
Current management programs may help
reduce costs and increase quality, but industry officials think future waivers coukl
spark significant changes in the system.
By spring, there should be enough ideas
and models developed so that Aging 2000's
technical assistance board can request a
blanket waiver from HCFA and private
insuren lo cover all of the participating
programs, Heenan u i d
Sleven D. Baron, presidenl o f Miriam
Hospiul, hopes the waivers will be expansive enough to Ihat existing case-management strategies at the hospiul can be applied to other divisions. •
Q
�Poor (information) circulation ails health care
By M a r k M l c h a l l
Managing adltor
"Doea anyone know anythrnj about our
myflety (uesl in Iht emergency roomT"
The question wis uttertij by • hospiial
unit secretary and documenledinlhe Aging
2000 repon to illustrate how poorly Hiformation flows Ihrougb Ihe heallh-care system and how critical n is that improvtmenls
he made.
A
in
g g2000
'Smart cards'
bedside charts, which are updated on a
regular basis several timea daily. However,
critical actions lhal occur during one's hospital stay would be ledwded on the card.
Inrormalion that a penon wanta to keep
confidential—such as a history of alcoholism or other drug abuse—could either be
sinred in a separate file on Ihe card lhal
needs a special access code or left ofT Ihe
card
Like most of the Aging 2000 recommendaiions. this one is dependent upon
private sector initiative and an industrywide consensus so that a compaliblc ryslem
can he ilevetnped and initiated. Sn far. nine
Cross A lllue Shield of Rho.k Island hai
eipressed Ihe most inlerest locally in the
smart card.
How 3, John Gorman, i
presidenl of research and developfnent for
Ihe Blues, said. "Smart ends are not Ihe beall and end-all "
Gorman, one of 160 comminee members who worked on (he Aging 2000 report,
noted lhal Dluc Cross wants lo improve the
flow of information and smart cards maybe
the latest technology lo do this, but there
may be other ways. loo.
He u i d thai some of those other ways
would include storing ihe mfonnation in a
centralned data bank rather than directly
on Ihe card or storingjust basic informalion
nn Ihe card, such as where and when a
nspilalizcd. I le explained lhal
then, if someone wanted lo know more
See Cards on page 211
Gorman; "Smart tarda an not lha b«-off
andand+a.
m
'Information
sometimes flows
smoothly, sometimes
stalls and sometimes
doesn't occur at all.'
One way Aging 2000 propces to improve Ihe (low of informalion is to create a
statewide patient informalion system. Aging 2000 memheni note lhal other imlusliiei have used ihe lalesl technological advances lo improve informalion flow, but
the health-care industry—where informalinn is often crilical—has been behind Ihe
limes and still collects information ihe same
way it did 30 yean ago.
The two-year study found lhal eommunkalion problems smong dilTerenl heallhcare providers, and between palient and
health care workers, were a major cause of
low-quality health cart and high costs.
For esample. Ihe report noted that docIon oflen have to treat patients in the
emergency room wilhoul knowing anything about Ihem. This, the report contends,
has led to the duplication of costly lesls. In
extreme cases, it has caused elderly patients lo undergo exploratory surgery for
diagnostic purposes simply because doctors
had no acce*s lo Iheir medical history.
The Aging 2000 study states. "Agencies and institutions must rely on oncanot her
to send information along with patients as
they travel through Ihe system. When Ihe
information doesn't come, it's s source of
frustration and resentmenL Hospital emergency room workers lament that patients
sometimes come from mining homes wiih
no medical history. Nuning homes report
thai hospitals don'l always tell the full slory
shout patients' conditions, oul of fear Ihat
they'll be dirTicult to place."
The report conltnucs,"lnextremecasea.
nursing homes send patients back to the
hospital i f paperwork is missing or filled
out incorrectly. The fragmented (low of
information limits Ihe efTecliveness of Ihe
community provider, of the nursing home,
of the hospital, and somelimes places the
elderly palient at risk."
Smart cards cy*d
An Aging 2000 task force commillee is
expected lo look into possible solutions,
paying particular anenlion to smart cards:
small plastic cards embossed wiih electronic devices lhal slort information.
A penon's medical history, including
prescribed medications, living circumstances snd emergency conlacll would be
stored on the card which is no larger than an
average-sized credit csrd.
The caids would not replsce hospiul
Cards
IContinuad from paga tSI
details about ihat hospitaltalion. Ihey would
access the hospiial's data bank.
Gorman said he expects an Aging 2000
tank force lo be established nest month lo
eiplrrrt these options. He said Dluc Crats
A [Hue Shield wsms the syticm thai ia
chosen lo he cnmpaliblc wiih Ihe insurance
company's Provide! Network System
(PNSUacompulerirtdnetwork ihat allows
hcallh-care providen to file claims with the
niuei elcclmnicxlly, withnil paperwork.
"Of OK realm uf Icthnolttgy lhal is nut
there, the question would become. 'What is
ihe best way of doing ihis. and whose
technology should we use?'" Gorman said,
lie added lhal Dluc C m s A Dhie Shield
and other health-can providen have made
substantial investments m (he PHS system
already.
'It ends up being a time
bomb that you're
carrying around.'
Linda Newton, vice president of Ihe
flluea' PNS snd claims Krvicea, estimated
Ihat (he company has inveated about SI
million for each year of the five-year-old
system. She said the company has sold
hardware and aoftwirt pocksgta lo heallhcare providen ranging from S2200 to
St 1.000, depending on ihe type o f system.
Some other industry officials are skeptical lhal smart cards will catch on in Ihe
very near future.
T h e smart card is very futuristic," said
Blair R. Sullentrop, president of Ocean
Slate Physicians Health Plan. "It requires
all providen to have common technological capability lo both read and input data..
.. M a t physicians in this stale don't even
have compuien to help wiih Iheir bask
business fund tom, let alone participate m
smart-card development.™
Blue Cross A Blue Shield of Maryland
anempted lo develop a smart-card system
bill pi« those plans on hold because neither
insuren nor piovideis could afford to pay
the price of installing Ihe necessary equipmenl. said Daniel T. McCrone. presidenl of
Lifecard International, a subsidiary of Ihe
Blues nf Maryland that holds s patent on a
smart-card system.
McCrone said he believes lhal eventually Ihe smart-card ryslem his company
helped develop will be uaed. but il will
require other sources offunding. "Our most
reasonable expectation would be to get
venture capitalists involved ll wilt lake
cither private industry or a big national
push to get Ihis ofT the ground."
Two conipaniu thai are hoping to spur
the use of smart cards (hroughoul society
art ATAT and the Nippondenso Co. of
Japan. The two signed an tgreement last
August lo work together lo develop uses for
the carda specifically lo store a person's
medical records or the repair history of an
aulomobile. ATAT makes ihe cards and
Nippondenso makes (he equipment that
reads them.
Privacy Issue
One way lo recoup the costs of developing a smart-card system is to rent out
space in Ihe cards to other companies or
government agcndei. However, this is one
* A.
PuMshar ffotwrt Smith h contamad that
smart cards could batoma raqulrad
y n i n r a a l MsntMcafton i
of the pitfalls of smart cards, according lo
Robert Ellis Smith, publisher ofthe Privacy
Journal, a Providence-based newsletter on
privacy issues.
Smith cxpttined that these cards are
capable of storing massive quantitiea of
varied information on an individual from
numerous soorces. He said the danger in
Ihis b thai they can become universal identification cards which individuals would be
•cqoirtd lo have if they warn to gel anything
acoompliahed.
Smith said another coinein about smart
cards is Ihat Ihey may be machine readable
but Ihey are not readable lo the patient lie
a i d lhal if (mart cards art used, it is important that hard copiea of Ihe Informalion
stored on them art piuvkltd to people
regular basis or that machines that can the o r d i are made available to pari?
Otherwise, people won't know what r
them, he said. He added, " l l ends ap K
a lime bomb dial you're carrymg aaoir
According to Smith, smart card*
used by wel fare departments in a (rw r
and the US Food Siamp propam u
perimenting with them.
Although smart cards bringa nanh.
kgal issues mvolvrngconfidentiaiity r
surface, the current system is bdievc
many in Ihe health-care industry lo be r
of a threat lo privacy.
There Hssn I IWXB i c m f w t c r t v
created yet that someone hasn't been ae
crack," noted Gorman. However, he
Ihe "way paper floats • round now" n •
less confidenlial.
This i t in agreement with Ike A
2000 report which found. "Typical
hospitals and clinics, medical u u a d
caned to and from file rooms, and any
member can request any dmrt. H b
unknown for hospital empbyoes to •
vital information about an i
condition before the palient <
This is no) the f m time a c
patient rafonnetioo system has bees
posed or attempted m Rhode bland
hi I9S7, the Southern New En
Prnnary Prevention Centcs ii|a at d at
ler Hospital The $2-5 million CXMCJ
the fint ofaeverel facilities piarard fr
US ll wax developed by the
rtnuaiitd P u e w lasrirute ia Francr
based on Ike concept of prevent!
medicine. Patients were given a ^ n g h
physicsT and had that infomwtion. •
with heredity and lifcalyk facton, iter
forcon^ajtu analysis. aLuadinQtoGrr
lie added lhal the center failed becar
Itsls wtrt loo costly. T V center event
waa petitioned into iteri nikap
(
�Training, support needed
By Frank Fortin
PBN editor
The Aging 2000 recommendations on
training and education may appear to be
minor compared to the other recommendations. But they are tied closely to the
report's assumptions on ethics and other
care-giving problems.
The report said, "The more informed
and educated we are, the better prepared we
will be both as individuals and as a society
to confront the aging process with grace
and wisdom."
But the committee found that education
and training about the elderly are sorely
lacking at almost every level. Even the
elderly frequently don't really know how
their own bodies function or where to get
such information when they need it.
The fundamental problem is that the
health-care system is designed to treat acute
illnesses, not the chronic conditions that
afflict many senior citizens. This "medical
moder focuses on diagnosis and treatment,
the committee said, and gives short shrift to
such things as quality of HfCvfunctipning in
old age and empowerment—the issues
which affect the elderly the most.
2000
Training
One reason for this is that more and
more doctors specialize, and fewer work in
primary medical care. Why? Most financial
incentives lead debt-strapped medical
school graduates toward medical specialties and away from the general practice of
medicine. The same is true for nurses and
other care givers for the elderly.
Even physicians who practice primary
care apparently are reluctant to take on
more elderly patients, because Medicare
reimburses office visits at only $27 per
elderly patient
The committee also said that thefieldof
geriatrics is not an importantfieldin medical
schools, because oflimited medical-school
faculty to teach geriatrics and gerontology,
poorly defined research, a negative image
and limited economic returns." Moreover,
only 40 percent of medical residencies offer geriatric rotations, "and few residents
choose them."
Echoing many of itsfindingsin the field
of ethics, the committee said family care
givers should be given more aid to carry out
their role in the system. The report said
family members usually operate in a vacuum
without training and assistance—physical
and emotional. "While some initiatives exist
to provide education to family care givers,
these efforts are not widespread, said the
report.
As a solution, the Aging 2000 committee recommended the establishment of a
training and resource center that would
provide formal and informal training in
elder care.
More formal training could be offered
by colleges and universities, and the training center could offer short, individual
courses to doctors, nursing-home workers,
social workers, community groups, emergency medical technicians and family care
givers.
Informal training would be provided
through a 24-hour information center for
the elderly and their families. For example,
the report found that elderly health-care
consumers are more likely than the young
to have adverse drug reactions but are less
likely to ask questions about their medication. A University of Rhode Island study
found that 5.5 percent of senior citizens
surveyed took their medication improperly
and that 19 percent didn't know what their
medication was intended to accomplish. Q
�^2000
A Project of Interfaith Health Care Ministries, Inc.
THE PROVIDENCE JOURNAL; December 10,1991
Aging 2000 receives
$500,000 grant for
health-care reforms
By GINA MACRIS
Joumal-BuUetin Staff Writer
PROVIDENCE — Aging 2000
has won a $500,000 grant from
the John A. Hartford Foundation
of New York City to provide technical assistance to health care providers interested in helping reform services to the elderly.
In a 435-page report unveiled
last week. Aging 2000 presented
three distinct proposals for organizing services for the elderly —
all of them intended to reduce administrative costs that now eat up
about half the health care dollar in
Rhode Island.
The Hartford Foundation, endowed in 1929 by one of the principals in the Great Atlantic and
Pacific Tea Company, now specializes in improving the quality
and financing of health care, with
particular attention to the needs
of the elderly.
Nuala Pell, a trustee of the
foundation, was "very helpful" in
obtaining the grant, according to
Chip Young, a spokesman for the
project. Mrs. Pell, the wife of Sen.
Claiborne Pell, also has been an
active member of Aging 2000, an
extensive network of private citizens that worked two years to develop the proposals.
The Rev. WilUam F. Nisi, executive director of the Interfaith
Health Care Ministries, sponsor of
Aging 2000, said he hopes the project will be able to garner another
$500,000 from private foundations to complete financing for the
two-year planning period.
"If other grant moneys are not
available, we will continue with
what moneys we have," Nisi said.
The grant will not directly fi-
nance any particular initiative of
Aging 2000. The project will encourage existing providers —
health insurers, hospitals and other agencies — to sponsor facets of
the overall plan.
"All who want to participate
are invited," Nisi said. "This
group is very inclusive about trying to work with everyone and
help everyone that they can."
He said Aging 2000 would employ a "core group of professionals" to provide information to prospective sponsors of Aging 2000
projects.
Among other things, those professionals would assist in obtaining permission to bypass federal
health care regulations to streamline bureaucratic expenses.
Aging 2000, dedicated to preserving the health and independence of the elderly for as long as
possible, recommends these approaches to services:
• An advocate to guide a patient through the various health
care options, reinforcing but not
supplanting the role of the family.
• An agency similar to a health
maintenance organization that
would provide all services.
• A network of preventive services focused on maintaining the
elderly in their homes, using senior centers as hubs.
Aging 2000 would improve
communication among health
care providers by introducing socalled "smart cards" that contain
medical records on computerized
microchips embedded in plastic.
The research phase of Aging
2000 was financed largely by SJS
Inc., a corporate strategy consulting firm headed by Ira Magaziner.
�^2000
A Project of Interfaith Health Care Ministries, Inc.
PROVIDENCE BUSINESS NEWS; December 16,1991
Aging 2000 project receives
$500,000 from N.Y. charity
News Staff Report
A New York charity has jump-started
the Aging 2000 program with a $500,000
donation to the Interfaith Health Care Ministries.
The two-year grant from the John A.
Hartford Foundation will help the Interfaith Health Care Ministries provide technical support to the insuren, hospitals and
other health-care providen that want to
implement the report's recommendations.
It will not fund Aging 2000 activities directly, however.
The Aging 2000 report studied the
Rhode Island health-care system for two
years and found that virtually everyone in
the system was unhappy with how health
care is delivered. The report detennined
that many of the system's problems can be
traced to an overwhelming bureaucracy
which consumes more than halfofall money
spent for health care.
The studyrecommendedthe establishment of three separate health-care systems
tlcsipictl In cut thrmigh the pnperwork nnd
hiiieauiniiy, IIIMI provide hcultli-tiirc services better and more cheaply.
The study was sponsored by the Interfaith Health Care Ministries and conducted
by SJS Inc., a consulting firm founded and
directed by Ira Magaziner. A committee of
160 people who work in most areas ofthe
health-care system advised the Aging 200
staff and closely monitored the drafting of
the report.
The Hartford Foundation wis established 62 years ago by two former executives of the Great Atlantic and Pacific Tea
Co. It concentrates onfinancingbiomedicalresearchprojects. One of its board members is Nuala Pell, the wife of US Sen.
Claiborne Pell, who was also a member of
the Aging 2000 advisory committee.
According to Magaziner, Aging 2000
needs one more grant to be operational for
the next two years. The Interfaith Health
Care Ministries is working with two other
foundations, and Magaziner said he hopes
to get a positive answer from at least one of
those foundations within a few months. Q
TTie Aging 2000 report focused on treating the elderly, since they account tor more
than half of the state's hospital days.
�2/TERM2
AGING & 2000
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THE PROVIDENCE JOURNAL
Monday March 1, 1993
PAGE:
C-01
SECTION: NEWS
EDITION: ALL
LENGTH: 2455
MEMO: same story ran i n a l l editions, excluding massachusetts. Each edition
ran i t s own regional health p r o f i l e , which i s attached to the story.
HEALTH
*Aging*2 000 s*grass-roots revolution
•People from a l l corners of the health-care web are coming together with a
common goal: To reform the system that cares for the elderly.
By FELICE J . FREYER
Journal-Bulletin Medical Writer
The year i s 1994. You are an elderly person l i v i n g i n , l e t ' s say,
Charlestown, and you get word of an o u t f i t offering a new approach to health
care for the aged.
I t ' s called*Aging*2000*of Washington County. You decide to j o i n . Within a
few days an*Aging*2000*representative comes to your home to assess your
health, asking you such questions as whether your a r t h r i t i s prevents you from
going outside, what medications you take and whether you have transportation
to the doctor's o f f i c e .
Then you v i s i t a doctor associated with*Aging*2000.*This person w i l l
examine you and a team w i l l be assembled to guide your medical care. I t s most
important team member w i l l be you, and other members w i l l include your doctor,
a social worker, a n u t r i t i o n i s t and other relevant s p e c i a l i s t s such asphysical
therapist, pharmacist and home health nurse.
I f you're healthy, the team may recommend that you j o i n an exercise
program to help you stay that way. You respond that you're not the treadmilltrotting type. But they hand you a guidebook l i s t i n g such a c t i v i t i e s as
dance classes and walking clubs, and you s t a r t to warm to the idea.
I f you're sick, the team w i l l work to ensure that you're receiving the
treatment that works best for you. Instead of j u s t shuffling from s p e c i a l i s t
to s p e c i a l i s t , grabbing a prescription from each, you'll have one group
looking at the big picture. The pharmacist, for example, w i l l check to see
that you're not taking drugs that c o n f l i c t or interact.
I f you're f r a i l and need intensive care, the home health nurse on your
team w i l l arrange to get you medical treatment at home, delaying as long as
possible your admission to a nursing home.
A dream?
Yes, but not an impossible one. I t i s , i n fact, the very proposal
1
�2/TERM2
AGING & 2000
PAGE
2
sketched out by the Washington County Consortium of*Aging*2000.*The consortium
i s one of 11 such groups around the state laboring - i n meeting a f t e r meeting,
conference a f t e r conference - to piece together a revolution.
*Aging*2 000*started three years ago as a study group founded by I r a
Magaziner, the Rhode Island businessman who i s now manager of f i r s t lady
H i l l a r y Rodham Clinton's task force on health care reform. The group of about
150 spent two years examining a l l aspects of health care for e l d e r l y people
- and found a tangled web of services i n which more i s spent on administration
than on care.
After announcing i t s findings i n December 1991,*Aging*2000,*which i s
sponsored by the I n t e r f a i t h Health Care Ministries, set about investigating
ways to change the system.
The project i s committed to remaining a "grass-roots" e f f o r t with a l l
ideas emanating from "the bottom up." That has been i t s v i r t u e and i t s curse:
With so many people involved, the process has been slow, somewhat muddled, and
seemingly as bureaucratic as the system i t seeks to reform.
*Aging*2000*splintered into 11 regional groups called "consortia," some of
which also splintered into subgroups. The groups are composed mostly of people
who work with the elderly - home health nurses, administrators of senior
centers, elderly housing projects and hospitals, doctors and others. There are
a few "consumers" - those who use the health care system but have no other
links to i t .
"When I think about the task, every once i n a while I'm l i k e , 'Whoa, what
i s t h i s ? Who do we think we are doing t h i s ? This i s way too much,' " said
Kathy Gremel of the V i s i t i n g Nurse Service of Washington County and Jamestown,
and chief of the Washington County Consortium. "At the same time I have
tremendous f a i t h i n people. What I see i s that we have a group of people who
want to make i t better. We're not sure how i t ' s a l l going to work yet, but
we're w i l l i n g to do i t one step at a time."
Most of the groups have been meeting weekly or biweekly since l a s t
summer, but each i s at a different stage of development. The Washington County
Consortium i s among the most advanced, yet i t has only l a i d down "the border
pieces of the puzzle," Gremel said. For instance, Washington County s t i l l
hasn't s e t t l e d on the answer to the most c r i t i c a l question of a l l - how the
system would be financed.
"We have to go through a process that requires a l o t of t a l k , a l o t of
compromise and a l o t of research," said Donald Miller, head of the East Bay
Consortium. "People i n Woonsocket think differently than people i n Westerly.
Rhode Island i s a very small state, but we probably have a dynamic here that
i s very much l i k e the country.
"The more people you involve i n the process the more of a chance that
i t ' s going to work."
*Aging*2000,*financed by foundation grants, has two full-time and three
part-time s t a f f members. But they are intended to guide rather than lead.
Their next step w i l l to be apply for a federal waiver enabling*Aging*2000*to
pool Medicaid and Medicare money to finance a new model of health care.
Possibly the plans emerging from each consortium w i l l be blended into one, two
or three projects to be implemented statewide.
But someone needs to p u l l i t a l l together, says Joseph Lubiner, vice
president of Miriam Hospital and head of the East Side*Aging*2000*Consortium.
"Some leaders are going to have to emerge. I f that doesn't happen, that's a
real problem," he said.
Magaziner's new job i n Washington has energized the participants, who
envision*Aging*2000*being chosen as a demonstration project for health care
reform.
But regardless of the outcome, a l l the consortium leaders said the
�2/TERM2
AGING & 2000
PAGE
3
process i t s e l f has been invaluable because i t has linked people from the far
corners of the health-care web.
"They're finding that they have the same problems i n common, the same
interests i n common and the same solutions i n common," said Louis Pugliese,
director of the St. Joseph Living Center i n Providence. " I t ' s r e a l l y
unifying. . . . A l l the competitors are coming together and they're talking to
each other."
"We've got a group of people from different d i s c i p l i n e s coming together
and talking about a common issue, and seeing how they could work together and
seeing each other's persepctive," said Susette Rabinowitz, director of the
Cranston Senior Center. " I learned a great deal about physicians, about their
concerns."
" I t doesn't r e a l l y matter whether*Aging*2000*works or not," said Gremel.
" I t has given us a forum for the people down here to t a l k . . . . No matter
what's going to happen i n the health care system, we're going to have a group
of people here trying to adapt to i t . "
*
*
*
PROVIDENCE
Providence, with i t s large and diverse elderly population, merits three
*Aging*2 000*consortiums.
John DeLuca of the DaVinci Community Center (272-7474) heads the North
End Consortium, which includes the Charlesgate area. His group has been
polling elderly people i n the housing projects; i t found that most had access
to doctors, but wanted v i s i t i n g nurses to come to the housing complexes and
s o c i a l workers to have o f f i c e s there. The consortium i s considering a plan to
ensure people could stay i n t h e i r communities when they need care.
The East Side Consortium has drafted a plan under which a single agency
would a coordinate a variety of services, ranging from emergency response to
help with household chores. Health benefits could be used more f l e x i b l y .
"Rather than having to worry about whether you're covered for service X or
service Y or service Z, (the agency) would figure out what you need and
f l e x i b l y allocate services accordingly," said Joseph Lubiner, a Miriam
Hospital vice president (331-8500).
The St. Joseph Consortium represents the south and west portions of the
c i t y . I t has s p l i t into 10 subgroups, each focusing on a d i s c i p l i n e such as
mental health, home health care, pharmaceuticals or nursing home care. Each i s
preparing recommendations for change that w i l l be blended into an a l l encompassing proposal. I t i s headed by Louis Pugliese of the St. Joseph
Living Center (272-3335).
*
*
*
BLACKSTONE VALLEY
North Smithfield and B u r r i l l v i l l e are part of the Northwest Consortium of
*Aging*2000,*better known as the Northwest Elder Care Coalition. The coalition,
working with a federal grant, formed independently of*Aging*2000*and has i t s
own, p a r a l l e l agenda - to coordinate care to the elderly i n the northwest
area.
(Other communities served by the c o a l i t i o n are Smithfield, Foster,
Glocester and Scituate.)
"We've looked a great deal at the rural issues - the i s o l a t i o n , the lack
of services," said Mary Frey, a s s i s t a n t director of the Dora Howard Adult Day
Care Center i n Smithfield (949-3890). The c o a l i t i o n i s not going through the
same process as most other consortiums, but may j o i n with one l a t e r , she said.
A Woonsocket-based consortium i s also representing North Smithfield and
B u r r i l l v i l l e , along with Woonsocket, Cumberland and Lincoln. Rather than
hammer out a theoretical plan, t h i s group has chosen to work on a p r a c t i c a l
matter - testing a form that nurses or s o c i a l workers can use to assess the
�2/TERM2
AGING & 2000
PAGE
4
overall health and functioning of elderly people. Once refined, such a form
would help r e a l i z e one of the central goals of*Aging*2000*- to assure that
health care attends to the whole person, not j u s t the ailments.
The Woonsocket group i s led by Michael Delmonico (765-3135), director of
planning and development at Landmark Medical Center.
*Aging*2 000*has apparently not taken root i n Pawtucket and Central F a l l s .
* *
*
EAST BAY
B r i s t o l , Barrington, Warren and East Providence are part of the East Bay
Consortium, the only consortium headed by someone who i s not a health care
provider. "I'm 60 years old, so I consider myself a potential consumer," says
Donald M i l l e r .
Three task forces are examining i n s t i t u t i o n a l care, home care and
consumer issues, and t h e i r research i s influencing a plan being written by the
consortium. "We're very much consumer-oriented," Miller said. "Right now, the
way the system works, i t ' s r e a l l y ruled by finances, which rules the
providers. Then you have consumers having to f i t into what's out here.
"Our feeling i s i t should go the other way around" - the health care
system conforming to the needs of the consumer.
For information about the East Bay Consortium, contact Ann Miller,
director of the Barrington Senior Center (247-1926).
Newport, Middletown, Portsmouth, Tiverton and L i t t l e Compton are part of
the Aquidneck Island Consortium. Jackie Janicki, consortium chief and patient
care coordinator for Island Hospice (846-3599), said her group's plan w i l l
probably combine an emphasis on home care with a program i n which each patient
would have an advocate to help him or her navigate the system.
" I t ' s very easy for us to identify what the problems are," J a n i c k i said.
"There's not always a consensus on how to change i t . "
* *
*
METRO WEST
Foster, Glocester, Smithfield and Scituate are part of the Northwest
Consortium of*Aging*2000,*better known as the Northwest Elder Care Coalition.
The c o a l i t i o n , working with a federal grant, formed independently of*Aging*
*2000*and has i t s own, p a r a l l e l agenda - to coordinate care to the elderly in
the state's rural northwestern area.
(The c o a l i t i o n also serves North Smithfield and B u r r i l l v i l l e . )
"We've looked a great deal at the r u r a l issues - the i s o l a t i o n , the lack
of services," said Mary Frey, assistant director of the Dora Howard Adult Day
Care Center i n Smithfield (949-3890).
The Cranston Consortium - headed by Susette Rabinowitz, director of the
Cranston Senior Center (461-1000) - has agreed on a basic philosophy but does
not yet have a s p e c i f i c plan. Rabinowitz said her group expects to propose a
multidisciplinary team overseeing each patient's care, and an emphasis on
prevention.
A North Providence-based group, the Hope Consortium, has already devised
a s p e c i f i c plan, and i s preparing to apply for tax-exempt status as a
nonprofit organization. Under the plan, older people would be encouraged to
join*Aging*2000*even before they need services, to draw them into health
promotion a c t i v i t i e s . Each person would choose an advocate to help navigate
the system and ensure that appropriate care i s given.
The Hope Consortium, led by Corinne Russo of the North Providence Senior
Citizens Center (231-0742), would offer i t s services in Johnston, North
Providence, Smithfield, Scituate, Glocester, Foster, Cranston and Providence.
*
* *
SOUTH COUNTY
The Washington County Consortium has proposed setting up an agency run by
�2/TERM2
AGING & 2000
PAGE
5
a consumer-dominated board of directors. The board would hire a company to
manage the plan and monitor quality control. The agency might receive payments
d i r e c t l y from the federal government and insurance companies.
"The big issue for us," said consortium leader Kathy Gremel
(1-800-834-3334), " i s how do we get our participants to r e a l l y be
participants. Our system i s set up so that people are recipients of health
care. We've talked about some wild different ways of doing i t - give the
participants the money and l e t them buy what they want. We haven't put those
l i t t l e pieces together."
With a rough plan in place, consortium members are now presenting t h e i r
ideas - wild and otherwise - to c i v i c groups and groups for the elderly
throughout the county, to get a sense of what w i l l f l y before drawing up the
f i n a l draft.
Jamestown i s part of the Aquidneck Island Consortium, which i s s t i l l
hammering out i t s plan. Jackie Janicki, consortium chief and patient care
coordinator for Island Hospice (846-3599), said her group's plan w i l l probably
combine an emphasis on home care with an advocacy program i n which each
patient would have an advocate to help him or her navigate the system.
" I t ' s very easy for us to identify what the problems are," J a n i c k i said.
"There's not always a consensus on how to change i t . "
* * *
WEST BAY
The Kent County Consortium i s drafting a plan under which patients who
join*Aging*2 000*would have an advocate to help them through the system. The
advocate would v i s i t the person's home, learn about h i s or her health and
circumstances and assure the person that someone i s available to t a l k to. Then
the patient would v i s i t a doctor, get a complete physical, and work with a
multidisciplinary team to deal with any problems.
"We found i n talking to consumers that they became more excited when we
talked about having an advocate, someone to speak for a patient," said
consortium chief Bonnie Sekeres, administrator of the Shalom Apartments i n
Warwick. (Participants would not be required to have an advocate, however.)
"Seniors, j u s t as anyone else, need to learn they have to be part of the
health care plan, that i t ' s not j u s t the physician who decides what's to be
done," she said.
The agency would receive payments d i r e c t l y from the federal government,
based on the number of members. That would save a great deal of form-shuffling
and a l l the attendant costs.
"No matter what we do, we keep going back to what i s good for the
consumer," Sekeres said. "Sometimes we can get bogged down with the finances.
We alv;ays have to remember to get away from that, to keep i n mind what i s
going to help the health care of the consumer, how they can remain independent
and s e l f - r e l i a n t for as long as possible."
* * *
KEYWORDS: elderly picture health
$A1YBVVHB
0002
******^*************************************************************************
�RHODE
Mr. Magaziner
Goes to
Washington
Surviving on pizza and potato chips,
working twenty hours a day, Rhode
Island's brainiest guy learns what it
really takes to make things happen.
By Stewart M. Powell
F
rom the conference room on the secondfloorof the Old Executive Office
Buildingrisesthe din of youthful subordinates welcoming their boss, the
senior White House adviser for policy development in charge ofhealth care
Ira Magaziner takes
reform.
"Ira, Ira, Ira," they chant as Ira Charles Magaziner strides toward his chair, his hair his place In the halgray and unruly, his eyes distant and serene, his lankyframestooped ever so slightly lowed halls of
by—could it be?—the weight of impossible dreams.
Washington, where
It is a weekday, shortly after 7:00 am., more than an hour before Washington's rush
hour peaks. Guardsfromthe uniformed branch ofthe United Stales Secret Service have his no-nonsense
just opened the wrought-iron gates downstairs to let inflex-timeemployees who are in style Is fast earning
by 7:00 a.m. and out by 3:00 p.m.
him a curious repuMagaziner has been at work for hours already, poring over dog-eared memos strewn tation among the
across his government-issue wooden desk Thefloor-toceQingbookcases in his spacious
office are brimming with reports laid askew as though scooped up and moved hastily capital's oW guard.
the night before. Straight-backed wooden chairs still huddle around the coffee table
1m
Photograph by Daniel Borris
�The challenge of
finding s ntn&ty for
ths nstton's hMtfth
•quaraly on ttie
•houldMOfMaeBzkwf, hare flanked by
Secretary o< Hearth
and Human Servteet
Doma Shalala and
Rrst l^dy Hlttwy
Rodham Clinton.
from the last brainstorming session to reshape the nation's
$940 billion health care system.
Magaziner's comer suite, with a reception area inner sanctum, and conference room, is the ultimate perk for a high-ranking presidential aide. The suite overlooks the Ellipse, the Washington Monument, and the Jefferson Memorial on the banks of
the Potomac River, virtually the same view as from the Oval Office in the nearby West Wing of the White House.
The coveted office signals that the occupant is on the inside in
the new administration and is courted by a capital city that takes
its cuesfromthe pecking order at 1600 Pennsylvania Avenue.
This time, though, the office is occupied by the ultimate outsider, an austere man who calls Rhode Island home, arichman
with little patience for perquisites or rituals of power.
His ways differ sharply from those who have been in this office before.
Sensing that the capital's incestuous bureaucracies and turf
barons rule the city by day, Magaziner quietly toils away deep
into the night, often putting in marathon twenty-hour days to
think unencumbered by Washington's ways. He has what
White House planner David Dreyer calls a "five o'clock shadow
at one in the afternoon."
Magaziner's workaholic style quickly became the talk of a
gossipy town within weeks of his arrival last winter. By word of
mouth, his sleepless, college-grind schedule quickly reached
mythological proportions, earning him grudging respect from
even the competitive White House twentysomethings and thirtysomethings who thought they might come to superiors' attention by burning the midnight oil.
The forty -five-year-old Magaziner merely works at his own
pace, without regard to the internecine competition, because he
has work to do and the work must get done. Once, he scheduled a three-hour meeting with President Bill Clinton on a Friday evening, then followed it a few weeks later with a brainstorming session with staffers that began at eleven o'clock on a
Samrday night Quipped one awestruck colleague: The nerd's
gone wild."
Magaziner has dreamed, debated, eaten, and napped in this
office, but there is hardly a hint of him here. Missing are the
persona] touches, the pictures, the books, the plaques. It is as
though Magaziner came reluctantly to help a beleaguered
friend, but left his heart at home.
MAGAZINER'S WHITE HOUSE ASSIGNMENT
culminates a life's worth of achievement, and makes him one of
the most high-powered Rhode Islanders in national political history.
He is a long way from the ardent boy from Far Rockaway,
New York, the brilliant son of a bookkeeper, who before the
ripe age of seventeen had picketed against unfair housing policies, organized a waiters' walkout at an Adirondacks summer
camp, and marched on Washington for racial equality. At
Brown University in the 1960s, he gained more momentum, becoming class president, valedictorian, and leader of a curriculum overhaul.
In the ensuing years, he went from social activist in Brockton, Massachusetts, to $100,000-a-year analyst for the prestigious Boston Consulting Group, to owner of the Providence
consulting firm Telesis that sold in the late 1980s for an estimated $6 million, while in the meantime authoring several
books on global economics. In early 1990, he started the public-policy think-tank SJS Incorporated, a hotbed in recent years
for experimental thinking that has made Rhode Island a kind of
laboratory for far-sighted studies of economics, the elderly, and
health care.
Magaziner has often intertwined his private business ventures with local activism. For instance, he volunteered the resources of Telesis to help map a revival of the Rhode Island
economy. That effort culminated in the Greenhouse Compact
in 1984, a plan that, if voters had accepted it, would have cultivated public-private partnerships and provided government incentives for industrial job growth.
As a key player in President Clinton's massive and beleaguered health care reform effort, Magaziner orchestrated a
staggering day-by-day schedule for working groups of more
than five hundred experts, and he is still spearheading the
mission with the supreme, unspoken confidence that it will
all work out.
One insider likens Magaziner's job to the Manhattan Project,
the intense program to beat Nazi Germany in the creation of an
Continued on page 84
�IRA MAGAZN
I ER
strongly held political differences.
For his part, Magaziner admits, " I
Continuedfrompage 28
don't feel that comfortable in Washingatomic bomb during World War Two. ton. Ifs not my kind of city, and I think
"You're throwingfivehundred strangers even if I were to stay a number of years, I
into a room and saying, 'Solve the world's would always want to be an outsider."
The outsider hardly endears himself
greatest problem,'" the official says.
Tou hope when you put it together, the by challenging the sacrosanct as a matter
of course. Here is someone, after all who
whole thing works."
once urged Congress to spend $25 milBoth Clinton and Magaziner know the
stakes. If the health care proposal Mag- lion to explore the questionable theory
that energy could be produced through
aziner is drafting rallies the nation, the
forty-six-year-old president could be the cold fusion, a theory that has since been
discredited by scientists. He makes a
first elected Democrat to-win a second
practice of raising the politically unthinkterm since Franklin D. Roosevelt did in
1936. But if Magaziner's effort fails, Clin- able—including a nationwide value-added
tax to generate the $100 billion needed to
ton could see his dreams disappear.
Their joint venture tests a deep affec- extend health care coverage to everyone.
Magaziner makes no apology for walktion burnished since they crossed paths
on the greenswards of Oxford University ing up blind alleys—it is part of the job. If
as Rhodes scholars. Magaziner admires he does not explore every avenue, the naClinton's insatiable appetite for detail, not tion's health care costs could nearly douonly for what it says about the president's ble to $1.7 trillion by 2000 and virtually
bankrupt the nation when the Baby
ability to grasp complicated issues, but
also because it means he pays attention Boomers hitretirement,leaving Clinton
on the political shoals.
to those he employs. Tve never worked
"It's not easy to bring changes to this
for him directly before," Magaziner says.
city," Magaziner laments as he prepares
"I think he respects and listens to the
to go public with the health care blue
people that he's with. You know, he is an
unassuming guy, and the fact that he is print "Often, Tve encountered a kind of
president doesn't mean that he acts any 'can't-do' attitude. I can't say it has been
easy or pleasant"
differently than he did before."
The clash between the no-nonsense
With the stakes so high, many people
Rhode Islander and the chummy Washin Magaziner's shoes might have been
ington elite was a traffic accident waiting
daunted by the idea of designing a national health care system. There might to happen. The capital simply is not used
to an outsider "coming in and doing a
have been a flicker of anxiety, a modest
admission that this is the project of a life- top-to-bottomreviewand issuing a set of
time. But the risks barely ruffle this taut, recommendations," William E. Brock, a
former senator from Tennessee and oneunflappable man, and even a job of the
current magnitude is not enough to faze time chairman of the GOP, groused in a
Washington Post Magazine story about
him. Overhauling a health care system
Magaziner. "Instead, it's a sort of drip,
that accounts for nearly one-sixth of the
drip, drip process that you have to stay
nation's economic activity, is, for Magaziner, just another crash project for a de- with and move the ball forward a little
every day. He's going to drive himself
manding client
crazy or drive everyone else crazy."
Hillary Rodham Clinton, who leads the
health care effort, regards Magaziner
YET STEADILY, MAGAZINER
as her partner in reform. "(He] understands numbers and understands costs IS PENNING SOME ofthe most farreaching changes ever proposed. He
and can come up with the best possible
compromise and consensus among peo- wins wide praise for devotion, if not alple who come from different points of ways for the emerging health care proposals. Sure, House Ways and Means
view," she says.
Committee Chairman Dan Rostenkowski has referred to some of Magaziner's
OFFICIAL WASHINGTON, a
evolving plans as "the domestic equivacity dotted with monuments to legendary
lent of Star Wars," but the chorus generpatriots, has rarely seen a self-deprecating patriot quite like Magaziner. The con- ally has been positive.
Senator John D. "Jay" RockefeUer IV, a
servative city eyes the brainy, resdess inkey force on Capitol Hill, is as surprised
tellectual with understandable caution.
His seeming indifference to the courte- as anyone. "What happened was not so
much that Ira adjusted to Washington,
sies of power worry a clubby world
but that Washington adjusted to Ira,"
where small talk and bonhomie grease
Continued on page 91
the skids for hard-nosed bargaining over
RHODE ISIAND MOI^THLY • JULY 1993
�IRA MAGAZINER
Continued from page 84
says the powerful chairman of the Senate
Finance Committee's panel on Medicare
and longnerm care.
Magaziner's emotionless, analytical
manner has been reassuring to officials
worried by the economic and political
stakes. Rhode Island Representative Jack
Reed eyes Magaziner's successful
courtship with understandable homestate pride. Washington "quickly appreciated his grasp of the issue, his native intellect and his unflappable demeanor,"
Reed says. " I think Washington has a
sense of confidence that we have somebody who is truly experienced."
In his work, Magaziner invites contrary
points of view, signaling thatfactsrather
than ideology decide outcomes. "He
takes notes, and people noticed that,"
says RockefeUer. There is nothing too
small, too unimportant to overlook to win
health care reform."
Magaziner has also won allies by appealing to Republicans in ways that
Hillary Clinton cannot Her passion about
the need for change has become a lightning rod for the wary and the partisan.
But Magaziner, a proven business consultant and long-time entrepreneur,
speaks their language. "He was calm. Republicans just somehow related to him,"
Rockefeller says.
Magaziner's low-key offensive is bolstered by a loyal, close-knit staff that
seems to delight in shared sacrifice.
Rhode Islanders Marjorie Tarmey,
Denise Ricketson, and Christine Heenan
came from SJS. Other aides have signed
on as well, for a helter-skelter lifestyle
where night merges into day with seamless exhaustion. "Everyone had a sense
that it was history in the making," says
task-force aide Jason Altmire, and they
have worked accordingly.
Dreams run high and tempers run
short "Half the people in our group
threatened to quit at least once a day,"
says John Lantos, a University of Chicago
pediatrician who participated on one of
the committees. Then half an hour later,
they'd be earnestly at work."
Magaziner, who survives on potato
chips and pizza, concedes that making
the omelet requires more than a few broken eggs—and egos. "You can't run such
a big process with so many people in
such a short time without angering some
people," he says without undue concern.
"And I'm sure I have."
FOR MAGAZINER, THE SACRIFICE USUALLY is unspoken. But
by late spring, as the unveiling of the
health plan was experiencing delays, he
admitted longing for time with his wife,
Suzanne, and three children, Seth, nine,
Jonathan, eight, and Sarah, five.
Even though they are close—he
moved them from their stunning Bristol
home on Poppasquash Point to a house
he purchased in a million-dollar neighborhood in the northwest section of
Washington—he still feels he is not doing enough. "What I do sometimes now
is I I go home and be with the kids a little
bit, tell them a story, and then go back to
work," Magaziner says. " I certainly
haven't been a proper husband or father
these past couple of months."
His children attend the private Georgetown Country Day School He makes it to
birthdays and afewsoccer games. But he
yearnsforthe time when the health plan is
made public and he can throttle back Regardless of the plan's timetable, his family is spending the summer in Bristol with
him commuting on weekends. " I miss
Rhode Island," Magaziner says wistfully.
Thafs my home. So ifs been tough."
Nonetheless, when the excitement and
frustrations of his job mount, he confesses it is "very hard to think about the personal price." And the long-termrewardif
the reforms succeed "will be something
[to] look back on and be proud o f he
says with typical understatement
Magaziner is prepared to do whatever
is needed to help the president sell the
health care plan to Congress and the public. 1 expect all hell to break loose when
we announce [it]," he says. The pragmatic, detail-oriented mastermind will do his
part by bargaining behind the scenes with
lawmakers, tough as he knows it will be
and as much compromise as he knows it
will take. "What we put out won't be perfect You can't design some new structures, no matter how hard you work on it
And so we look forward to the debate.
And where people have good suggestions
to make, well try to modify what we've
done to accommodate them," he says.
The grueling give-and-take threatens
to take months, if not years. By then,
Magaziner hopes to be immersed in another package of reform, possibly the
overhaul of the educatioa system.
For now, though, he braces for the
challenge of transforming his revolutionary health care package into the law of
the land, a task that would draw the inveterate outsider more deeply into Washington's inner workings.
"It wfll be a real roller-coaster ride,"
Magaziner says. "We've just got to try to
stay on the track"
•
Stewart M. Powell is White House correspondent for Hearst Newspapers.
RHODE ISLAND MONTHLY • JULY 1993
�Business Week
June 25, 1990
BUSINESS SHARES THE BLAME FOR WORKERS' LOW SKILLS
merica, once the home of the The other nations also have well-orga- who have goodreading,math, science,
world's most skilled labor force, nized national systems for moving highand problem-solving skills. These worknow may be throwing it all school graduates into industry. TTie ers can readily absorb new skills as
away. Schools continue to turn out transition from school to work in the technology and production requirepoorly educated young people. Employ-U. S. is described as "the worst of any ments change. With workers who
ers continue to reject the idea of spend- industrialized country."
adapt quickly to new conditions, manuing large amounts of money to train The study focuses on some 82 millionfacturers can introduce new products
workers and upgrade skills. The easi- jobs in the U. S. that do not require a on short cycletimesand frequently
est—but most damaging—way to re- four-year college education. These in- switch production runs.
main competitive is to downgrade skills clude skilled employees, such as nursesHMH ROAD. In the U. S., however, the
and cut wages. Indeed, the U. S. is on a and construction workers, as well as commission discovered that fewer than
de-skilling binge for the sake of short- line workers such as machine opera- 10% of the 400-plus companies interterm productivity growth that could tors, assemblers, retail clerks, and viewed arereorganizingwork in this
prove disastrous for business and the health service employees. According to fashion. Instead of investing in workeconomy in the long run.
projections, most recruits for these ers, most companies are pursuing othSo concludes a major new study by a jobs will be deficient in such basic er strategies toremaincompetitive:
cutting wages, exporting production
group called the Commission on the
••.»
jobs•"toy low-wage countries, or de-skilSkills of the American Workforce...;v;.; •:'/' r/= >.'• --y ; j:'r:*
ling jobs through automation. All of
Most companies, it finds, accept the > THE LOW PRIORITY
these methods are based on what Maidea that they must live with a lowCOMPANIES GIVE SKILLS - gaziner calls a "high-turnover, lowskilled work force. Less than 10% of
model." Many employers, he
employers surveyed are creating jobs PBOOOCTTVTTT Less than. 10% plan to wage
;M
that call for workers with broad-based spur output by reorganizing work in a says, assume that the U. S. will have a
large pool of uneducated, unskilled
skills and the ability to adapt to. fast- ' way that calls for employees with broa<f-'''''
people. That being the case, the compachanging technology and markets. In based skills and adaptability .
nies are using automation to create
other words, business by and large is
very simple work tasks—jobs denot demanding—and the society is not SnUS SBOBnSIS Onlyl5% worry
delivering—the large-scale improve- about shortages of skilled workers such scribed by some critics as "idiotments in education and training that as nurses and construction workers.-. proof'—with low wages and no emAmerican industry needs.
SKOAinAmiM Less than 30% are ployment security.
The commission's study, titled planning to have special programs for
Companies that take this path may
"America's Choice: High Skills or Low women, nmnigrants, and minority youth be successful, but only in the short
Wages," will be issued on June 18. Es- who will make up 85% of new workera term, the commission says. The nation
tablished by the nonprofit National
faces a choice. "We can choose forms
Center on Education & the Economy, AmTBOB Over 30% are more con- of work organization which achieve
the 32-member commission is a biparti- cerned about workers' attitudes and
coat competitiveness in the short run
san group of business, academic, and personalities than about basic gintig
based upon low skills, low wages, and
laborrepresentativeschaired by Ira C. .. CUTA, WEYOFJOO+'CQMPAMS, GQMMBSOR
ultimately a society with a low living
ONIWSIUVnCMieKMIIMMOKI .
Magaziner, a business strategy consulstandard," Magaziner says. "Or we can
tant who is president of SJS Inc. The.
choose forms of work organization
commission co-chairmen are Ray Mar- skills as reading and writing. Even so, which require more investment but
shall and William E. Brock, who served the skills commission found, relatively which result in cost competitiveness
as Labor Secretaries in the Carter and few employers plan to sharpen their based upon higher skills, higher
Reagan Administrations, respectively. employees' skills through remedial wages, and a higher living standard."
The report is funded by the Carnegie training. Although all the U. S. compa- The commission wants the U.S. to
Corp. of New York, New York State, nies surveyed complained about a lack take the high-wage path. It recom
Towers Pen-in, and the German Mar- of skills, most were concerned more mends fundamental changes in the
shall Fund.
about workers' attitudes and personal- way the U. S. educates and trains the
T H I WORST.' The commission conduct- ities than educational skills (table).
70% of young people who will not graded in-depth studies of workplaces and In contrast, America's competitors uate from four-year colleges. It urges
education-training systems in the U. S., tend to upgrade line workers' jobs andthe government to encourage compaGermany, Sweden, Denmark, Japan, fill them with well-educated young peo-nies to adopt high-performance work
Ireland, and Singapore. It concludes ple. Most important, a high percentage systems. Employers would be required
that, except for Ireland, the foreign of foreign companies is achieving large to invest 1% of payroll in either their
countries provide far better schooling .productivity gains by reorganizing own training programs or a national
and job training for noncollege-bound work to eliminate tiers of managers fund to upprade worker skills. These
youth than the U. S. As a result, Amer- and give workers more of a say. The are controversial proposals, but the
ican youth rank near the bottom in resulting "high-performance" work- U. S. needs strong action to upgrade
comparisons of school • performance. place calls for multis killed line workersits work forcetoworld-class standards.
A
�July 1, 1990
End of the line
U.S. industry, education must retool their thinking
A
By Charles M. Madigan
lmost a century ago, tndusry in
Ihe Umied Saia made one of
Uiosc important decisions that
became eentnl to the development of
the nation aod ia imprrssivv mid-20th
Centurs- improvement in living jiandards.
Most «orfcen were deemed capable of
completinj only simple,repetitivetailo.
Managetv by defuuuon. *ere ururt and
would perfonn the brain work. Work
would be broken down into simple
taslo. and a cheap, undereducated work
force would complete them.
The production line wu the result.
aJon{ with a system that was fueled by
a constant, seemingly aidless supply of
undereducated women managed tn a
corps of well-tnined. weil-cducaied and
well-paid supehon.
Thai process provided employment at
relauvdv good wages right up through
the 1960s and made the US. a world
industnal leader, but it also led 10 a
whole set ofrealitiesthat play out in
the work place, in the economy and in
education today.
Among them are the assumptions
that the quickest way to increase efficiencv is to cut costs by cutting wages;
that there will always be a supply ol
cheap labor and that there is Utile need
on the shop flnoc for intelligehce and
sophistication.
But a fat new report from a commission at the National Cenier on Education and the Economy, which is based
in Rochester. N.Y.. argues that if those
amtudes don'l change, the United
Sutes will watch its economic position
in the world continue to erode, along
vith the standard of living of some 70
percent of its workers.
The central theme of the report is
that the nation is in the process of
making a senes of imporuni decisions
about working and about workers, but
that industry and educatioa have not
learned the lessons that make the nation's overseas competition so strong.
While the trend in the world marketplace is deaflv toward well-educated,
well-trained workers, education in the
U-S. still focuses on the estimated 30
percent of students »ho plan to attend
college.
And while the trend in the factory of
the future is for independent worken
making important decisions on the job.
the vast majonry of American industries continue to embrace the tum-ofihe-ccntury production-line ethic, at
their own expense and at the expense of
the nation's future.
"The choice America faces is a choice
between iugh skills and low wages." the
repon says. "Graduallv, silently, we are
choosing low wages."
Thereponfrom the Commission on
the Skills of the Amencan Work Force
is a genuine eye-opener, a survey that .
reviewed working in the U.S. from bottom to top, then applied those conr
elusions io the process of education
itself.
"Amenca invests less in its front-line
work force than me major countnes -
with which we compete." the repon
Byv "We expect less of them in school.
We give then lea jot traming when
they start OUL And we lei them sink or
swim when they ga into the work
force
"Yet these are the very people wt
must count on to lead the way to a
competitive and productive economv.
. . . While the nations we studied diiTer
in economy and culture, they share an
approach to education and training of
workers and to high-productiviry work
onanizaiion which we lack."
The studyrejectsarguments that the
Japanese, for example, or the Germans
have an advantage in building a work
force because of their cultures. The
problem in the US., it says, is the aN
sence of genuine educational standards.
"They insist that virtually all of their
students reach a high educational standard. We do not. They provide professionalized' education to non-college
worken to prepare them for their trades
and to ease their school-to-work transition," the study says.
The Americas methods, based on the
production-line system, "served us well
in the past. This commission has serious reservations about whether they will
serve us well in the future."
One of the commission's most surprising diicoirries was that the value of
a high school diploma as an indication
of imelleciuai development has N-inually
disappeared.
Having a diploma is significant today,
it said, only because it tells a potential
employer an applicant was dependable
enough to show up at school for four
ycuv Nor du) moil emploven seem
ovcrl\ concerned al the decline in the
SLandards in high school education.
"Ourresearchuncovered a wide range
of concerns parading under the blanket
term of skiUs.' " thereponsaid. "While
businesses all over complained aboui
the uuaiity of applicoits. few talked
aboui educational skills.
"The pnmary concern of more than
SO percent of employers was finding
worken wiui a good work ethic and appropnaie social behavior—reliable, a
good attitude, a pieuant appearance, a
good personality "
Somewtiai surprisingly, the chapter on
eduation noted that emoloyen wanted
worken "who will simpiv do whai their
worken haw always done." Only J percent of ail onpioyen said education
and skill requiremcnu are increesing in
the workplace.
Pursuing that theme, the commission
broke the 117 million-member Amencan work force into three categones.
About one-third of all jobsrequiredlittle more than an gth-giade education:
another thudrequiredI basic education
plus some additional skills: and the final
third required a four-vear college degree.
ll also noted that there a a built-in .
tendency in public education to put students on vinous "tracks" eartv on, with
certain groops advancing into preparation for college, while the othen find
themselves struggling to cope wim simple mathemaiics and basic writing.
These groupings, thereponsaid, are
important because of what has hap-.
' pened io buying power and income in the U i over the last decade.
"The top-eaming 30 pertrnt of
vmeriean families moeased their
thare of national income from 54
percent in 1970 to 38 percent in
1988. while the bottom 70
percent
have been losing ground." the
study said. "Over the pan 15
yean, the earnings gap berwetn
white-collar professionals and
skilled trades people has gone
from 2 penxnt to 37 percent; the
gap between professional and clerical worken has gone from 47 percent to 86 percent."
There are Amencan companies,
thereponnoted, that are well
along in making the tnnsition to a
smarter work place because they
value employees and provide almost constant education and
training. The process is expensive
and time-consuming, but the commission considen the alternative
worse.
"The sums aun is not i rhoice.
We cannot remain a high-wage,
low-skill nation." the repon concludes.
"Either Amenca »-ill do whatever is necessary to create high-performance work organizations and
the high skill lev els needed to
sustain them, or the countn will
continue the slide toward low .
skills and the low pay that goes
with them."
�Boston Globe
June 19, 1990
Panel seesrisein poverty
if education isn't improved
cal and professional education or a job.
• Help all studentsreachthe certificate,
with the help of publiclyftuidedalternative
Some Americans will becomericher,but programs or youth centers.
most wOl slide into poverty unless there is a
• Establish comprehensive professional
radical overhaul of job training and high educational certifications for those not bound
school classrooms, a commission of business for college.
leaders predicted yesterday.
• Tax all employers 1 percent of the paySeventy percent of the work Torce — in- roll for formal education or training of workcluding truck drivers, clerks, secretaries ers, their own or others.
farm workers and other workers who are not
• Create a board to organize and adminiscollege-educated - will lose ground in wages ter the proposed new education and training
without strong training in skills, according to systems.
a panel headed by two former US secretaries
Estimated costs for a variety of programs
of labor, Bill Brock and Ray Marshal^
could run as high as $72 billion, but the counIn areportissued yesterday in Washing- try is already spending $32 billion to $34 bilton, the Commission on the Skills of the lion on a number of job training and educaAmerican Work Force called on business, tion programs for 16- to 19-year-olds, the reschools and government to streamline and co- port said.
ordinate the present "haphazard, incoherent
Brock, labor secretary in the Reagan adand bureaucratic" ways that workers are ministration, and Marshall labor secretary
trained for their jobs.
for Jimmy Carter, spoke of the steep decline
"About 40 million of 117 million worken in American productivity is the past 15 years
don't need educational skills but social skills and warned: The choice is dear. Either
and physical stamina to sfSur economic pro- America will do whatever is necessary to creductivity," said Ira Magaziner, business con- ate high-performance work organizations and
sultant and co-author of the study, "Ameri- the high skiD levels needed to sustain them,
ca's Choice: High Skills or Low Wages!"
or else the country will continue to slide toAfter eight months and thousands of in- ward low skills and the low pay that goes
terviews is the United States, Japan, Ger- with them."
many, Sweden, Denmark, Ireland and SingaThe report supported by $600,000 is
pore, the 34-member commission, made up of grants, cited the Boston Compact as a posibusiness, education and labor executives, tive example of school-to-work transition. Its
madefiverecommendations:
description of the Boston Compact indicates
• Set a high national education standard, that 900 firms in the city take part in the
in math, English and other basics, for 16- summer jobs program while nearly 600 addiyear-olds who would earn a Certificate of Ini- tional hire graduates from the city's high
tial Mastery as a gateway for college, techni- schools.
By Muriel Cohen
GLOBE STAFF
�The Christian Science Monitor
June 19, 1990
T H E U.S.
MODERNIZING THE WORK FORCE
Major Change in US System Urged
Private group proposes steps In (dimivate meaningless diplmnns nnd dend-einl jobs
riHc
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incentives to move toward
a high productivity model
of work organization.
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�Education Weejt
June 20, 1990
Plan Offered for
Raising Youths'
Workforce SkiUs
Panel Would Require
Certificate for Training
By Lynn Olson
^ypnnnt of
funds each year to send their workers
through certified employment and training
programs.
The report, "America's Choice: High
Skills or Low Wages," waa scheduled to be
released this week at a press conference ia
New York City.
It ia based on an eight-month study of
economic and human-resources policies in
the United States and in sixforeignoountries: Denmark, Germany, Ireland, Japan,
Singapore, and Sweden.
"A dozen nations now pay wages above
ours," it notes. "Our distribution of income
is more skewed than any of our major competitors, and our poverty rate is much higher."
Unless the nation redesigns its busineases to become more productive—by putting more authority in the hands of worken
and substantially improving their education and training—"we may all slide into
relative poverty together," the report asserts.
worken. So, basically, what we
hava is a cumulalrre deficit."
Tie 35-oeniber panel of praniaent
Naliooal Examining Board
hminiMS, educaboo, labor, govern— *. and civic leaden waa chaired
Tb mprow that srtuatMQ, the comby ba C Magasnar, an mtonatiaD- DUS^MQ roooouoeods tfas c^ea&oo of
al-feusuieB sbmte^st snd piTtiiilfnt an independent, national emsmmg
ot an International in Provulence, board that would set new standards
RX, aftunvUttntidwrliratedtowork- for sduostkxial i ^ i ** ^*. oompaingonecnnnmiranHsrK-ialiaiea.'nn rafale to the highest in the world.
axhairmBi are twofannerVS. SeoStudents who passed a senes of
ratarias of Labor, William E. Brock
and Ray Marshall.
them itandanlafayappradmately
Reaearchaa on loan firm
age 16 would receive a "Certificate
taaoa, uniwstiea, uniona, and th* of Initial Mastery," whkh would be
U.S. Labor Department ni<riwi
requiredforentry into all subsemore than 2,000 interviews with quentformsof education and trainplant ezacutrvea, employeea, and poli- ing, *»*Hi«4inj college.
cymaken in tlx United States and
Almost all of ths countiies visited
abroad to compare approachea to bu- by ths cofl^^^u^sos ^Dpose soots fo^m
man-naourcei dewelopcMBt.
of TVH/WI j^iy>wi stsndards.
Most ot the commiasiao'i firvimgi Under the proposal, U A students
s nfccuaedoo what it rdtn to aa who dropped out—or who did not re*frmt line" workers the vast major- ceive s Certificate of Initial Mastery
ity of currenl and future employees by age 18—could attend local "youth
who work in noo-managerial poa- centen," created by each state,
tiooa and do not have college degrees. where they wouldreceivealternaIts proposals are designed to pro- tive eduation and training.
vide these workoi with s much highTSeee centen would be legally reer level of general education than sponsibleforhelping all young peothey now receive; a greater command ple between the agea of U and 21
of terhniral, vorabnnal. and proha- who bad left school before earning
sonal alalia; a imnothw transition their
oertificatea.
into the wuridcrce, and more reapooAccording to thereport,the centen
siblity and authority at the work ate. would provide a supportive, CunilyUnlike moat European tystema, Uka environment, with year-round
the proposed plaa would not attempt aooess educano^^ eoplo^^Deut and
to sort and track ynmgntm iato q>o- career counseling, work es^Mrience,
snd job plarrmrnt Local employen
dffc career paths baaed oo ability.
I f you compare us to our principal would be encouraged to provide job
oompetitan,* said Mare S. Itoker, opportunities for youth-center stupresidenl of the National Center os dents to provide sn incentiveforthem
i Education and the Eooncmy, which to remain in the program.
| sponsored the conunissioa. "we take
Changes in Labor Laws
| £ir leas good care of our kids when
they're young."
In addition, once such youth cen"We provide them with an injferior ten were ««*«Kli«hj»< the commisI quality of general education," he sion recommends that the child-la! continued. "We provide them with bor laws ba
so that youths
: very little in the way of occupational through age 18 couid notreceivea
| skills. And we have virtually no work permit unless they had al•chool-to-work transition program readyreceivedtheir initial certifiI worth speaking of."
cate or were enrolled in a program to
, Moreover, be asserted, "once work toward it
: these kids are in the workforce, very . "At fint glance, thia may seem
I few of the funds that are spent by dreconian." thereportstates.. "But
| firms for further education and in the long run, this requirement
| training are spent oa the front-line will benefit the children."
m
A comprehensive strategy to be unveiled
this weekforupgrading the skills of Ameria's "front line" workers would require everyteeoagerto eara a national certificate
around age 16toqualify for employment or
further education and traming.
nie report by the National Commission
on the Skills of the American W>rk Fbrce
warns that the country is headed toward an
"economic cliff." in part because of shortcomings in its labor force. Its Car-reaching
set of recommendationa for remedying the
situation includes:
• Combining the Last two yean of high
school with a new system of technical and
professional training for non-eoUege-bound
youths;
• Creating a network of "youth centen" to
provide alternative education for all 14- to
21-year-olds who have dropped out of
school;
• Providing all Americans four yean of
publicly financed education and training
beyond the initial certificate; and
• Requiring all employers, including
Schools, tO allocate a
ContinuedfromPage 1
1
11
rn
1
�Education Week
June 20, 1990
"If they do not yimrm the education and akilla mgniftwri by the initial certificate," it saya, "they will be
rmiirmnrt to dead-end joba which
leave them in poverty even if they
are working.*
"Right now," Mr. Magarinrr asaerted, "a k* ofkida like the $4 or $5
an hour they can earn at 16 or 17,
and thafs better than school. The
only problem is they won't like it
when they're 40 *
In high-unemployment sreas, the
commission r— ' **'^ thatff*ft*f
and the federal government,
through the youth centers, provide
paid work-study arrangements br
students, or, in cases where such
work would present particular hardships, consider providing stipends
while they attend the program.
School districts would be required
to notify the nearest youth center
about any student who dropped out
An amount equal to the average perpupil expenditure, inrtiiHing all state
and federal funds, would then be
transferredfromthe school to the center, which would continue receiving
those payments until the student
earned a certificate or reached age 21.
v mrT%
11
Continued. From Prtceding Page
grams would probably be offered by
high schools, perhaps in cooperation
with community colleges or colleges.
They would provide s combination of school- and work-baaed learning. And they would be open to adult
workers and to students who had
earned their initial certificates.
lb ensure a smooth transition from
these programs into the workforce,
employen would be encouraged to
provide part-time work and training
ss part of the curriculum. And they
would be urged torewardthose who
achieved the certificates with higherlevel jobs and better pay.
The state and federal governments
would agree tofinancefour yean of
education and training, beyond the
initial mastery level, fbr all Americans at any point in their adult lives.
commission's proposal would provide students with the opportunity
to move horizontally between occupations or to pursue further training
and education at any time.
There are no dead ends in this
system," said Mr. Tucker. "All of
these tracks could lead to college if
you wanted them to."
Youths who suowdfd in one of
these programs would receive a highschool diploma and, if appropriate, an
aasodate's degree along the way.
Employers' Contribution
The report also makes a number
ofrecommendationsto ensure that
employen contribute to the skills of
their workforce and reorganize their
firms for higher productivity. According to the report:
• The federal government should
require all employen to allocate a
minimum amount of funds each
A 'Nonsystem' Tbday
year to send their worken through
The proposed system would re- certified education and training
place what is now a "nonsystem" for programs.
workbound youths, according to Mr.
Initially, employen would be reTucker. The report found that fewer quired to spend approximately 1 perthan 2 percent of VS. students cur- cent of their payrolls on education
rently move into apprenticeship pro- and traming, but the amount would
grams from high school, and that
inaease progressively over a decadeA New System l b morrow?
such training is confined largely to long period. Schools would be considTo provide non-college-bound building and selected manufactur- ered employen for these purposes.
youths with the skills, qualifica- ing trades.
• Employen failing to meet this
tions, and status of their counterOnly 25 percent of those who go target would berequiredto contribparts in other countriea, the com- directly into the workforce have tak- ute about 1 percent of their payrolls
mission also calls for the establish- en vocational courses, the report to a national skills-development
ment of s comprehensive system of notes, and fewer than 40 percent of fund, which would be uaed to train
technical- and professional-educa- these students actually wind up in temporary, part-time, dislocated,
tion oertificatea.
skilled jobs that are related to their and disadvantaged workera whose
Under this system, national pri- vocational training. The result, it training employen probably would
vate-sector committees convened by says, is that most young Americans not underwrite.
the VS. Secretary of Labor would set graduate from high school and
• Businesses could use up to 15 perperformance-based assessment stan- flounder in dead-end, low-wage joba cent of their allocated
to help
dards for jobs covering the broad until their mid-20'a
redesign their workplaces to use
range of occupations that do nc* reIn contrast, many European teen- mere highly skilled worken and to
quire a baccalaureate degree.
agers have already completed a com- improve productivity.
Individuals who met these stan- bined program of work and study by
• A rmfUrml infinmntion and techdards would be swarded twhniral age 19 that ensures them a job and a nical-assutance service would proand professional certificates—and higher level of technical and general vide support to companies trying to
associate's degrees, where appropri- education than their American peers. reorganize their work environments.
ate—for various levels of mastery.
Unlike the European systems, the
• National awards would be made
The vsst majority of students
would begin working toward these
certificates around their junior year
in high school at age 16. The pro-
�i
Education Week
June 20, 1990
mn
to recognue the beet compeny policies A programs related to human-reaource development.
pnctioes.
Funding for the youth centers
LoalBoanU
would cost approximately $8-2 billb oversee the enti™ eystem. the Uoc, asauming that 25 peroenl of the
report aaek> the creatioa of a net- current 16-year-old popiditmn atwork of "employment aad training tended such s program far a twoboards" in the ma/or labor markets year period.
H M panel does not mrimato how
throughout the country.
Among other responsibilities, much it would cost tofinancefour
these boards would create snd ovei^ yean of education and training fbr
see the youth centers; administer all Americana. But it notea that the
the new aeries of national aaaeas- operating expenses for educational,
ments Sir professional and technical training, and employment services
oertificatea; ensure young people's far the nation's 16- to 19-year-olds
mooth transition from school to an already costing approximately
work; and operate a "second chance" $36 billion annually.
Nonetheless, the panel acknowlay^tem lor adults seeking the certifiedges, its proposal would require the
cate of initial mastery.
In addition, they would manage a equivalent of a new "a.i. Bill of
labor-market-information system to Rights" or a self-financing scheme
project future workforce needa. And based on student loans.
But it says, "we believe that the
they would operate as a job service,
providing infbnnatioa and counsel- benefits to society would increase
ing and making contacts for individ- dramatically as well. We therefore
believe that somefinancingmechauals seeking employment.
At the federal level, the report ad- mam should be created to encourage
vocates the creation of a Cabinet thisfarthereducation over the next
counal that would be directly re- decade."
One of the commission's biggest
sponsible to the President fbr the coordination of federal government challenges, however, will be con-
vincing employen and the public
that such drastic changes are needed.
According to the mmmtssino's research, the vast majority of employe n interviewed wanted worken
with a good work ethic appropriate
social behavior, and "8th gnde"
writing ani mathematics skills.
ftw employen expressed great
worriea about the education level of
their worken, the report notea, and
the majority lacked any expectation
that their skill requirements for
worken would be growing.
Despite the widapread presumption that advancing technology and
the evolving service economy will a*ate joba demanding higher alalia," it
says, "only 5 percent of epjployen
mentioned concern over growing educabonal-akill needs.'
"We must try to convince people
that the status quo is not one of our
options," said fanner Secretary of
Labor Marshall.
Thingi will get worse," he predicted. "You're not going to pay
American worken $10 per hour to
get something done you could get
done in Korea far S2."
�WilUam E. Brock
And Ray Marshall
Building
A Better
Work Force
Labor Day, a recognition of the accomplishments of our nation's work force, also signals
the return to school for millions of students.
Unfortunately, these two events have little in . ate an education performance standard—
common other than their placement on the bench-marked to the highest in the world—to
calendar. The world of work and what one be met by all American students at age 16.
learns in school are more disconnected than the age at which young people can legally
leave school in most states. Students who
ever in the United States.
This September, we have little to celebrate meet the standard would qualify to enroll in a
in this country. We continue to lose ground in college-preparatory program, to begin studymany international markets, our real earnings ing for a skilled non-college occupation or
and productivity growth have declined, our even to enter the work force. However, those
students rank at the bottom on international who did not meet the standard would be
achievement tests and we all but ignore the required to continue their education toward
one million high school dropouts we "lose* the performance standard as a condition for
being allowed to work part-time before age
every year.
18.
Why?
Part of the problem is the American workCertain young people, for a variety of
place, which is still based on a system of mass personal or societal reasons, do not do well in
- manufacture pioneered during the early the present public school environment.
1900s. Under this system, complex jobs are Therefore, the commission also proposed albroken into simple rote tasks that workers ternative learning programs to recover nearly
can repeat with machine-like efficiency; for all of our dropouts and help them meet, this
many workers, an eighth-grade education is new educational standard. The programs
about all they need to do their jobs. For would provide counseling and job-experience
employers, financial success depends on keep- services, would combine work with studies
ing labor costs down; therefore, workers with and would interact closely with the business
high-level skills do not necessarily receive community.
higher wages. Further, only 8 percent of
At present, there is no consensus about
America's front-line workers receive any for- how to prepare students for the world of work
mal on-the-job training.
if they are not college bound. To accomplish
The other part of the problem is our this goal, the commission recommended a
education system. It serves the needs of only comprehensive system of technical training
30 percent of our young people—those who and certification for non-college professions.
proceed to college. The other 70 percent We used the word "professions" deliberately,
receive the worst job preparation in the because these certificate programs would set
developed world, even though it is they who higher standards and reward higher skills in a
will make or break our economic future.
range of occupations. This would be an opporTo ensure a more prosperous future for all tunity for business and labor to work together
Americana, we need to make some fundamen- to create anew the skilled crafts on which
tal changes in the workplace and in the America was built
schools. By the year 2000. more than 70
These recommendations, together with
percent of American jobs will not require a
college education—building a relationship be- those which would provide incentives for greattween school and work is nothing short of aa er investment in the training of front-line
workers by all employers, have the potential to
economic necessity.
As two former labor secretaries, we re- once again build the world's premier work
cently co-chaired the National Center on Edu- force.
This September, as our workers celebrate
cation and the Economy's Commission on the
Skills of the American Workforce, a group of Labor Day and our students return to the
leaders from business, labor, education and classroom, we ought to be conscious of the
government gathered to study the future choices we are making. Only when we begin
skills needs of our. nation's non-college-work to insist on a high-skills, high-wage economy—in our schools and iii our companies—
force..
• After months of research in businesses and ' will our workers and students have cause for
in schools in the United States and in six celebration.
foreign countries, the commission offered
The writirj urvtd, rtsptctivtly, as stcntary
some ideas for change.
First, to meet global competition, the com- oflaborfrom 19SS to 19S7 and as ucrttary
' mission believes the United States must ere- oflabor from 1977 to 1981.
�Times
June 24, 1990
BOARD OF ECONOMISTS / LAURA D'ANDREA TYSON
Poor Schools Are a Threat
to Our Standard of Living
R
teatij. t u s drmr DM
that bt n a trndUif hla m
tm* is SomaUa tar blft
aebaoi •> ht eoub) ftl • bnur
**—"— than tb* oat oOtrad br
lha pubbe ichoalj IB Waahlnfuii.
Is tb* (y** of a muuwiml pannt.
lb* opual of th* wsritf'i vtallblnauoo caoaot pnmd* a pubUc
r-mpiri^t ta thai of aa
tmmaaamhly panw ThM World
No douIN than an public •ehaol
lyaumi m th* Qnliad Suui lhal
compan faTonblr to—or an bnur than—tlM** is S"—*'** Bui for
many dUadTama^td (aalUaa. tb*
local fuDdiof baa* of tlMlr achool
dinheu m i faoufb ts pravM*
t»«n rudifflcnui7 •Ulli ia nadtna,
wnonf and mathenauea.
Tb* pnblami of Amancu *!•mmiair- aod MeoodarT-Kteol
•ducaueo an m . bomrar. Umltad
is lowtr-taeoo* (amiIf-awl an
not tunpl; UH rtaull tt tnadcquau
limdint By now. tb* a^aUInf
(ana about Assteaa rrtiiniim an
well known, at lasi to tbo** wbo
ar* abl* toraadaod UDdantand as
•diunal pwe* MCB aa Ihia oo*ooly as Miaai•d 6% of AJncrleas blfb «chaol
addlUonal I JO blUiOB-apan
cbasf* eoB^arad 10 th* prapclad
ooal of th* a r a ^ i and lou ballim ilmHjr ts brlDf ia
is tb*
avtnftQf ooun*. th* annf* H ns(
food nouth. Ts prond* as cduodon g»np«rabl» is that la ochw
oeiaoMa. tb* Utuud Siaia* ha* u>
IP"
of tb* ^ a a l ebawudsuci of th*
JLB*ncu achool i/siam and
Ammcao loctftr. Our dMantnl. taad tyaum. baasd oo local autooomj aod chOK*. la mon txptnaiT*
thas a cantnlly aitminlaiand
A
Ofamiry-liy-ttaBilry onwiilaiic*
with tBtam achool qnuaa imtcaia* that cbotea la unooaaary lor
artiminnal wrdlaom A nport
n l m d last wMk by tb* OomnM•on OB th* SUU* of tb* ABOricu
Workfona. a b^iartm ooam*.
mm maud by tha Rocbaur.
K.T.-baa«l Nstaaal Ootv oa BdacaXJan and tb*
j t^f-^f
thai nauooa wtth food acbooli
ban on* ttunf In mm m o a acl of
itnnjtnl nauonal parformanc*
aundank that TtruaJy all audona muat OMM by a n >• and thai
ban a dlno
ea on tbatr anpisymtnt prapena. Tha auodardi
italillili hifli goal* for auidcai
tcfaKTcmaii and prartda an ob(aca«aui(i which lb*
af indiTtdnala aad
ba I*I • 1 K M * of
tbtaa nationa haa a wjwua of
nd our papuUuoc a alao mon
h*t*nf*ooua than that ol
BOA other oouniBti Many of our
Kbool-af* chUdm do noi ipaaa
b«Uah and eon* boa dtran*
cultural *" f '" *
naally. thm an tha apaoal
Tba •oluuoo la Amcrtca'a aduea•dueaUooal oavdi of chlldnn
ralaad In porcny-aa tnlmatad
u mon mundan* (ac30% 'of all ^»»»»*—" chlldm.
mon than twlc* that of any Euro- tan, anch u hlgbv taacbar aalartaa mutrt ts thosa of other
pon oountry.
Por prmou* ftnmuon* of Im- profaaalenali. longv acbool yian,
•Ugranta and tstroductioo of nauonal wnculum
poor chlldnn, and taatlng aundarda and a bradaa outaiandlng tr conumUMnt to pn-kmdergartducauon. capraally (or chUNot only an our studonta public acbool tan
•yaicsi providad dr*n from dlaad»ania|*d
W* ban tb* (arb^UndttMMofotttM
lha antry way
bltbcat dnpout
Pailin is tmpra** dentntary
and lllltaracy Mtvancod countrlM, they Inio lb* mainstraam. Now, aad Mcondary wtia^iKw will bava
maa aaoof tba
ara trailing atudanta of 'for
many,
tba
adrancad Induatnal eoun- many nawty Induatriallzod aynaa la an u- •undard of UTtng. Man than 70%
surmountabla of Amarlcas jotn rtqutn only a
inaa and. tn
nationa.
Mgb achool oducattao.
bamar.
conpanaos is
Thcac Job* an Ul* bsekbon* of
otbar eountnaa,
™
U canaarraour uudtnu
ttrm hara bacn th* Amancan aoanoay. Onr lha
oooBauoUy perform at or oaar th* imwllllng toreoognliatba hoJing laal two dacadaa. aa araaultof
beuoia of almoai arary camina- •bortiall many on tha left bar* lagging praducortty growth ual
Uon p w * Not only an OB au- baa umrtuing to auppoct nnegam aimog lortign ceapaUUoa. raal
daaia tar bahmd tbsa* af ochar nauonal aundaida. Daaplu Up aar- wagea (or thca* job* ban (allaa by
•dranead ooumnaa. lhay an trail- ntm is th* naad for acadasuc ncor. 12%.
tat itudmia cf many nawly Indus- moat auis* aad (tmmimtllaa ban
ara mtora
tallad to Imposa minimal nandaida Doing tba 19Kk.
Aock. T b « will b* ( m r wcrtai
t n a highly —hr—'H. blfh-m- tor high achool fnduauoo, aueh aa bi Amanci nlalln ts lb* pspolacooa pannu tac* a (onaldahl* tov yaan of Engtlah and ihn*
cbalksft tn obtaimni a high -qual- yaan —t± of maih. adanea and
ity admuoa (or tbatr ehlktrm
Racamly. a laufinaot I know r»- lool eommuaty raluaa conUnua is
porsd thai wban hla aon trana- ba men highly valued than baatc
Tba aohMaB k is Bad a way fcr
(•nd tnn an adraDcad-plaeaaaeb wsrtar ts produc* mar*
m a p n g m tn a waalthy N*w
Alwiyt aaanund of Ih* markat
Pt^tmnA auburtoan blfh acbool Is a marhmtm. a graanag munbar of
atandard blfh acbool program la Amarleaa poiicy-maam arfu*
Spam, ba bad ts auuale »
thai th* anlutlon ts Amarica'i adu- prandlng ov werkoa with man
ts hlariaaamanaHa ap«1- caUooaJ s i n Ua* In gnatar com- aophtaucatad machbacry than oir
paUUoa
and efaao*. Tb* Idaa I* thaitaregn ooapmtan wan uaog.
tno* raOaas a (lanac mUtyi
CXbar adranoad Induainal BaUona « achool pdnopals ban mora au- Now, many countn** with l o w
prartda high acteol artiniwn for lanooy, If pannu ban mmplai* wage* ua* tha am* niai hliiaiy.
all
tbatr ftudanu thai afaal or tnmkaa to eboomng achooia aad If often with beoar-cducatad work•aaaad tboaa *a pronda tar only acboola an fundod p n l y on tha en—md Una
tea* et tb* ousbar and typaa of therpraducuai
OIM ooUaga-boimd aujdania.
Kudeau thry can auran. tba
Amencan producer* ban raBaree oompMitlon (or auidania wUI •pond«d
oth oonaarrattTaa and Ubanls torca
In pndictabla way* Thry
achools is nlaa ertiratmnal bav* emailed
•ban naponslbUlty (or th* auodardi
wigca and bancflta
and
tnnorau.
•cm Rata of Amarlcan alamaniaor movad prodocUon ofhbora.
Although tha ehotoe appraach High-paying )Oba (or Amancan
ry and leoondaiT aducauoo. ConamuTea naadfaaUy bold thai •ay Impran tnoaulraa lor achool w u l m ban beco daappaonng at
tundtoi la adaquau is tba chal- pofonnanoa. tt wUI almost oar- an alanmng rata.
loga. Yat a ncam atudy by Ih* tainly woraao lha •ducatldaal
Eoonomic Policy Inauuiu m a l a . pllghi of tha dtaadrantagad. whoa*
ibaLAmmca ranka Ulh out of 16 cboic* liai b*tw«a ooa bad achool
Induauial nauoea In tha ahan of
natlooal product daroud 10 pncouagt artraitm U would taka an
m
B
|
b
rt
w4
But aa th* n^cn by tb* Canauanoc on the SkUli ot U»* American Workfon* imbcataa. there ia a
high-wage nrategy for meeting
tb* challangea of low-wag* foreign
Tb* auatagy reaia on n*w forma
of wort argiraaauoo mat p n
gnatar naponaiblllty. aaralng
power and produetivlly to enrage
werkm thnugb gnatar delefauon of aiohority.raductxmof auperriaion. job rwauen and OaHbUIly aat eontimnng tnimng.
Many European and Japan***
csmpaswa—aucb u HawleitPackard and lal
Machinee-han demonatnted lha produeliTtty-anhancing eflacta of aucb orfantaauonal
WlthoA a dramailc tmpneea m la ekmemary and Kcondary
•ducatioq. bowreer. tha bigbwaga nntagy lor meeting foreign
~—T-"""' a not leaabletarmoat
Amencan companla*. High-pertoraanc* wort organiaoona nqiare highly quallfled workan who
can learn eonunuoualy, adapt
qidckly and ceatributa ts th* dantepment of new idee*. Tbaaa an
Uw ebaractcnsOca of
American high achool gnduaiaa
today.
Unlem we aofn our i
liefmuncuu
to ov atandard of linsg is mset
th* oompeduon of beuar educaicd
aon productive worken m the
real of tb* world.
�Los Angeles Times
August 27, 1990
The brain gap
Machines getting smarter, but
workers aren't, some experts say
By S.J. Diamond
Los Angeles Times
There seems to be some concern that as cash registers get
smarter, the people behind them get less so.
Consumers complain, that clerks can't add up even two or
three purchases without a register. A newspaper columnist
writes of his encounter with, a salesclerk who couldn't "do 10
percent" of $28.86 in her. head.
And a Los Angeles lawyer named George Schulman had to
fight a McDonald's clerk and her manager over the proper
charge for two "happy meals" with shakes substituted for the
provided drinks. It was computed several times, with different results. "Maybe the register can't ring up something that's
not already in the computer," says Schulman, "or maybe they
were just unable to explain what they were doing."
The sagging capability of American workers is neither news
nor limited to retail counters. Overall, "the rate of increase in
productivity has dropped dramatically" in this country since
the 1970s, said the recent report of the Commission on the
Skills of the American Workforce.
The commissioners, from both industry and government,
blamed, among other things, the poor education and training of
front-line workers, and the fact that management would rather
turn to machines or offshore workers than train them.
Our math skills in particular have been slipping. It has been
reported that a quarter of American 13-year-olds don't understand basic math principles, that American eighth graders
scored 13th among 17 nations in math, that the average
Japanese 12th grader is better at math than the top 5 percent
of American 12th graders.
The wonderful abilities of the machines further depress the
operators' abilities. As Emerson wrote in 1841, 'The civilized
man has built a coach, but has lost the use of his feet"
Plain old cash registers are often computer terminals connected to a company's main frame. They do everything from
registering sales to keeping track of inventory, leaving it to the
employee just to punch in the item number, price and amount
tendered. Most machines even announce the correct change.
"You don't need math to operate the machine," says Jim
Cortese, spokesman for NCR (formerly National Cash Register)
in Dayton, Ohio, "but you still have to count out the change."
Many machines don't even demand item number and price.
Fast-food stores with limited menus may have machines with
buttons describing each item, which automaticallyringup the
price when pushed. Big stores with a wide range of goods have
scanners which "read" a bar code; again, the machine supples the price.
With such machines, why should salespeople know math?
Why, indeed, should children learn math procedures, wrote a
New York math teacher to Time magazine, "when a $4.95
calculator will do it more quickly and accurately?"
Cortese's answer "The issue is larger - it's what learning
those skills does to your brain, which needs software in it."
Obviously, these machines have real advanUges, having been
developed not to depress everyone's math skills but to automate retail sales procedure.
"They enable us to take care of customers a lot quicker,
which improves the level of service," says Rob Rohde, director
of human resource planning and development for Sears Merchandise Group. Salespeople can spend more time helping
customers oo the sales floor.
Machines also free people from the need to master certain
skills. Many retail counter jobs are now open to the young,
untrained and uneducated. Fast food restaurants, supermarkets, big merchandisers generally require neither proof nor
exercise of arithmetic skills and in return, pay Uttle.
"The register does everything now," says Aileen Gorman,
spokesman for Boston-based Bradlees discount stores, which is
installing scanners, along witb a formal course in customer
service for salespeople. "They don't have to do much thinking, but they do have to smile, to listen actively, to treat the
customer with courtesy."
„
t
�Philadelphia Inquirer
June 17, 1990
Failing to invest in workers
A i t f 11 John Coand had anoufb
f \ of dotal pickop work likt bcioi i
janitor aod baipiof nx can.
X A . So last year be walked into a
loriniBent iraunnf aitacy. Ha ducaaMO bu a i l l i and all kinds of job
opponuninej with • counselor. Tojathar.
ibey dacioad ibe beai beu ware weldm*.
resiaurani cookini aod iDdosmaJ prac
aai csnirol.
Ht wnisd on process coatraL la which
be would rctulaii aaiomaiad machinery,
aad corolled ia • ooe-yaar free traiamc
coune. While be went lo school, ba tot a
BDOe-aeak stipend — • btlp ia npponiaf bn wilt aad two small childraa.
AJihou|b Conrad Is aa American, tba
Uhiiad Suies is noi lO'esnni la bis trainID| and it is not tbt VS. economy thai
will banafiT from bis oew saills when ba
rvnims to work.
Swiideo. where be has lived for tbt tail
five years is picking up iht irainini lab
and will reap ibe rewards of bis increased value as s worker Witb his op(raocd m i l l ht will bt sbie to product
hilhcr valut |oods and pay more laxta.
kowner* io iht United Slates would a
hon<olle|c iraduate Ilka Conrad find
such sn ortanaed syrtm of career advice, traininf and financial asaistance
And thai lack is just one symptom of a
diareiard for human Baoarcas thai is
provoking growini alarm among US
bnsiness owners, tcooomists and policy
analysts who see n as t growing tbraal to
iht nation s economic well-being.
Tbt lattsi. and moat thprough. indictmem of ibe U.S- worktr^raioihg syatev
will come lomomw. wbco a blue-nbboo
paoaL indudini two lormtr taoetanat
ol labor, will lama s m o n mniammg .
sweeping recommendations (or cbangt
ia tht way iht United Suits prepares
noo-colleft fnduatts for ibe workforce.
Tht United Slates bas already saaa
somt of its products lose oul oo world
markets, and ovtr tbt last » yaan n has
wttnected s 12 percent decline in the raal
mcomck of us Doa<ollega-educaied
workers.
Tbt only way to reverie our panan of
siagnauni productivtry and daclming
real wages is to increase prodomnty.'*
and to do that wt must prondt wortan
witn better skills, says In Magannar.
who chaired tbc panel thai spent the last
tear rcMarching iht issue.
If thai doea noi happen, ba warns, t b *
ramificanou an tenous.'
Uagtsnar I group, tbt Cammisoa oo
ilw Skills of tht Amencan Work/orca.
will propose broad cbangas tn the way
iht Uoiiad Suia preperet DOCKOllege
gnduaies for work, both donng high
school and Uter is tbey require add>nooal mils to continue advanang la
ibair careen.
Wiihoui tocb cbahgaa tba Unnad
Suits will tea a coonnomg aroaioa of In
stallry io campen io world markats and a
needy dacliac in ill sundard of living,
accordiog to tba repon. "Amancat
Choice High Skills or Low Wagea."
Tbc commiwos was convened by tba
Nanooal Caour OB Education aad tba
Economy. • oooprofit orgaaiatioa ipecialinoi in tducauon and human reBuree issues.
iu repon will be the ibird ibis year to
decry tht baphaiard way ia wbicb noa'mllege-oound youth — more than half ol •
tu I S high school induaits — i n
irtmad for work and fuootled mu careen
Boih tht Educational Tasting Stmca
snd ih/Central Accounting Offtct cofl.
cludtd ihat ibote nudants an given
inon i.inft in tbeir high school educanooi snd |tt almost no tsnsuoct wnb
cboosini and prtpanng for careen.
Secnttry of Labor Eluabatb Dole bas
also tm braced the campaign to improve
preperatm for work. She bas taufr
lished. wiimn the Department of Labor
Tanja Eckhof i i a tochalcaMrasrng undent at tht I U U mcul-workinf vocational achool in Hamburg.
The United States
gives inadequate
guidance and
assistance to its noncollege graduates,
say business people
and economists. And
the lack of an
organized workei^
training system is
seen as a growing
threat to the
country's economy.
John Coand got fro* trauung oa tsduatrUl proccaa control ia Swadaa.
bia Universty. aasaa* Ihat tba o n c m
among chief nocuDvoe aad soma poll^
makan Is nlll far from growing into a
national consensus.
Tbeae repons we pat oat. bow much
do these really filler down' io toaety at
large, she wooden.
The lack of career aid for nofKOlleg*boud youth ia tht United Suits stands
In sharp contntst with the help avalUble
for ihoaa going oo lo higher tducauon.
Wayne Sammltr't siory is all too typical
of bow Amancan youth drift into careen, tba stadias say.
Samraler graduaiad la 1*7] (ram Naaht
way High School in Bucks County, he
taid with little advice on tba bear way u
aster hu cboatn prateanoa. health can.
Sua Berrymtn. dlracior of tba Instirate Ht also said bt received vwoally no
oa Educauoa and tha Economy at Colum- ooanaaling at Bncu County Community
an omca of Work-Baaed Laeming. wheat
pnmary goal Is to help young paople
aove lata prodocnv* careen and upgrade their job stalls.
Oeapite ibt apaurgt of concern, bow.
rvtr. tbtre is widespread tppnhensioa
thai the nanon will an b* abl* io mtuttr
tba public will to make the necessary
chasgaa.
-I'm not tangsioe aboat the Amencan
capactiy to ture I Iht atuauonl around."
says Thaodon Hanbberg. prefasor ol
public policy tad history ai Ua Umvernry of Pennsylvania. "Becauae ooly 2
perceni of ibe workforce turns over
every year, i l l a slow cnau lhal ual
really being felt yet, and It's hard to tea
Collate, wben ba earned aa saaooate
degree in health car*. Whan ba decided
ooi t* transfer u a (oar-yaar collage, be
ami to wort la a window factory and a
fast-food ouUai becauat ht iboagbt bis
two-year degree wotddal qualify him lor
a health-care Job.
Through bu mother, a auna. be eventually got work aa a hoaptul orderly aad
than manad to acbool lor a ooniag
degree He It BOW head nam in tbt
ihon-pfocedure unit at Frankfort Hoepi
tal's Tamsdals Campoa
Sammlar't bosncing • round csntraau
sharply wiih the way worken ia other
eouaineo an channeled into careen
la Germany, for example, almon all
tndents who an noi planning u go da to
a onivemty become tppnniicas ia any
ISoa WORKFORCE on »C1 .
�Philadelphia Inquirer
June 17, 1990
U.S. failing
to invest in
its workers
WORKFORCE, from 1-C
one of J80 occupanoos at the age of
15 or 16. For the n«Xt two or thrn
years, about mrwHourttu of their
nm« is spent in on-the-job training:
ih« rest is spent in school.
" Tanja Eckhof. for example, is enrolled as a technical-drawing student
at ihe stale metal-working vocational
school In llomburg. Germany. There,
last month, she fabneated metal
parts to help leam how two-dimensional drawings translate into threedimensional objects.
While ihe major indiuthal nations
each have their own system for
training future workers, they all
have several features in common
thai arc missing in the Uniied Slates,
according to fhe GAO report Issued
last month:
• They have relatively heavy Investment in education and training for
non-college students.
• They expect ihat all students, even
those not planning to go to college,
will meet cenam academic standards before ihey leave school.
• They supply broad asnstance. frequently wuh help from the business
community, to enable students to
leant about job requiremcnu and
find jobs.
What these policies produce, according to the studies, are workers
who are much better prepared than
their Ui. counterpans to do the jobs
of ihe future: jobs requiring decision-making and technical skills,
even from the lowest-level workers.
llllflll
/MOaUCNOK
Dirk Obrecht (left) and Vlggo Frani are apprentice mechanics at a car dealership in Hamburg.
Workers. ID fact are much more
important than technology In keeping companies competitive, according to snidles reported by tha American Society for Training aod
Development. About three-quarters
of tb* US. increase la produc;.vity
over the last 40 years came as a result
of what worken learned either oo
the job or before entering the workforce, while only a quarter came
from new technology, the society
says.
And thai, says Hershbarg. Is why
the education of U i workers is so
Companies increasingly require critical.
those skills as they strive to remain
-Those kids in other countries will
competitive by producing goods of
higher quality, with more special- be competing with onr kids, and
ized features, and get them to market their products will determine our
faster
kids' sundard of living."
U.S. lagging in productivity
::
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produCTrfp«r»*sr*«r. ISW.
:
:- Japan •• •
• W.Garreany
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•
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• 27.3% . . H g H B i ^ B a
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�San Francisco Chronicle
June 19, 1990
U.S. Worker
Training
Criticized
Panel urges joint assault
on low level of education
By Jolut Fckhtmm
Among other things, the comTha United SUta wUI lealac* tht balk of Its workforce to nussioQ recommended that:
e low-wife fnmre anlen It ndl• All VS. companies spend at
olljr ilten the wej work if orx*- least 1 percent of their payroll edunixed u d itndenu ire edoealed, cating and training worken.
a puel warned yesterdaj.
• American students be comTht Comminkm on the Skllb pelled to reach the world's highest
of the American Workforce uid educa fVma I-performance level
the nation haa a choice between
• To prevent students from
gMng Its worken high tklUs or dropping out of high school, those
low wages and that "gradually, ai- under the age of 18 should be proleotly we are chooaing low wags." hibited from working unltu enThe panel, chaired by two for- rolled In a program to meet the
mer secretaries of labor, propoaed InCTeised education standards.
an idealiaOc. mulUblUioo-doUar
technical ^ pn>
program — to be financed by both • Extensive
training be provided for
government and Indtutry — to re- fesskmal
the 70 percent of the population
verse the trend.
that does not go to college.
Already a doien countries proAn appendix to the report sugvide higher avenge wages than gested the proposals could Intht United States. US. children crease federal and state educa aonrank at the bottom oq most Inter- al spending by $36J billion. Panel
national educational tests and the Chairman I n Magaziner said corVS. poverty level Is higher than In porate spending on training would
many Industrial eountrtes, tha jump by almost CS billion to meet
panel'i report said. The only way the 1 percent requirement.
out of the downward spiral Is to
increase VS. productivity by upAlthough few U i companies
grading the skills of VS. workers, come dose to spending the recomthe report said.
mended 1 percent of payroll on
"America today Is faced with a training. Magaziner said. West
workforce crlsli thai most of us German companies already an reare unaware of," said John Scol- quired to spend 19 percent, Swedley. chief executive of Cupertino- ish companlts pay 13 percent and
based Apple Computer Inc. and tha governments of Singapore and
chairman of the National Center Ireland require a 1 percent spendoo Education and tht Economy, ing level.
which created the commiuion.
-Yes, it will coet, but I think the
return will be far beyond whatever Is paid." ** ^ commission Civ
mnt
TRAINING U.S. WORKERS
From Page 1
chairman WUUam Brock, a Washington consultanl and former secretary of labor. Two former governor!. James Hunt Jr. of North Carolina and Thomas Kean of New
Jersey, said they thought stale govenunenu would back tha proposals.
The panel suggested that tba
government could pay to train
worken and then be repaid
through a 1 percent Income-tax
surcharge levied on the people
who receive the training.
Brock said the commission's
eight months of research and
more than 2,000 Interviews conducted at domestic and foreign
companies produced one major
finding that startled him.
"We thought we had a severe
shortage of skilled worken. but we
found something much different
and much more troubling." he said
during a New York press conference that was broadcast to several
other cities. "Managers are largely
satisfied with the skill levels of
their worken, because most jobs
require low skills."
That creates a vicious cyde, according to the report. Business defines jobs narrowly and requires
Uttle real skill, and consequently
little Isrequiredof VS. schools.
Achieving a hlgh-ochool diploma today means Uttle In the way of
educational achievement, commistion memben stated In the report
and reiterated at the press conference. A diploma simply Indicates
to employen that the holder had
the intestinal fortitude not to drop
out of school — the national dropout rata is 20 percent — and thus
might be reliable on the job.
FIVE STEPS
Tha Corvnkuor on lha Skilh of
lha Amancan Woitfom't
Ina
faconunandohon (ot wesys lo
aducola and Irom a highly
ikilltd, pmduttna work torca,
• Require every U.S. Hwdwit
to mert by OQ* 16 educotionol
itandords at high as thou of
any ofher country.
• Ensure riiot virtually every
student achieve this level by
creating and paying for altern^rtn^ looming enwronfflentt
at iwcetsary. Prevent dropouts
by prohibiting children under
iKe o g . of 18 from working
unlets *nrell*d in o piogram lo
meet th* educational perform
(nunc* requirement.
• Provid* •at*niive tedtnical
and profeiitonal training for
Ih* 70 percent of th* population Ihat does not go re colleg*.
• R*quira every employer to
spend at least t petont of ill
payroll to educate, train and
improve th* skills of its worfc• Creat* a tingle fed*
system to manage the proposed n*w •ducation and
fioimng i^fltatft.
schedule™ and maintenance people.
The commission crUldied
what It described u the shortslghtednea of busmen management
which, it says, spends little on
training worken or upgrading
their skills. Only 8 percent of bluecollar worken In the United States
receive training, and most of that
8h»e-Cell«r Feros
Is basic orientation and safety inThe panal called for a major struction.
reorganization of work practices.
Albert Shanker. president of
' It would give much more responsi- the American Federation of
bility to blue-coUar worken. who Teachers, who was specially invitwould receive a far better educa- ed to attend the press conference,
tion and mora on-the-job training ceiled the report "therichestsnd
than they get now.
most imporunt" of the more than
ThaL in turn, is supposed to 100 educational-reform proposals
sharply increase productivity by he has read, because it deals with
reducing the nutaber of supervi- the relationship between the econsors, quality checkers, production omy and education.
�Wall Street Journal
June 19, 1990
Work Skills Panel Urges Major Changes
In School Education, Job Organization
By A I J O T R. K A U
Suff n*p*wr o/ TUB WAIL trmMMT JOUBNAI.
WASHINCTON-MaJor zhinfTt tn t l f t ictuol educAtkn uid wortpUcc orcuizi*
uon v c needed to empfiuiie ilfinti skllli
u d pteter worttr uiUorlty oyer bow
Jobs t n dooe. i wort iklUi mmmmniri
aid.
Tbe Oommimoo on the SUUs of the
Amencan Wort place aid that If both educatioa and wort syttemt aren't rertied.
the U^. will cootlnue kBUif compeuave
fround to foreign nationa.
Most
employen have ao far done
rruonibly well lo meetinx foretri compeution by uainf fewer, low-paid workers,
with low skills, the repon said. But the
focus must switch to usui( better-educated,
better-trained employees, with more controi over their wort, or at least n % of
workers "wUI see their dreams slip away,"
the commisnoo said.
Tlie commlscon w u formed by tbe Nauonal Center oa Education and tbe Economy. Rochester. N Y., which was spun off
from Carnefte Corp. two yean ato- Since
1966. tbe rroup has issued repons uiruif
restnictunnf of U i schools and freater
Oexiblllty hi federal funding of educatloo
for disadvantaged youths.
One company thai already follows the
hifh-skllL employee "empowerment" approach Is Intemadooal Bnsiness Machines
Corp.. tbe repon said. When manager! at
IBM's Austin. Texas, factory thai supplies
circuit boards for personal computer! said
they could ssve tto mlllloo by buying
boards elsewhere. IBM had other ideas.
Because It pursues a full-empioymenu
no-layoff policy, managtn instead cut
cosu by upfradlng worker skills, the repon said. Tbey orgiimed workers into
teams, pvtaf eachresponsibilityfor Its
own inspection, repaln and materials or
denng. Workers who had performed such
indirect tasks were assigned lo productloo
teams, and far fewer Indirect employees
were needed.
Job dasslflcatlons were changed, reorfanuUf manufacsunng slots Into categories with nsuig skillrequirements,the repon said. Educanoo and training progrants were launched: the plant now
spends more than 5* of Its payroll to teach
workers.
According to the report IBM says that
the SCO mlllloo gap h u bees closed. Productivity ts up by more than 200%, quality
is five times bener, and the inventory h u
bees cut 40%. Praducoon hks nsn 60OV
and tbe plant employs man people t h u
ever.
Ytw ArSuj exiieneoce Is a good exampie of what IBM b u been doing in the U i
and abroad. Wai too Burdlck. senior vice
president for personnel, said in u Inter,
view. In both manufsnunng and service
)ota. tbe aun Is to "unleash more of
Iworten'l Innovative u d creative"
powers, be said.
With more employee Involvement In
wort place functlonj such u ordenng sup
piles, setting schedules, keeping quaJlty
records, mam I* nance and problem -solving,
morale is higher and productivity climbs.
Mr. Burdlck said.
By contrast, the commission said "the
vast majonty" of U i employen aren't
moving to "high pertormance'' work organiuuoii. which requires educated
worken, nor invesnag to train employees.
Fully S7 billion of the QO billion In annual
training outlays Is spent bytt.000companies, only 0.55. of all U i companies, and
fewer than 200 of these employen-large
companies with significant professional
and managerial staff-spend more than n
of their payroll on formal training, the repon said.
The commission Is hesded by I n Magsilner. a consul last in Providence. R J , and
by WUllam Brock and Ray ManhalL. former U i labor secretaries. Tbe study involved Interviewing 400 U i companies
and comparing school u d workplace programs in six foreign nations with those In
su states. Tbt cocnmlssun recommended.'
—A new high-level educaOooal performance standard should be set for high
schools, and made a requirement to be met
by age IS.
-States should assure that nearly all
students obtain a ctrtmcaie thai they ve
met this standard. With federal a i l they
should also create allernadve learning programs lor those wbo cannot reach the Initial standard In regular schools, and use
youth centen to enroll school dropouts.
Youths shouldn't be allowed to won before
age U unless they've achieved the cemncate or are enrolled In a program toward
It.
—A thorough system of technical and
professlonaJ educafloo should be Innltuud
for noo-college-hound high school graduates. Specific Amipatfrr * »nu« r i f i M be
combined with general edueation.
"Because we have failed totorgea relationship between how well a student does
in school and what kind of job he or she
can get. we have turned our high schools
Into Uttle more t h u holding tanks for noocoUege-bound students." Mr. Minhsll
1
1
-Employen should he given Incentives
and aulstance lo Invest in further educaboo and training of their worten. and to
pursue workplace methods aimed at high
productivity. All companies would have lo
contribute at
ft 1% lor a^twmw, iiwi
training.
—Employment and training boards
should be set up by the federal gsverament
and stales, lo help employen define their
worker.skill needs, give worten access to
traming and help local goveroments and
othen plan effective lahonnartet programs.
�WALL ST.J.:03/05/93
A her Diagnosing a Case of Out-of-Control Co
Health Strategist Magaziner Now Must Find C
age to the 37 million Americans who don't lower than fees private insurers now pay;
have it while curbing costs permanently. and limiting the annual increase in insurStaJJ Reporten of T H E W A L L STREET JOURNAL
"Health-care reform is going to take a ance premiums.
WASHINGTON - A few weeks before lot longer than anyone would like to hear,
While Mr. Magaziner says he is comthe election, some of Bill Clinton's top including Ira," says Steven Baron, presi- mitted to market competition as the ultiadvisers began suggesting that he put off dent of Miriam Hospital in Providence, mate way to rein in health costs, many
his plans to overhaul the nation's health- who worked with Mr. Magaziner on a people feel that such government mancare system and concentrate for the time plantomake Rhode Island's medical deliv- dates would run countertohis grand goal.
being on the economy.
ery system for the elderly more efficient. "Once you get on a price-control regime,
But up in Providence, R.I.. a longtime "1/ you err on the side of saving money it's hard to get off," Bill Gradison. a
friend of the president-to-be was busy now, you're probably not talking about real former congressman who is now president
reform." Even some advising the White of the Health Insurance Association of
churning out reams
,. ~ --v
House task force are wary of Mr. Maga- America, says he told Mr. Magaziner
of data illustrating
ziner's zeal.
recently.
that the two issues
are inextricably
Even if short-term price controls are
Work for GE, Rubbermaid
linked. Unless the
successfully
Mr. Gradison and othYet Mr. Magaziner's background has ers argue thatlifted.
relentless rise in
they could stifle the innovaobviously
convinced
him
he
can
succeed.
health-care costs
that is necessary to holding down costs
In the business world, he has solved highly tion
could be brought unin
the
marketplace. Additionally, once the
complicated problems for General Electric controls
der control quickly,
are lifted, some believe that prices
Co.,
Rubbermaid
Inc.
and
other
corporate
the
numbers
would
soar,
much as they did when Presigiants, sometimes practically overnight. dent Nixon ended
showed, the slugfederal price restraints
"He
has
come
in
with
pretty
brutal
data
gish economy never
in
the
spring
of
1974.
about how we're the high-cost producer in
really would redirectly controlling costs, of
a certain area and need to Improve on that Beyond
cover.
lies the daunting task of extending
or we're going to haverealtrouble," says course,
Ira Magaziner's
tm Magariner James Houghton, the chairman of Corning health coverage to all Americans. It is no
secret that Mr. Clinton wants to meet this
argument won out.
Inc. "Costs are a part of his thinking."
challenge through "managed competiNow, though, he has to do far more than
years ago. Mr. Magaziner helped tion." a blend of free-market forces and
just demonstrate the problem: He has to leadTwo
a study of the health-care system in government regulation, under which emcome up with the solution.
Rhode Island that broke down the cost of ployers and individuals would band toThe White House has recruited hun- medical
services as if they were products gether In giant pools to shop for health
dreds of the nation's leading experts to on
a
factory
floor. The report, which even coverage. The hope is that the tremendous
craft a plan to overhaul the health system, medical industry
found eye-open- buying power of these pools would
bui it's Mr. Magaziner. a relative new- ing, showed that veterans
only
4
6
cents
of every heighten competition among insurance
comer to the field, who has the power. dollar spent on health care in the
state companies, doctors, hospitals and other
Hillary Rodham Ointon. chairwoman of actually goes toward healing the sick;
the health-care providers, lowering costs and
the administration's health<are task rest is basically for bookkeeping and other
improving quality for everyone.
force, clearly is in charge of this remarkNurses, the report found, may
able undertaking. But as the leader of the overhead.
Mr. Magaziner is the one who "brought
spend
half
their
time
on
duty
filling
out
"working group" putting together the de- forms.
the basic managed-competition concept to
tails of the proposal, Mr. Magaziner is the
the Clintons," says Dr. Ellwood, who is
Given those findings, few who worked considered
one who has his hands on the plumbing.
the father of the theory. "He
Mr. Magaziner on that project would
He is using his authority to focus on with
be
surprised
to
see
the
White
House
task
swift and drastic medical cost control. force recommending that whole layers of
Some fear Mr. Magaziner may be taking the health-care bureaucracy simply be
on too much, too fast. "I think he is overly stripped
away. Currently, for example, a
optimistic about the possibilities of quick hospital bill
paid under the federal Medisavings.* says Henry Aaron, an economist care program
the elderly can go
at the Brookings Institution whose advice through as manyfor
as
layers of review:
was sought by the Ginton campaign. But doctors and nurses, six
hospital's utilization
Mr. Magaziner is solidly backed by the review department, aa fiscal
intermediary,
only two people who really matter - the a so-called peerrevieworganization,
a
president and Mrs. Clinton.
"super" peer review organization and,
'As Quickly as Possible"
finally, the Health Care Financing AdminCosts have to berestrained"not five istration in Washington. "It's checkers
years from now, but as quickly as possi- checking other checkers." Mr. Magaziner
ble." Mr. Magaziner says in his flrst says.
interview since taking the helm of the
Still, many health-care experts aren't
working group. "U you don't do health as confident as Mr. Magaziner that the
reform - and I mean now - the budget is layers can be done away with, and dollars
busted again in two years." Of the S800 saved, so easily. "Ira's estimate of bow
billion that the nation spends each year on much was waste is not agreed to by
health care, he figures that $130 billion everybody." says Patrick Mattingly. presigoes for unnecessary tests and procedures dent and medical director of Harvard
and S70 billion for unnecessary adminis- Community Health Plan of New England.
trative costs.
"We just can't take away some of i t "
A highly successful business consult- Special Panel
ant. Mr Magaziner is widely admired for
As rapidly as Mr. Magaziner thinks he
his keen intellect and the fact that he isn't can whittle the bureaucracy, he knows that
beholden to any particular camp in the a comprehensive refonn plan will take
debate over health-care reform. "If you time to implement. So, meanwhile, he has
didn t have Ira Magaziner to make this set up a special panel to explore short-term
work, you'd have to invent him." says Paul options. It is looking at several possibilities
Ellwood, a physician and organizer of an that advocates say would impose discipline
influential group of academics and medi- in the system but would surely be political industry executives seeking solutions cally explosive: anftutrightfreeze on all
to the health crisis.
medical prices, similar to the economyBut some worry that the rapid savings wide controls imposed by President Nixon
Mr. Magaziner is seeking could end up in the early 1970s; requiring private inundermining the administration's long- surers to reimburse doctors and hospitals
term strategy for extending health cover- at Medicare s rates, which are at least 10%
By RICK WARTZMAN
And HILARY STOLT
-
�I ru* m«ien«i m«v o» proteciea oy copyngm law. lima i / . u a . (.oa*)
WALL ST.J.iflMSZa
\
felt it was very practical and pragmatic. " had made during the campaign. But Mr.
Actually, it s probably more apt to •inton crossed out the date, saying that if
describe managed competition as complex things slipped beyond the 100-day deadand untested. That Mr. Magaziner would line, it could jeopardize the plan's chances
be attracted to such an approach is fitting. of getting through Congress this year.
As a 45-year-old father of three, whose
It is now 59 days and counting. Many a
high forehead is covered by a tousled mop morning, Mr. Magaziner wakes up well
of hair that is more salt than pepper, Mr.
Magaziner is too old at this point to be before sunrise in his hotel suite, and
called a whiz-kid. But he is a radical
arrives at the Old Executive Office Buildthinker - trained, he says, to "do in my ing by 4 a.m. toreadand write. At 7.
mind a whole series of what-if's . . . to there's a staff meeting. By 9:30, he's in
think of all the possible scenarios that can with the first lady. Often, he can still be
screw something up."
found in the office 12 hours later, consider• 'He of ten sees things in a different casting all the what-ifs.
than everybody else," says Robert Rubin,
the head of the White House National
Economic Council. Adds Treasury Secretary Lloyd Bentsen: "The ideas just sort of
effervesce."
Most important, when he comes up with
one. Mr. Magaziner has an open door to the
president, whom he has known since they
were Rhodes scholars 23 years ago. He
also has a self-described "very easy relationship" with Mrs. Clinton, with whom he
has worked closely in the past. He now
meets her every morning in her West Wing
office.
Attempting health-carereformisn't
Mr. Magaziner's first seemingly quixotic
pursuit. As a Brown University student in
the late 1960s, he persuaded the administration to revamp the entire curriculum, a
move that brought the school enormous
popularity. A few years later, he joined a
group of young idealists hoping to revitalize the downtrodden community of Brockton. Mass.: results were disappointing. A
decade ago. Mr. Magaziner pushed an
industrial policy plan in Rhode Island;
voters rejected it by a 4-to-l margin.
It is doubtful, though, he has ever
worked harder. Over lunch at the White
House a few days after the inauguration,
Mr. Magaziner handed the president a
schedule showing completion of the health
plan at the end of May. a month beyond the
first 100 days" pledge that Mr. Clinton
�T t M mat«ri«l m«v b« pfot«ct»d by eopynght law. (Tilla 17, U.S. Coda)
U2-
N.Y.TIMES:Q2Z2fiZaa
dia," the best consultant ever retained by the company. He said Mr.
Magaziner helped Coming compare
itself with foreign competitors.
"Ira constructed a model of what
we were up against by visiting foreign countries and collecting hnge
amounts of information about our
competitors' taxes and labor costs,"
Mr. Ackerman said in an interview.
"Based on his advice, we decided to
By ROBERT PEAR
make a big commitment to the liquidSpecial io T V N r * Yort rimes
crystal display business in Japan,
WASHINGTON, Feb. 25 - He reed logically from A to B to C to D. and it's been a success story for CorIra can go immediately from A and B ning."
made radical changes in the curricuOn the other hand, in 1989, Mr.
toC."
lum at Brown University He led a
Magaziner told a Congressnaal comband of young idealists working for
'An Outsider in Washlngtoo'
minee that the Federal Government
social change in Brockton, Mass. He
Following an edict he imposed on should invest in research on "cold
tried unsuccessfully to make his other
Mr. Magaziner re- fusion," lest the United States fall
home state of Rhode Island into a fused toofficials,
discuss the Administration's behind Japan and European counlaboratory for his theory of industrial health-policy
review By his own ac- tries in developing this technology.
policy.
count he is "an outsider in WashingAnd now he is trying to revamp the ion," a novice in the capital's corri- Congress, he said, must not "dawdle
nation's health-care system. Ira C. dors of power But he presides over a and wait until the science is proven."
Magaziner is President Clinton's sen- policy-making apparatus like nothing The science, however, has still not
tor adviser for policy development. seen here in decades: more than 300 proved commercially valuable.
But he works mostly for Hillary Rod- economists, health-policy experts,
Led Curriculum Refonn
ham Clinton in her effort to devise a Government employees and consultMr. Magaziner grew up in New
plan to control health costs and guar- ants racing to assemble a major
York City, the son of an accountant
antee health care for all Americans. health-care proposal by May 1.
who worked at a tomato-packing
Mr Magaziner. who is 45, is vari"He is worth several million dol- company. As valedictorian of the
ously described as a complex, intense lars,
1 ihink he owns one rumpled class of 1969 at Brown, he led efforts
man; a shy, eccentric genius; a harsh sun, but
he doesn't press," said to liberalize the curriculum. Through
taskmaster who works harder than Markwhich
Patinkin, who wrote a book noisy rallies and quiet negotiations,
anyone on his staff
wiih Mr. Magaziner in 1988. "He
persuaded faculty members to
"Ira is a nonlinear thinker," said spends 90 percent of his mental ener- he
move away from large lecture classStephen H Crolius, a 37-year-old con- gy thinking about policy. He lives to es
and toward individual instruction
sultant at Telesis, a company founded solve policy problems."
and independent study.
by Mr. Magaziner. "Most people are
Mr Magaziner's career as a busiused to thinking in terms that progoal was to eliminate most of
ness consultanl illuminates his ap- the"The
and let students
proach io health policy. He has im- haverequirements
greater
freedom
to choose their
mersed himself in vast quantities of
said Elmer E. Comwell Jr.,
Ira C . Magaziner
detail and data, just as he did when he courses,"
professor of political science at
worked for clients like Volvo, General aBrown.
"Ira and another student
Electric,
Coming,
Wang
Laboralories
Borru Nov. 8. 1947. New
a very comprehensive repon,
and the Governments of Israel and drafted
and most of their recommendations
Yortc City.
Sweden
were adopted by the faculty. A great
He has established more than two deal of Brown's popularity flows
Hometown: Bristol. R.I.
dozen commmees to study aspects of from the 1969 curriculum reform. We
health policy, including cost controls, were viewed as ah avant-garde kind
Education: Public schools of
long-term care and menial health. of place."
Far Rockaway, Queens, and
Each team must meet seven deadLawrence, L.I.; Brown
After two years ai Balliol College,
lines Each deadline, in his jargon, is
University; Oxford
a tollgate He spends his time talking one of the oldest colleges at Oxford
with these committees, with mem- University, Mr. Magaziner and sevUniversity.
bers of Congress and with lobbyists eral friends wem to Brockton, an old
from groups like the Health Insur- shoe-manufacturing center 19 miles
1971-73,
south of Boston, for a local experiance Association of America.
neighborhood organizer,
ment in social democracy that sought
Mr.
Magaziner
was
a
Rhodes
Brockton, Mass.; 1973-79,
to reverse the city's economic deScholar
al
Oxford
University
with
Boston Consulting Group;
Bill Clinion, and his intelleclua) im- cline.
1979-89, president of
print is evident in Mr. Clinton's camIn an effort to give more power to
Telesis, a business
paign manifesto, "Putting People the residents of Brockton, Mr. MagaFirst."
consulting concern; 1990ziner and his friends supported libIn a 1990 study called "America's eral candidates for local office and
82, president of SJS Inc., a
Choice. High Skills or Low Wages," established a food cooperative, a
consulting concern. 1988Mr. Magaziner said the nation must weekly newspaper, a tenants' rights
81, chairman. Commission
train workers and reorganize the organization and a nonprofit corporaon the Skills of the American
workplace to meet challenges of the tion to repair dilapidated housing.
Work Force. Also involved in
21si century. As candidate and as
"We were very idealistic, commitPresident. Mr. Clinton has often ted and earnest," said Joshua C.
public policy studies Rke the
talked about ihe need for "an econ- Posner. who graduated from Brown
Greenhouse Compact, lor
omy of high-wage, high-skill jobs."
in 1971. "After a couple of years, it
Industrial development, and
Consultant and Agitator
became clear we were not going to
Aging 2000, for health care,
the world starting with BrockFor nearly 20 years, Mr. Magaziner change
in Rhode Island.
ton. Ira realized there was a lot about
was a consultant to blue-chip compa- the
real world that he didn't know,
nies, which he often charged more and he
Fanty: Married to Suzanne
wanted to leam. That's why he
than $500 an hour, colleagues say. But
to the Boston Consulting Group
McTigue; two sons and one
he also advised Walter F. Mon dale went
daughter.
and Michael S. Dukakis, the Demo- in 1973, to be a business strategy
cratic candidates for President in consultant."
This was a turning point in Mr.
faterests: New York Giants
1984 and 1988, and he has not abanfootball fan; New York
doned his past as a political agitator. Magaziner's career. At this time, his
he moved toward the
Yankees baseball fan; travel
Roger G Ackerman, president of friendsofsay,
the political spectrum.
Coming, which makes glass and high- center
with his children.
"Up till then, Ira had seen big busilech materials, described Mr. Maga- ness
as an institution to be skeptical
riner as a tremendous encyclope- about,"
Mr. Patinkin said. "But a
number of Brockton shoe factories
shut down because of foreign competition. All his work to help the needy
was overwhelmed by the closing of
those factories. Ira realized U-at corporate and economic success was the
truest path to save the world, to create orosoeritv for those who didn't
Washington
at Work ^ j ^ J j ^
An Idealist's New Task:
To Revamp Health Care
�This material may ba protected by copyright law. (Titie 17. U.S. Coda)
N.Y.TIMES Q2/?6/93
:
have ii."
In 1979 Mr. Magaziner formed his
own consulting concern, Telesis, to
develop his ideas on industrial policy
and to advise corporate clients. In
1986 he sold il io Towers Perrin, a big
consulting company, for a sum estimated by Rhode Island businessmen
at $6 million. He formed another consulting concern, SJS Inc.. in 1990.
Mr Magaziner put his economic
ideas to a test in 1984. He was the
chief architect of a $248 million industrial development plan for the State
of Rhode Island. The proposal was
called the Greenhouse Compact, an
allusion to the fact lhal Mr. Magaziner wanted to establish "greenhouses" io nurture promising industries like robotics. But the plan was
overwhelmingly rejected by voters in
a state referendum.
An agitator turned
consultant who
now presides in the
corridors of power.
Recalling ihe referendum, Prof
George H. Boris of Brown, who de
scribes himself as a free-markei
economist, said, "Ira's economic
ideas were primitive, just off the
wall." He maintained thai Mr. Maga
zmer seemed to assume thai Rhode
Island, the nation's smallest state,
could develop iis own economy and
ihnve on exports. Thai notion is absurd. Professor Boris said, because
Rhode Island is economically depend
ent on its neighbors, Massachusetts
and Connecticut.
In addition, Mr. Bom said . "There
was great suspicion that the Greenhouse Compact would favor some
firms at the expense of others. Businessmen feared their competitors
would be subsidized by the state."
But many ideas from the Greenhouse Compact, like the proposal for
government aid to high-tech industries, showed up in Mr. Clinton's economic proposals.
J. Joseph Garrahy, a Democrat
who championed the Greenhouse
Compact as Governor of Rhode Island in 1984, said, "Leading educators
and businessmen saw it as a valid
way of trying to help the state out of
its economic difficulties."
Representative John F. Reed, a
Rhode Island Democrat, said: "Ira's
predictions about the state's economy
have unfortunately been borne out. If
we didn't do anything, he warned, the
job base and the manufacturing base
would decline. He was right."
In the national health-care industry, as in the Rhode Island economy,
Mr. Magaziner wants to stimulate
free-market competition, but he also
welcomes the firm guiding hand of
government. Thus, the President's
Task Force on National Health Care
Reform is considering "interim cost
comrols" like limits on doctors' fees
and hospital charges.
Edward J. Caron, a vice president
of Providence College, who worked
with Mr. Magaziner at Telesis and
SJS Inc., said: "Ira thinks in very
broad strokes His health-care re
form proposal will be well-supported
and well-documented. But he will
need nuts-and-bolis people to put hi?
strategy into effect in the real world
ai ihe level of ihe average person
because he thinks ai a more globa
level/'
�Health care adviser
'obsessed' with task
By Judt Hasson
and Judy Keen
USA TODAY
On the mantle in Ira Magaziner's offlce, there's a sign that
says it all:
"It s May 3rd. stupid."
Only 26 days away, that's the
date that Magaziner, the top
White House adviser on health
reform, says President Clinton's health care task force was
lo deliver recommendations
Ginton can send to Congress
and sell to the public.
The sign echoes the key to
Clinton's campaign, when the
No. 1 issue was explained by a
sign saying. "It's the economy,
stupid."
For Magaziner and many
Americans, now health care is
No. 1. And Magaziner — working closely with flrst lady Hillary Rodham Ginton, who chairs
the president's task force —
says It's important to deliver by
May 3, or very soon after that
"We knew we had to do
health care first; we knew we
had to do it this year," he says.
Lying awake at night, the
gentle, soft-spoken Magaziner
runs over the details again and
again of what the administration is trying to do In designing
the biggest social change in
American life in a generation.
"I'm obsessed with it because it's such a big responsibility,'' says Magaziner, who
looks more like a rumpled college professor than the millionaire consultant he is.
THE MAGAZINER FILE
liii
ASE: 45. Bom Nov. 8.1M7
IMCATtOK Brawn University, A.R, 1969; Oxford Untverrity,
Rhodes Scholar, 1989.
E X P U U C f l Pruident of SJS Inc. a puMteiMUcy strategy
arm that raaeardMa economic and social lasues (198942);
president aad flounder of Telesis, an internadoaal corporate
strategy cxnsuMng flrm (197949); corporate consulting for the
Boston Consulting Croup In Boston, London and Tokyo (197379); author of three books.
Worked on "Aging 2000.'' a two-year study of Rhode Island's
heal tlxe re system.
FAMILY: Married to Suzanne McTlgie; sons Seth, 9, and Jonathan, 7; daughter Sarah, S.
SPAM TIIIE: All spent on work these days. To eaerdse, be
climbs the stairs of the Old Executive Office Building next to
the While Home where bto office ts.
Pressure to produce something different isn't new for
Magaziner.
"I've worked this hard in my
life before," he says.
Back home In Rhode Island,
friends and colleagues call Magaziner a "whiz kid" who has
specialized in helping major
companies solve complicated
problems with ease.
"Ira is one of the smartest
human beings I've ever met,"
says Thomas Anton, a public
policy professor at Brown University. "His mind has an inflnite capacity to grasp details
and ideas In a way which is
quite startling"
"He's very much like Bill
(Ginton)," says former Massachusetts Gov. Michael Dukakis.
T h a t very inviting kind of
manner which basically says.
'Look. I may be bright... but
you people know a lot more
than I do about what's going
on.'"
But not everyone is a fan.
"Ira Magaziner may be the
brightest guy In the world, but
you can't marry managed competition and price controls,"
says the conservative Heritage
Foundation's Robert Mofflt. referring to two keys to the administration's plans. "You
might as well try to make the
Earth flat"
An undergraduate during
the Vietnam era, Magaziner
started making his mark early.
He waged a successful campaign to overhaul the curriculum at Brown University.
"It changed the Image from
a second-rate Ivy League
school to a flrst-rate one. He
By Mtlt Mandcltohn. U S A TODAY
MAGAZINER: We knew we had to do health care first; we knew
we had to do it this year.' the White House consultant says.
did it almost single-handedly,"
says Stuart Alt man. health expert at Brandeis University.
As a private consultant, he
tried — but failed — to get
Rhode Island to pump millions
of dollars into revitalizing state
industries. He spent two years
studying health-care problems
In Rhode Island.
Now, he rises before dawn
for a grueling day that often
doesn't end until near midnight
— with a break only to go
home and tell a bedtime story
to his three children.
And the clock ticks on. Details are demanding attention.
Decisions have to be made because people want change —
especially, he says, they want
to be sure they'll always have
medical care they can afford.
"There is a tremendous insecurity in the system." Magaziner says. "1 would say that
most Americans would value
getting rid of that Insecurity."
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Identifier
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2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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[Magaziner] [Loose]
Creator
An entity primarily responsible for making the resource
Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F Segment 2
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Medium
The material or physical carrier of the resource.
Preservation-Reproduction-Reference
Date Created
Date of creation of the resource.
2/6/2015
Source
A related resource from which the described resource is derived
42-t-12093080-20060885F-Seg2-023-013-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/e82ffe208d5134283ecd93507dc68924.pdf
c4d83b752917479e001fd2a29aeee0e7
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
OA/ED Number:
4787
FolderlD:
Folder Title:
1CM [Ira C. Magaziner] Media Affairs [Folder 1]
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
4
1
�Withdrawal/Redaction Sheet
Clinton Library
SUBJECT/TITLE
DATE
RESTRICTION
001. fax
Christine Doudna to Ira Magaziner; re: Writing Book on Clinton
Health Care Plan (partial) (1 page)
01/18/1994
P6/b(6)
002. fax
Christine Doudna to Ira Magaziner; re: Writing Book on Clinton
Health Care Plan (partial) (1 page)
01/18/1994
P6/b(6)
DOCUMENT NO.
AND TYPE
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number: 4787
FOLDER TITLE:
ICM [Ira C. Magaziner] Media Affairs [Folder 1]
2006-0885-F
ip2729
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)]
Freedom of Information Act - |5 U.S.C. 552(b)|
PI
P2
Pi
P4
b(l) National security classified information 1(b)(1) of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency [(b)(2) of the FOIA]
b(3) Release would violate a Federal statute |(bX3) of the FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) of the FOIA|
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) ofthe FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) ofthe FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells 1(b)(9) of the FOIA]
National Security Classified Information 1(a)(1) of the PRA]
Relating to the appointment to Federal office [(a)(2) of the PRA]
Release would violate a Federal statute [(a)(3) ofthe PRA]
Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) of the PRA|
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)<5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(a)(6) of the PRA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�A.
0
THE TIMES
National Press Building
529 14th Street, N.W.
Suite 1040
Washington, D C. 20045
Telephone: (202) 347-7659
March 7, 1994
Mr. I r a Magaziner
Senior A d v i s o r t o t h e P r e s i d e n t
f o r P o l i c y Development
The White House
Old E x e c u t i v e O f f i c e B u i l d i n g
Room 216
Washington, D.C.
Dear Mr. Magaziner,
I am w r i t i n g on b e h a l f o f myself and t h e Washington
bureau c h i e f s o f n i n e other l e a d i n g European p u b l i c a t i o n s
t o i n v i t e you t o j o i n us f o r b r e a k f a s t on a d a t e c o n v e n i e n t
t o you.
We have r e c e n t l y formed t h i s group t o t r y and improve
our access t o a d m i n i s t r a t i o n o f f i c i a l s , and would g r e a t l y
a p p r e c i a t e t h e o p p o r t u n i t y t o have an i n f o r m a l d i s c u s s i o n
w i t h you about h e a l t h care r e f o r m .
We meet i n a p r i v a t e d i n i n g room a t t h e W i l l a r d H o t e l ,
and a r e happy f o r our guests t o t a l k on o r o f f t h e r e c o r d as
they p r e f e r .
I enclose a l i s t o f t h e group's members. As you can see,
a l l t h e l e a d i n g West European c o u n t r i e s a r e r e p r e s e n t e d . We
would be most g r a t e f u l i f you would agree t o see us.
Yours s i n c e r e l y .
jbUftiL
Martin Fletcher
U.S. E d i t o r
The London Times
�THE TIMES
National Press Building
529 14th Street, N.W.
Suite 1040
Washington, D.C. 20045
Telephone: (202) 347-7659
GREAT BRITAIN
FRANCE
Martin Fletcher
The Times o f London
O f f i c e T e l : (202)347-7659
Fax T e l : (202) 393-3892
A l a i n Frachon
Le Monde
O f f i c e T e l : (202)338-1084
Fax T e l : (202) 338-0992
Daniel Franklin
The Economist
O f f i c e T e l : (202)78 3-57 53
Fax T e l : (202) 737-1035
SPAIN
GERMANY
C a r l o s Widmann
Der S p i e g e l
O f f i c e T e l : (202)234-5442
Fax T e l : (202) 462-9238
ITALY
Paolo P a s s a r i n i
La Stampa
O f f i c e T e l : (202)347-5233
Fax T e l : (202) 347-5691
FINLAND
K y o s t i Karvonen
H e l s i n g i n Sanomat
O f f i c e T e l : (202)662-7555
Fax T e l : (202) 662-7554
A n t o n i o Cano
E l Pais
O f f i c e T e l : (202)638-1533
Fax T e l : (202) 628-4788
IRELAND
Conor O'Clery
The I r i s h Times
O f f i c e T e l : (301)320-2308
Fax T e l : (301) 229-1036
SWITZERLAND
P h i l i p p e Mottaz
SSR Swiss T e l e v i s i o n
O f f i c e T e l : (202)77 5-08 94
Fax T e l : (202) 293-7204
HOLLAND
Maarten Huygen
NRC Handelsblad
O f f i c e T e l : (202)363-6944
Fax T e l : (202) 537-2959
�OJ. 0 7. 94
11:56 AM
*Manhattan
Institute
P02
T H E MANHATTAN I N S T I T U T E
52 Vanderbili Avenut • New York, NY 10017
William M. H. Hammeti
President
Telephone: 212/359-7000
Facilmlle: 212/599-3494
March 7,1994
Mr. I n Magaziner
Senior Advisor to the President for Policy Development
The White House
Old Executive Office Building, Room 216
Washington, D.C. 20500
Dear Mr. Magaziner:
As you know, the recent New Republic article by Manhattan Institute Senior Fellow,
Elizabeth McCaughey, has generated a tremendous amount of controversy and discussion about
President Clinton's proposals for health-care reform.
Wc share your belief that this is one of the most important policy issues facing the
American people in this decade. With that in mind, we are organizing a public fomm here in
New York for some of the city's most prominent political, business, and media leaders. We
would be honored If you would consent to participate In the forum with Ms. McCaughey in a
serious exchange of views on the President's plan. I believe that a candid and reasoned
discussion of the Issues Involved will help move us closer to the goal that we share of excellent .
health care for all Americans.
The forum will be held on March 29,1994 over lunch at the College Hal! of the University
Club located at One West 54 th Street, New York G'ty. Lunch will be served at 12:30 p.m., and the
program will run through 2:00 p.m. T hope that you will be able to join us, and look forward to
hearing from you. I can bereachedat 212-599-7000.
Thank you for your consideration and best regards.
Sincerely,
faff*
William M. H. Hammett
President
�'LJ
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001. fax
DATE
SUBJECT/TITLE
Christine Doudna to Ira Magaziner; re: Writing Book on Clinton
Health Care Plan (partial) (1 page)
01/18/1994
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4787
FOLDER TITLE:
ICM [Ira C. Magaziner] Media Affairs [Folder 1]
2006-0885-F
^2729.
RESTRICTION CODES
Presidential Records Act - 144 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b)|
PI
P2
P3
P4
b(l) National security classified information [(b)(1) of the FOIA|
b(2) Release would disclose internal personnel rules and practices of
an agency [(b)(2) of the FOIA)
b(3) Release would violate a Federal statute [(bX3) ofthe FOIA)
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) of the FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) ofthe FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells [(b)(9) of the FOIA]
National Security Classified Information [(a)(1) of the PRA]
Relating to the appointment to Federal office [(a)(2) of the PRA|
Release would violate a Federal statute 1(a)(3) of the PRA]
Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) of the PRA]
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA|
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(a)(6) of the PRA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�p.
Chrmioc Doudna
[poTi
•
P6/(b)(6)
January 18, 1994
^96
Mr. Ira Magaziner
The White House
By Fax: 202/456-7739
Dear Mr. Magaziner,
My friend Jennie Greene, who met you at the Renaissance
Weekend, passed along the message that you had suggested I
contact you. I am writing a book for HarperCollins Publishers on
the Clinton Administration's healthrefonnattempt. My book will
focus on the story of how the Clinton Plan was shaped and the
major factors and personalities which will affect its eventual
outcome but will also include considerable history which predates
the Clinton campaign. The book will come out sometime after a bill
has been voted in Congress and before the '96 elections. 1 am not
writing for publication about this subject in the interim.
I am eager to meet with you at your convenience and talk in
depth about the process by which you and your colleagues came up
with the Health Security Plan. I have been working on this project
since last February and have spoken to dozens of congressional
staffers, members of Congress, representatives of various interest
groups and members of the Health Care Task Force.
My background prior to this book was 20 years as a
magazine writer and editor. I have worked at and written for a large
number of publications, including The New York Times, Rolling
Stone, The Village Voice, The Financial Times, American Lawyer,
Investment Vision, McCalls, Redbook, Savvy, Vogue, and more. I
had no previous expertise about health care but have writ
extensively about political and social issues, especially<vomen's
issues.
I will call you next week in hopes of setting up an
appointment In the meantime, if vou wish more information, my
phone number i f . . P6/(b)(6), .
Yours truly,
Christine Doudna
01
�Oo. 07. 94
1 1:56 AM
*Manhattan
Institute
P02
T H E MANHATTAN I N S T I T U T E
52 Vonderbtli Avenue • Sew York, NY 10017
William M. H. Hammett
President
Telephone: 212/399-7000
Faciimlle: 212/599-3494
March 7,1994
Mr. Ira Magaziner
Senior Advisor to the President for Policy Development
The White House
Old Executive Office Building, Room 216
Washington, D.C. 20500
Dear Mr. Magaziner:
As you know, the recent New Republic article by Manhattan Institute Senior Fellow,
Elizabeth McCaughey, has generated a tremendous amount of controversy and discussion about
President Clinton's proposals for health-care reform.
Wc share your belief that this is one of the most important policy issues facing the
American people in this decade. With that in mind, we are organizing a public forum here in
New York for some of the city's most prominent political, business, and media leaders. We
would be honored if you would consent to participate tn the forum with Ms. McCaughey in a
serious exchange of views on the President's plan. I believe that a candid and reasoned
discussion of the Issues Involved will help move us closer to the goal that we share of excellent ,
health care for all Americans.
The forum will be held on March 29,1994 over lunch at the College Hall of the University
Club located at One West 54th Street, New York Gty. Lunch will be served at 12:30 p.m., and the
program will run through 2:00 p.m. I hope that you will be able to join us, and look forward to
hearing from you. I can be reached at 212-599-7000.
Thank you for your consideration and best regards.
Sincerely,
A/A
William M. H. Hammett
President
�Pundits/Qpinion Leaders
3/2/94
The organizational memo from the First Lady's office is still the framework
for the tag team approach to the pundits/opinion leaders. Paul is following
up to nail down the remaining persons.
A
J. Germond —
Karen Finney 62960
v/}U£
Joe Klein —
Ask ICM
Eretiftr—
Joan in Altnmn'H uffiui 022 2736
^
M. Mea<ns —
llBoh_with time and day.
E. Yoder —
Jiarma Pierce^i Gergen's office 62195
^ ) H . Johnson —
leather
^ S. Donaldomr^" UoneY Ask Joan iirMtman's office
^ Russert/Rooney — Heather
- Schieffer/Pratt— Heather
Edboards
ike
Kaien Finney
/
^ ^
�FR:
RE:
DT:
Karen
P u n d i t Meetings
2/25/94
Yes i t ' s me. I'm back w i t h everybody's f a v o r i t e t o p i c : p u n d i t
meetings. There a r e a s e r i e s f o meetings t h a t s t i l l need t o be
scheduled. Please t a k e a l o o k a t t h i s l i s t and c a l l me, ( x .
6-2960) o r e - m a i l me w i t h guidance as t o your p r i n c i p a l ' s
availability.
I am t r y i n g t o schedule t h e s e meetings b e f o r e
3/15/94.
1.
CNN and Fox network e d i t o r i a l board meetings - t o be done
here i n Washington. The meetings w i l l be one hour.
2.
Time, Newsweek and US News & World Report e d i t o r i a l boards
- t h e s e w i l l r e q u i r e a h a l f day t r a v e l t o New York C i t y .
3.
Russert/Rooney and S c h e i f f e r / P r a t t - t h e s e two meetings
were a s s i g n e d t o I c k e s , Stephanopolous, Magaziner.
L i s a would
l i k e t o schedule them on o r near t h e d a t e o f t h e FOX and CNN
meetings.
BOTTOM
You have reached t h e bottom o f t h e document
...Press RETURN
�wee 12- H
Proposed Health Care Calendar
Monday, 14th
Tuesday, 15th
Wednesday, 16th
Thursday, 17th
Regional media day (VA, KS, OK, NE) begins
Friday, 18th
Regional media day continues (POTUS)
Wire b r i e f i n g
ABC/Jennings interview (pre kids town meeting)
Saturday, 19th
radio address
Sunday, 20th
off
�Health Care Calendar (two)
Monday, 21st
(public debut of charts, with Medicare focus)
Seniors/AHA s a t e l l i t e extravaganza
Tuesday, 22nd
^
(^(J^
small business heroes "
primetime press conference/Larry King ^
Wednesday, 23rd
doctors' lunch/press avail
tape Good Morning America (kitchen table)
fL^Jl*^
Thursday, 24th
GMA runs
GMA
POTUS presentation on H
S L ^ Q ^
Friday, 25th
regional media (MN, rTNy Houston, TX)
Saturday, 26th
radio address
^ ^ A ^ ^ ^
�CHRISTINE DOUDNA
DATE:
TIME:
LOCATION:
STAFF:
Tuesday, April 5
1:00-1:45
Your office.
Paul and/or Lorrie.
Christine Doudna has been a freelance writer for various publications for a
number of years, but knows nothing about health care policy (by her own
admission). She has mostly written on gender issues for the New York Times and
international trade and economics for the Financial Times.
Doudna is writing a book on the plan's development which is not scheduled to be
published until after the bill has been voted on. From her cover letter (attached),
it sounds as if she is writing less on policy and more on the personality struggles
and process. I would be aware of any attempts to try to get you to criticize other
Administration officials or members. Instead, you could talk more philosophically
about the rationale behind the plan and the President and First Lady's
commitment to this issue in the face of massive interest group opposition and
historical failures. This is a method that David Gergen does very well —
humanizing the debate by connecting personal stories and the Clinton's
involvement to the policy development and process.
For what they're worth, her articles on international competitiveness from the
Nexus search are attached.
ATTACHMENTS
Cover letter
"Japanese Industry 7; A Wholesale Jobs Agency" 12/7/87
"Venture Capital 4; High-Flying Yen Shoots Meteors Down To Earth" 12/4/87
"Venture Capital 4; Their Computer Helps Dentists Pick Remedies" 12/4/87
•*?
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
002. fax
DATE
SUBJECT/TITLE
Christine Doudna to Ira Magaziner; re: Writing Book on Clinton
Health Care Plan (partial) (1 page)
01/18/1994
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4787
FOLDER TITLE:
ICM [Ira C. Magaziner] Media Affairs [Folder 1]
2006-0885-F
U>2729_
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b)|
PI
P2
P3
P4
b(l) National security classified information 1(b)(1) of the FOIAj
b(2) Release would disclose internal personnel rules and practices of
an agency [(b)(2) of the FOIA]
b(3) Release would violate a Federal statute [(b)(3) ofthe FOIA)
b(4) Release would disclose trade secrets or confidential or financial
information [(b)(4) ofthe FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) ofthe FOIAj
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIAj
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIAj
b(9) Release would disclose geological or geophysical information
concerning wells 1(b)(9) of the FOIAj
National Security Classified Information [(a)(1) of the PRA|
Relating to the appointment to Federal office |(aH2) of the PRA|
Release would violate a Federal statute |(aX3) of the PRA]
Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) of the PRA]
P5 Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) ofthe PRA|
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) ofthe PRA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�H.
Chri.nioc t)w4na
P6/(b)(6)
January 18, 1994
Mr. Ira Magaziner
The White House
By Fax: 202/456-7739
Dear Mr. Magaziner,
My friend Jennie Greene, who met you at the Renaissance
Weekend, passed along the message that you had suggested I
contact you. I am writing a book for HarperCollins Publishers on
the Clinton Administraiion's health reform attempt My book will
focus on the story of how the Clinton Plan was shaped and the
major factors and personalities which will affect its eventual
outcome but will also include considerable history which predates
the Clinton campaign. The book will come out sometime after a bill
has been voted in Congress and before the '96 elections. I am not
writing for publication about this subject in the interim.
I am eager to meet with you at your convenience and talk in
depth about the process by which you and your colleagues came up
with the Health Security Plan. I have been working on this project
since last February and have spoken to dozens of congressional
staffers, members of Congress, representatives of various interest
groups and members of the Health Care Task Force.
My background priortothis book was 20 years as a
magazine writer and editor. I have worked at and written for a large
number of publications, including The New York Times, Rolling
Stone, The Village Voice, The Financial Times, American Lawyer,
Investment Vision, McCalls. Redbook, Savvy, Vogue, and more. I
had no previous expertise about health care but have written
extensively about political and social issues, especially women's
issues.
I will call you next week in hopes of setting up an
appointment. In the meantime, if you wish more information, my
phone number is'
"
'
P6/(bK6)
Yours truly,
Christine Doudna
01
�C o p y r i g h t 1987 The F i n a n c i a l Times L i m i t e d
F i n a n c i a l Times
December 7, 1987,
Monday
SECTION: SURVEY; Pg. V I I
LENGTH: 1132
words
HEADLINE: Japanese I n d u s t r y 7;
A Wholesale Jobs Agency
BYLINE: C h r i s t i n e
Doudna
BODY:
The Japanese are on a buying spree around t h e w o r l d t h e s e
days. The s o a r i n g yen has t r a n s f o r m e d t h e w o r l d ' s markeplace
i n t o a b a r g a i n h u n t e r ' s p a r a d i s e . Japanese a r e suddenly b u y i n g
O r i e n t a l c a r p e t s , a r t nouveau g l a s s . Van Gogh
p a i n t i n g s and cameo j e w e l l e r y .
H a l f t h e f u r c o a t s s o l d t h i s year w i l l be s o l d i n Japan, a
c o u n t r y whose t e m p e r a t u r e r a r e l y d i p s t o f r e e z i n g and whose c o l d
season l a s t s o n l y two months. The growing w e a l t h and
s o p h i s t i c a t i o n o f t h e Japanese consumer are a l s o f o r c i n g
some changes i n t h e n o t o r i o u s l y stodgy Japanese m a r k e t p l a c e .
Shoppers a r e bypassing t r a d i t i o n a l r e t a i l o u t l e t s t o d i s c o v e r
the more e s o t e r i c j o y s o f d i r e c t m a i l , f o r e i g n c a t a l o g u e s and
s a t e l l i t e shopping.
F u j i T e l e v i s i o n , f o r example, now produces a
monthly show by s a t e l l i t e hook-up which has s o l d e v e r y t h i n g from
Madonna-style l e o p a r d l o v e s e a t s t o c a s t l e s i n France.
Yet f o r a l l t h e i n t e r e s t i n buying f o r e i g n goods, and t h e new
power o f t h e yen, i m p o r t s have r i s e n o n l y m o d e r a t e l y . The
Japanese d i s t r i b u t i o n system i s commonly presumed t o be t h e
culprit.
F o r e i g n companies o f t e n r e f e r t o i t as t h e most s i g n i f i c a n t
n o n - t a r i f f t r a d e b a r r i e r , " f o r i t discourages e n t r y i n t o t h e
market o r hope f o r s e r i o u s p r o f i t s . The d i s t r i b u t i o n system i s an
a n t i q u a t e d , b u t s t i l l p o w e r f u l behemoth which p r o v i d e s
extraordinary service t o r e t a i l e r s a textraordinary cost.
Japan has t h e h i g h e s t r a t i o o f w h o l e s a l e r s t o r e t a i l e r s i n t h e
w o r l d . One r e c e n t study put i t a t 5:22, more t h a n t h r e e t i m e s
h i g h e r t h a n t h e US, UK, France o r Germany. Japan has, i n f a c t ,
the same number o f w h o l e s a l e r s as t h e US, w i t h o n l y h a l f t h e
p o p u l a t i o n , and o n l y 10 per c e n t fewer r e t a i l e r s .
Many o f t h o s e w h o l e s a l e r s s t i l l o p e r a t e on a p e r s o n - t o - p e r s o n
b a s i s . Every day thousands upon thousands o f agents t r a v e l
t h r o u g h crowded c i t y s t r e e t s t o t a k e o r d e r s and s u p p l y r e t a i l e r s .
�57 per cent of whom are family businesses. They a l s o r e t u r n
unused goods to a s t o c k p i l e r who shares the r i s k with the
manufacturer f o r unsold items.
The whole system operates
h e a v i l y on c r e d i t and a r a t h e r quaint e t h i c : a strong sense of
l o y a l t y i n exchange f o r years of s e r v i c e keeks r e t a i l e r s locked
to the same s u p p l i e r s no matter how a n t i - c o m p e t i t i v e the p r i c e s .
The system has been perpetuated by Japan's under-developed
road network and i t s high land p r i c e s which means t h a t the
superstore or American-style shopping mall could not p r o p e r l y
develop on Japanese s o i l . Even i f a d r i v e r could make i t to a
discount s t o r e , there would probably be no p l a c e to park. As a
r e s u l t , r e t a i l i n g and wholesaling have remained h i g h l y
fragmented.
But the Government has been l o t h to take on the d i s t r i b u t i o n
i n d u s t r y d i r e c t l y f o r the system a c t s as a kind of n a t i o n a l
employment agency f o r the country. A s i g n i f i c a n t percentage of
the n e a r l y 11 m people who work i n the i n d u s t r y (18.6 per cent of
the e n t i r e working population) are r e t i r e d workers
who need more than t h e i r company's pension and the Government's
s o c i a l s e c u r i t y b e n e f i t s to s u r v i v e .
The system a l s o seems to soak up whatever surplus i s generated
elsewhere i n the economy: when 90,000 manufacturing j o b s were cut
l a s t year, the d i s t r i b u t i o n industry showed an i n c r e a s e of
210,000 workers. I n some i n d u s t r i e s the
Government's c o m p l i c i t y i n the s t a t u s quo i s more a c t i v e .
I n the case of the beef industry, f o r instance, the Government
has sanctioned a near-monopoly i n the d i s t r i b u t i o n system. A l l
beef i s expensive, no matter the grade or c u t . P r i c e s have
l i t t l e to do with production c o s t s or supply and demand.
Beef growers are a powerful p o l i t i c a l lobby i n Japan who have
caused the L i b e r a l Democratic party to be dubbed "the l i v e s t o c k
c l a n x " The extra-governmental agency which c o n t r o l s the beef
market, the Livestock Industry Promotion Corp ( L I P C ) , buys
v i r t u a l l y a l l the beef which the country imports (about 30 per
cent of a l l consumed) and has p r o f i t e d s u b s t a n t i a l l y from the
yen's performance i n the l a s t two y e a r s : LIPC p r o f i t s jumped i n
f i s c a l 1985 from an annual l e v e l of between D o l l a r s 130 m to
D o l l a r s 200 m to D o l l a r s 257.3 m and i n 1986 to D o l l a r s 333.3 m.
But the p r o f i t s have not f i l t e r e d down to the consumer: imported
beef i s e s s e n t i a l l y no cheaper than domestic.
Though f o r e i g n e r s are the most outspoken c r i t i c s of Japan's
d i s t r i b u t i o n system, the immediate v i c t i m s are the Japanese
consumers, who are not being permitted to share i n much of the
enormous wealth Japan i s c u r r e n t l y enjoying. The mark up on
domestic goods can be as onerous as that on foreign goods:a JVC
movie recorder that could be bought f o r D o l l a r s 898 i n New York
t h i s year s e l l s f o r D o l l a r s 2,211 i n Japan; a Sony CD P l a y e r
t h a t went f o r D o l l a r s 179 i n New York c o s t s D o l l a r s 410 i n Tokyo;
�a c a s i o C a l c u l a t o r went for D o l l a r s 6 i n Hong Kong and D o l l a r s 41
i n Japan. As one foreign observer put i t , "Everything i s a
luxury item i n t h i s country."
So f a r , consumers have proven to be s u r p r i s i n g l y d o c i l e about
the d i s c r e p a n c i e s . Indeed, small r e t a i l e r s have always exerted
c o n s i d e r a b l e p o l i t i c a l power i n Japan because the neighbourhood
economy meant they dominated the marketplace. But they a r e
slowly l o s i n g ground to the l a r g e r r e t a i l s t o r e s
which can o f f e r more competitive p r i c e s .
I n the e a r l y 1970s, when l a r g e r e t a i l s t o r e s f i r s t began to
t h r e a t e n s m a l l operators, the Government enacted what i s known as
the Law of Large S c a l e R e t a i l Stores - which r e q u i r e s any
p r o s p e c t i v e r e t a i l o u t l e t over a c e r t a i n s i z e to obtain approval
from a m a j o r i t y of neighbourhood businesses and then approval
from the Government before beginning c o n s t r u c t i o n . I n p r a c t i c e ,
t h i s means a w a i t i n g period of two to f i v e y e a r s before
c o n s t r u c t i o n can begin, i f a t a l l .
The Law of Large-Scale R e t a i l Stores i s c u r r e n t l y on the
agenda of trade t a l k s between Japan and i t s t r a d i n g p a r t n e r s ,
s i n c e most imports are s t i l l c a r r i e d i n the l a r g e r e t a i l o u t l e t s
and s i n c e i t i s the only l e g a l impediment to imports i n the
d i s t r i b u t i o n system. Large r e t a i l e r s are a l s o seeking t h e i r own
s o l u t i o n s to bypass the cumbersome d i s t r i b u t i o n system and take
advantage of the high yen.
Supermarkets are beginning to manufacture t h e i r own l a b e l
products and absorb the added r i s k , as w e l l as p r o f i t .
Both
w h o l e s a l e r s and r e t a i l e r s are procuring more goods abroad
d i r e c t l y and s t a r t i n g new businesses abroad: Japanese department
s t o r e s a r e cropping up a l l over A s i a .
New ventures l i k e d i r e c t marketing account f o r only
the market so f a r ( l e s s than 1 per cent of a l l r e t a i l
y e a r ) but p r o j e c t i o n s to the year 2000 see a growth to
cent, according to Marplan Japan, a marketing r e s e a r c h
a dent i n
sales last
3 per
company.
The adventurous consumer remains key p l a y e r i n the marketplace
and i f he/she continues i n the mood to buy, the market w i l l
s u r e l y f i n d a way to manufacture new f a n t a s i e s .
�C o p y r i g h t 1987 The F i n a n c i a l Times L i m i t e d
F i n a n c i a l Times
December 4, 1987,
Friday
SECTION: SURVEY; Pg. I V
LENGTH: 735 words
HEADLINE: Venture C a p i t a l 4;
H i g h - F l y i n g Yen Shoots Meteors Down To E a r t h
BYLINE: C h r i s t i n e
Doudna
BODY:
Venture c a p i t a l i n Japan had a bad year i n 1986.
By October,
38 v e n t u r e businesses had gone under, w i t h combined l i a b i l i b i e s
o f some Y 115 bn.
F i v e o f these companies were c o - c a l l e d s t a r businesses, whose
m e t e o r i c b e g i n n i n g s had c r e a t e d a f r i s s o n o f a d u l a t i o n i n t h e
l o c a l p r e s s , and whose f a i l u r e s prompted i n s t a n t s o u l - s e a r c h i n g .
Had t h e second wave o f v e n t u r e c a p i t a l crashed on an overdose
o f optimism? Was t o o much money c h a s i n g g o a l s t h a t were t o o
ephemeral? Was Japanese management h e p e l e s s l y i l l - e q u i p p e d t o be
entrepreneurial?
The answer t o a l l o f t h s e q u e s t i o n s may be yes; b u t t h e
immediate c u l p r i t was p r o b a b l y t h e h i g h yen, which b r o u g h t h a r d
t i m e s f o r a l l e x p o r t - d r i v e n businesses.
I n any case, t h e hubbub
has m o s t l y subsided now, f o r , however b i g t h e l o s s e s , t h e major
v e n t u r e c a p i t a l f i r m s i n Japan s u f f e r e d o n l y a r e d u c t i o n
i n p r o f i t , n o t a major body blow.
Japan A s s o c i a t e d Finance Company, ( J a f c o ) t h e c o u n t r y ' s
l a r g e s t v e n t u r e c a p i t a l f i r m , l o s t Y 4.7 bn l a s t y e a r .
That
meant t h a t i t s r e t u r n on investment went down from 40 per c e n t t o
34 per c e n t .
Venture C a p i t a l i s something o f a mutant c r e a t u r e i n Japan.
Many o f t h e d e a l s d e s c r i b e d as v e n t u r e d e a l s are l o w - r i s k , l o w
r e t u r n , o r a t most, medium r i s k , memium r e t u r n - a v e r y d i f f e r e n t
a n i m a l from t h e US p r o t o t y p e o f two young e n t r e p r e n e u r s i n a
garage w i t h a dream. Depending on who you t a l k t o , v e n t u r e
c a p i t a l i n Japan might be d e s c r i b e d as e i t h e r a p r o m i s i n g
b u s i n e s s o r a non-event.
The number o f v e n t u r e c a p i t a l f i r m s jumped from e i g h t , i n
1972, t o 81 by 1983, w i t h a combined i n v e s t m e n t o f Y 200 bn by
t h e end o f 1985.
But t h a t doesn't p r e v e n t an a n a l y s t a t a
�prominent American investment f i r m i n Japan from s a y i n g : "There
i s n ' t any v e n t u r e business here, t h a t ' s t h e problem."
The 10 l a r g e s t v e n t u r e c a p i t a l f i r m s i n Japan a r e a l l
a f f i l i a t e d t o huge s e c u r i t i e s houses o r banks, which means t h e r e
i s p l e n t y o f i n v e s t m e n t money a v a i l a b l e , b u t i n v e s t m e n t p o l i c y i s
generally conservative.
J a f c o , f o r i n s t a n c e , never funds s t a r t - u p s o r s e e d - l e v e l
companies, "We i n v e s t a f t e r w a r d s , i n second o r t h i r d l e v e l
companies," e x p l a i n e d a s e n i o r e x e c u t i v e .
Many o f t h e v e n t u r e
companies a r e s p i n - o f f s from b i g companies, and i t s i s t h e
corporate a f f i l i a t i o n , r a t h e r than the product, t h a t s e l l s the
deal.
"Our i n s t i t u t i o n a l i n v e s t o r s would r a t h e r t r u s t an
o r g a n i s a t i o n , and i n s t i t u t i o n o r c o r p o r a t i o n t h a n an i n d i v i d u a l , "
the executive said.
That p h i l o s o p h y d e f i n e s t h e investment c l i m a t e f o r a l l b u t a
m i n o r i t y o f f i r m s - and a l s o e x p l a i n s t h e s c a r c i t y o f t r u l y
e n t r e p r e n e u r i a l d e a l s . Good management i s v e r y hard t o g e t i n
v e n t u r e businesses.
The best and t h e b r i g h t e s t i n Japan f l o c k t o
t h e c o r p o r a t i o n , where l i f e l o n g s e c u r i t y i s t h e t r a d e - o f f f o r a
p o t e n t i a l l y s t a g n a n t c a r e e r . (The Government i s w o r r i e d enough
about t h e l a c k o f e n t r e p r e n e u r i a l s p i r i t to' have backed something
c a l l e d Kanagawa Science Park, a k i n d o f i n c u b a t i o n c e n t r e f o r
start-up a c t i v i t i e s ) .
One o f t h e most i n t e r e s t i n g e x c e p t i o n s t o t h e r i s k - a v e r s e r u l e
i n v e n t u r e c a p i t a l investment i s t h e l e a d i n g independent v e n t u r e
c a p i t a l f i r m - Schroders PTV, a j o i n t v e n t u r e between Schroder
Ventures, a s u b s i d i a r y o f t h e UK merchant bank and P a c i f i c
Technology Ventures Co, o f C a l i f o r n i a . T h i s a d v i s e s a combined
v e n t u r e c a p i t a l fund o f Y 4.6 bn.
PTV was founded i n 1982 by t h e American computer p u b l i s h i n g
magnate P a t r i c k McGovern and merged w i t h Schroders i n 1985.
The
f i r m i s r u n more o r l e s s as an A m e r i c a n - s t y l e v e n t u r e c a p i t a l
f i r m , w i t h an investment p o l i c y o f f u n d i n g a l l phases o f v e n t u r e
b u s i n e s s , i n c l u d i n g s t a r t - u p s . The company managed t o r e c r u i t
young e n t r e p r e n e u r i a l types w i t h backgrounds i n o p e r a t i o n s as
w e l l as f i n a n c e , and boasts t h e c a p a b i l i t y , unique i n Japan, t o
work c l o s e l y w i t h budding e n t r e p r e n e u r s , t o t u r n t h e r i g h t i d e a
i n t o a v i a b l e business.
Schroders PTV may prove t o be t h e wave o f t h e f u t u r e once t h e
baby-boom g e n e r a t i o n i n Japan encounters t h e f r u s t r a t i o n o f t o o
few t o p j o b s i n t h e s t i l l - c h e r i s h e d t o p c o r p o r a t i o n s , and t a k e s
the great leap out of the c o r p o r a t i o n .
For now, i t s a c t i v i t i e s are d e c i d e d l y avent-garde - and
d e c i d e d l y s m a l l s c a l e , when measured a g a i n s t t h e g i a n t s l i k e
J a f c o . Next year i t plans t o t a k e i t s f i r s t company p u b l i c , and
t h a t w i l l p r o b a b l y be a c l o s e l y watched watershed. I n t h e
meantime, t o quote a popular Japanese p r o v e r b , those who want
shade w i l l choose t h e b i g t r e e .
�PAGE
24
7TH
STORY o f Level 1 p r i n t e d i n FULL f o r m a t .
C o p y r i g h t 1987
The F i n a n c i a l Times L i m i t e d
F i n a n c i a l Times
December 4, 1987,
Friday
SECTION: SURVEY; Pg. I V
LENGTH: 1065
words
HEADLINE: Venture C a p i t a l 4;
T h e i r Computer Helps D e n t i s t s Pick Remedies
BYLINE: C h r i s t i n e
Doudna
BODY:
I n d u s t r i a l e n t r e p r e n e u r s are genuine mavericks i n Japan, t h e i r
numbers so few as t o d e f y p r e c e d e n t - s e t t i n g .
So when Zaiken Nashida and Kunio Morino, b o t h 34, s e t o u t i n
t h e i r m i d - t w e n t i e s t o j o i n t h i s r a r e breed, t h e y f o l l o w e d a
m a k e s h i f t t e x t b o o k l o g i c : b o t h were s t u d y i n g e n g i n e e r i n g , b o t h
were i n t e r e s t e d i n t h e f i e l d o f m e d i c a l - r e l a t e d computers, and
t h e y shared e n t r e p r e n e u r i a l dreams.
They d i d n ' t have a p r o d u c t , o r even a v e r y r e f i n e d i d e a f o r a
p r o d u c t , b u t t h e y came up w i t h a f i v e - y e a r p l a n - t h e i r f i r s t o f
many, t h e y hoped. They decided t o spend f i v e y e a r s p r e p a r i n g
themselves ( g e t t i n g r e a l - w o r l d business e x p e r i e n c e and, i n t h e
case o f Nashida, a l s o d o i n g a masters programme a t Tokyo
U n i v e r s i t y ) w h i l e t h e y pursued t h e " r i g h t " i d e a f o r t h e i r f i r s t
venture.
A f t e r graduate s c h o o l , Nashida took a j o b w i t h t h e c o n s u l t i n g
f i r m o f McKinsey and Co (he g o t i t s name o u t o f "some book",
l o o k e d up t h e number i n Yellow Pages and went t o a p p l y f o r a
j o b ) , w h i l e Morino went t o t h e microcomputer f i r m Panafacorn.
They met every two weeks t o t a l k about t h e i r dream company.
Then, i n 1982, r i g h t on schedule, t h e y q u i t t h e i r j o b s and
launched t h e i r new v e n t u r e , t h e n named Computer A s s i s t C o n s u l t i n g
Group, a company t o design and produce computers f o r d e n t i s t s .
Japan has a t o r t u o u s l y complex system o f n a t i o n a l d e n t a l
i n s u r a n c e , which r e q u i r e s d e n t i s t s t o f i l l i n d e t a i l e d t r e a t m e n t
forms f o r every p a t i e n t v i s i t - a time-consuming o p e r a t i o n made
more onerous because v e r y few d e n t i s t s (most o f whom a r e men)
ever l e a r n t o type.
�O r i g i n a l l y , Nashida and Morino t h o u g h t t h e y c o u l d d e v e l o p a
s o f t w a r e programme t h a t would s i m p l y f y t h e process, b u t t h e y soon
r e a l i s e d t h a t t h e y a l s o needed t o develop new hardware, because
t h e keyboard system o f t h e standard p e r s o n a l computer was p a r t o f
t h e problem. T h e i r breakthrough i d e a was t o develop a system
where t h e d e n t i s t c o u l d s i m p l y t o u c h t h e computer screen t o
f i l l i n t h e b l a n k s , and a s e c r e t a r y c o u l d t h e n i n s t r u c t t h e
computer t o t a k e care o f a l l i n v o i c i n g .
I n 1983 t h e y r a i s e d Y 1 m t h r o u g h p r i v a t e sources (Y 75 m o f
w h i c h was a l o a n ) t o develop t h e new computer, and h i r e d a young
e n g i n e e r named A k i r o Sato t o implement t h e i r i d e a s .
A d e n t i s t named Hideo Matsumoto a l s o p l a y e d a key c o n s u l t i n g
r o l e : i t was h i s i d e a t h a t t h e computer be programmed w i t h a k i n d
o f a r t i f i c i a l i n t e l l e g e n c e t h a t would p r o v i d e t h e d e n t i s t w i t h a
computer d i s p l a y o f p o s s i b l e t r e a t m e n t s f o r t h e diagnosed
c o n d i t i o n . The f l e d g l i n g company, housed i n l o w - r e n t o f f i c e s i n
n o r t h e r n Tokyo, s u r v i v e d on c o n s u l t i n g fees w h i l e d e v e l o p i n g i t s
product.
The p r o t o t y p e - named A q u i l a x 1 ( a f t e r A k i r o Sato, t h e
computer d e s i g n e r ) - was u n v e i l e d i n 1984.
I t was t e s t marketed
t o a g e n e r a l l y e n t h u s i a s t i c response, b u t t h e r e were problems,
t h e system was t o o b u l k y f o r t h e s m a l l o f f i c e s o f Japan, t h e
computer speed t o o slow, and t h e p r i c e (Y 5.5 m) t o o h i g h
f o r most o f t h e market ( t h e average d e n t i s t ' s revenue i n Japan i s
Y 36 m a y e a r ) . So N i s h i d a and Morino went back t o t h e d r a w i n g
board.
They a p p l i e d f o r a l o a n t o do f u r t h e r R & D
t h r o u g h Japan's
Venture E n t e r p r i s e C a p i t a l Association, a p r i v a t e a s s o c i a t i o n of
v e n t u r e c a p i t a l f i r m s , whose loans are guaranteed by t h e
Government. Last October t h e y i n t r o d u c e d t h e i r r e f i n e d p r o d u c t ,
A q u i l a x I I - a more compact, f a s t e r computer, p r i c e d more
a c c e s s i b l y a t Y 3 m - t o t h e marketplace and have s i n c e r e c o r d e d
some Y 30 m i n s a l e s . Next year's s a l e s p r o j e c t i o n s a r e f o r "a
minimum" o f Y 200 m; f i v e - y e a r p r o j e c t i o n s a r e f o r Y 2 bn; and
t h e 10-year g o a l i s Y 10 bn, " i f t h e y do i t r i g h t , " says A q u i l a z
board member Ken F u j i i .
F u j i i i s a key p l a y e r i n A q u i l a x ' s f u t u r e . He i s an
i n v e s t m e n t o f f i c e r o f Schroders PTV, t h e l e a d i n g independent
v e n t u r e c a p i t a l f i r m o f Japan, and i t was a t h i s u r g i n g t h a t h i s
f i r m made a " s u b s t a n t i a l " investment i n A q u i l a x l a s t J u l y . His
boss, Nobuo M a t s u k i , managing d i r e c t o r o f Schroders PTV,
had
i n f o r m a l l y counselled Aquilax during the s t a r t - u p years, but i t
wasn't u n t i l t h e young e n t r e p r e n e u r s had p e r f e c t e d t h e i r p r o d u c t
t h a t p e r f e c t e d t h e i r p r o d u c t t h a t F u j i i undertook an i n - d e p t h
study of the marketing p o t e n t i a l of the d e n t a l secretary
computer.
F u j i i ' s r e s e a r c h convinced him t h a t A q u i l a x was p e r f e c t l y
p o s i t i o n e d t o f i l l t h e "niche" market i n d e n t a l computers.
�Computers a r e n o t w i d e l y used by d e n t i s t s i n Japan ( o n l y 10 per
c e n t o f d e n t a l o f f i c e s had them by 1985), b u t F u j i i concluded
t h a t A q u i l a x c o u l d win h e a r t s and minds where c o m p e t i t o r s had
f a i l e d - p a r t l y because o f t h e e x c e l l e n c e o f t h e p r o d u c t , p a r t l y
because o f t h e v a g a r i e s o f t h e Japanese d e n t a l system.
Each o f t h e 47 p r e f e c t u r e s i n Japan has i t s own s e t o f d e n t a l
i n s u r a n c e forms, which means t h a t any computer programme t h a t
would s e r v i c e t h e whole c o u n t r y e f f i c i e n t l y would need t o have 47
d i f f e r e n t v e r s i o n s o f a b a s i c model - an i m p o s s i b l e volume f o r
any s o f t w a r e programmel But F u j i i reckoned t h a t , i f A q u i l a x c o u l d
f o r m a t t h e forms f o r a l l t h e major m e t r o p o l i t c a n areas o f Japan
(Tokyo, Osaka, Nagoya, a t o t a l o f 10 p r e f e c t u r e s ) , i t c o u l d g e t
access t o - and e v e n t u a l l y dominate - 80 per c e n t o f t h e t o t a l
market.
T h i s was l a r g e enough t o be p r o f i t a b l e , y e t s m a l l enough (and
troublesome enough) t o ward o f f c o m p e t i t i o n from t h e g i a n t s o f
Japanese t e c h n o l o g y .
The game was t o develop a m a r k e t i n g
s t r a t e g y t h a t could penetrate a n o t o r i o u s l y conservative t a r g e t
audience.
A q u i l a x had no r e a l long-term business p l a n when i t l i n k e d up
w i t h Schroders PTV, so t h i s marriage o f v e n t u r e c a p i t a l t o
v e n t u r e business i s so f a r a honeymoon saga. F u j i i works v e r y
c l o s e l y w i t h t h e management o f A q u i l a x , a c t i n g as a de f a c t o
m a r k e t i n g and s a l e s manager (he was even i n s t r u m e n t a l i n g e t t i n g
t h e company's name changed). The s t a f f has i n c r e a s e d t o 20, and
t h e b i g g e s t c h a l l e n g e now i s t o r e c r u i t a s o p h i s t i c a t e d s a l e s
f o r c e - never an easy t a s k f o r a v e n t u r e business i n Japan, where
even t h e brash young t h i n g s are r e l u c t a n t t o f o r e g o t h e s e c u r i t y
of a large corporation.
But optimism i s rampant among a l l t h e p r i n c i p a l s . The company
a l s o counts among i t s i n v e s t o r s t h e man who i s known as t h e
" g r a n d f a t h e r o f v e n t u r e c a p i t a l i n Japan", Dr Y a i c h i Ayukawa, a
good omen by any l i g h t s . P r e s i d e n t N i s h i d a ' s f i v e - y e a r f o r e c a s t
f o r h i s company i n c l u d e s managing a f r a n c h i s e o f d e n t a l c l i n i c s .
The d e n t i s t ' s computer was s i m p l y "the e a s i e s t p l a c e t o s t a r t "
t h e dream, he e x p l a i n s .
�.' HealthLine* Management, Inc.
3115 So. Grand Blvd. Suite 600
St. Louis, MO 63118 1000
(806)443-3901 (314)776; 3900
Fax (314)776-4344
December 15, 1993
Ira Magaziner,; Special Assistant to the President
White House: Old Executive Office Building, Room 216
Washington, D.C. 20500
Dear Mr. Magaziner:
HealthLine® Management, Inc., (HMI), a wholly owned corporation of Saint Louis University,
is engaged in a bread range of physician services and hospital specialty services. We serve a
constituency of physicians, hospitals, and health clinics within 200 miles of St. Louis, and
manage a network of medical practices owned by Saint Louis University Health Sciences
Center. HMI is committed to supporting the independence and accessibility of local health
care, especially in underserved or rural areas.
One of our most effective communications is a quarterly newsletter, HealthLine Ink, which
addresses timely administrative, medical practice, and clinical issues. HealthLine Ink is
distributed free of charge to 5,000 physicians, clinicians, and administrators, and is read
extensively throughout the Saint Louis University- campuses.: • ••
We would very much appreciate responses from you or from someone on your staff to the
attached healthcare reform-related questions, for publication in the Winter, 1994 issue of Ink.
You are the only person to whom we have sent these questions. If you would prefer not to
answer these questions, or if you have suggestions for a more appropriate respondent, would
you please; let us know?
Please be assured that your responses will be read by a large portion of the medical
community in the St. Louis region. Ink articles are generally 600-1,000 words in length. If
you provide responses that take this length into account, we can assure you that your
responses will be published in context and as completely ai possible.
Since the publication date for this issue is January 3, I must ask that you forward a response
by no later than December 28, either via facsimile (314/776-4344), or through the U.S. mail
to the address on our letterhead.
Thank you. Your responses will help us and our clients to develop proactive strategies for
coping with healthcare reform.
Sincerely,
John L. Chastain
Marketing Associate
An AJJiliate of Saint Louis University Medical Center
�Questions to the Clinton Administration Healthcare Reform Task Force, December 14,
1993. Answers will be published in the Winter 1994 issue of HealthLine Ink.
A primary concern of physicians relates to the kinds of provider relationships that will
emerge from reform. Although a significant level of vertical integration is anticipated
between hospitals and physicians, debate centers on the extent to which physicians will be
forced to change or abandon private practice situations, and how they can best prepare for
the healthcare environment under some form of managed competition. Questions one through
four address these concerns.
1. Will healthcare reform have the effect of eliminating private practices of physicians in
rural and urban situations?
2. What vertical integration affiliation strategies do you recommend for physiciansespecially rural physicians who may have a limited choice of groups with which to affiliate?
3. What reassurances do you have for physicians who fear that their ability to make
independent medical decisions will be compromised under healthcare reform?
4. When do you expect the Clinton healthcare proposals to take effect, and what should
physicians do now to prepare for reform?
Questions five through nine address the stated goals ofthe Clinton healthcare reform
proposal to increase the numbers of primary care physicians and to increase access to
primary and preventive medicine. Two methods of affecting these goals are to change the
funding of medical education by Medicare and to alter the relative Medicare reimbursement
rates of generalist versus specialty physicians.
5. What structure will changes in graduate medical education by Medicare most likely take?
6. What is the administration's response to the recommendation by COGME (in the
upcoming Fourth Report) and of the PPRC's suggestion that Congress require all payors to
contribute to a national pool for funding the direct costs of medical education?
7. Medicare currently reimburses providers in rural areas at a lower rate than those in urban
areas because it assumes that their costs-especially personnel costs-are lower. However,
most small-town physicians and administrators claim that they lose employees to large cities
because they are unable to offer comparable rates of pay. Will Medicare continue to
reimburse at a lower level for services delivered in small towns?
8. Why is the administration committed to medical education loan forgiveness programs for
physicians who practice in underserved areas?
9. What strategies do you recommend for teaching hospitals that may be hit by the combined
impact of reductions in reimbursements for medical education and by reductions in Medicare
direct reimbursement for patient services?
�MEMORANDUM FOR LORRIE MCHUGH
FR:
PAUL JAMIESON
RE:
WORLD AFFAIRS REQUEST
DATE:
APRIL 25, 1994
Ira received a request for an interview sometime on June 25 or 26 from World
Affairs television, a Canadian-owned show which syndicates in various markets
across the U.S. and has interviewed Panetta, Dole, Cisneros, etc. Although it has
a limited number of stations, I do think it would be good for some other
administration person to do it, but I will leave that to your discretion.
Enclosed is the paper on the show. I have called to regret for Ira and have told
them that we will get back to them one way or another as to whether or not we
can provide a surrogate. The contact is Joe Sheffo at 514/847-2970.
cc:
Susannah Wellford
�03/25/84
0002
WORLD AFFAIRS
17:32 FAI 5148478808
World
Les Affaires M
2 od
^4 X - Ai£itc44t>
25 March, 1994
Ms. Marge Taimey
Scheduler
Mr. Ira Magaziner, Senior Advisor to the President
Dear Ms. Tarmey:
Enclosed is the information on The Power Brokers that I promised.
We will be honored if Mr. Magaziner canfindthe time to participate in the
interview. The program is unique in that it is a direct line between public
television viewers (a very well informed audience) and the real people behind
the Washington power structure.
If you should have further questions about the program, please feel free
to contact me.
sincerely,
M
oe Sheffo
Vriter/Researcher
600 de Maisonnfuvft West. Suir.* : ^ C . r^.w-vr.: Cu^v. KSA 3J? •"''::iM<i$«7 2970 f O X r C S M W ? - ^ *
�03/25/94
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FAI 5148478806
WORLD AFFAIRS
World dflfflis Affairs
Les Affaires Mondiales
WORJLD AFFAIRS TELEVISION PRODUCTIONS/
LES TELEPRODUCTIONS LES AFFAIRES MONDIALES
MISSION STATEMENT
WORLD AFFAIRS produces informative and innovative television programming by
bringing together authorities from various disciplines and professional expertise in an
informal setting; to explore and discuss current global events and voice their opinions on all
topics at hand.
SYNOPSIS
WORLD AFF AIRS TELEVISION PRODUCTIONS is a Canadian-controlled
corporation, bssed in Montreal, with offices in Naples, Florida and Hong Kong. Since its
inception in 1986, WORLD AFFAIRS has specialized in news and public affairs
television programming.
WORLD AFFAIRS is owned and managed by the Executive Producer, Mr. Larry
Shapiro, one of Canada's leading independent television producers of news and current
affairs programming.
After a distinguished career with the Canadian Broadcasting Corporation, Larry Shapiro
formed the Company and developed an array of public affairs series focusing on
economics, politics and international news.
MAJOR PATRONS
THE ROYAL BANK OF CANADA
KLM
ALCAN ALUMINUM
THE ROYAL CANADIAN MINT THE HONG KONG TRADE OFFICE
THE DONNER FOUNDATION MERCK FROSST M A R L E A U , LEM.IRE
THE NEW FLEPUBLIC THE ECONOMIST MAGAZINE SATURDAY NIGHT
DELEGATION OF THE COMMISSION OF THE EUROPEAN COMMUNITY
THE MONTREAL GAZETTE
THE RITZ^CARLTON KEMPINSKY HOTEL
THE CANADIAN INSTITUTE FOR INTERNATIONAL AFFAIRS
600 de Maisonncuve Wesr. Suite 3230. Montreal. Quebec H3A 3J2 T e l : ( 5 8 4 7 - 2 9 7 0 Fax:(5H)847-8806
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�03/25/94
17:33 FAI 5148478806
WORLD AFFAIRS
I2]004
World
Affairs
Les Affaires Mondiales
THE POWER BROKERS
In addition to being the nation's capital, Washington, D.C. is in many
ways the capital of the world. Decisions made at the White House, the
Pentagon, and on Capitol Hill will have efifects thatripplefar beyond
America's own borders. In addition to these governmental bodies, there are
numerous organizations, lobby groups, and joumahsts who assemble in D.C.
from around the world in order to report on and influence tlie policy ofthe
United States government. As a national program, broadcast across North
America thi ough the Public Broadcasting Service, The Power Brokers gives
the viewer direct access to Washingtonians who are power brokers in thenrespective fields.
Hosted by Linda Chavez in the prestigious setting ofthe Hay-Adams
Hotel, the one-on-one interview foimat of The Power Brokers provides
viewers with a unique look at the individuals behind the much derided
"beltway monolith." Uninhibited by commercial interruptions or die
meaningles s banter that characterizes most shows of this type. The Power
Brokers devotes a full half hour to its guests in order to reach an
understanding of their perceptions of current pohtical developments and the
role that they play in them.
Last season. The Power Brokers hosted an impressive array of
Washington notables: Senate Minority Leader, Robert Dole, candidly
discussed his plans to run for President in 1996. Leon Panetta, President
Clinton's Budget Director, analyzed die budget battle and his role in pushing
the budget plan through Congress. Congresswoman Eleanor Holmes
Norton, the District of Columbia's representative in Congress, gave her
views on D.C. statehood. And Fred Barnes, Senior Editor of The New
Republic, talked about the power of pohtical pundits.
Taping for this season is scheduled to take plafce June 25 and 26. Ifyou
are interested in participating in public television's omy interview series
focused on the people who comprise the D.C. power structure, please call Joe
Sheffo at World Affairs Television Productions (514.847.2970).
600 de Maisonnffiive West. Suito 3230. Montreal. Quebec H3A 3J2 Tel:(514)ft47-2970 Fax:(514)847-8806
�03/25/94
17:34 FAX 5148478806
WORLD AFFAIRS
World (tffflffrh Affairs
Les Affaires Mondiales
THE POWER BROKERS
Host for 1994 Season
Linda Chavez
Currently the Director of the Manhattan Institute's Center for the New
American Community, Ms. Chavez has had a distinguished career as an
author, pohdcal commentator, and public servant. Besides authoring Out of
the Barrio: Toward a New Politics of Hispanic Assimilation. Ms. Chavez is a
frequent contributor to such publications as USA Today. Fortune, The Wall
Street Journal, and The New Republic. Her experience as a pohtical
commentator includes appearances on "Fighting Words," "Media Watch,"
and "The Editors," which air on PBS, as well as CNN's "Crier & Co." and
"The Macneil and Lehrer Newhour." Ms. Chavez has also served as the
Staff Direcror of the U.S. Commission on Civil Rights and as the Director of
Public Liaison at the White House.
Othe r distinctions include being editor of the American Federation of
Teacher's quarterly journal, American Educator, and working as a Special
Assistant to the Deputy Assistant Secretaiy for Legislation at the Department
of Health, Education, and Welfare.
600 dr Maisonne jve West. Suite 3230. Monureal. Quebec H3A 3J2 Tel:C514)847-2970 Fax:(514)547-8606
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�03/25/94
17:34 FAX 5148478806
WORLD AFFAIRS
(21006
World
Les Affaires Mo^disiles
THE POWER BROKERS
Hosts
David Halton: Washington Correspondent, Canadian Broadcasting Corporation (CBC).
Susan Dentzer: Senior Writer, U.S. News and World Report.
Order of Broadcast
Host
7.; Senator Robert Dole: Senate Minority Leader.
Halton
2.) The Honorable Douglas Wilder: Governor, State of Virginia.
Dentzer
3.) Leon Panetta: Director, Office of Management and Budget;
former U.S. Representative (D-CA) and Chairman ofthe
House Committee on the Budget.
Halton
4.) Lamar Alexander: former Secretary of Education and
Governor, S'ate of Tennessee.
Dentzer
5.) Henry Cisneros: Secretary of Housing and Urban Development.
Halton
6.) Congresi-woman Eleanor Holmes Norton: U.S. Representative
(D-DC).
Halton
7.) James W. Cicconi: former Assistant to President George Bush
and Deputy to the Chief of Staff
Dentzer
8.) BUI Emmoit: Editor, The Economist Magazine.
Halton
9.) Madeleine Kunin: Deputy Secretary of Education.
Dentzer
10.J Fred Barnes: Senior Editor, The New Republic.
Halton
JJ.) David Wilhelm: Chairman, Democratic National Committee.
Dentzer
J2.J Anthony Lake: President Clinton's National Security Adviser.
Halton
13.) Paul Duke: Host and Editor, Washington Week in Review.
Halton
(
600 de MaixftniKMiw Wcsi. Suite 3230. Monireal. Quebec ! 13A 3.1:?. Toltf.Ti4)vS4?-2 -)70 Fax:f5l41847.8806
�03/25/94
17:34 FAX 5148478806
WORLD AFFAIRS
(21007
World (#M%h Affairs
Les Affaires Mondiales
THE POWER BROKERS
Hosts for 1993 Season
Susan Dentzer
As senior writer and chief economics correspondent for U.S. News &
World Report, Ms. Dentzer covers a wide array of economic issues. She
specializes in writing about economic and political economy concerns and
U.S. - Japan relations. Ms. Dentzer has been panelist on programs such as
"The World in Review" and "The Editors," airing on the Canadian
Broadcasting Corporation and PBS, and "Washington Week in Review" on
PBS. She is also the host of another World Affairs's series, "Medically
Speaking."
Honors include being awarded tlie prestigious U.S. Japan Leadership
Program Fellowship, which allowed her to travel to Japan and research that
countryfirsthand, and receiving a Nieman Fellowship at Harvard University.
David Halton
Veteran reporter David Halton is the senior Washington correspondent
for Canadian Broadcasting Corporation Television News. Mr. Halton was
based in Ottawa for 13 years as the CBCs chief political correspondent
before being posted to the U.S. in September, 1991.
Mr. Halton has been with CBC News for 28 years. First serving as a
Paris "based correspondent in the 1960s, he was moved to the Moscow
Bureau in 1967 and returned to Paris the following year. Mr. Halton has also
covered stories in the Middle East and Vietaam and has served posts in
Quebec and London.
Before joining the CBC, Halton worked in the print media as the
bureau editor for Time magazine in die Montreal office.
600 de Maisonneuve Wesr. Suirc 3230. Montreal. Quebec H3A 3J2 Tel:(5141847-2970 Fax:(514)847-8806
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WORLD AFFAIRS
THE POWER BROKERS
ALASKA
Bethel
KYUK (4)
Thursday 5:00pm
CALIFORNIA
Sacramento 'KV1E (6)
Saturday 5:30pm, Sunday 7:30am, 5:30pm
CONNECTICUT
COT Cable
programming;
Wednesday 11:30am, 4:30pm, 9:30pm
Friday 8:00am, 1:00pm, 6:00pm
LOUISIANA
New
Orleans
WLAE (32) Wednesday 5:30pm
NEBRASKA
Omaha
Cox cable
programming
Cox 17 Monday 6:00pm, Tuesday 11:00am
Cox 19 Friday8:30pm
NEW YORK
Brooklyn
WNYE (25) Thursdayl 1:00pm
Plattsburg
WCFE (27)
Tuesday 12:00am
IS002
�04/07/94
17:11 FAX 5148478806
WORLD AFFAIRS
TEXAS
College
Station
KAMU(15) TBA
VIRGINIA
Richmond
WCVW (57) Sunday 6:30pm
(2]003
�04/07/94
17:12 FAX 5148478806
WORLD AFFAIRS
f.
U N I T E D STATES
OFFICE OF THE
SENATE
REPUBLICAN
LEADER
W A S H I N G T O N . D. C.
BOB
DOLE
KANSAS
September 3, 1993
Dear Jim:
Many thanks f o r your recent note. I
enjoyed p a r t i c i p a t i n g i n "The Power Brokers,"
and look forward t o working w i t h you i n the
future.
As you know, three years i s a l i f e t i m e
i n p o . l i t i c s , but I c e r t a i n l y appreciate your
confidence and support.
Keep i n touch, and plearse l e t TT.© -"know i f
I can ever be of help.
Best regards,
li&'iii'ili'i'vHii'!':
•V'.'V'.V..--; .VdO
BOB DOLE^J*
James S c i u t t o
World A f f a i r s
600 de Maisonneuve West
Suite 3230
Montreal, Quebec H3A3J2
CANADA -
0004
�04/07/94
17:12 FAX 5148478806
WORLD AFFAIRS
] « p
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U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE SECRETARY
WASHINGTON. D C 20410
September 15, 1993
Mr. Jcimes E . Sciutto
Producer
The Power Brokers
100 North C o l l i e r Blvd.
Suite 1105
Marco Island, FL 33937
Dear Mr. Sciutto:
I thoroughly enjoyed the opportunity to
appear on The Power Brokers. Though i t was your
show':3 inaugural series, I was extremely impressed
with the quality of the production and with the
outstanding people with whom I was able to work.
The staff at World Affairs can be proud of
turning out a f i r s t - c l a s s program. I look forward
to seeing the show i n October.
Again, thank you for i n v i t i n g me on the show.
Best wishes i n your continued work.
Sincerely,
Henry G- Cinseros
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�04/22/94
16:41 FAX 5148478806
WORLD AFFAIRS
The Power Brokers
SCHEDULED GUESTS
1994 SEASON
Lynne V. Cheney
Sen. Nancy L. Kassebaum
Michael Kinsley
i]005
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
ICM [Ira C. Magaziner] Media Affairs [Folder 1]
Creator
An entity primarily responsible for making the resource
Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F Segment 2
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Medium
The material or physical carrier of the resource.
Preservation-Reproduction-Reference
Date Created
Date of creation of the resource.
2/6/2015
Source
A related resource from which the described resource is derived
42-t-12093080-20060885F-Seg2-023-012-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/a0d76d4ee04256f8563f309b0c9aa184.pdf
78d0106c6a4b2b6a7d3e2cf2b37c6bb9
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
4787
OA/ID Number:
FolderlD:
Folder Title:
Calls For Mrs. Clinton
Stack:
Row:
Section:
Shelf:
Position:
s
53
3
4
1
�6
V
PHOTOCOPY
PRESERVATION
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
ARTICLE:
FACT:
"The bill guarantees you a package of medical services but you can't have
them unless they are deemed 'necessary and appropriate.'"
This is very misleading. Today, insurers can decide that procedures,
treatments, etc., are inappropriate or unnecessary. No insurance plan
guarantees you the right to unnecessary or inappropriate care. To imply
that such decisions are made only by doctors and individuals today is
deliberately misleading, at best. Under reform, most such decisions
will be made by patients and their doctors. In fact, the Health
Security Act gives consumers more guidance and more rights about
what is necessary and appropriate.
In addition, the Act does not, as the statement implies, forbid a plan from
delivering services ~ even if it does consider them not necessary or inappropriate. It
says they may do so. And under the Act you have clear means of immediate appeal
should you feel you deserve different or additional care ~ a guarantee that rarely
exists today.
Most importantly, the bill (page 15-16) specifically states that "Nothing in this
Act shall be construed as prohibiting the following: (1) An individual from purchasing
any health care services." There is nothing in the Act to prohibit any individual from
going to
doctor and paying, with their own funds, for 20^ service. There are
also no restrictions on the purchase of supplemental insurance.
ARTICLE:
FACT:
"That decision (whether or not care is necessary or appropriate) will be made
by the government, not by you or your doctor."
Untrue. If anything, the "necessary and appropriate" care provision in
the bill delegates authority to the medical profession — rather than
imposing further government bureaucracy between the patient and the
doctor. For most people today, their insurance company, not their
doctor, has final authority over what is necessary, appropriate and
therefore reimbursable. Today, insurers can decide that procedures,
treatments, etc., are inappropriate or unnecessary. No insurance plan
guarantees you the right to unnecessary or inappropriate care.
Michael Kinsley criticized this article, saying: "It is pointless to compare the
Clinton plan with some idealized version of the classic American system, in which
you can go to any doctor you want, who can perform any treatment he wants, order
any test she wants, prescribe any drug he wants, and charge whatever she wants, all
paid for by insurance." ["Health Care Nonsense", The Washington Post. 1/27/94]
Under reform, most such decisions will be made by patients and their doctors.
The National Board has the authority to issue guidelines relating to what is necessary
and appropriate. The authority to issue these guidelines does not infer that there are
no options left to physicians and patients, only that a benefits package guaranteed to
all Americans must be consistently defined across states.
Guidelines that are developed by the Board will be developed in an open
hearings process in which all interested parties can have input. Regulations used by
insurance companies today are developed by the companies as those companies see
fit.
�ARTICLE:
FACT:
"Escaping the system and paying out-of-pocket to see a specialist for the tests
and treatment you think you need will be almost impossible."
That is wrong. Under the Act, you can pay "out-of-pocket" for
anything you want at any time, to any physician or hospital willing
to treat you.
However, we should stress that, under reform, it is very unlikely that
individuals will have to pay for such treatment. Every plan, even the most structured
HMO, must offer at the very least a point-of-service option which enables you to go
see a physician of your choice at any time. In some plans you may have to pay
somewhat more to do this, but it is always an option, unlike today and unlike the
alternative plan (Cooper) endorsed by The New Republic.
ARTICLE:
FACT:
"If you walk into a doctor's office and ask for treatment for an illness you must
show proof that you are enrolled in one ofthe health plans offered by the
government. The doctor can be paid only by the plan, not by you."
False. You do not have to be enrolled in a plan to be treated. If you
go to a doctor and are not enrolled in a plan, the doctor will treat you.
You will then be given information on available plans and you may
choose any plan you want. The plan you choose then pays the
physician. The purpose of this provision is to assist all individuals in
enrolling in a p an.
However, as noted above, an individual may pay any doctor any price for
any service outside the comprehensive package of services offered as part of a
plan. So if an individual wants to go to a doctor and pay the doctor they can.
ARTICLE:
FACT:
"The bill requires the doctor to report your visit to a national data bank
containing the medical histories of all Americans."
Not true. The very first provision of this section of the Act states: "The
information system must be consistent with privacy security standards
in the Act." Physicians may be required to submit data on outcomes,
treatments, etc. for the purpose of improving quality and assessing
treatments and outcomes. But the Act very specifically prevents
against tying this data to specific individuals.
Sections 5101 and 5102 spell out detailed protections that assure that patient
records and individual health data are strictly protected. Therefore, the implication
that an individual's medical records will be in a national data bank and that those
records can be accessed by all kinds of other agencies, individuals, etc., is patently
untrue.
ARTICLE:
If you work for a company with fewer than 5000 workers you "must enroll in
one ofthe limited number of health plans offered by the regional alliance
where you live."
�FACT:
Misleading. These individuals choose a health plan from the regional
alliance bargaining on their behalf. But it is clearly misleading to
assume there will be a "limited" number of plans offered by the
alliances. In contrast, the alliance is obliged to offer all plans certified
by the state, including at least one traditional "fee-for-service" plan.
The only exception is that an alliance may decide not to offer a plan
than charges 120% or more of the average premium cost in the region.
For example, one of the real world models of an alliance — the California
Public Employees Retirement System - offers its members a choice of 24
different p ans and individuals choose a personal physician in the plan. And
more than two-thirds of the members are so satisfied with their plan that they
would recommend it to a friend. This is a big difference from today's system
in which the great majority of Americans face a very limited choice of health
plans. About 50% of Americans insured through their employer have only
one or two options of health plans. The great majority of Americans will have
more choice in the alliance system.
ARTICLE:
FACT:
ARTICLE:
FACT:
ARTICLE:
"Under the bill, a National Health Board . will
. decide how much the nation
can spend on health care beginning in 1996.
This is untrue. The Health Security Act makes no attempt to "decide
how much the nation can spend on health care" and specifically rejected
the idea of global budgets or arbitrary price controls. The National
Board is only authorized to set the initial premium targets — the rates at
which health insurance premiums (for the comprehensive benefits
package) rujl national health expenditures may increase from year to
year. These premium targets are important guarantee to American
taxpayers and businesses who are being asked to contribute to their
health care that their premiums will not continue to spiral out of
control, as they have done for years. There are no restrictions in the
Act on the amount of money that may be spent by people with their
own funds for additional services or supplemental insurance
policies.
"The bill outlaws plans that would cause a region to exceed its budget or that
cost 20 percent more than the average plan."
Wrong again. No plan is "outlawed." The premium limit does not
preclude any plan from participating. The alliance has the option (not
the requirement) to refuse to contract with a plan charging more than
20% over the average premium (so that people have a safeguard against
insurance company price inflation).
"Even the bill's authors anticipate that restricting the dollars available for
health care in the teeth of these trends will produce grave shortages; the bill
provides that when medical needs outpace the budget and premium money runs
low, state governments and insurers must make 'automatic, mandatory,
nondiscretionary' reductions in payments to doctors nurses and hospitals to
assure that expenditures will not exceed budget."
�FACT:
This is misleading. The author here is clearly implying that such a
mechanism exists in the main proposal - it does not. The section
the author is quoting from here refers to states that choose to form
single payer systems, not from the description of the primary system
advocated in the plan. Virtually all single payer systems work in this
manner, adjusting payments to providers to make certain budgets are
met.
Even with regard to single payer systems, there is absolutely no indication in
the plan that the bill's authors are anticipating "grave shortages." This is responsible
legislation; the plan merely spells out, in this special case, the mechanism by which a
single payer system would meet targets if expenditures were running ahead of
anticipated costs. To spell out such a mechanism is hardly an admission that "grave
shortages" are expected.
ARTICLE:
FACT:
ARTICLE:
FACT:
ARTICLE:
FACT:
"Above a threshold level of quality, alliance officials will approve health plans
based on lowest cost, not highest quality."
Not true. In contrast, the alliance is obliged to offer all plans certified
by the state, including at least one traditional "fee-for-service" plan.
The only exception is that an alliance may decide not to offer a plan
than charges 120% or more of the average premium cost in the region.
They are not required to do this however.
"What most of us call fee-for-service (choose your own doctor) will be difficult
to buy."
That is wrong. To the contrary, the Health Security Act preserves feefor-service arrangements by requiring all alliances to offer at least one
fee-for-service plan. Today, more and more Americans cannot choose
a fee for service plan because their employers have chosen not to offer
that option. Recent reports have shown that"... a growing number of
employers have abandoned traditional indemnity [fee-for-service] plans
entirely. In fact, more employers now offer managed care plans than
offer traditional indemnity plans." In fact, in 1988 , 89% of employers
offered fee-for-service plans but, by 1993, this number had dropped to
65%. ["1992 Health Care Benefits Survey", Foster Higgins, 1992;
"Health Benefits in 1993", KPMG Peat Marwick]
"Price controls on doctors' fees and other regulations will push doctors.."
That is wrong. There are no price controls in the President's plan.
Price controls ~ calling for government micro-management of every
health care service, doctor's fee, drug technology, and product - were
considered and specifically rejected. The Health Security Act does have
~ as a backup mechanism for cost control - a limit on how much
insurance premiums can increase every year. This is an important
guarantee. If employers are to be told they have the responsibility to
contribute to coverage ~ and if the federal government is going to
�provide discounts to small businesses and low-income individuals —
then American businesses and families deserve the guarantee that their
premiums, and government spending, won't continue to rise unchecked.
Since, the federal government won't make market decisions on specific
prices; health plans will have to decide themselves how to become
more efficient in a way that won't drive consumers to another plan. As
Stephen Zuckerman and Jack Hadley, two leading health policy
analysts, wrote in support of the plan's premium limits, "it seems far
preferable that insurance companies that are responsible to their
subscribers make these decisions than having the federal government
involved in detailed price negotiations and review procedures with
individual hospitals and physicians." ["Clinton's Cost Controls Can
Work", Washington Post. 11/7/93]
ARTICLE:
FACT:
"The bill limits what health plans can pay physicians and prohibits patients
from paying their doctors directly."
False. Any health plan that pays physicians according to their own
contracts may pay those physicians anything they like. The bill only
tells most health plans what to pay physicians with whom it has no
contract. These fees apply to fee-for-service plans and for charges
when individuals go out of the plans' network of doctors.
It is not clear why a patient would want to pay a doctor "directly," for
services that their insurance company is obligated to pay. If the implication is that
individuals cannot go to any doctor and pay for whatever they want, that is false.
Their right to do so is expressly protected.
ARTICLE:
FACT:
"The Clinton bill calls utilization review a 'reasonable restriction' on patient
care and expressly includes it as a requirement for doctors treating patients
with fee for service insurance as well."
That is wrong. The plan does not "require" fee for service insurers to
use utilization review. It says they may do so. The purpose is to
define what fee for service insurers - who have no contracts with the
physicians they are paying ~ may do in assessing charges. Utilization
review is one option they are expressly permitted, not required, to
do.
In reality, the bill is just following common practice here, acknowledging the typical
practice of utilization review in fee for service plans. If the author is implying that
many Americans are enrolled in plans where there is no review by the insurer, she is
being deliberately misleading. As Michael Kinsley said, "It so happens that the New
Republic's own health care plan (of which I am a member) has extensive 'utilization
review.' . . . Utilization review is one of the developments rapidly spreading ~ for
good or ill - under our current health care system. It is one reason health cost
inflation has abated so dramatically . . . " ["Health Care Nonsense", The Washington
Post. 1/27/94]
�ARTICLE:
FACT:
"Some states recently have enacted laws to safeguard choices patients want to
make for themselves, such as which hospital or pharmacy to use. HMOs
protest that these laws hobble cost containment, and the Clinton administration
apparently agrees. The Clinton bill pre-empts state laws protecting patient
choice. "
Deliberately inaccurate. The Act guarantees all individuals full choice
by giving everyone the option many don't have today ~ access to a fee
for service plan in which they can choose any provider. The Act also
mandates that all HMO's and other managed care plans offer a pointof-service option in which individuals have a right to see any doctor
outside of their plan or its network. This, again, is far greater choice
than many individuals have today. In fact, current trends are towards
declining numbers of individuals in fee for service plans and therefore
fewer choice of doctors.
Most of the relevant laws that are being "pre-empted" are not geared to
protecting patient choice ~ which is fully protected and expanded in the Act ~
but to protect providers from price competition and other pressures of
managed care organizations. The state aws the Act overrides are those that
bar managed care organizations from creating their own networks ~ for
example, not allowing a managed care network to refuse to admit a qualified
physician into its network.
ARTICLE:
FACT:
ARTICLE:
FACT:
"Doctors in training will be assigned to the coveted specialty programs based
partially on race and ethnicity...."
This is ridiculous. No physician or medical student is "assigned" to
any specialty or told what type of medicine they can practice. The
Act does make clear that funding of medical education will put more
emphasis on the widely-acknowledged need to train primary, as
opposed to specialty care physicians, and that attention will be paid to
the potential under-representation of minority groups.
"Under the Clinton bill you are entitled to a package of basic benefits, but you
can have them only when the are 'medically necessary' and 'appropriate.'
That decision will be made by the National Quality Management Council, not
be you or your doctor. The Council... will establish 'practice guidelines' to
control 'utilization' of health services."
That is wrong. You and your doctor will decide the type of care that
you need. The National Board has the authority to issue guidelines on
what may be necessary or appropriate. Its process of issuing any
guidelines will entail the fullest participation of all concemed.
Today, virtually all insurance plans can refuse to pay for services deemed
unnecessary and inappropriate, and it is the insurance company ~ not the patient and
physician -- with the ultimate authority. The decision-making process of insurers are
not subject to any public input or scrutiny. To imply that the new system will have
restrictions on what is necessary and appropriate, when the current system does not,
is anything but truthful.
�There is nothing in the Act to suggest that the "practice guidelines"
referred to here will be mandatory or will control anything. They are to assist
plans, providers and others in providing higher quality care. As the Act says, they
"may be used by health care providers to assist in determining how diseases,
disorders, and other health conditions can most effectively and appropriately by
prevented, diagnosed, treated and managed clinically."
ARTICLE:
FACT:
"The Secretary of Health and Human Services has the power to set a
controlled price for every new drug, and to require the drug manufacturer to
pay a rebate to the federal government. . . If a producer balks at paying the
rebate, the Secretary can 'blacklist' the drug, striking it from the list of
medications eligible for Medicare reimbursement."
Very misleading. The word "blacklist," with quotation marks
around it in the statement, does not appear in the bill. Putting
quotation marks around it implies it is directly lifted from the text. In
this case, however, it obviously applies to the author's interpretation of
the text.
The Secretary can, in some circumstances, request a rebate on a drug as a cost
containment tool. This will apply only to those drugs purchased in bulk by the
federal government for the millions of Medicare beneficiaries. Manufacturers are
given processrightsin these negotiations as well. There is no "blacklist".
ARTICLE:
FACT:
"Under the bill, the Secretary weighs the development costs and profit margin
for the single new drug, rather than the overall profitability of investing in new
cures."
The statement refers to page 373 of the bill. The bottom of that page
and the next page list no less than 8 factors that must be considered by
the Secretary in negotiating a rebate in the Medicare drug program.
Clearly, there is no effort to exclude the consideration that many efforts
to produce new drugs cost a great deal and produce no profit to drug
manufacturers. Drug companies would certainly be given the
opportunity to raise these considerations and there is absolutely nothing
in the proposal would prevent the Secretary from considering that
reality.
�A
Compromise on Health Care
Hillary Rodham Clinion has ruled uui o mprO'
mise with the sponsor of the >.>nls bipamsan health
care bill in Congress, Representative Jim Cooper.
Democrat of Tennessee. Her animus is odd. because
his bill is the closest cousin to ihe proposal she drew
up on behalf of the Administration.
The Cooper bill improves upon the basic framework of the Clinton plan. But it also contains a fatal
deficiency: Mr. Clinton would guarantee coverage
to everyone; Mr. Cooper would not. That mistake
can be fixed. Congress's best choice is a marriage
between the two bills.
Purchasing Cooperatives. The core of Mr. Cooper's plan, and the President's, is the creation of
regional purchasing cooperatives. The cooperatives
would offer small employers and individual buyers
a choice of private health plans at attractive prices.
Under Mr. Clinton's bill, everyone except employees of some of the largest companies — those with
more than 5,000 employees — would join a cooperative. But that threatens to pile enormous power in
the grasp of the cooperative, a government agency.
Mr. Cooper would infuse competition into the
system by permitting companies with more than
100 employees to negotiate coverage on their own.
The problem with this idea is that too many small
companies would be eligible to shun the cooperatives, hire only healthy workers and thereby negotiate low premiums on their own. A good compromise
would set the threshold between 200 and 500.
Premium Controls. Mr. Clinton would impose
unrealistically severe caps on private insurance
premiums. If health plans are not allowed to raise
premiums to recapture the cost of expensive investment, they are not likely to innovate. And overly
tight caps will drive health plans to skimp on care
sick people need.
Mr. Cooper does away with controls altogether.
A good middle ground is to set targets for premiums, which if exceeded would trigger an examma-
non by the cooperatives to diagnose why prcm
•Aere rising so fast.
Tcu Cnp. The way to force heakh plans ;.. ••.
down costs is to encourage individuals and cu.-r.,'.,
nies to weigh costs before choosing insurance ; -.a:
calls for taxing expensive policies. Mr C!i:;:i.':i
backs down from any such tax. Mr. Cooper wmiij
raise taxes on employers that provide high-oi-*;
coverage — thereby encouraging them to limn :.. \
free benefits to workers.
L niversa/ Coverage. Major reform enci:-along at most once in a generation. The Presu-TI:
has promised every American ample health <.p.-.:r
ance. That humane stand should not be com:-,
mised. Mr. Clinton would make this happen lar^ .
by requiring employers to pay about 80 percent ul
the cost of covering their workers. Republicans
oppose this employer mandate because, they say. K
would force employers to cut back employment. But
studies show that companies would absorb the cosi
by lowering wages, not by laying off workers
Mr. Cooper wouldn't require individuals to buv
coverage or employers to pay for coverage Hwould provide subsidies for families earning twice
the poverty-line income or less to buy insurance
through the cooperatives. But that could still mejn
a family earning $30,000 would have to buy a $5,000
policy on its own. Mr. Cooper calls that universal
access; we call it merciless.
Some in Congress want to put the burden in
individuals, not employers, to buy insurance wnn
the help of government subsidies. So far, no one has j
put forward a workable scheme that would noi
require a huge tax hike. That leaves Mr. Clinton ;
employer mandate as the best idea in sight.
Mrs. Clinton is right to focus on universal
coverage, but she should not blind herself io :"virtuous parts of Mr Cooper's bill. Rather thar,
casting Mr Cooper's proposal aside entirely :-.»
Administration should embrace its strengths
preserve an employer mandate to overcome • weakness.
;
�NO TRUTH:
TALKING POINTS ON "NO EXIT" THE NEW REPUBLIC ARTICLE
The New Republic should be ashamed of itself. This is one ofthe clearest examples of
irresponsible journalism seen so far in the health care debate. Elizabeth
McCaughey's February Tth No Exit" cover story touted by The New Republic as
"What The Clinton Plan Will Do For You" was full of lies, factual inaccuracies, and
willful distortions ofthe President's Health Security Act.
n
McCaughey's article is factually incorrect and obviously diminishes her credibility as
a journalist and the integrity of The New Republic editors that were willing to
publish an article full of inaccuracies and distortions. It's clear that the publication
made no attempt -- even cursory - to check the facts in this biased article. For
example, in the 9 sentences of tlie first paragraph, 5 are direct lies, and 2 are clear
misrepresentations. Ms. McCaughey and The New Republic were obviously more
intent on scaring the American public than providing the "straight story" they claim.
And that is the real problem with this kind of irresponsible journalism -- its
consequences extend far beyond the pages of a single article in a single magazine.
From now on, Ms. McCaughey's article becomes a legitimate source for opponents of
reform to use in a critique of the President's plan. They've got cover for their
criticisms of the Health Security Act. These lies and distortions feed on each other
and, unfortunately for those interested in a substantive debate on health care refonn,
they can have a serious impact on the future of health care in America.
Case in point: millions of Americans watched Bob Dole on television after the State of
the Union, making a number of points very similar to the lies in this article. I f
anyone asks him about his sources, he's covered by Ms. McCaughey. An advance copy
of the article was obviously given to the "Project for the Republican Future" which is
already running a TV ad citing it. For the next year, you can expect to hear everyone
from insurance industry executives to members of Congress to pharmaceutical
manufacturers refer to this article to back up their attacks. All because 1 writer was
willing to write and 1 magazine was willing to print lies and distortions.
New Republic writer Michael Kinsley further criticized the article asserting that: "It
is pointless to compare the Clinton plan with some idealized version ofthe classic
American system... The important comparisons are of Clinton's system with the
system as it actually will work with no reform, and as it will work under rival reform
plans." ["Health Care Nonsense", The Washington Post. 1/27/94]
The New Republic should retract the article - or, at the very least, issue a public
statement that their article contained many distortions of the Clinton plan.
�NEW REPUBLIC ARTICLE: TOP LIES
LIE:
"Escaping the system and paying out-of-pocket to see a specialist for the tests
and treatment you think you need will be almost impossible."
TRUTH: Under the Act, you can pay "out-of-pocket" for anything you want at any time,
to any physician or hospital willing to treat you.
LIE:
"Under the bill, a National Health Board... will decide how much the nation
can spend on health care beginning in 1996.
TRUTH: The Health Security Act makes no attempt to "decide how much the nation can
spend on health care" and specifically rejected the idea of global budgets or
price controls.
LIE:
"What most of us call fee-for-service (choose your own doctor) will be difficult to
buy."
TRUTH: To the contrary, the Act preserves fee-for-service arrangements by requiring
all alliances to offer at least 1 fee-for-service plan.
LIE:
"Price controls on doctors' fees and other regulations will push doctors.."
TRUTH: There are no price controls in the President's plan.
LIE:
The Act "... expressly includes [utilization review] as a requirement for
doctors treating patients with fee for service insurance as well."
TRUTH: Utilization review is but one option they are expressly permitted, not required,
to do.
LIE:
"Doctors in training will be assigned to the coveted specialty programs based
partially on race and ethnicity...."
TRUTH: This is ridiculous. No physician or medical student is "assigned" to any
specialty or told what type of medicine they can practice.
LIE:
If a producer balks at paying the rebate, the Secretary can ^blacklist' the drug,
striking it from the list of medications eligible for Medicare reimbursement."
TRUTH: There's no blacklist. Contrary to the implication - deliberately spread by
using quotations around the word -- "blacklist" doesn't even appear in the bill.
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Analyzed below are all statements made in the "No Exit" article where the author
referenced a specific page in the Health Security Act. An analysis of this article
leads to this conclusion: not one statement she makes referencing a
particular page o f t h e text is entirely accurate. Some are distortions and
misleading portrayals of elements ofthe Act. Others are outright lies.
ARTICLE:
"The bill guarantees you a package of medical services but you can't
have them unless they are deemed ^necessary and appropriate.'"
FACT:
Very misleading. Today, insurers can decide that procedures,
treatments, etc., are inappropriate or unnecessary. No insurance plan
guarantees you the right to unnecessary or inappropriate care. To
imply that such decisions are made only by doctors and individuals
today is deliberately misleading, at best. Under reform, most such
decisions will be made by patients and their doctors. In fact, the
Health Security Act gives consumers more guidance and more rights
about what is necessary and appropriate.
In addition, the Act does not, as the statement implies, forbid a plan
from delivering services - even if it does consider them not necessary
or inappropriate. It says they mav do so. And under the Act you have
clear means of immediate appeal should you feel you deserve different
or additional care - a guarantee that rarely exists today.
Most importantly, the bill (page 15-16) specifically states that
"Nothing in this Act shall be construed as prohibiting the following: (1)
An individual from purchasing any health care services." There is
nothing in the Act to prohibit any individual from going to any doctor
and paying, with their own funds, for any service. There sire also no
restrictions on the purchase of supplemental insurance.
ARTICLE:
"That decision (whether or not care is necessary or appropriate) will be
made by the government, not by you or your doctor."
FACT:
Untrue. I f anything, the "necessary and appropriate" care provision in
the bill delegates authority to the medical profession -- rather than
imposing further government bureaucracy between the patient and the
doctor. For most people today, their insurance company, not their
doctor, has final authority over what is necessary, appropriate and
therefore reimbursable. Today, insurers can decide that procedures,
treatments, etc., are inappropriate or unnecessary. No insurance plan
guarantees you the right to unnecessary or inappropriate care.
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Page 2
Michael Kinsley criticized this article, saying: "It is pointless to
compare the Clinton plan with some idealized version ofthe classic
American system, in which you can go to any doctor you want, who can
perform any treatment he wants, order any test she wants, prescribe
any drug he wants, and charge whatever she wants, all paid for by
insurance." ['Health Care Nonsense", The Washington Post. 1/27/94]
Under refonn, most such decisions will be made by patients and their
doctors. The National Board has the authority to issue guidelines
relating to what is necessary and appropriate. The authority to issue
these guidelines does not infer that there are no options left to
physicians and patients, only that a benefits package guaranteed to all
Americans must be consistently defined across states.
Guidelines that are developed by the Board will be developed in an
open hearings process in which all interested parties can have input.
Regulations used by insurance companies today are developed by the
companies as those companies see fit.
ARTICLE:
"Escaping the system and paying out-of-pocket to see a specialist for the
tests and treatment you think you need will be almost impossible."
FACT:
This is a blatant lie. Under the Act, you can pay "out-of-pocket"
for anything you want at any time, to any physician or hospital
willing to treat you.
However, we should stress that, under reform, it is very unlikely that
individuals will have to pay for such treatment. Every plan, even the
most structured HMO, must offer at the very least a point-of-service
option which enables you to go see a physician of your choice at any
time. In some plans you may have to pay somewhat more to do this,
but it is always an option, unlike today and unlike the alternative plan
(Cooper) endorsed by The New Republic.
�ANALYSIS OF THE NEW REPUBLIC A R T I C L E
Page 3
ARTICLE:
"If you walk into a doctor's office and ask for treatment for an illness
you must show proof that you are enrolled in one of the health plans
offered by the government. The doctor can be paid only by the plan, not
by you."
FACT:
False. You do not have to be enrolled in a plan to be treated. If you go
to a doctor and are not enrolled in a plan, the doctor will treat you. You
will then be given information on available plans and you may choose
any plan you want. The plan you choose then pays the physician. The
purpose of this provision is to assist all individuals in enrolling in a
plan.
However, as noted above, an individual may pay any doctor
any price for any service outside the comprehensive package
of services offered as part of a plan. So i f an individual wants to
go to a doctor and pay the doctor they can.
ARTICLE:
"The bill requires the doctor to report your visit to a national data bank
containing the medical histories of all Americans."
FACT:
Not true. The veryfirstprovision of this section of the Act states: "The
information system must be consistent with privacy security standards
in the Act." Physicians may be required to submit data on outcomes,
treatments, etc. for the purpose of improving quality and assessing
treatments and outcomes. But the Act very specifically prevents
against tying this data to specific individuals.
Sections 5101 and 5102 spell out detailed protections that assure that
patient records and individual health data are strictly protected.
Therefore, the implication that an individual's medical records will be
in a national data bank and that those records can be accessed by all
kinds of other agencies, individuals, etc., is patently untrue.
�ANALYSIS OF THE NEW REPUBLIC A R T I C L E
Page 4
ARTICLE:
If you work for a company with fewer than 5000 workers you "must
enroll in one ofthe limited number of health plans offered by the
regional alliance where you live."
FACT:
Misleading. These individuals choose a health plan from the regional
alliance bargaining on their behalf. But i t is clearly misleading to
assume there w i l l be a "limited" number of plans offered by the
alliances. In contrast, the alliance is obliged to offer a l l plans
certified by the state, including at least one traditional "fee-for-service"
plan. The only exception is that an alliance may decide not to offer a
plan than charges 120% or more of the average premium cost in the
region.
For example, one of the real world models of an alliance -- the
California Public Employees Retirement System -- offers its members a
choice of 24 different plans and individuals choose a personal
physician in the plan. And more than 2/3 ofthe members Eire so
satisfied with their plan that they would recommend i t to a friend.
This is a big difference from today's system in which the great majority
of Americans face a very limited choice of health plans. About 50% of
Americans insured through their employer have only one or two
options of health plans. The great majority of Americans will have
more choice in the alliance system.
ARTICLE:
"Under the bill, a National Health Board... will decide how much the
nation can spend on health care beginning in 1996."
FACT:
This is untrue. The Health Security Act makes no attempt to "decide
how much the nation can spend on health care" and specifically
rejected the idea of global budgets or arbitrary price controls. The
National Board is only authorized to set the initial premium targets -the rates at which health insurance premiums (for the comprehensive
benefits package) not national health expenditures may increase from
year to year. These premium targets are important guarantee to
American taxpayers and businesses who are being asked to contribute
to their health care that their premiums will not continue to spiral out
of control, as they have done for years. There are no restrictions in
the Act on the amount of money that may be spent by people
with their own funds for additional services or supplemental
insurance policies.
�ANALYSIS OF THE NEW REPUBLIC A R T I C L E
Page 5
ARTICLE:
"The bill outlaws plans that would cause a region to exceed its budget
or that cost 20 percent more than the average plan."
FACT:
Wrong again. No plan is "outlawed." The premium limit does not
preclude any planfiromparticipating. The alliance has the option (not
the requirement) to refuse to contract with a plan charging more than
20% over the average premium (so that people have a safeguard
against insurance company price inflation).
ARTICLE:
"Even the bill's authors anticipate that restricting the dollars available
for health care in the teeth of these trends will produce grave shortages;
the bill provides that when medical needs outpace the budget and
premium money runs low, state governments and insurers must make
^automatic, mandatory, nondiscretionary' reductions inpayments to
doctors nurses and hospitals to assure that expenditures will not exceed
budget."
FACT:
This is misleading. The author here is clearly implying that such
a mechanism exists i n the main proposal — i t does not. The
section the author is quoting from here refers to states that choose to
form single payer systems, not from the description ofthe primary
system advocated in the plan. Virtually all single payer systems work
in this manner, adjusting payments to providers to make certain
budgets are met.
Even with regard to single payer systems, there is absolutely no
indication in the plan that the bill's authors are anticipating "grave
shortages." This is responsible legislation; the plan merely spells out,
in this special case, the mechanism by which a single payer system
would meet targets i f expenditures were running ahead of anticipated
costs. To spell out such a mechanism is hardly, an admission that
"grave shortages" are expected.
�ANALYSIS OF THE NEW REPUBLIC A R T I C L E
Page 6
ARTICLE:
"Above a threshold level of quality, alliance officials will approve
health plans based on lowest cost, not highest quality."
FACT:
Not true. In contrast, the alliance is obliged to offer a l l plans certified
by the state, including at least one traditional "fee-for-service" plan.
The only exception is that an alliance may decide not to offer a plan
than charges 120% or more of the average premium cost in the region.
They are not required to do this however.
ARTICLE:
"What most of us call fee-for-service (choose your own doctor) will be
difficult to buy."
FACT:
Another lie. To the contrary, the Health Security Act preserves fee-forservice arrangements by requiring all alliances to offer at least one feefor-service plan. Today, more and more Americans cannot choose a fee
for service plan because their employers have chosen not to offer that
option. Recent reports have shown that"... a growing number of
employers have abandoned traditional indemnity [fee-for-service]plans
entirely. I n fact, more employers now offer managed care plans than
offer traditional indemnity plans." In fact, in 1988 , 89% of employers
offered fee-for-service plans but, by 1993, this number had dropped to
65%. ["1992 Health Care Benefils Survey", Foster Higgins, 1992; "Health Benefits
in 1993", KPMG Peat Marwick]
ARTICLE:
"Price controls on doctors' fees and other regulations will push
doctors.."
FACT:
Yet another lie. There are no price controls in the President's plan.
Price controls -- calling for government micro-management of every
health care service, doctor's fee, drug technology, and product -- were
considered and specifically rejected. The Health Security Act does have
-- as a backup mechanism for cost control -- a limit on how much
insurance premiums can increase every year. This is an important
guarantee. I f employers are to be told they have the responsibility to
contribute to coverage -- and i f the federal government is going to
provide discounts to small businesses and low-income individuals then American businesses and families deserve the guarantee that
their premiums, and government spending, won't continue to rise
unchecked, [more]
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
Page 7
Since, the federal government won't make market decisions on specific
prices; health plans will have to decide themselves how to become
more efficient in a way that won't drive consumers to another plan. As
Stephen Zuckerman and Jack Hadley, two leading health policy
analysts, wrote in support ofthe plan's premium limits, "it seems far
preferable that insurance companies that are responsible to their
subscribers make these decisions than having the federal government
involved in detailed price negotiations and review procedures with
individual hospitals and physicians." ["Clinton's Cost Controls Can Work",
Washington Post, 11/7/93]
ARTICLE:
"The bill limits what health plans can pay physicians and prohibits
patients from paying their doctors directly."
FACT:
False. Any health plan that pays physicians according to their own
contracts may pay those physicians anything they like. The bill only
tells most health plans what to pay physicians with whom it has no
contract. These fees apply to fee-for-service plans and for charges
when individuals go out of the plans' network of doctors.
It is not clear why a patient would want to pay a doctor "directly," for
services that their insurance company is obligated to pay. If the
implication is that individuals cannot go to any doctor and pay
for whatever they want, that is false. Their right to do so is
expressly protected.
ARTICLE:
"The Clinton bill calls utilization review a >easonable restriction'on
patient care and expressly includes it as a requirement for doctors
treating patients with fee for service insurance as well."
FACT:
This is a lie. The plan does not "require" fee for service insurers to use
utilization review. It says they may do so. The purpose is to define
what fee for service insurers - who have no contracts with the
physicians they are paying -- may do in assessing charges.
Utilization review is one option they are expressly permitted,
not required, to do. [more]
�ANALYSIS OF THE NEW REPUBLIC ARTICLE
PageS
In reality, the bill is just following common practice here,
acknowledging the typical practice of utilization review in fee for
service plans. If the author is implying that many Americans are
enrolled in plans where there is no review by the insurer, she is being
deliberately misleading. As Michael Kinsley said, "It so happens that
the New Republic's own health care plan (of which I am a member) has
extensive "utilization review.'... Utilization review is one ofthe
developments rapidly spreading - for good or ill - under our current
health care system. It is one reason health cost inflation has abated so
dramatically . . . " ["Health Care Nonsense", The Washington Post. 1/27/94]
ARTICLE: "Some states recently have enacted laws to safeguard choices patients
want to make for themselves, such as which hospital or pharmacy to
use. HMOs protest that these laws hobble cost containment, and the
Clinton administration apparently agrees. The Clinton bill pre-empts
state laws protecting patient choice."
FACT:
Deliberately inaccurate. The Act guarantees all individuals full choice
by giving everyone the option many don't have today - access to a fee
for service plan in which they can choose any provider. The Act also
mandates that all HMO's and other managed care plans offer a pointof-service option in which individuals have a right to see any doctor
outside of their plan or its network. This, again, is far greater choice
than many individuals have today. In fact, current trends are towards
declining numbers of individuals in fee for service plans and therefore
fewer choice of doctors.
Most of the relevant laws that are being "pre-empted" are not geared to
protecting patient choice -- which is fully protected and expanded in
the Act -- but to protect providersfromprice competition and other
pressures of managed care organizations. The state laws the Act
overrides are those that bar managed care organizations from creating
their own networks -- for example, not allowing a managed care
network to refuse to admit a qualified physician into its network.
�ANALYSIS O F THE NEW REPUBLIC ARTICLE
Page 9
ARTICLE:
"Doctors in training will be assigned to the coveted specialty programs
based partially on race and ethnicity...."
FACT:
This is ridiculous. No physician or medical student is "assigned"
to any specialty or told what type of medicine they can
practice. The Act does make clear that funding of medical education
will put more emphasis on the widely-acknowledged need to train
primary, as opposed to specialty care physicians, and that attention
will be paid to the potential under-representation of minority groups.
ARTICLE:
"Under the Clinton bill you are entitled to a package of basic benefits,
but you can have them only when the are "medically necessary' and
"appropriate.' That decision will be made by the National Quality
Management Council, not be you or your doctor. The Council... will
establish "practice guidelines'to control "utilization'of health services."
FACT:
Another lie. You and your doctor will decide the type of care that you
need. The National Board has the authority to issue guidelines on
what may be necessary or appropriate. Its process of issuing any
guidelines will entail the fullest participation of all concemed.
Today, virtually all insurance plans can refuse to pay for services
deemed unnecessary and inappropriate, and it is the insurance
company -- not the patient and physician - with the ultimate
authority. The decision-making process of insurers are not subject to
any public input or scrutiny. To imply that the new system will have
restrictions on what is necessary and appropriate, when the current
system does not, is anything but truthful.
There is nothing in the Act to suggest that the "practice
guidelines" referred to here will be mandatory or will control
anything. They are to assist plans, providers and others in providing
higher quality care. As the Act says, they "may be used by health care
providers to assist in determining how diseases, disorders, and other
health conditions can most effectively and appropriately by prevented,
diagnosed, treated and managed clinically."
�ANALYSIS O F THE NEW REPUBLIC A R T I C L E
Page 10
ARTICLE:
"The Secretary of Health and Human Services has the power to set a
controlled price for every new drug, and to require the drug
manufacturer to pay a rebate to the federal government...
//a
producer balks at paying the rebate, the Secretary can "blacklist' the
drug, striking it from the list of medications eligible for Medicare
reimbursement."
FACT:
Very misleading. The word "blacklist," with quotation marks
around i t i n the statement, does not appear i n the b i l l . Putting
quotation marks around i t implies i t is directly lifted irom the text. In
this case, however, it obviously applies to the author's interpretation of
the text.
The Secretary can, in some circumstances, request a rebate on a drug
as a cost containment tool. This will apply only to those drugs
purchased in bulk by the federal government for the millions of
Medicare beneficiaries. Manufacturers are given process rights in
these negotiations as well. There is no "blacklist".
ARTICLE:
"Under the bill, the Secretary weighs the development costs and profit
margin for the single new drug, rather than the overall profitability of
investing in new cures."
FACT:
The statement refers to page 373 of the bill. The bottom of that page
and the next page list no less than 8 factors that must be considered
by the Secretary in negotiating a rebate in the Medicare drug program.
Clearly, there is no effort to exclude the consideration that many
efforts to produce new drugs cost a great deal and produce no profit to
drug manufacturers. Drug companies would certainly be given the
opportunity to raise these considerations and there is absolutely
nothing in the proposal would prevent the Secretary from considering
that reality.
�THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
September 16. 1993
STATEMENT BY DR ARTHUR FLEMMEVG
"As the former Secretary of Health. Education and Welfare in the Eisenhower
Administration, I would like to express my strong support for President Clinton's health care
reform proposal. The proposal he is about to present to the nation is comprehensive,
thoughtful, workable and fair - a proposal that will lead us on the road to a nation where
health security with quality care is guaranteed for all Americans and health care costs are
brought under control.
I have worked for health carereformfor the better part of four decades, and I have
seen other health care reform efforts start with high hopes and fail. But I believe this is
different. The President has presented us with a historic opportunity, and we must seize the
moment. Let us get a plan on the books and begin to learnfromexperience, instead of
engaging in endless rhetoric.
As a former U.S. Commissioner of Aging, I am particularly enthusiastic about the
plan: because this proposal will mean a stregthened Medicare program - providing greater
security and expanded benefits for older Americans.
Under the President's proposal, older Americans willreceiveall the benefits they do
today. In addition, Medicare will be expanded to cover prescription drag benefits, and there
will be a new long-tenn care program to cover home- and conmrity-based care. Neariy all
Americans will still have to pay only 25% of the total cost of thefartB benefits they receive
- including the new drag benefit Any increase in the premium will be consistent with the
increase in benefits. Only the wealthiest Americans - those people earning $100,000 or more
- will pay the full actuarial value of the benefils theyreceive.Finally, Medicare funds now
being wasted to cover fraud and overehaiges will be used to pay for these new benefits.
Over the next several months, there will be likely many attempts by those opposed to
refonn to scare Americans about the effect of the President's plaa
But older Americans should know that President Clinton's proposal will mean greater
security and expanded benefits. And I hope that older Americans - and Americans of all ages
- will join in getting this plan on the books."
Dr. F lemming was Secretary of Health, Education and Welfarefrom1958 through
1961. He was Chair ofthe White House Conference on Aging in 1971 and U.S.
Commissioner on Aging at HEW from 1973 to 1978. Currently, he is Chair of the National
Citizens' Board of Inquiry into Health in America, Co-Chair of Save our Security Coalition.
-30-30-30-
�To: Hillary Rodham Clinton
Fr: Gene Sperling, Jason Solomon
Re: Phone Call To Elliott Richardson
Date: December 20, 1993
You might call former Secreatry of HEW Elliot Richardson, a key architect of the Nixon
health plan. His number is (202) 835-7500.
The purpose of the call would be to enlist his help in defending the Clinton proposal as
reasonable and workable. Specifically, you might ask him to write an op-ed that compares the
Nixon health reform proposal ~ which came during Richarson's tenure as Secretary of HEW
(1970-1973) — to the Clinton proposal. This op-ed would emphasize that financing health
reform with an employer mandate - as the Nixon plan did - is the simplest, fairest and most
conservative way of achieving universal coverage. It would point out that an employer
mandate builds on the current system and is therefore the least disruptive.
We would obviously provide any assistance that he might want in drafting the op-ed.
Richardson's support would help do the following:
1) Inoculate us against attacks from Republicans that this is overly burdensome on businesses.
2) Set our proposal apart as the most logical way of financing reform.
3) Make our proposal seem more like a centrist approach.
Background on Past Contact:
In an attempt to reach out to former HHS/HEW Secretaries, he was called by Avis LaVelle's
deputy at HHS, Melissa Skolfield, in early October. At the time, he was asked if he would
consider endorsing the principles of the plan. He expressed interest, saying that he thought we
were getting unfair coverage on the Medicare and Medicaid savings. He was also interested in
seeing Dr. Arthur Flemming's statement of support from September (Richardson was an
assistant secretary for Dr. Flemming at HEW) and talking to David Gergen. But apparently
this never received the proper follow-through.
As part of this outreach to former Secretaries, Ira has met recently with Joe Califano, and
Chris Jennings and other members of the staff are in constant contact with Dr. Flemming, an
strong supporter of the plan.
Background on Richardson:
Elliot Richardson is currently a senior partner with the DC law firm Milbank, Tweed, Hadley
& McCloy. His former government posts include US Attorney for Massachusetts and
Assistant Secretary for HEW under President Eisenhower, Attorney General and Lieutenant
Governor of Massachusetts, and Under Secretary of State, Secretary of HEW, Secretary of
Defense and Attorney General in the Nixon Administration. Richardson was Secretary of
HEW from 1970 to 1973.
�Background on Nixon Proposal:
In February of 1971, President Nixon announced a new "National Health Strategy" in a
special message to the Congress. Elliot Richardson was his HEW Secretary at the time.
The four basic principles behind the "new strategy" were:
1) Assuring Equal Access
2) Balancing Supply and Demand
3) Organizing for Efficiency
A. Emphasizing Health Maintenance
B. Preserving Cost Consciousness
4) Building on Strengths
To implement this strategy, President Nixon proposed a six point plan:
A. Reorganizing the delivery of service. (This was centered around promoting HMOs,
resulting in the HMO Act of 1973)
B. Meeting the special needs of scarcity areas
C. Meeting the personnel needs of our growing medical system
D. A special problem: malpractice suits and malpractice insurance
E. New actions to prevent illnesses and accidents (medical research and prevention)
F. A National Health Insurance Partnership
This last point was the most broad in scope. It was Nixon's attempt to fulfill his State of the
Union pledge to "ensure that no American family will be prevented from obtaining basic
medical care by inability to pay." Nixon portrays his approach, like ours, as an attempt to
build on the current system. The National Health Insurance Partnership consisted of basically
two parts:
1) a proposed National Health Insurance Standards Act which will "require employers to
provide basic health insurance coverage for their employees." To justify the employer
mandate, Nixon said, "In the past, we have taken similar actions to assure workers a
minimum wage, to provide them with disability and retirement benefits, and to set
occupational health and safety standards. Now we should go one step further and guarantee
that all workers will receive adequate health insurance protection." The costs would be
"shared by employers and employees, much as they are today under most collective
bargaining agreements."
2) a proposed Family Health Insurance Plan to provide health insurance for families headed
by people that are unemployed or self-employed.
�Issues Every Plan to Refonn Health Care Financing Must Confront
by
Henry J. Aaron
1
On any reasonable scale of complexity, major reform of health care financing is the
most intricate legislation with which Congress has had to grapple since World War II.
Countless issues of economic analysis, administration, and political balancing are responsible
for the more than 1,300 pages of draft legislation President Clinton has submitted to
Congress. If the Clinton proposal or any other of comparable reach is enacted, lengthy
implementing legislation from fifty states and shelf-fulls of regulations will multiply the
legislation page-count.
The goals of reform are widely acknowledged: assuring essentially all U.S. citizens
and legal residents financial access to health care; to slow the growth of health care
spending, which means reducing the tendency for insured patients and their care provideragents to consume health care the marginal benefit of which falls well short of equals
marginal social cost; and to sustain or improve the quality of care. While not all agree, I
shall assume that removal of imperfections in the health insurance market and feasible
subsidies will not suffice to achieve the first goal through voluntary actions of businesses
and individuals. For that reason I believe and shall assume that some form of mandate, on
individuals or businesses, or some form of direct government provision will prove necessary
to make certain that virtually everyone is insured. If a mandate is necessary, the object that
people are to be required to buy must be defined and the entity required to do the buying
must be named and its responsibilities specified. I shall focus on certain issues related to
such a mandate. In so doing, I shall neglect issues of considerable importance including the
'Director of Economic Studies, Tlie Brookings Institutions.
�Allied Social Sciences Association
Henry J. Aaron
mechanisms for achieving cost control and ways in which quality of care can be sustained
and improved, that will be addressed during the debates on health care reform.
Question 1:
2
Should Experience Rating Be Abandoned?
Most current insurance is "experience rated," meaning that insurance premiums
retrospectively equal actual loss experience ("self-insurance") or prospectively reflect
predictable variations in
outlays ("medical underwriting"). Roughly half of insured
employees are covered by employers who self-insure. By excluding self-insured plans from
state regulation, the Employee Retirement and Income Security Act of 1974 encouraged this
practice. Self-insured companies typically pay actual claims plus a small administrative
charge to an insurance company or other agent hired to process claims. Other employers
and all individuals buy insurance coverage most of which is subject to medical underwritingPremiums set by medical underwriting are heavily shadowed by past experience.
Insurers set premiums based on individual or group characteristics that are correlated with
the use of health care. Even companies or individuals that are not self-insured are subject
to surcharges or nonrenewal of coverage based on their actual claims.
2
I use the plural, "debates" because tlie institutions involved in insuring patients and delivering care
are so complex, the financial stakes in reform are so large, and the pace of advance in medical science is
so rapid, that the desired organization of delivery of care and scale of insured services is likely to change
greatly over time. Hence, the health care reform debate of 1994 should be seen not as a crisis that national
action will resolve once and for all, but as the start of a continuing political colloquy and periodic
legislation that will persist for many years.
-2-
�Allied Social Sciences Association
Henry J. Aaron
Taxonomy
Initially, most health insurance was "community rated," meaning that in a given
community or metropolitan area all members of each of a small number of family types paid
the same premium. This arrangement proved unstable for obvious reasons. New insurers
raided old companies by offering premiums below the community rate to groups with low
expected costs. Insurers using community rating found average costs of their remaining
clients had risen, raised premiums, and thereby created new opportunities for raiding.
Currently, only a few communities and companies continue to engage in community rating,
typically in noncompetitive insurance situations.
Few adherents of experience rating can be found outside the ranks of professional
economists.
Few advocates of community rating can be found inside the ranks of
professional economists except among some specialists in health care. Noneconomists see
price variations as unfair - punishing the sick
and tend to down play the incentive effects
of price variations. Despite -- or, perhaps, because of -- this perspective, noneconomists in
my view come closer to a valid judgment on experience rating than do economists. The
practical question, I shall argue, is: how much variation from community rating, if any, is
desirable or necessary.
Incentive Domains
Incentives arising from price variations can affect choice of insurance, personal
behavior, or business behavior.
..3..
�Allied Social Sciences Association
Henry J. Aaron
Choice of Insurance. Price differences normally affect the quantity of commodities
that people demand. Most of the health care reform plans calling for mandatory coverage
that are now under serious political consideration would provide relatively generous
coverage of services to everyone. This statement needs to be qualified, as coverage has both
an extensive and an intensive margin. The extensive margin is represented by the range of
covered services. The intensive margin is defined by controls on total spending. Tight
limits on spending with a broad menu of services means that some people will qualify
under the plan for a wide range of medical interventions, but that not all who might stand
to benefit will in fact receive them. Within a given budget, a clear tradeoff exists between
the range and availability of services. The plans now under discussion typically would
permit people to buy insurance coverage for services (the extensive margin) not covered
under the mandated package. Whether they would be permitted to buy insurance and, if
permitted, whether they would find such insurance attractive to relax constraints on the
extensive margin is less clear.
One striking feature about the mandatory plans now under discussion is that they
do not contain high- and low-option plans that differ based on deductibles and cost sharing.
They deny such choice, in part, because having plans with two levels of generosity raises
3
serious problems of adverse selection. Some private plans have found that the premium
difference between high-option and low-option arrangements was greater than the difference
between the deductibles. Despite this fact, some people, in apparent defiance of the laws
3
Stiglitz and Rothschild
.-4-.
�Allied Social Sciences Association
Henry J. Aaron
of rational behavior, continue to demand high-option coverage. Thus, while some people,
including perhaps most economists, might prefer less costly, high-deductible plans,
proposals now under discussion preclude this option.
Price differences can also affect the choice of provider or provider group. The
essence of managed competition is that differences in prices charged by providers for given
benefits should be clearly and fully visible to households and that households should bear
the full differences in costs. The goal is to encourage efficient provision of health care and
innovation in the way health care services are organized and delivered. All of the major
proposals for reform of health care financing, other than the so-called "single payer" options,
embrace this principle; and there is no good reason why a single-payer plan should exclude
provider competition. For that reason, I shall not discuss it further.
Personal Behavior. The potential for price differences to influence personal behavior
varies between large and small groups, whether experience rating is achieved through
underwriting or self-insurance. The scope for personal incentives is small in large groups.
Because wage rates and fringe benefits normally do not vary from worker to worker, but
are set for the whole group or for large sub-groups, such as families with children, a classic
free-rider problem exists. Incentives for any individual behavioral changes that premium
variations might promote, other than the selection of insurance plans or provider groups,
are divided by n, where n is the size of the group. In short, the general practice of setting
wage rates and fringes for large groups based on average characteristics of the group means
that incentive effects of variations in premiums for groups of more than a very few members
are negligible.
-5-
�Allied Social Sciences Association
Henry ] . Aaron
In the case of groups with fewer than about ten members, a group that includes
fewer than 20 percent of all employees and less than half of the privately insured, premium
variation can affect behavioral incentives, but only to the extent that it is based on actions
controllable by the individual. Self-insurance is rare in very small groups because the time
variance of outlays increases as groups size declines. Underwritten premiums vary on the
basis of a few characteristics: age, sex, place of residence, occupation, and medical history.
Of these characteristics, the first and the last are much the most important. Age and
sex are not controllable behaviors. About 10 percent of the variation in the use of medical
services is predictable given current techniques if medical history is excluded from
4
consideration. Thus, one state-wide Blue Cross-Blue Shield plan sets a base premium for
males over age 65 roughly seven times higher than premiums for men under age 24. The
company sets a base fee for twenty four industry groups, provides discounts of up to 10
percent for sixteen industry groups, and imposes surcharges ranging to 30 percent, charging
the highest cost companies a surcharge of 44 percent over the lowest cost companies.
Medical history is partially controllable. Use of use of mental health services is
somewhat controllable; use of cancer chemotherapy is much less so; use of cardiac intensive
care after a coronary is largely involuntary. All can lead to higher premiums, complete
denial of coverage, or denial of coverage for the specified condition, permanently or for a
period of time.
4
Joseph Newhouse
-6-
�Allied Social Sciences Association
Henry J. Aaron
Additional correlates of use of health care include personal behaviors - smoking, participation in risky sports, eating habits. Some of these indisputably controllable behaviors - heavy drinking or down-hill skiing ~ are beyond the observation of medical underwriting.
In total, no more than 20 to 30 percent of the variance in the use of health services is
5
predictable.
Even in the case of individuals subject to medical underwriting, the incentives
provided by price signals may be incorrect. Take discounts for nonsmokers, for example.
This price signal is misleading in two ways. First, and most important, the price is not the
coefficient on smoking from an accurate structural model of the effect of smoking on health
expenditures during the contract period. Rather, it is the coefficient on smoking from a
reduced form equation in which many relevant variables are excluded. To the extent that
the omitted variables are correlated with smoking behavior, the coefficient on smoking is
an incorrect behavioral signal to people regarding the economic consequences of smoking.
Second, the time period of insurance contracts is very brief, usually six months or one
year. What one should be interested in is the effect of current behavior not just on health
expenditures over the next six months or one year, but on the discounted present value of
expected lifetime health expenditures. The effects of current behavior on lifetime outlays
almost certainly differ in magnitude ami may even differ in sign from the effect over the next
relatively brief period. Thus, Schelling has estimated that smoking has little effect on
lifetime health care spending, because smokers die tend to young, thus truncating their
5
Newhouse
__7_.
�Allied Social Sciences Association
Henry J. Aaron
consumption of health care, and may also die cheap -- a quick smoking induced coronary
or a well-advanced case of lung cancer may well occasion less health care spending than
gradual decline, with repeated illnesses and possibly capped by a lengthy nursing home
stay. The brief duration of insurance contracts manufactures pecuniary externalities.
In short, the value of incentives from medical underwriting are seriously compromised. The price signals to controllable behaviors are almost always too high or too low
(because of excluded variables) and may even be of the wrong sign (because of truncated
contract duration). This is a classic case of market failure because not all relevant ArrowDebreu markets exist.
In any event, the major source of predictable interpersonal variations in costs arise
from characteristics over which individuals have little or no control - age and genetic
endowments, which condition medical histories. Deciding how to distribute age-related
variations in health insurance costs is purely a matter of distributional equity (apart from
insurance coverage).
With advances in molecular genetics and the impending success in decoding the
human genome, the capacity to identify genetic predispositions to a wide range of illnesses
is coming into view. This capacity will make predictable much variation in health spending
that now appears random or that is correlated with other behaviors including past use of
medical services. It is hard, I think, to defend the proposition that people born with a
predictable tendency to develop, say, cancer should incur a negative "dowry" at birth equal
to the predictable medical costs they will incur. The dowry does not become more
defensible even if it turns out to be positive because, perhaps, the lifetime medical costs
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�Allied Social Sciences Association
Henry J. Aaron
associated with a high probability of a death from cancer are less than the cost of treatment
for alternative deaths from other possibly more costly illnesses -- Alzheimer's disease, for
example. In fact, most noneconomists and perhaps many economists, I think, would find
these speculations more than a little bizarre.
Business Behavior. Many illnesses and injuries are related to the work place or, more
commonly, to occupation. Some production processes, such as mining, are inherently
dangerous or unhealthful. Prices of commodities that are dangerous to produce should
reflect the costs generated by these dangers. Self-insurance and medical underwriting
achieve this goal. Community rating would defeat it. Furthermore, companies can engage
in various practices, including plant design, selection of types of equipment, investments in
worker training, and wellness programs that affect health expenditures. Community rating
reduces the return to companies from such practices. While the sacrifice of experience rating
would weaken these incentives, it is possible to promote work place safety in other ways,
as current regulations attest. These alternative techniques may be less accurate or more
costly than reliance on accurate price signals would be. But the existence of alternatives
indicates that not all incentives guiding employer behavior that emanate from experience
rating need be sacrificed.
Experience rating also creates perverse incentives.
It encourages employers to
discriminate in hiring. Employers have an incentive not to hire candidates with high
predictable health care costs, whether or not these costs are related to capacity to meet job
requirements. The alleged reticence of employers to hire older workers may be attributable
in part to the tendency of health costs to rise with age. The same considerations arise with
..9..
�Allied Social Sciences Association
Henry J. Aaron
respect to workers with disabilities or histories of illness. This incentive is particularly
strong with respect to low-wage workers, since health insurance is often a large part of total
compensation for workers paid at rates near the minimum wage.
Laws prohibit
discrimination based on age, disability, or such other correlates of medical expenditures as
race and sex. But regulations that require behavior contrary to strong economic incentives
do not have a conspicuously successful track record. Community rating does away with
these incentives.
Experience rating may also affect business organization. The tendency for companies
to reduce core work forces by contracting with workers as individual contractors or to
purchase services from other companies that were once produced internally by low wage
workers has been strengthened by the rapid and unpredictable growth of health insurance
costs. Companies that do not offer health insurance tend to attract employees who place
little value on health insurance relative to other forms of compensation of equal cost. The
converse occurs with companies that provide health insurance as a fringe benefit of
employment.
The extent of such "clientele" effects among workers is unknown. The
introduction of an mandatory coverage, whether the mandate applies to employers or
individuals, will undo any such clientele effects.
Conclusion
On balance, experience rating through either self-insurance or medical underwriting
produces modest constructive incentives at best. In most cases, the price signals are
inaccurate and they may even be of the wrong sign. Most of actual variation in outlays is
traceable to factors over which individuals have little control. Some variation arises from
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�Allied Social Sciences Association
Henry J. Aaron
work place factors over which employers have control.
But most of the variation in
predictable medical outlays is traceable to factors that no one can much control. Hence, the
common view that the choice between experience rating and community rating is mostly a
matter of fairness or distributional equity and that experience rating does indeed penalize
the sick is mostly, but not completely, right.
I conclude that experience rating is undesirable. In the name of small potential
efficiency gains, it would require extensive direct administrative costs, it would create
perverse incentives (don't hire the sick, the old, the handicapped), and it would therefore
necessitate extensive regulatory oversight to prevent abuse. Some elements of experience
rating that most economists would defend can be easily retained. Thus, the Clinton health
plan, at least at the outset, would retain geographic variations in health spending by basing
initial premiums within each regional health alliance on historical spending. Whether efforts
should be made over time to reduce such inter-alliance variations raises additional questions
that I shall not explore here.
Apart from such geographic variations, it is not clear that, on balance, experience
rating promotes economic efficiency and it raises a host of disturbing equity concerns.
Economists should stop displaying a regrettable instinct for the capillary by dwelling on
imagined efficiencies from experience rating. I would urge them to turn to tasks that are
genuinely important for efficiency in the delivery of health care - for example, to designing
partly prospective payment systems that promote competition but discourage cream
skimming by providers.
A move to community rating should be accompanied by
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�Allied Social Sciences Association
Henry J. Aaron
heightened scrutiny over work place safety and exploration of defensible variations in
premiums among companies related to hazard-specific variations in medical outlays.
Question 2:
6
How much redistribution will community rating cause?
Most economists hold that the costs of health insurance will be borne by workers in
7
the medium to long run, whether premiums are collected from employers or workers.
Thus, an employer mandate with experience rating would result in only modest redistribution of costs for currently provided care. A mandate would impose new costs for currently
uninsured workers. With the passage of time, these costs would lead to reduced wages or
other fringe benefits for covered individuals or groups. The increase in premiums and the
associated reduction in other forms of compensation would exceed the increase in services
consumed by these groups since they are disproportionate beneficiaries of uncompensated
care, the cost of which is shifted through charges to other payers and from there to
premiums for the currently insured. Thus, redistribution would occur to the extent that the
cost of services currently provided to the uninsured but paid by the insured are shifted to
the uninsured.
Such shifts are relatively modest, since roughly 85 percent of the U.S. population is
insured. Far larger redistribution would result from community rating which would level
insurance costs across U.S. companies.
An individual mandate would require large
subsidies to low income households to make an individual mandate affordable.
^ h i s section draws on Henry J. Aaron and Barry Bosworth
7
Krueger, Gruber
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�Allied Social Sciences Association
Henry J. Aaron
President Clinton's plan stops well short of establishing a single national price for
health insurance. It would charge employers one of three premiums set in each health
alliance based on whether the worker is single, a single head of household, or married.
Each state would form one or more nonoverlapping regional health alliances among which
the three premiums would differ based on historic spending patterns.
How these boundaries are drawn will affect premiums at any given location. The
premium charged a business in a town adjacent to a metropolitan area will depend
sensitively on whether the town is included in the presumably high cost metropolitan area
or in some presumably low cost suburban or rural alliance. For similar reasons, how
alliance boundaries are drawn will influence whether companies with 5,000 or more workers
will exercise the option under the Clinton plan to form their own health alliances
independent of the regional alliances. The flow of subsidies paid to low income households,
who are eligible for aid if family income is below 150 percent of official poverty thresholds,
and to businesses, who are eligible for subsidies if they employ fewer than 75 workers and
pay average earnings below $24,000, will also depend on how alliance boundaries are
drawn. For all of these reasons, the drawing of boundaries among health alliances is likely
to inidate political battles even more intense than those associated with Congressional
redistricting.
The magnitude of the shifts in costs among companies as a result of shifting from
experience rating to the proposed community rating is impossible to measure accurately
with currently available data. Table 1 gives a crude indication of the size of shifts among
two-digit SIC industry groups. The data in table 1 exaggerate the shift in costs among
-13-
�Table 1. Private Employer Health IrRurance Costs by Industry, 1992
Total Health Insurance
Retirees
Current Employees
Cost of uninsured workers
(billions of dollars)
171
18
153
20
Cunrm
employer comributions
for heahhiruur once
(S oer FTE)
{% of vases)
Total
Adjusted employer
coraribaions
for heahh Insurance
<t oer FTE)
a
Difference berween
currenl aid adjusted
contriburions
($ Der FTE)
(% ofwaees)
2,017
7.2
2053
(236)
-0.8
394
485
312
2.5
3.5
1.7
2,041
2,041
2,041
(1,647)
(1.555)
(1,729)
-10.3
-11.4
-9.6
Mining
Metal mining
Coal mining
Oil and gas extnction
Nonmetallic minerals, except fuels
4,776
5,327
9,982
3,240
3,341
11.4
12.9
23.3
7.3
10.2
3,048
3,165
4,146
2,724
2,746
1,728
2,163
5,835
516
596
4.1
5.3
13.6
1.2
1.8
Construction
1,572
5.4
2,373
(800)
-2.7
Manufacturing
Durable goods
Lumber and wood products
Furniture and finures
Stone, clay, and glass products
Primary metal industries
Fabricated metal products
Industrial machinery and equipment
Electronic & other electric equipmenl
Transport equipment
Instruments and related products
Misc. manufacturing industries
Nondurable goods
Food and kindred products
Tobacco manufactures
Textile mill products
Apparel and other textile products
Pnpcr and allied products
Printing and publishing
Chemicals and allied products
Petroleum and coal products
Rubber and misc. plastics products
Leather and leather products
3,466
3,801
1,705
2,296
3,224
5,108
3,431
3,838
3,451
5,449
3,958
1,923
3,017
3,238
7,653
1,759
1,480
3.506
2,607
4,267
6,800
3,328
1,365
10.7
11.2
7.4
10.0
10.6
14.3
11.4
10.5
10.2
13.5
10.1
7.5
10.0
11.6
17.3
7.9
8.5
9.8
8.3
9.5
14.2
12.1
6.8
2,416
2,452
2.225
2089
2,390
2,593
2,412
2,456
2,414
2,630
2,469
2049
2367
2,391
2.869
2031
2001
2,420
2.323
2,502
2,776
2,401
2,189
1.050
1,349
(520)
7
834
2,515
1,019
1,382
1,037
2,819
1,489
(325)
• 649
847
4,785
(472)
(721)
1,086
284
1,765
4.024
927
(823)
3.2
4.0
-2.3
0.0
2.8
7.0
3.4
3.8
3.1
7.0
3.8
-1.3
2.2
3.0
10.8
-2.1
-4.1
3.0
0.9
3.9
8.4
3.4
-4.1
Transportation and public utilities
Transportation
Railroad transportation
Local & interurhan passenger transit
Trucking and warehousing
Water transportation
Transportation by air
Pipelines, except natural gas
Transportation services
Communications
Electric, gas, and sanitary services
3,615
2,221
1,622
559
1.761
5,230
4,293
2,697
2,201
6,572
4,871
10.1
7.1
3.3
2.7
6.3
14.5
11.3
5.3
7.8
15.6
11.3
2,621
2,412
2095
2.128
2317
2.860
2,713
2,463
2386
3,070
2,804
994
(191)
(673)
(1.569)
(555)
2,370
1.580
234
(185)
3,502
2,067
2.8
-0.6
-1.4
-7.6
-2.0
6.6
4.1
0.5
-0.7
8.3
4.8
Wholesale trade
2,426
7.1
2,177
249
0.7
788
4.5
2.090
(1.303)
-7.5
2,123
3,002
1,593
2,864
2,180
1,216
716
4.106
5.9
10.3
4.2
3.3
6.0
3.4
2.8
2.190
2052
2,153
2042
2,194
2,126
2,091
(67)
750
(560)
622
(14)
(910)
(1,375)
-0.2
2.6
-1.5
0.7
-0.0
-2.6
-5.3
2.9
Agriculture, forestries, and fishing
Farms
Agricultural services, forestry, & fisheries
Retail trade
Finance, insurance, and real estate
Depository institutions
Nondepository institutions
Security and commodity brokers
Insurance carriers
Insurance agents, brokers, and service
Real estate
Hnldim and cihg iavKtrntm gffitcs
4,7
1.777
�Currenl
employer comribiatons
for heahh insurance
(% ofwaies)
ISDerFTE)
Industrv
d
a
c
5.5
9.3
3.4
6.0
3.6
6.9
7.5
5.6
7.8
4.4
1.3
0.8
0.4
4.3
2,177
2005
2,095
2,170
2.110
2.209
Difference between
currenl md adjusted
contriburions
a oer FIE)
(% of wises)
(697)
(421)
(1.511)
(764)
(1.357)
(387)
201
(894)
183
(64)
0.772)
(1,915)
(1.979)
(415)
-2.6
-2.2
-8.8
-3.2
-6.5
-1.5
0.6
2068
2.157
-4.0
2066
0.6
2041
-0.1
2.068
-7.7
2,054
-11.5
2,047
-10.6
-1.0
2006
-16.5
0
0,0
2.04)
(2.041)
Sources: Current and adjusted employer contributions computed by the authors from unpublished data of the Bureau of Economic Analysis and Lewin-VHI. The industrial
distribution of total employer payments is estimated for census years by the Bureau of Economic Analysis. Theseratioshave been held constant since the last census
year, 1987, and applied to total employer contributions of each year. Impons, enports, and shipments are from the 1987 Input-Output table (BEA). the December 1992
Merchandise Trade supplement, and tabulated from "U.S. Commodity Exports and Imports as Related to Output: 1982 and 1981" (Census Bureau, 1986).
Adjusted premium includes a 13 percent increase in average costs to cover uninsured workers and assumes uniform costs for non-retirees (community rating).
b Data for imports, exports, and shipments for all industries except manufacturing are from the 1987 Import-Output table, BEA.
This figure includes both wholesale and retail trade.
& Other services include museums, botanical, zoological gardens; engineering and management services; and services not classified elsewhere.
Services
Hotels and other lodging places
Personal services
Business services
Auto repair, services, and parking
Miscellaneousrepairservices
Motion pictures
Amusement andrecreationservices
Health services
Legal services
Educational services
Social services
Membership organizations
Other services
1,480
1,784
583
1,406
754
1,821
2,469
1,264
2,449
2,177
296
139
68
1,791
Adjusted employer
conffibiaions
far heahh insurance
IS Der FIE)
�Allied Social Sciences Association
Henry J. Aaron
industry groups, but very likely understate the shift in costs among companies. Columns
2 and 3 present data for 1992 on total employer contributions for health insurance per fulltime-equivalent worker and as a percent of wages, respectively. The enormous differences
among companies arise from four sources: variations in the proportion of active workers for
whose insurance employers pay; variations in the range of benefits covered; variations in
the cost of a given set of benefits based on riskiness of employment, age and other
demographic characteristics of the labor force, and the location of the industry; and
variations in the ratio of the number of retirees for whom employers provide benefits to the
number of insured active workers.
The data in columns 2 and 3 understate variation in current costs among companies.
Much of the cross-company variations in health insurance costs traceable to demographic
factors vanish in averages across two-digit SIC industries. But data presented by David
8
Cutler indicate that demographic variations are far more important in explaining crosscompany differences in costs than are plan variations.
Column 4 shows average costs per full time equivalent worker under a system in
which coverage is expanded to all workers and employers pay 80 percent of the national
average insurance premium. The estimates in column 4 are based on the assumption that
the cost for current employees is uniform across all plans nationally and that the cost of
providing insurance for the 26 percent of the private workforce that is currently uninsured
would be half that of a currently insured worker. The premiums for the total private
8
David Cutler
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�Allied Social Sciences Association
Henry J. Aaron
economy exclude the costs of retiree benefits, which are then added back, on a very
approximate basis, by two-digit industry. Columns 5 and 6 show the change in employer
health care spending in dollars and as a percent of wages from current levels (column 2) to
that shown in column 4.
The changes in spending shown in column 5 differ from those under the Clinton plan
for at least five reasons. First, some companies will receive subsidies under the Clinton
plan. Second, the Clinton plan, at least initially, would not eliminate regional variations in
health costs. Third, some companies now offer benefits beyond those in the Clinton benefit
package and payments beyond 80 percent of total insurance cost. While not required to
continue offering such benefits, many companies almost certainly would do so. Fourth, the
costs of retiree benefits would initially remain with companies (apart from the shifting
inherent in a move away from experience rating) if, as seems likely, the Clinton proposal
9
to relieve companies of the full cost of retiree benefits does not survive. Fifth, the estimates
make no allowance for the effect on premiums of regional health alliances of averaging in
the "medically needy," a group now receiving medicaid that has relatively high costs and
that would be part of the community-rated pool within each regional alliance.
10
Thus,
while the shifts in costs shown in table 1 do not accurately characterize the distribution of
health care costs under President Clinton's plan or any other proposed reform, they do
indicate the magnitude of shifts arising from a move to community rating. For example.
9
Even if companies must pay premiums for retirees under the age of 65 and for benefits not covered
by medicare for retirees over age 65, the Clinton plan relieves companies of much of the cost of retiree
benefits, who are relatively old and therefore relatively costly, because of community rating.
10
Lewin-ICF
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�Allied Social Sciences Association
Henry J. Aaron
mining and manufacturing would almost certainly be the largest gainers. Retail trade and
most service industries would experience sizable losses.
These shifts are large enough to cause perceptible reactions. In the long run, as
noted, standard theory and empirical research indicate that changes in the cost of health
insurance premiums will be borne by workers through higher or lower wages or other
fringes. If the shifting occurs through retardation in the growth of nominal wages, the
adjustments would be concentrated in labor markets, with only secondary implications for
prices or the reallocation of output among industries.
In the case of general increases in labor costs a different mechanism may come into
11
play. Costs may initially be passed forward to all consumers in the form of higher prices.
The increased real cost of labor would cause a shift to more capital intensive production,
and consumers would shift demand away from labor intensive products with the largest
price increases. As a result, workers end by bearing more of the burden than would be
conveyed as their share of consumption. The eventual effect may differ little from direct
wage shifting, but the process of price shifting can result in a larger change in product prices
and in the composition of output for a possibly lengthy transition.
Unlike general employment taxes, changes in health insurance costs are not uniform
across companies, who will therefore find it difficult to pass costs forward if they are not
shared by competitors. Companies whose health insurance costs rise relative to the average
will have enhanced incentives to transfer them to workers through lower wages or other
1
'Gordon
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�Allied Social Sciences Association
Henry J. Aaron
fringes. Companies whose health insurance costs fall relative to the average will have
incentives to widen profit margins. In reality, the adjustment process will vary widely in
speed and character, because factor and product markets are imperfectly competitive and
the extent of forward or backward shifting will depend on the leverage companies enjoy in
product and labor markets.
Most of the debate among economists regarding the effects of health care reform has
proceeded at a highly aggregated level — concerning effects on overall employment, for
example. Within the representative-company, representative-household framework, the
effects of health insurance reform are small. Nevertheless, the results shown in table 1
suggest that the transition from experience rating to community rating will entail significant
adjustments. While the algebraic sum of these effects is almost certainly minor, the absolute
size of adjustments from largely offsetting gains and losses deserves more analytical
attention than it has received. Unfortunately, the data demands from disaggregated analysis
are formidable, and existing data do not satisfy those demands.
Question 3:
Should companies or individuals be subject to an insurance
mandate?
To achieve universal coverage with certainty, any reform of health care financing
must rely on a mandate. President Clinton's plan requires employers to sponsor insurance
plans for all employees and pay 80 percent of the average cost of insurance in the health
alliance or alliances to which the employer belongs. His plan also mandates that nonaged
individuals who are self-employed or are out of the labor force to demonstrate that they
have insurance. Senator Chafee's plan, in contrast, would require employers to sponsor
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�Allied Social Sciences Association
Henry J. Aaron
coverage, but not to pay for it. The mandate to pay for coverage would fall on individuals.
Many employers would no doubt continue to pay for coverage because Senator Chafee
would retain most of the tax advantages now enjoyed by employer-financed coverage.
Which approach is superior: an employer mandate or an individual mandate? The issues
fall into three broad categories: administrative ease, and subsidy efficiency, and transition.
Enforcing Coverage
Under an employer mandate, the government enforces coverage by dealing with
companies for employees and with individuals for people who are self-employed or not
employed.
Employees. The ease of administration for the employed depends in large measure
on how premiums are set and on how coverage is determined. The task is easy if employers
pay a payroll tax at the same rate wherever the company operates and if employees and
their dependents are thereby covered. This arrangement is essentially what is entailed under
some national health insurance schemes.
Complexity increases as employer payments vary for different workers, for example
on the basis of hours worked or of earnings. More difficult problems arise if payments vary
based on the employment status of spouses ~ for example, if premiums are lower for one
or both members of a couple when both husband and wife work than if only one is
employed outside the home. Additional difficulties arise if, as under the Clinton plan,
different members of the same nuclear family are employed in areas with different financing
arrangements (that is, under different regional or corporate alliances). In that event, the
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�Allied Social Sciences Association
Henry ] . Aaron
source of coverage must be determined, and transfers of funds among financial agents must
be managed.
The chief administrative advantage of the employer mandate is that the government
must deal only with companies rather than the far larger number of individuals. This
advantage is eroded to the extent that employees are required to pay part of the cost of
coverage and are directly eligible for subsidies based on income that require periodic filings
to determine eligibility and subsidy amount. If the employee payment were identical for
all workers, the requirement of individual payment would not add any serious administrative complexity for employees. Because of withholding, the individual mandate
would not necessarily entail greater administrative complexity for employees than does an
employer mandate for any given premium rule.
Self-employed and Not-employed. The difference between enforcing coverage under
an employer mandate and doing so under an individual mandate loses much meaning for
the self-employed. For any given pattern of charges, the government would have to rely
on declarations accompanying tax returns, direct registration, or some other enforcement
mechanism. As with all tax enforcement, the self-employed will pose more vexatious and
administratively costly problems than do the employed.
By definition, an employer mandate cannot reach those who are outside the labor
force and who are not members of a family in which at least one person works. The Clinton
plan relies on an individual mandate for people in such households.
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�Allied Social Sciences Association
Henry J. Aaron
On balance, therefore, the difficulties of enforcing coverage under an employer
mandate and an individual mandate seem quite similar, apart from the ways in which
subsidies are paid to households or businesses.
Subsidies
All systems of mandatory private coverage require explicit subsidies. An individual
mandate requires subsidies to low income households for whom the mandate would
otherwise be unaffordable. Subsidies to businesses under an individual mandate are, by
definition, unnecessary, since no business is required to pay anything for health insurance
for its workers. Subsidies to low income families may also be desirable under an employer
mandate if households are required to pay part of the cost of insurance the number and size
of such subsidies is bound to be smaller than under an individual mandate offering similar
benefits because employers pay most of the cost of insurance.
However, employer mandate plans typically call for two classes of subsidies transitional subsidies to ease the transition for some companies that did not previously pay
for coverage, and permanent subsidies to reduce the tendency for mandated premiums to
raise employment costs of low wage workers excessively.
How to structure permanent subsidies under an employer mandate raises difficult
questions of design. As will become clear it is difficult to avoid creating incentives that are
hard to defend. The Clinton proposal illustrates these difficulties. As noted, the Clinton
plan requires all employers to pay 80 percent of the average cost of insurance for each of
three family types, but caps the payments in two ways. First, no company is forced to pay
more than 7.9 percent of payroll for health insurance. This limit means that companies with
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�Allied Social Sciences Association
Henry J. Aaron
costs above 7.9 percent of payroll are automatically eligible for subsidy. Second, companies
with fewer than 75 workers are eligible for caps equal to a reduced percent of payroll. The
lowest rate, 3.5 percent, applies to employers with fewer than 50 employees and earnings
per worker under $12,000 annually.
This arrangement creates at least three odd interrelated incentives. First, companies
with 75 or more workers have a strong incentive to contract out for services that can be
produced by 75 or fewer low wage workers. Custodial services, mail rooms, and other low
skill services are best purchased by separate small companies that are eligible for caps under
7.9 percent.
Second, the cap is ineffective in amehorating the disincentive for companies not
subject to the 7.9 percent cap to hire low wage workers. Family benefits typically will cost
approxim^felv£2^50^per hour. A company with average health care premium costs under
VA^^
7.9 percent of payroll must bear that full cost when it hires a minimum wage worker. While
recent research has caused many labor economists to reduce their estimates of the
disemployment effects of increases in the minimum wage, a jump of about $2.50 per hour - or roughly a 50 percent increase in the minimum wage ~ and one that is indexed vastly
exceeds any historical change. This effect is responsible for the incentive to "buy rather than
make" services produced by low wage workers.
Third, the caps on maximum payments create disincentives to hire high wage
workers. Two examples illustrate this incentive. Consider company X with 75 or more
employees that is subject to the 7.9 percent cap. If health insurance costs would average
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�Allied Social Sciences Association
Henry J. Aaron
$3,000 per employee but for the cap, and if the company takes on an additional worker at
a $100,000 salary, the company's health costs rise not by $3,000 but by $7,900.
A second example is somewhat more striking.
Consider company Y with 24
employees earning an average of $12,000 annually. This company will be eligible for the cap
of 3.5 percent of payroll on its health costs, holding them to only $10,080. If it wants to hire
a supervisor at a salary of $90,000, the cap to which it is subject rises to 6.2 percent and its
health charges rise by $13,356, a tax of nearly 15 percent.
Too much should not be made of this last oddity which depends largely on the
existence of notches in the subsidy formula of the Clinton plan. If the concessionary rate
phased out gradually rather than in steps the anomalies are drastically reduced.
These odd incentives are entirely eliminated if the subsidy is based not on average
company earnings or the number of employees but is targeted on all low wage workers.
The number of companies eligible for subsidy would be vastly increased. In that event, the
number of recipients of subsidies rises dramatically. Furthermore, any method of subsidizing low wage workers by making payments to companies confronts companies with higher
gross costs of raising wages for such workers - the cost of the wage increase itself plus the
loss of subsidy.
None of these problems arises under an individual mandate where the subsidies are
paid to families. Of perhaps greater importance, both in terms of target accuracy and total
subsidy cost is the fact that individual subsidies can be based on family income, while
employer-based subsidies, as a practical matter, must be based not on family income and
not even on family earnings, but on earnings of each worker.
-22-
�Allied Social Sciences Association
Henry J. Aaron
Transition
The chief advantages of the employer mandate over the individual mandate appear
to be transitional. The employer mandate keeps current employer outlays flowing, thereby
minimizing the need to replace those funds with new taxes or direct personal payments.
To that extent, the employer mandate minimizes the adjustment costs of shifting to a new
payment base. This advantage is both economic and political. The economic advantage is
encapsulated in the old saw from public finance: an old tax is a good tax. The deeper truth
in this saying is that current taxes are capitalized into values of assets that people have
purchased on the expectation that taxes would persist. Undoing such taxes ~ or contractual
distributions of health insurance costs — will produce windfall gains and losses. As table
1 indicates, these gains and losses may be considerable.
This transitional argument is somewhat weakened to the extent that current employer
payments can be maintained under an individual mandate through maintenance-of-effort
rules or by requiring employers to pass savings from reduced payments for health insurance
to workers in the form of higher wages. Such rules are difficult to design and enforce
effectively. The transitional argument is weakened also by the findings presented earlier in
this paper regarding the shifts among employers in costs arising from a shift to community
rating.
-23-
�Allied Social Sciences Association
Henry J. Aaron
References
Aaron, Henry J and Barry Bosworth, "Economic Issues in Reform of Health Care Financing," Brookings
Papers on Economic Activity: Microeconomics, 1994, forthcoming.
Cutler, David, [paper for this session]
Gordon, Robert J., "Can the Inflation of the 1970s Be Explained?" Brookings Papers on Economic Activity,
1977, 1, 253-277
Gruber, Jonathan, Testimony, Committee on Ways and Means, House of Representatives, Date, 1993
Krueger, Alan B., "Observations on Employment-Based Government Mandates, With Particular References
to Health Insurance," mimeo, Princeton, 1993
Lewin-VHI, Inc., The Financial Impact of The Health Security Act. 1993
Newhouse, Joseph P., "Patients at Risk: Health Reform and Risk Adjustment," Health Affairs, Supplement,
1994, forthcoming
Stiglitz, Joseph E. and Michael Rothschild, "Equilibrium in Competitive Insurance Markets: An Essay on
the Economics of Imperfect Information," Quarterly Jounml of Eccmomics, 90, 1976, 629-49
-24-
�"ISSUES EVERY P L A N TO REFORM H E A L T H CARE FINANCING
MUST CONFRONT"
by Henry J. Aaron
SUMMARY
In this paper delivered to the American Economic Association, Aaron agrees
with three major goals ofthe Administration: provide universal coverage,
reduce the rate of growth of health care spending, and sustain or improve
quality. Aaron endorses a mandate (either employer or individual) or some
form of direct government intervention to achieve universal coverage.
Experience
Rating
vs Community
Rating
Much ofthe paper deals with whether a reform system should embrace:
1) Experience rating: premiums equal actual loss experience or "self
insurance" or prospectively reflect variations in outlays or "medical
underwriting" or
2) Community rating, in which residents of a community or metropolitan
area pay the same premiums.
Aaron urges his colleagues to move away from endorsing experience rating as
the most efficient and move toward supporting community rating as the most
equitable. He does have reservations about community rating (for example,
there is little incentive for individual cost consciousness because everyone is
paying the same premium rate) but he sees it as the best possible method for
ensuring universal coverage. Aaron de-emphasizes the importance of
personal behavioral effects (a key in experience rating) on health care costs,
arguing that age and medical history are much more important. Many
illnesses are workplace related, so companies need incentives to reduce
illnesses at the workplace. Aaron also argues that the personal
redistributional effects of community rating are modest, since 85 percent of
the US population is currently insured.
Analysis
of Health
Security
Act
Aaron's paper is generally favorable toward the plan, although he warns that
how boundaries for alliances are drawn have enormous potential political
pitfalls and will greatly effect the fairness of an alliance-based system.
Aaron also points out that under community rating, cost shifting will make
big winners out of mining and manufacturing while service industries stand
to lose considerably. These shifts will ultimately be passed on to workers in
the form of lower wages. While he fears complexity of any mandate, he
argues that an employer mandate is easier to enforce and more manageable
than an individual mandate.
�Can the United States Refor* Its Health Care Syst&m?
by Henry Aaron
SUMMA&Y
In this paper, Henry Aaron examines the prospects for health
care reform fron sore of a political and practical perspective
than an econoaic one. His basic point i s that the scope of the
administration's proposals are unprecedented in U.S. history and
beyond the capacity of our political systen to deliver in their
entirety. Nevertheless, Aaron looks favorably on many aspects of
the President's plan, and he believes a less extensive compromise
has the potential to be enacted to "serve as the seed from which
real reform can grow."
The author begins with an overview of structural obstacle
J fundamental reform, including the political difficulties ot
ranging a multi-billion dollar industry and the shifting of
resources that comes with such change. Aaron focuses on the
President's proposals in recognition of these underlying forces,
and he comments on some of the other major plans. While he
labels the President's initiative as "unavoidably complex," he
says the Chafee plan "contains no coherent road map to universal
coverage and relies upon the rosy claims for cost containment of
the more euphoric proponents of managed competition."
Finally, Aaron analyzes five fundamental "questions" that
will drive the health care reform debate.
1) Unlvinal CPYcrflgt
Support for this goal has grown. The debate w i l l focus on
timing and method, which together strongly influence cost.
2) EMlQYtr MflndflU
A compromise "limited mandate" would allow opponents to
claim victory in practice and proponents to win in principle.
3) Sptnding L l i l t i
The magnitude of savings the President i s calling for w i l l
take more than four years to achieve. While spending limits are
preferable, they will not win majority support.
41 RQll Qt Alliflncti
Some form of "health alliances" will be approved, although
the role and powers of the alliances will not be as extensive as
proposed by the President.
5) How much can be Impleeented over the remainder of this decade
The scope and timing of what can be done ultimately depends
on political leadership and w i l l .
�JAMA
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Declining Blood Lead Levels and Cognitive Changes
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H. A. Ruff, P. E Bijur, M. Markbwitz, Y.-C Ma,' J:F. Rosen, Bronx, NY-
Lead-Contaminated Soil Abatement
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M. Weitzman, Rochester, NY; A;AscKengrau.
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Use of Peer Ratings to Evaluate Physician Performance
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Use of Coronary Artery Bypass Surgery
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Influence of Age and Income
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Using 'Windows of Opportunities' In Brief Interviews
to Understand Patients' Concerns
;.:.».....;...].....;..„... 1667
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i.i^^^i..™.!.;;*:!::.;^...:..;:.:....:..:.-1669
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Dear President Clinton .1:;..:Y.:.L...:..:.I^....Y™/:.!:J1::;..J:^
.1678
V. R. Fuchs, Stanford, Calif
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Editorials
'^^t^^t0^ •
Childhood Lead Poisoning: The impact of pievention ;
J. 1679
S. Binder, T. Matte, Atlanta; GaY";.<.',Y>-hvi; ' ^ y ' - s v Y - .
• :x.Y:Y'
•-• .Y
•
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Defining the Good. Dqctor^.:;...^^
R. G. Petersdorf;vyashington;,DC-
.;'i68i
1
Y-^-VW'^'Y .';
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1598
Rorino Statthelmor, TTw Cathedmla ot Broadway, M. T. Southgate. Chicago,
Medical News & Perspectives
leoa
Hispanic/Latino Health Issues Explored... Rural Reformers Eye Managed Cooperation'...
Satellite Hookup Unka Major US Military Hospital With Army Physicians In Mogadishu, Somalia...
Thanks to Gift From Ross Perot, University of Texas Southwestem's MD-PhD Program Triples In Size...
Statisticians Offer Overall Incidence Estimates for Various Kinds of Cancer During This Year
(Tabfe of Contents continued on next page.)
1593
�Commentary
Dear President Clinton
YOU are to be congratulated for recognizing the gravity of
the crisis in health care. But please do not try to present a
detailed plan for health care within 100 days. The problems
are too complex and the public's understanding of them is too
imperfect. Instead, you should present to the Congress and
the public a clear statement of, and rationale for, your goals
for health care and your basic approach to achieving these
goals.
If your goals include covering all Americans for a package
of essential services, sharing the costs of this package fairly,
and slowing significantly the rate of growth of health expenditures, do not imagine that incremental reform of the present
system can do the job. Only comprehensive change in finance
and organization has a chance of success.
The public, however, is not ready for comprehensive change.
Most Americans have health insurance. Most Americans are
satisfied with their doctor. Most Americans believe that the
large profits of drug companies and excessive physician incomes are the main problems. They are not. If drug company
profits were slashed in half, health care costs would fall by
less than 1%. If physicians' net incomes were cut by 20%,
health care costs would fall by less than 2%.
You must, therefore, provide leadership for a major effort
to educate the public about the real problems in health care.
Three changes in particular are absolutely necessary in order
to avoid a catastrophic collapse of the system within a decade.
First, we must disengage health insurance from employment. Except for Medicare and Medicaid, health insurance in
the United States is now based primarily on employment.
This tie originated during World War I I when wages were
frozen, but employer contributions to health insurance were
exemptfromsuch control. Thus, employers used insurance as
a legal way to bid for scarce workers. The tie was nourished
in the post-World War I I era by the tax-exempt status of
employer contributions to health insurance, an exemption
that became more valuable to workers as wages and taxes
rose.
Sooner or later, the inequities and inefficiencies associated
with employment-based health insurance will become so apparent as to dictate disengagement. The current system has
moved far from the concept of social insurance—that is, the
equitable sharing of the cost of medical care across the population. Most large companies are self-insured. Most other
employment-based insurance is experience rated: this year's
From Ihe Departments ol Economics and Health Research and Policy, Stanford
University and National Bureau ol Economic Research, Stanford, Calif.
Reprint requests to National Bureau of Economic Research, 204 Junipero Serra
Blvd. Stanford, CA 94305-8715 (Mr Fuchs).
1678
JAMA. April 7, 1993—Vol 269. No. 13
premiums are based on last year's utilization. Thus, costs
vary across firms depending on the age and health status of
their employees.
When health insurance premiums were a small percentage
of total compensation, and when most premiums were community rated, the distortions were minor. Now they are large
and getting larger every year. Today, workers' choices of job,
decisions about job change, and timing of retirement are
frequently influenced by health insurance considerations. As
a result, labor market efficiency suffers. It also suffers when
employer decisions about hiring, training, promotion, and
firing are influenced by the impact of such decisions on health
care costs. To restore labor market efficiency and to achieve
equity in the financing of health care, the artificial link of
insurance to employment must be severed. There must be
subsidization of those who are unable to afford insurance and
compulsion for those who are unwilling to acquire it.
Second, we must tame but not destroy technologic change
in medicine. Technologic change is the most important force
behind the escalation of health care expenditures. If health
care technology is allowed to develop in the same unconstrained manner as in the past, it will create enormous economic, political, and ethical dilemmas. On the other hand, we
must not inhibit technologic change to the point of preventing
advancements in medicine that can increase the length and
the quality of life at reasonable cost.
From a social point of view, technologic change in medicine
suffers from two serious problems. First, there is too much
of it, and second, some of it is misdirected. Third-party payment for health care induces too much technologic change
because it assures a market for any change that meets standards of efficacy and safety, regardless of costs relative to
benefits. In most industries technologic change must exceed
a satisfactory benefit-cost threshold; otherwise, it will not be
undertaken.
The misdirection of innovation in medicine arises because
of the differential valuation of an "identified" as opposed to
a "statistical" life. When a patient is facing certain death, the
individual, his or her family, and society as a whole are willing
to pay heavily for any innovation that offers even a small
promise of postponing death. By contrast, the healthy population is not as willing to pay for preventive innovations that
would save many more lives for each dollar of expenditure.
The executives who make decisions about medical research
and development know that this bias exists and therefore
understandably fund new projects that offer the greatest
profit potential. Also, legislators and administrators in government who help determine the direction of research and
Commentary
�development are influenced by the greater political pressure
generated by the possibility of saving an identified life.
The point here is not to blame the drug companies or
government officials for responding in a rational manner to
the signals they receive, but rather to call attention to a
systemic bias in the signals sent to those who fund and develop new medical technology. The challenge is to develop
institutional and scientific resources that can undertake comprehensive assessments of medical technologies, combined
with incentives and constraints that will ensure that these
assessments influence research and development decisions in
socially desirable directions.
Third, we must learn to cope with an aging society. At the
beginning of this century there were 10 children (less than
age 18 years) in the United States for every person aged 65
years or older. By 1960, the ratio had fallen to four to one; by
1990, it was two to one; and the ratio continues to fall. This
demographic revolution has major implications for politics,
economics, and social dynamics. The implications for health
care are particularly striking because the elderly now consume almost 40% of all health care in the United States, and
the proportion grows every year. In principle, the amount of
health care that the elderly can consume is limited only by the
imagination and ingenuity of scientists, physicians, drug com-
Editorials
panies, and other producers of health care goods and services.
Beyond some age, which varies from individual to individual,
almost every part of the body can benefit from repair or
replacement. Rehabilitation therapy and assistance with daily living for the frail or disabled elderly create two other
potentially huge sources of demand. No nation can afford a
health policy that provides the elderly with all the care that
might do them some good without regard to cost.
Success in dealing with these three central issues will
require major improvements in our governmental institutions. The market is a powerful and flexible instrument for
allocating most goods and services, but it cannot create an
equitable, universal system of insurance, cannot harness
technologic change in medicine, and cannot cope with the
potentially unlimited demand for health care by the elderly. On the other hand, the savings and loan debacle, the
HUD scandals, and the cost overruns in defense procurement do not inspire confidence that our government can
currently handle the complex issues of health care efficiently and honestly. Thus, major political reform in general, and in the health area in particular, is a necessary
precondition for significant improvements in the health
care system. Your biggest challenge is to lead that reform.
Victor R. Fuchs
• ^ H H ^ ^ ^ H ^ H ^ H H H H I ^ ^ H
Editorials represent the opinions of the authors and THE JOURNAL and not those of the American Medical Association.
Childhood Lead Poisoning
The Impact of Prevention
Exposure of children to lead remains a pervasive problem in
the United States. The US Environmental Protection Agency estimates that in 1990 approximately 3 million children in
the United States had blood lead levels high enough to affect
intelligence and development (whole blood lead level >0.48
H.mol/L [10 (xg/dL]). The residential use of lead-based paint
was prohibited in 1978/ and lead use in gasoline has decreased dramatically since the early IQTOs/' Nevertheless,
approximately 74% of all housing units built before 1980
contain lead-based paint, and dust and soil heavily contam1
2
From the Division of Environmental Hazards and Health Effects. Lead Poisoning
Prevention Branch. National Center for Environmental Health. Centers for Disease
Control and Prevention. Atlanta. Ga.
Reprint requests to Division of Environmental Hazards and Health Effects. Lead
Poisoning Prevention Branch. National Center for Environmental Health. Centers for
Disease Control and Prevention, 4770 Bulord Hwy NE, Mailstop F42, Atlanta, GA
30341-3724 (Dr Binder).
JAMA, April 7, 1993—Vol 269, No. 13
inated by lead-based paint or leaded gasoline used in the past
are found throughout the country.
The results of the two studies on lead published in this issue
of JAMA** make important contributions to our understanding of the impact of secondary prevention—the identification
of and treatment for children with blood lead levels of public
health concern. Such secondary prevention has been the cornerstone of public health efforts in childhood lead-poisoning
prevention to date. Although different in focus and design,
each article provides new information related to both the
efficacy and the limitations of secondary prevention of childhood lead poisoning.
The most critical secondary prevention interventions are
environmental activities designed to reduce children's exposure to environmental lead hazards, such as stabilizing or
removing peeling lead paint or cleaning up lead-contaminated
house dust. The reduction of lead hazards in the homes of
exposed children can also result in primary prevention, since
1
6
Commentary/Editorials
1679
�-iC-GL HEALTH-REFORM
Massachusetts Leaders Deal with Health Care Refonn on State Level
Richard A. Knox Globe Staff, The Boston Globe Knight-Ridder/Tribune
Business News
Jan. 7 — I n a Massachusetts microcosm of the Washington health reform
cabate, the Weld administration i s running into problems as i t t r i e s to design
: workable proposal that would compel every c i t i z e n to buy coverage rather
chan make employers pay.
Only weeks before a Weld plan i s supposed to be unveiled, the governor's
aides deny rumors they have given up on the idea of such an ""individual
mandate to buy health insurance. But they acknowledge the inherent
d i f f i c u l t i e s and say there i s s t i l l no consensus within the administration on
a health reform policy.
""This i s not an easy problem,' s t a t e Human Services secretary Charles
Baker said i n an i n t e r v i e w , r e f e r r i n g t o f i n d i n g sources of money f o r
government subsidies t h a t low-income people would need t o buy h e a l t h
insurance. ""That's what we've been w r e s t l i n g w i t h f o r the past couple of
months.''
Weld's quandary resonates nationally. President Clinton's health reform
proposal i s b u i l t around the so-called ""employer mandate'' that Weld hates,
while a contingent of 19 Republicans in the U.S. Senate, including
minority leader Robert Dole of Kansas, i s backing the ""individual mandate '
version that Weld's people are finding problematic.
President C l i n t o n and H i l l a r y Rodham C l i n t o n have i d e n t i f i e d the Senate
Republican proposal, authored by Sen. John Chafee of Rhode I s l a n d , as the
leading hope f o r a b i p a r t i s a n compromise.
I f a r i s i n g - s t a r Republican governor concludes t h a t the i n d i v i d u a l mandate
i s unworkable, i t could a f f e c t the congressional h e a l t h reform debate, health
p o l i c y experts say.
" " I t ' s extremely i n t e r e s t i n g , ' said John Hollahan of the Urban I n s t i t u t e ,
a Washington-based t h i n k tank. ""People are g e t t i n g very nervous about an
employer mandate. An i n d i v i d u a l mandate i s c e r t a i n l y f a i r e r , and i t doesn't
h i t small businesses. That's the a t t r a c t i o n . But a l o t of the d o l l a r s the
employer i s now paying would have t o be paid by the government.•'
The course Weld sets i s l i k e l y t o influence the f u t u r e of Massachusetts
health reform whatever happens i n Washington, because Congress i s expected t o
give wide l a t i t u d e t o s t a t e e f f o r t s under way before a f e d e r a l reform package
i s passed.
Weld's p o l i c y could also be a f a c t o r i n h i s r e e l e c t i o n campaign, because
the governor needs a c r e d i b l e health reform proposal t o counter Democratic
a l t e r n a t i v e s . " " U l t i m a t e l y you've got t o have u n i v e r s a l access and u n i v e r s a l
mandates,'' said attorney general Scott Harshbarger. " " I f you're not going t o
subsidize anybody, you can't r e q u i r e i n d i v i d u a l s t o buy coverage.'•
" " I t h i n k the Weld a d m i n i s t r a t i o n decided a few months ago t o jump on the
individual-mandate bandwagon and i m i t a t e Chafee, and now they're forced t o
confront the a c t u a l dilemma of how t o do t h i s , • observed one Massachusetts
Democrat who asked not t o be named. " " I f they decide i n d i v i d u a l mandates don't
work, then where do they go?'
There i s not even agreement w i t h i n the Weld a d m i n i s t r a t i o n about the goal
of health insurance f o r a l l Massachusetts c i t i z e n s . " " I ' l l pass on t h a t , '
said one aide involved i n the discussions. ""We're t r y i n g t o make the world
better.''
Baker said the goal i s ""universal access to coverage ' rather than
actually getting everyone covered.
The Weld administration i s determined to avoid making employers pay for
health insurance, as a long-deferred Dukakis-era law w i l l require next January
unless Weld can get the Legislature to repeal i t . Baker has said he would
resign before supporting an employer mandate.
However, Baker and others said they are grappling with many problems in
figuring out how to make an individual mandate work. These include:
11
1
1
1
1
1
1
1
�Financing: How to pay for the hundreds of millions of d o l l a r s i n
Hr-pvernment subsidy that the near-poor would need to comply with the legal
equirement that they buy insurance. Weld administration o f f i c i a l s say they
W are s t i l l discussing how much of the health insurance premium low-income
F people should be expected to pay, so i t i s not yet possible to estimate how
' much subsidy would be needed.
Enforcement: What do to about people who f a i l to buy health insurance
despite the legal requirement. As Baker points out, as many as 12 percent of
Massachusetts drivers don't buy auto insurance even though the law requires
it.
Dumping: The discontinuance of health insurance by employers who now
provide i t . While there i s dispute about the extent to which t h i s would occur.
Baker says i t i s ""one of the things we've been struggling with.•'
Incentives: How to give individuals a carrot to purchase insurance as well
as penalties i f they f a i l to.
Fairness: How to provide government subsidy to low-income people who need
i t to purchase coverage without being unfair to those who already struggle to
buy coverage.
The idea of requiring individuals rather than employers to buy health
insurance i s appealing to Republicans because i t i s tied to individual
responsibility, i t avoids government intrusion into business, and i t would
not impose new costs on small businesses that could eliminate current or
future jobs.
However, some c r i t i c s say t h i s idea may harbor some paradoxes. The key
point of contention, both here and in Washington, i s the cost of government
subsidies.
" " I t i s not viable to require people to buy insurance unless you provide
subsidies to those who can't afford i t , ' • said Karen Davis, president of the
Commonwealth Fund, a New York philanthropy, who has advised the Clinton
administration on health reform. ""That i s certainly going to be more
expensive than an employer mandate.'•
Hollahan, who i s working on an analysis of the cost of an individual
mandate, said preliminary estimates indicate that i t would require government
subsidies for 80 million or more Americans - people in families making less
than about 250 percent of the federal poverty line, or about $37,500 annually.
" " I t seems to me almost inconceivable that you'd have an entitlement
program that would provide subsidies to that many people,•' Hollahan said.
Proponents dispute the contention that individual mandates would cost the
government more. ""That's not necessarily true,•• said Christine C. Ferguson,
Chafee's chief l e g i s l a t i v e aide. " " I think the Clinton proposal assumes
subsidies to employers of about $200 b i l l i o n - about the same amount of money
we're talking about over five years to subsidize everybody under 240 percent
of the poverty l i n e . ' '
""This notion that an individual mandate i s more expensive than an
employer mandate i s baloney, Baker added. ""They cost the same. The only
difference i s the way i t ' s dressed up. One approach i s honest, and the other
i s not.''
At the same time, the Weld aide said how to pay for an individual mandate
i s a major question. " " I f you have to come up with new sources of revenue to
pay for whatever you're doing,'' he said, you create a l l sorts of problems.'•
-END-OF-AUTOBREAK(1)-AUTOBREAK(2)-FOLLOWS
11
****
f i l e d by:KR-F(—)
on 01/06/94 at 21:05EST ****
**** printed by:WHPR(MMIL) on 01/07/94 at 09:46EST ****
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Calls for Mrs. Clinton
Creator
An entity primarily responsible for making the resource
Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F Segment 2
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Medium
The material or physical carrier of the resource.
Preservation-Reproduction-Reference
Date Created
Date of creation of the resource.
2/6/2015
Source
A related resource from which the described resource is derived
42-t-12093080-20060885F-Seg2-023-011-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/f62e8f1d629f5cfc3a2fc95a51fbb85a.pdf
407a68671cfbc1c8562d431b2250a8be
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
4787
OA/ID Number:
FolderlD:
Folder Title:
Bureaucracy/Big Government
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
4
1
�Just what
the doctor ordered...
big government?
By Arien Specter
P
resident Clinton and First Lady Hillary
Rodham Clinton have the right objective
in the health care reform debate: providing comprehensive health care for all
Americans. But Big Government should not
be a product of reform. Unfortunately, based
on the President's 1,342-page "Health Security Act" (transmitted to Congress on Oct. 27),
Big Government is being prescribed.
After the president released his 239-page
preliminary draft health reform proposal on
Arlen Specter is a Republican member of
the Senate from Pennsylvania
Sept. 7,1 proceeded to read it and was struck
by, among other things, the proposed bureaucracy. I was surprised to see back then the 77
new entities, agencies, commissions, councils
and advisory groups being proposed. There
were also at least 54 existing entities proposed
to have new or expanded responsibilities.
Now comes the "Health Security Act" and
more government. Conservatively, the administration is proposing 105 new entities and 47
existing entities or programs with new or
expanded responsibilities or other change in
function.
Whether this results in 40 percent or 30
percent of Americans paying more for health
coverage is unclear. What is clear, though, is
this is Big Government. Just look for yourself.
\a
£l)C lUaaljiiifitoii fciinco KEUNESDAY. DECEMBER 22. mj
0 ~2
�THE ADMINISTRATION'S
HEALTH SECURITY ACT
National
Health
Board
October 27,1993
New entities & programs
0
Existing entities /programs witti new or
expanded (unctions and responsibilities
or ottier change in function
Botti new and existing entities & programs
(regional variance)
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Dept. of
Labor
Dept. of
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Potential Federal Funding Sources for School Health Programs
Ul
I
56
Compiled by the Health Services Suboommittee of the
Interagency Committee on School Health
CD
(JJ
This chart provides basic descriptive information on Federal funding sources available to school-based or school-linked health programs.
Available funding sources for training of school health professionals are also provided on Ihis chart In general, information on the dollar
amount specifically targeted for school health programs Was not available. The FY 93 budgetreportedis for the entire program, and not
exclusively for the school health component.
revised 11/8/93
Title of Program
Lead Agency
Brief Description
Contact Person
Medicaid (Title XIX), including
Early and Periodic Screening
Diagnosis, and Treatment
Program (EPSDT)
DHHS/HCFA/MB
Medicaid pays for health services provided
to low-income individuals who meet its
eligibility criteria. There is a defined list
of clinical services provided, including counseling,
health education, and other necessary clinical
services.
William Hiscock
410/966-3275
EPSDT is the comprehensive preventive
health program for Medieaid-eligibte children
under age 21.
FY 93 budget: $28,036,000,000
(Total Medicaid State and Federal spending for
children under age 21)
\
Q
�Title of Program
Lead
Brief Description
Contact Person
i
Ul
I
(D
(D
Xi
Family Planning Program
(Title X)
DHHS/OASH/OPA
Family planning services, personnel training,
and service delivery research are all supported
by this program. The health services include
health education, some clinical services and
family planning counseling.
Jerry Bennett
301^492-2003
CD
FY 93 budget $ 173,418.000
Adolescent Family l i f e
(Title XX)
DHHS/OASHADPA
Provides communities with useful models
of pregnancy prevention programs that
promote abstinence for unmarried adolescents,
and deliver comprehensive care for pregnant
adolescents to reduce negative oiticomes.
Counseling, health education and clinical
services arc provided.
Jerry Bennett
301/492-2003
FY 93 budget: $7,598,000
Indian Health Service
Clinical Services
DHHS/IHS/OHP
Comprehensive health services for Native
Americans in areas serviced by the
Indian Health Service. Services include
counseling, health education, and clinical
services.
Richard Kotomari
301/443-4646
FY 93 budget: $ 1,800,000,000
(Total IHS budget)
o
\
o
CD
�Title of Program
Lead Agency
Brief Description
Contact Person
Critical Populations Program
Adolescent Track
DHHS/SAMHSA/
CSAT
Services for youth that use (hugs.
The services include counseling,
health education and limited
clinical services.
Edwin Graft
301/443-6533
ru
01
i
UD
CD
FY 93 budget $ 2,523,418
Prevention of Alcohol and
other Drug Abuse among
High Risk Youth
DHHS/SAMHSA/
CSAP
Demonstration grants for innovative and
effective models to prevent substance abuse.
The program targets most age groups as well as
parents. Health education is the major
health service provided.
Rose KittreU
301/443-0353
FY 93 budget S 50,400,000
Center for Mental Health
Services Research Project
DHHS/SAMSHA/
CMHS
Three year projects to determine the
accessibility and effectiveness of mental
health services provided to elementary
school children who are emotionally disturbed.
Gary Decarolis
301/443-1333
FY 93 budget $750,000
o
\
O
CD
�Title of Program
I^ad Ai
Brief Description
Contact Person
i
tn
(0
CD
Community and Migrant
Health Centers
DHHS/HRSA/
BPHC
Comprehenuve health services are
provided to low-income children through
community-based primary care providers.
Many programs have a school-based or
school-linked component Services include
counseling, health education and clinical
services.
Jane Martin
301/5944475
CD
CD
FY 93 budget Section 329 $ 57,306,000
Section 330 $ 588,808,000
Section 340a $ 57,014,000
Maternal and Child Health
Slate Block Grants
DHHS/HRSA/
MCHB
Assures access to health care services for infants,
children, and adolescents, promotes the health of all
children by providing preventive and primary care
services, and facilitates, the development of
community-based systems of services for
children with special health care needs. School
health programs are coordinated in 43 States through
Adolescent Health Coordinators.
Linda Johnston
Joann Gephart
301/443-4026
FY 93 budget $664434,000
Advanced Nurse Education
DHHS/HRSA/
BHP
Supports the development and expanaoo of
graduate programs in nursing. Programs
that have a school health focus are eligible.
Thomas Phillips
301/443-6333
FY 93 budget: $ 12,000,000
o
Ul
(0
�Title of Program
Lead Agency
Brief DescripUop
Contact Person
i
ru
cn
i
Nurse Practitioner/NurseMidwifery
DHHS/HRSA/
BHP
Provides support for educational programs
that prepare nurse practitioners and nurseirridwives.
IlKMnas Phillips
301/443-6333
>—
$
CD
CD
FY 93 budget $14,000,000
Nursing Special Projects
Grant Program
DHHS/HRSA/
BHP
Supports continuing education for nursing,
including nurses that work in school health.
This program also provides funds for nurse
managed clinics. These funds may be used for
salary, support staff, equipment and facilities.
Thomas Phillips
301/443-6333
FY 93 budget $ 10,300,000
HTV Education Program
DHHS/CDC/DASH
Provides funding for all State departments of
education, and most territories, 18 large city
departments of education, 25 national organizations,
4 city health departments, and 5 universities to
help improve HTV education programs.
Peter Cortese
404/488-5365
FY 93 budget: $384)00,000
Comprehensive School Health
Program
DHHS/CDC/DASH
Funds five demonstration States to implement
comprehensive school health programs.
Amanda Manning
404/488-5374
FY 93 budget: $ 3,000,000
\
o
(0
�o
Title of Program
Lead Agency
Brief Description
Contact Person
I
Si
CD
Food Labeling Education
Program
DHHS/FDA/FSIS
A major education campaign to help consumers
use the new food label in planning a healthy
diet The Federal government, and public
and private sector groups are producing
educational materials, conducting research,
and planning media activities to help
consumers understand the new food label.
Naomi Rulakow
202/205-4317
CD
CD
FY 93 budget: School Health portion not reported
Drug-Free Schools and
Communities Act
DOEd/OESE
Provides State, local and discretionary
grants for drug abuse prevention,
education, counseling, and referral services.
Bill Modzdeski
202/401-3030
FY 93 budget: $598,277399
Elementary and Secondary
Education Act (Chapter 1)
DOEd/OESE
Provides formula grants to States for
compensatory education programs. Many
programs support integrated service delivery,
including health education and services.
Mary Jean LeTendre
202/401-1682
^<»^
FY 93 budget: $6,100,000,000
o
o
CD
�7
o
Title of Program
Lead Agency
Brief Description
Cortact Person
k
i
Individuals with Disabilities
Education Act
DOEd/OSERS
Provides health and education services at school
to children with disabilities.
Connie Gamer
202/205-8124
DOEd/OERl
Provides funding for 34 disease prevention
and healdi promotion demonstration grants
(to SEAs, LEAs, public and private sector
organizations) that support the design of
K-12 health education curricula, staff
development, parent and community involvement,
and parent education and coordination.
oo
co
FY 93 budget: $2,800,000,000
Comprehensive School Health
Education Program - Fund for
Innovation in Education
2
Shirley Jackson
202/219-1556
FY 93 budget $4,400,000
Nutrition Education & Training
USDA/FNS/NTSD
Promotes healthy eating habits for children
in schools and child care facilities.
Projects include in-service training and
development" of nutrition curricula guides.
Helen Lilly
703/305-2585
FY 93 budget: $ 10,000,000
Special Supplemental Food
Program for Women, Infants
and Children (WIC)
USDA/FNS
Provides supplemental foods, nutrition education
and health carereferralsat no cost to low
income pregnant women, non-breastfeeding postpartum
women, infants and children up to 5 years old.
Alberta C. Frost
703/305-2746
FY budget 93: $2,860,000,000
o
OD
\
o
CD
�Title of Program
School Breakfast Program
Lead Agene
USDA/FNS
Brief Description
Provides low cost andfreebreakfast to
children in grades K-12.
Coatact Person
i
Stanley Gamett
703/305-2590
USDA/FNS
Provides low cost and free lunches to
children in grades K-12.
CD
(0
CD
CO
FY 93 budget: $902,400,000
National School Lunch Program
i
ru
ui
Stanley Gamett
703/305-2590
FY 93 budget $4,055,200,000
o
CD
\
O
CD
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 2
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Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
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Clinton Presidential Records: White House Staff and Office Files
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2/6/2015
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42-t-12093080-20060885F-Seg2-023-010-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/4fececb24d7201532b8e5a8e90723047.pdf
50cc0d4ddee921a4a3289f5051e0c91e
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Croup:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4787
FolderlD:
Folder Title:
[Abortion] [loose]
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
4
1
��/"AM-HEALTH-ABORTION
/ "LAWMAKERS WANT ABORTION COVERAGE IN HEALTH PLAN
/
WASHINGTON (Reuter) - Thirty-three female House members urged F i r s t lady
Hillary Rodham Clinton Friday to include abortion coverage in any f i n a l
health care reform plan to be proposed.by President Clinton t h i s f a l l .
In a l e t t e r to Mrs. Clinton, the lawmakers said they believed Congress
would approve abortion coverage as part of the health care overhaul, despite
a recent House vote to retain tough r e s t r i c t i o n s on federal funding for
abortions.
~~Basic health care for women means reproductive services, including
family planning and abortions. This fact i s reflected, in the majority of
private plans, which currently cover abortion s e r v i c e s , ' the l e t t e r said.
"American women expect health care reform to expand access to health care
services, not take away coverage many have today, ' said the l e t t e r ,
sponsored by Rep. Nita Lowey, D-N.Y. and signed by 3 3 House members of the
Congressional Caucus on Women's Issues.
The women also asked for a meeting with Mrs. Clinton to discuss the issue.
Mrs. Clinton i s heading a task force charged with designing
a broad plan to reform the nation's health care system. The president i s
expected to announce a health care proposal in September.
Abortion rights advocates had expected that the administration plan —
which w i l l cover not only federal health care services but basic benefits for
a l l Americans — would cover abortion services.
But the White House has never publicly said abortion w i l l be covered,
although o f f i c i a l s say undefined reproductive services w i l l be included in
their proposal.
The election of more women and pro-choice lawmakers to Congress i n 1992
had led to expectations that current r e s t r i c t i o n s on federal funding for
abortion, which have been in place for years, could be overturned.
Pro-choice forces, suffered a major House defeat on June 30, however, when
they attempted to require federal funding for abortions during debate on the
Labor-Health and Human Services funding b i l l .
1
1
�John Llnder
(R-Ga.) knew
the rules, and
used one to
end debate,
; ihoddi^g colleagues who .
didn't know
him.
New guy Under
stunning!/ ends
abortion debate
By Jeanne Cummlngs
WASHINGTON DUREAU
Washington — Rop. John out that House rules allowed
Llnder (R-Ga.) ployed o koy further debate only If no Hoiwo
rolo fn Wednesday's House veto moinbors objected.
to maintain the governmcnt'B
"I object," Mr. Under said
16-yeor bnn on federal funding I quietly as (ho House fell Into
of nbortlons for most poor i stunned silence and reporters
women.
scrambled to figure out who he
Usiny ti pnr[innicntai7 nio- was nnd whose side he was on.
neitvor, the Ropublicon frcsh- The debate stilled, the House
miiti from Dunwoody silenced 'voted and Mr. Hyde's amendan cinotiotyil dobnto on Ihe ment was approved.
House door, clearing tlio way
In an Interview later, Mr.
for a 255-178 volo for Ihe niitlabortlon amondmcnt sponsored Lintler sold he was not encouraged by Republican leaders to
by Rep, Henry Hydo (R-Ill.).
Preliminary wrangling over close debate and that he even
the amendment came just min- startled Mr. Hyde and his allies
utes after the House defeated with the^suggestlon.
nn effort by atwrlion rights sup"I'm on the pro-life side,
porters to allow states to decide and I supported Hie Hyde '
whnt conditions, If nny, to place amendment," Mr, Under said.
on toypnyor-pnld abortions.
"We had tlw monionluni of SO to
Thiit debate disintegrated 60 voles, and It hud gotten so ncinto n rnncorom, emotional {rimonious, there was a real
floor show, with scvbrol female i chance Ihe tone of Ihe dobnle
Dcmociflts iiccusing mnlc Re- would change,
publlcaiis or being insensitive
Waahhtglan - Hmt'a lew flip qrarab (Woto poor women.
prtlon vutod A "yus" voto It D volotort m rbof
Mr. Under, fo;»rlng tlint ol- lloii ban.
lowiii(> such a discussion lo con- Volhiu V M : impi. Buddy Da don (Dt, Nolhwi
(D). Itoy nowlimd (D), John llixiM (II). Jnck
llnnc would jeopardize chances Don)
Ktngiloii (n). Nml Otngilnli (H) nml Mao Coffin*
for ultlniute pnssngii of llic
Hyde uinonchncnt, stopped up nVOIIIMJ IIOI Itaps. Bmiffti Dlihoii (Of, Don
lo the microphoiK! and polnled Jotumon (D), JOIHILowls f )J oivl r:ynlh<n Mokvi
1
I
�Abortion foes
win key vote
Bv \far,a P-;er.te
•nd '.V:[|iam M. "A'elc
LSA TODAY
TMe H::-ase voted cecisively
•Vecr.esday :o Keep ihe ban on
federal funding of most abor:ions for poor 'Aomen, a \iaory
for opponents of abortion
rights.
The J55-1TS vote also suggested trouble ahead for President Clinton s plan to include
abortion coverage in a national
lealth-care plan, and for the
proposed Freedom of Choice
Act. A iich would limit most
state restnctions on abortion.
This vote demonstrates that
most Americans oppose taxfunded abortion on demand,"
?a:d Douglas Johnson, spokesman for the Nauonal Right to
Life Committee. 'If (Clinton)
does what he says he's going to
do. he'll run into a buzzsaw."
Clinton has lifted the ban on
abortion counseling in federally funded clinics, a move appiauced by abortion-rights advocates. But Wednesday's vote
was the flrst significant test in
Congress this year.
Abortion-rights supporters
reacted with fury. "Callous and
outrageous." said Kate Michelman, president of ihe National
Abortion Rights Action League.
Its supporters say they hope
the Senate will soften the
House language and allow
funding if a woman's health is
at risk. Opponents say that
means abortion on demand.
u
The vote, on an amendment
to a spending bill for Labor and
Health and Human Services
departments, followed several
hours cf raucous debate, parliamentary manuevering and
weeks of intense lobbying.
It wasn't a total victory for
abortion foes: The House
agreed to allow funding in
cases ofrapeand incest. Since
1981. federal funding has been
permined only in cases when a
woman's life is in danger.
Clinton sought to end the
ban, called the Hyde amendment after sponsor Henry
Hyde. R-Ill.; it passed in 1976.
"Society doesn't have to subsidize a constitutional right."
said Hyde. "We have the right
to travel, but does the govern; ment have to provide us with a
plane ticket?"
Abortion-rights supporters
said the ban discriminated
against the poor. "Therightto
choose is meaningless without
the means to choose." said
Rep. Carolyn Maloney, D-N.Y.
i J
THURSDAY. JULY
/2
�for
abortions
abortion
ABOmON, fnw Pa* U
tc praei hard to prevtU is the confer
enoe conunittee and in the expected
flght over iaclodhg abortion In health> BrlSft-na, tte Houae oa
can reform,
'WedMedey peeeed an
"h it aew up to tte Senate to make-aiwrtnant to ban Medicaid
a dear abatement that all women —' abortioni excepttocaaea of
BY KAKEN SCHNBIDSB
whether or not Aey depend on the rape, incest or a threat to the life
. WASHWGTON — Tha Kouae on govenunentfortheir health can — of cte woman.
All Michigan Repubhcaoa
^edn«^ay reuincd a ban cn uupay- have this ehofae," taid PaiMh; Mir"yeCwfek* wu a vote
er-funded abortioni ior poor *^nia. iMo, prttidff.t of tte Planned Parent" voted
tte ben on taipayer-funded
gMn« abortion oppooents crroctl mo hood Federation of America In New for
aborttai (cr poor women, but
Yorit
mpatumfara battle thii year ova
state Democnta were aplit.
Sara
Phw.
ttokeewooan
for
tte
wfaether u> mcluda abortion covengt
Hen'a how tte atate ddegaticn
tn the nador'a ccmprehenavt beafch National Abortion Righta Action
voted:
League
ia
W
a
a
U
&
g
t
o
n
.
Mkt
H
\
«•
can plan.
Thatopakicdvoto — 255-178 — pea tte preeldent toteeWeaS rmo^ lONCMTt:
came afw houri of heated debate and ductive health iericee,tochnfingabor
Yees Jamea Barda, David
procedural wangbng by abortiOR right*tion, labia pian. We will wort to make Hniv.
feleKOdee. Bart Stupak
aun
C
o
n
g
r
e
a
e
d
o
e
a
p
o
t
take
thk
auppcrten trying to block tte buL It
M
e
t
Bob Carr, Barbara>Roae
rcnewa a Ifryear ban OA gorenuneot
COOM; John Conyva, John
aubokted
a
b
u
d
g
e
t
ttet
fuodidgforiboniona egtcept to tava
the life at the pregnant woman or n wouk! have drtcped tte bin oe ipend> &^B. WSham Ford, Sander
ing govKnimt Tooocf OB abortioni
caaea of rape and faceet
for the peer, io abortion opponent!
Abordoo rtgbu snportert, who
uueuvend to bttig tte amentsMnt
had bees counting on tte new female to
• Teet Dave Cute, Peter
tteflo«fora vote.
aod bbck meniben in the Honee to
Heeketia.JoeKnSaibtrtNki
Rip.
Henry
Hyde,
MB.,
w
h
o
a
n
o
o
give then) the edge, now wfll cuni to
Smith,
Fred Upton.
•ored
tte
original
XU'rn*
he
e&ed
tte Senate, which is expected to adopt
•
Not
votfats Paul Henry iaiB
qceptiona
to
tte
b
e
n
tor
rape,
a
n
d
a leaa atringem venioa d the bdL
end
u
n
a
b
le to vote.
nceet
to
gals
non
voteti
The Houae vote had been tern ae a
He eno otter atertfon eppomen
•aWcal teat of tte atrength of each aide
tit the ongoing abortioo debate. The cned ttet taoif AaMloiL eMa ••
they a ^ ^ o ^ HSi, ' * i *
aae d the margin d victory wu
WPporMB^Ajfia^tekgued /tar
afgnifirantforabortion opponefita.
jfm. wVff doc Well give you a Me
It wiD give them clout thk year to
Stitee
moid
eonfiime
to
b
e
permit•
aberton/
flght the Freedom of Choice Act, which
ted to payfcrMedicaid abottkn
An Qtoda coSletgue, Denvooat
would limit tte ability of atatea to
they
chooae.
aa
13
etttea
do.
CBRHM
Cottna. uid ate wai offend*!
reetrict ibortkxu, regardieaa d wtet
Throughout tte day, then wai by Hyde'a commenta, and he aptif Supreme Court doea. ^e vote
alio is expected to influenoe CreaUai't much talk os bothrteeofwintkigtopraattedberoottefkMrtoapologiae.
BaH CUnton'a dedakn on whether to put thii eswtieni] Md dtvtefve iaeee to Weaa repieiBtativei "all not kt
no. Bw Houn meobera wen wUe myfae,"he laid liter. "Hen fw*
indude abortion in a beak benefta
Q^toi^ce»eec«.Ipuaada«ntetoBveoptotbatloftyotf.
peekage io hi* health care plan.
Tte»^WM«aodoadandtt»
.1 "Ira cieartyjrtng to hive • U|
Itppart on the national heelth debate, com. Soine nombert^ ^ei^ee WM
iow^nootno uibMiiy
Doutfaa Jotoeon, legMatlw dfrecta of met with aphwae, cuenwih htaeee..hirt
,
i"**
M about equittand UrMH
A
n
d
tte
datete
reweW
tmA
ta*,
the National Right to Life Gmngtee
alctj jender «nd nee.. ,.
j. jsr iSi wcr«n 3«w Kfp.
in' Waahingtco, aak! tfter SH?' votv,.
"Both M*-* rr-vs;!* i?
the/ facx&t.' TM VH4*:> y, *A .T&x Si rwtor? M::X!f:xV. t>-'^. 'T« it *it;-. .0'
Ir'wcuM be 3 cntica! vote"
ffttleaamtf wac vota ayintt pog wortiSeid Ritoh Seed executive dtrecWiad worn of odor."
'
of the Oiriittan Coattoe b Oeeepeate, Ve., "The tBMaage k: Keep
la^r nd OM. ov pMidMt am.
K e abcrtkea odd tte M £ S t
i CM podage or it wl tate a
^ttooopthiblMttcv
1
restriction
Hffl THEY VOW
,
,
B
(
Ae' ABORVW, hp llA
v
'.
- *
Be aid MKhftnUngwttld tefl {temiiot-*-..
.
bieckwflott'TouanttenaiA
AMI Jfirart tf <MtornPrh
YaTcBThm in edtntkrYou e £ l WaHn**tot!mtrib** to Hiii
hive i decent place to live, K ten'i
G e
9 O <£
m m a w^
'O G
s o
�nouse Keeps uau un i*jLcuicmu auut u^n^
Curses fly
infloorfight
By J Jennings Moss
THE MASHINCiTON IIMt
Abortion rights supporters and
P r e s i d e n t C l i n i o n lost a key vote i n
the House yesterday when law
m a k e r s voted to c o n t i n u e p r o h i b i t
ing worn* n on Medicaid f r o m usinn
f e d e r a l d o l l a r s f o r most a b o r t i o n s .
The Mouse voted 2.S.S 17H to keep
P r o - c h o i c e a c t i v i s t s said t h e y w i l l
keep p u s h i n g .
/
HYDE
• D e s p i t e today's s e t b a c k , t h e f i g h t
to r e s t o r e f a i r n e s s to g o v e r n m e n t
h e a l t h care; f u n d i n g ts f a r f r o m over."
l a m e l a . ) M a r a l d o . P l a n n e d Parent
hood p i e s . d e n l . said m a s t a t e m e n t
I h e u p c o m i n g Senate d e b a l e m u s t
c e n t e r o n t h e p u b l i c h e a l t h needs o f
o u r most v u l n e r a b l e c.t.zen.s not
m y o p . c a n d sell s e r v i n g d o g m a "
On t h e t h e H o u s e f l o o , . t e m p e r s
H a t e d w h e n t h e d e b a t e .shifted n ,
^ " h c r Ihe H y d e A m e n d m e n t
From page AI
1
" • V i n g to J e t t h e ? ' T ™
Act
^ " W
7TOCA , c o 7 ?
,
,
,
m
, , r
^
C
h
,
s
,
,
i
n
Put i n , n
l
f
K , M , a h o r
'uttonal.
,
care plan
h
t
,
n
e
n
.
d
m
c
n
^
"
"»nis«iiisti.
u
the H y d e A m e n d m e n t , w h i c h p r e vents M e d i c a i d f u n d e d a b o r t i o n s
e x c e p t in cases w h e r e t h e l i f e o f t h e
m o t h e r is i n danger. T h e v e r s i o n app r o v e d y e s t e r d a y also w o u l d a l l o w
f e d e r a l l y f u n d e d a b o r t i o n s i n cases
of r a p e o r incest.
D u r i n g o n e o f t h e most e m o t i o n a l
and h i t l e r debates o f t h e 103rd C o n
grcss, lawmakers ranted and cursed
at each o t h e r o n t h e H o u s e floor. The
tone m a y f o r e s h a d o w u p c o m i n g debates o n o t h e r b i l l s r e l a t e d to abort i o n , e s p e c i a l l y M r . C l i n t o n ' s national health care plan.
"Providing a constitutional right
to an a b o r t i o n does not m e a n s o c i e t y
• The lederal government
is prac
ung d.scr, ,i„ .
^ U c ^ n - s
" » " » •u-.-.lih
n
;ll()1 y
""''""'•••tiuiiy
and fairness with nil
-.men
and ,a„k,
, ve ..us,
K
H-'>l il will,
c.lleagues
who vote
••'RHiHsl .Hople of color, who
(
m
v
n
u
l l l U
(
w
islahve
d i r e c to
r.
h
S
." " ""
t v
•'"'""^ "'c P
and who vo'e
..Mams, w o m e n . " said K v p . C y n t h . a
NkKiMi.y.t.n.igi.ii^.n,,,.,.,,
Mr
vde r e s p , . , , „ such c o m ..« I N y saviiiM I , , ,
-sine,.,,.,,
H-ul Ins o p p „ . „ ,
,
,
- " " • . ' - . • c d h v . h e i , paren.s
W. c.m,.,,, s a v r t h i - . m l . , , , „ ,
.
(
^\zz*s: 5::,:": r**-"
S
•'
m, , , W
The amendment was part of the
. i ipropriations bill for the Labor and
) iealth and H u m a n Services departm e n t s T h e H o u s e passed t h e b i l l ,
Some D e m o c r a t i c w o m e n were infuriated b y what they consu.ered
M r H y d e ' s " p a t e r n a l i s t i c torn:
Rep. Cardiss Collins
Illinois
D e m o c r a t , asked that M r H y d e s
be s t n e k e n b e c a u s e o M h j j j r
o f f e n s i v e " n a t u r e M r . H y d e to Id t h e
s w o m a n h i s r e m a r k s m.ght
n o , o f f e n d i f she b o t h e r e d u
heck
with " m i n i s t e r s " i n her disti - con
ccrned about unwanted prcgnanc o n R r e S
" T h a t f u r t h e r e n r a g e d M r s CoUina
and other female House •ncT.bcra.
•1 felt h i s r e m a r k s w e r e h i g h l y
T
h
e
i
n
d
ofTens.ve." M r s C W ^ • « * » ; "
w h o l e tone w a s P
' ^ ,
Away f r o m t h e m i c r o p h o n e s and
. ^ v i s i o n cameras. R e ^ ^ w ^ s i
M f u ™ . Maryland Democrat . m l
a t e r n a , , S
n i
When Rep. C o r r i n e B r o w n , Florida D e m o c r a t , blocked M r . Obey's
amendment, the Wisconsin Democrat rushed over and began shouting
at M i s s B r o w n . T h e t w o e x c h a n g e d
a n g r y w o r d s , a n d soon o t h e r f e m a l e
lawmakers joined the dispute.
Finally, Rep. Bill Richardson,
New Mexico Democrat, ushered Mr.
Obey away f r o m the o t h e r lawmakers, and M r s . Collins was heard
to say," I d o n ' t c a r e . . . w h a t y o u d o . "
• Major Garrett and Frank J. Murray contributed
to this
report.
NO FEDERAL FUNDING
S i ^ S o S m S S ^ S y o Z 266-178 to raMn the
thr—t
women.
Vbtipg to
y ethe
s to IWe
k e e potthe
the abortion
b a n were
of rape,
9 8 D e m o c r a t s a n d 157
s
s
w
sir^ci'ir^a ****
M c . ^ . l o R - e . 0 the l w r n a k e n .
W h e n he d i d so. m a n y o r t h e f . n . a l e
i .vvnvikers r e b u f f e d h i m . H e ..iter
apologized to M - C o ^ n ,
• m e f r a c a s d i s t r a c t e d t h e l . nise
, ,, , e v r y m g on its legislative ^ u s r
or 114 fire
l l
-.M
see HYDE, page A8
Republicans
Voting n o o n the b a n v ^ r e 161 D e m o c r a t s . 16 R e p u b l i c a n s a n d o n e
i r t l a
J
305 124
Mr. Clinton made r e p e a l i n g t h e
H y d e A m e n d m e n t a c a m p a i g n is
sue, a l o n g w i t h a p l e d g e to l i f t o t h e r
federal restrictions on abortion.
Mr. Clinton had no i m m e d i a t e
comment a f t e r the vote, a n d W h i t e
House spokeswoman Dee Dee
M y e r s said she d i d not k n o w i f h e
w o u l d veto a b i l l c o n t a i n i n g a v e r s i o n
of the H y d e Amendment.
" H e never t h o u g h t i t w a s a s u r e
t h i n g that it c o u l d b e k e p t o u t , " M i s s
M y e r s said last n i g h t . " I d o n ' t k n o w
that he believed it w o u l d p a s s "
1
n r
M e s.-,,., " T . , „ s w h . , , I w a n ,
" s M - i c t . h e u s e o f M e d i c a i d r.ioney
lur .iburlions
afTeli
i<cp. P a t r i c i a S c h r o e d e r , C o l o r a d o
Democrat.
V o t i n g f o r t h e m e a s u r e w e r e 98
I k m o c r a t a a n d 157 R e p u b l i c a n s ,
w h i l e 161 D e m o c r a t s , 16 R e p u b l i
i m s a n d t h e sole i n d e p e n d e n t v o t e d
g a i n s t it. A m o n g t h e 114-member
11 e s h m a n c l a s s . I S D e m o c r a t s a n d
11 R e p u b l i c a n s w e r e i n f a v o r o f t h e
a m e n d m e n t , w h i l e SO D e m o c r a t s
m d four Republicans opposed it.
One D e m o c r a t i c f r e s h m a n d i d not
vote.
y
v
"<>usc actions
has to s u b s i d i z e t h e e x e r c i s e o f that
constitutional right," Rep. H e n r y
H y d e said. T h e H o u s e f i r s t a p p r o v e d
the Illinois Republican's measure in
1976.
M r . H y d e said t h e issue " f o r c e s u s
to c o n f r o n t w h e t h e r we w a n t to c o
e r c e — a n d t a x i n g is c o e r c i o n — lite r a l l y m i 11 ions o f p e o p l e t o s u b s i d i z e
the t r i u m p h o f K i n g H e r o d , the
slaughter of the innocent."
H i s o p p o n e n t s said t h e m e a s u r e
unfairly targets poor women who
c a n n o t a f f o r d to have a b o r t i o n s o r to
raise unwanted c h i l d r e n .
" W o m e n a r e not b e a s t s , a n d that's
w h a t w e ' r e r e a l l y h e a r i n g h e r e . " said
Independent
Vottng yes w e r e 15 D e m o c r a t s a n d 4 4 Republicans
Voting n o were 5 0 D e m o c r a t s a n d lour Republicans.
O n e Democrat d i d not vote
ore
�THE
:
NEW
YORK
TIMES
THURSDAY,
JULY
1, 1993
Bad Omen Is Seen
The Clinton Administration took no
role in today's fight, which began after
it made a budget proposal that included Federal financing for Medicaid
abortions; currenl law allows them
only when the life of the woman is
threatened. After making its budget
proposal, the Administration kept quiet
out of deference to the Appropriations
Committee chairman, Representative
William H. Natcher of Kentucky, an
abortion opponent who has been helpful to the Administration. It may be
heard from when the Senate takes up
the issue.
Abortion foes contended that today's
vote showed that the so-called Freedom of Choice Act, which would ban
ABORTO
IN FOES WN
I
VOTE IN THE HOUSE
ON FUNDS FOR POOR
CURBS DEBATED FURIOUSLY
Continued on Page A16, Column I
Hyde Restrictions Approved by
255 to 178, but Outlook in
the Senate Is Uncertain
A
ByADAMCLYMER
SpwIAI io The New York Times
WASHINGTON, June 30 - After furious debate, anti-abortion forces won
a significant victory today when the
House voted to retain curbs on Federal
financing of abortions for poor women
except in cases of rape, incest or
threats io the life of the woman.
Representative Henry J. Hyde, Republican of Illinois, succeeded in keeping alive the restrictions he has successtully championed since 1977, although they are slightly weaker than
(hose imposed since 1981. But the ultimate fate of Mr. Hyde's amendment is
uncertain; the Clinton Administrations budget proposal had no restrictions on abortion financing, and the
Senate, which will deal with the issue
next, has historically been more sympathetic to abortion rights than the
Hnusc
Thii iuaue .o> Jvb,v...<J seriousiy, if
briefly, today for the first time in several years, because supporters of abortion rights had hoped that the changing
political climate, including a President
who supports abortion rights, would be
reflected in the House. But the 259-10178 vote showed that the House's views
on Federal financing of abortions had
not changed very much. I Roll-call, '
page A16.|
Arguments Are Familiar
The arguments on both sides were
also familiar.
Mr. Hyde said financing abortions
through Medicaid, the health program
for the poor, would offend taxpayers
made "complicit" in abortion. He said,
"You're going to get a million more
abortions,'' and declared, "We're
awash in a sea of blood."
Representative Nancy Johnson, Republican of Connecticut, argued that
taxpayers already subsidized abortions for the middle class through the
tax deductibility of private health insurance plans that paid for them. Without similar provision for the poor, she
said, "this is an issue of discrimination
and fairness."
Continued From page Al
most state restrictions on abortion,
would be defeated. Its chief House
sponsor, Representative Don Edwards,
Democrat of California, said that issue
was very different from the-issue of tax
money for abortions. But he said he
would certainly wan a while before
trying the Freedom of Choice Act after
today's anger.
The fury of today's debate seemed to
start when Democratic women who
oppose restrictions on abortion financing discovered that Mr. Hyde had found
a way through the parliamentary
maze, which they had expected to protect their position. Mr. Hyde phrased
his amendment in a way that passed
parliamentary scrutiny; abortion
rights supporters thought the decision
to admit the amendment was wrong
but lacked the votes to challenge and
overturn it.
Representative Nita Lowey, Democrat of New York, challenged Mr.
Hyde. When the Illinois lawmaker, who
is widely respected hy many abortionrights suppfirtcr.: in the H'X;>e who
consider him si nee re and readier than
most conservatives to support spending for children, sought five minutes to
explain his amendment, she blocked
him by initiating a quorum call. For the
next hour and 25 minutes, members
milled around the House floor as tern
pers got hotter, before a 20-minute debate was agreed upon.
Arguments Run Together
That went relatively smoothly until
Mr. Hyde, in his final minute, ran his
arguments together. He seemed to
some members to endorse the argument that "there are too many of you
people and we want to refine, refine the
breed." He told reporters later said he
was arguing that those who supported
abortions for the poor had made that
demeaning argument, and that he was
merely trying to expose its insensitivity. "Thank God we can save some of
the lives of the children of the poor," he
said.
Represenutive Cardiss Collins, an
Illinois Democrat who is the senior
black woman in the House, jumped up
and said, " I am offended by that kind of
debate."
M r Hyde shot back, " I am going to
direct my friend to a few cninisters who
will tell her Just what goes on in her
community."
That comment enraged Ms. Collins,
and she sought to get his words strick
en from the record. But the parliamentarian ruled that her complaint had
come too late, after he had made additional comments. It also did not appear
that Mr. Hyde's comments had violated any rule.
But later Mr. Hyde took the floor and
announced that he would seek to have
i
the remark that Ms. Collins objected to
deleted from the Congressional
Record. " I think it was very improper
of me to say whom she should talk to in
her district," Mr. Hyde said. He added
that until the latest rcdistricting. he
had represented some of what is now
Ms. Collins's district and knew some
black ministers there who strongly opposed abortion.
Ms. Collins told reporters after the
first exchange that she considered Mr.
Hyde's comments "paternalistic." She
added, " I don't think he is in a position
to know what goes on in an AfricanAmerican district."
But after his apology on the floor, she
said she accepted it and regarded him
as a "gentleman and a scholar."
That was not the only angry dispute
between black women and white male
lawmakers. Representative David R
Obey, Democrat of Wisconsin, shouted
angrily at Representative Corhnne
Brown, Democrat of Florida, after she
objected to giving him three minutes to
explain a softening substitute for the
Hyde amendment, which he had first
planned to offer but then withdrew
before the vote.
Shooting Their Feet?
He said he withdrew it because liberals thought it would be defeated,
though it might be revived later. He
had planned to offer a provision to
allow abortions also for the "health of
the mother," which Mr. Hyde contended amounted to "abortion on demand."
Mr. Obey also would have prohibited
abortions in the third trimester except
in the case of threats to the life of the
woman. The Hyde amendment does not
treat the third trimester differently.
Ms. Collins said later that Mr. Obey
had no right to "yell and shake his
finger at her."
The abortion-rights advocates had at
first seemed to score a victory, when a
different version of the amendment
restricting financing of abortions was
stricken from the bill on a point of
order.
That left no restrictions at all on
Federal financing cif abortion in tli.;
bill, which provides IZi-j.'i billion fur
the Departments of Labor, Education
and Health and Human Services.
But then Mr. Hyde produced a slightly different version that passed parliamentary muster, and the angry debate
followed.
He argued that while there was indeed a legal right to abortion. "Providing a constitutional right to an abortion
does not mean society has to subsidize
the exercise of that constitutional
right."
When the issue came to a vote, 98
Democrats and 157 Republicans voted
with Mr. Hyde, while 161 Democrats. 1«
Republicans and 1 indpendent voted
against him. With Mr. Hyde's amendment, the bill passed easily, 305 to 124
�Hyde Abortion Ban Survives Bitter Debat
Clinton Opposition Rejected, 255-178, as Tempers Flare in Racially Charg
Hyde responded: "We tell poor
women, 'You can't have a job, you
Washmgton Post Staff Writer
can't have a good education, you
can't have a decent place to live. I'll
The House yesterday upheld a
tell you what we'll do. We'll give you
modified version of the 16-year-old
a free abortion because there are too
ban on federally funded abortions
for poor women after a bitterly con- many of you people and we want to,
kinda refine, refine the breed.' "
tentious and racially charged deAt that point, an angry Rep. Carbate.
diss
Collins (D-IU.) rose and grabbed
President Clinton had advocated
the
nearest microphone. "I'm ofrepealing the ban, and the 255 to
fended
by that type of debate," she
178 vote represented the first masaid.
jor test for the new Congress on the
To which Hyde replied: Tm going
highly emotional issue. Yesterday's
to
direct my friend to a few ministers
action—marked
by shouting
who
will tell her just what goes on in
matches, name-calling and fingerher
community."
pointing on the floor—left uncerSeveral other black female lawtain the fate of future abortion-re- makers
quickly got out of their seats
lated measures. Activists on both
and tried unsuccessfully to respond.
sides of the issue acknowledge that During a subsequent procedural
using federal tax dollars for abor- vote, tempers still raged as several
tions is one of the most controverblack women screamed at Hyde.^
sial aspects of abortion rights.
Soon, a bizarre kind of chaos en"It certainly wasn't a great day," veloped the floor, with Speaker
said Rep. Nita M. Lowey (D-N.Y.),
Thomas S. Foley (D-Wash.) huddfing
who along with other abortionwith various Democratic lawmakers
rights supporters ultimately were
trying to figure out what was going
outmanuevered on the floor by their
on. The confusion was dramatized
opponents. She complained that the
when Rep. Corrine Brown (D-Fla.)
tenor of the debate, led on the anobjected to Rep. David R. Obey (Dtiabortion side by Rep. Henry J.
Wis.) taking thefloorto explain why
Hyde (R-Ill.), was "uncalled for and
he had chosen not to offer an amendnasty."
ment he considered friendly to ator*
The vote was taken on a modified tion-rights supporters.
version of the Hyde amendment,
"I got shot in the fanny by people I
which since 1977 has banned Medwas trying to help; I don't appreciate
icaid funding for abortions except to that," Obey said later, exptaining
save the life of the woman. The new why he had yelled and waggedJiis
finger at Brown on the floor. •»«
Hyde amendment adds rape and
In the end, Hyde apologized' to
incest as conditions that would_ al-..
Collins.
And the debate contiau&I iii
low federal funds to be used for
the halls.
— I
abortions and is similar to a proviAbortion-rights supporte^Jpd
sion that was overwhelmingly apthe setback did not signal pemanfent
proved by the House Appropriadefeat on other issues, sudr-aifjhe
tions Committee last week.
battle to include abortion coveraigvin
On a day marked by furious prothe
finalClinton health care pacftige
cedural wrangling, abortion-rights
and
passage of the Free&S2&of
supporters tried to use parliamenChoice
Act, which would baivnffist
tary techniques to prevent the
state restrictions on abortion, rt^^ar
Hyde amendment from coming to a
as the Hyde amendment goeas aborvote. They had preferred to put off
tion-rights supporters hope the Senthe debate to another day. But they
ate adopts more moderate language
and the issue can be fought again in a
ABORTION, From Al "
later House-Senate conference after
were badly defeated on a procedural
the administration has weighed in.
vote, and then Hyde cleverly worded
But Maureen MalJoy of the Nahis amendment so that it could teara
tional Right to Life Committee called
challenge that it violated Houwrutes
the vote "a 98 percent victory for the
prohibiting legislation from -beirig
'pro-life' movement" that spelled
attached to spending bills, "SuHP as
trouble in Congress for Clinton and
the one the House was consideHfifcn.
abortion-rights proponents.
Tempers flared after ffteHH^a
Maryland and Virginia representRep. Cynthia A. McKinney ( W k X
atives mostly voted along party lines
who is black, characterized the tyrde
on the amendment, with Democrats
amendment as "nothing but a dign
opposed to the ban and Republicans
criminatory policy against poor won
in favor. The exceptions were Reps.
men who happen to be disproportio»i>
Constance A. Morella (R-Md.), who
ately black." She added that she had
voted against the abortion ban, and
"just about had it" with colleague
Lewis F. Payne Jr. (D-Va.), who
who continually cast votes that hurt j
voted for it.
the poor, people of color and women.!
Her remarks drew hisses from Re-j
publicans.
By Kevin Merida
TTT
3
�O F F I C E
N E W S
A N A L Y S I S
MORNING
NEWS
SUMMARY
Room I60OEOB, Ext 7151
HEALTH CARE/ABORTION —
The House voted d e c i s i v e l y Wednesday t o
keep the ban on f e d e r a l funding of most abortions f o r poor women,
"a v i c t o r y f o r opponents of abortion r i g h t s . " (USA Today) The
New York Times c a l l s i t "a s i g n i f i c a n t v i c t o r y " f o r a n t i - a b o r t i o n
forces. (Al)
The 2 55 t o 178 vote upheld a version of the Hyde amendment
t h a t adds rape and incest as conditions t h a t would allow f e d e r a l
funds t o be used f o r abortions. (WP Al) The A d m i n i s t r a t i o n "kept
q u i e t out of deference" t o Rep. Natcher, (D-Ky.). Rep. Natcher
thought some r e s t r i c t i o n s were needed t o p r o t e c t h i s b i l l from
attack; " i n pursuing t h i s strategy, however, he accepted a
precedent t h a t could haunt him as a chairman who has sought t o
block non budget-related amendments on spending b i l l s . " (WSJ)
A f t e r "several black women screamed a t Hyde... a b i z a r r e
kind of chaos enveloped the f l o o r , " w i t h House Speaker Foley
"huddling w i t h various Democratic lawmakers t r y i n g t o f i g u r e out
what was going on." (WP) "The arguments on both sides were
f a m i l i a r . " (NYT) "Given the i n f l u x of new black lawmakers i n
Congress, the debate's r a c i a l overtones were more s t a r k than i n
the past." (WSJ)
The 255-178 vote also "suggested t r o u b l e " ahead f o r
President's plan t o include abortion coverage i n a n a t i o n a l
health-care plan, and f o r the proposed Freedom of Choice Act,
which would l i m i t most s t a t e r e s t r i c t i o n s on a b o r t i o n . (USA
Today, NYT) The act's sponsor, Rep. Edwards (D-Ca.), said he
would wait a while before t r y i n g t o pass i t on the f l o o r . (NYT)
More than a dozen groups, including the AARP, the AFL-CIO,
and the American Hospital Association agreed to coordinate a .
nationwide campaign to promote the outlines of the President's
health care reform package. (WP) The coalition i s called the
Health Project, and i t "steps into the void created l a s t month"
when the DNC dropped i t s plans to coordinate the campaign. (WP)
r
v
�
Dublin Core
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Title
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Health Care Task Force Records
Creator
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White House Health Care Task Force
Is Part Of
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
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William J. Clinton Presidential Library & Museum
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2006-0885-F
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 2
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Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
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Clinton Presidential Records: White House Staff and Office Files
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2/6/2015
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42-t-12093080-20060885F-Seg2-023-009-2015
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Clinton Presidential Records
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Health Care Task Force
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WH [White House] HC I F [Health Care Task Force] Process
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�TALKING POINTS ON HEALTH CARE TASK FORCE
AND THE "TOLLGATE* POUCY DEVELOPMENT PROCESS
THE TASK FORCE...
President Clinton established the Task Force on National Health Care Reform on January
25,1993 to develop a proposal to fundamentally reform America's health care system. Their
charge: prepare health care reform legislation to give American families the security they
need and bring spiralling health care costs under control President Clinton set a 100-day
schedule for this policy development, emphasizing in his "Joint Address to Congress" tha
there is urgent need for action: all of our efforts to strengthen the economy wE faH unless
we also take this year, not next year, notfiveyears from now, but this year, bold steps to refor
our health care system."
Demonstrating his level of commitment to solving this complex problem, the President
appointed First Lady Hillary Rodham Clinton to chair the Task Force. As President Clinton
said, the First Lady is both experienced and able to "bring people together around complex
and difficult issues to hammer out consensus and get things done."
The President's health care reform process has two tiers: thefirstis the Task Force itself;
which includes representation from the highest levels of the government - including the
Secretaries of Health and Human Services, Labor, Treasury, Commerce, Defense, and
Veterans Affairs - as well as senior White House officials. The second level is comprised
of 34 working groups - including federal employees, outside experts and health-care
professionals - which have been set up to advise the Task Force and develop health care
policy within the Tollgate" system.
POLICY DEVELOPMENT: THE "TOLLGATE" PROCESS . . .
The policy evaluation effort of the Task Force is being coordinated by the President's Senior
Adviser for Policy Development, Ira Magaziner, and is based on the "Tollgate" system - a
research and evaluation process commonly used in the business world for large-scale projects
that need to be completed quickly. To advise the Task Force, Mr. Magaziner has formed
34 working groups - involving health professionals, Congressional staff, health care experts,
officials from various agencies, and White House personnel These working groups, which
are divided into health policy subject areas, will guide their research efforts through a series
of tests, or "tollgates", before a comprehensive set of options is presented to the Task Force
for consideration.
In thefirstseries of tollgates - the broadening phase - each working group was asked to
put all options "on the table" - ensuring that all issues were considered, all questions
discussed, and that correct methodology was used. In the current phase, this broad group
of options is being narrowed, after which the working groups will make draft
recommendations which will be synthesized into a comprehensive set of proposals. At that
point, outside auditors will check to ensure that all cost and savings projections are sound,
and that all legal concerns have been addressed.
�V
.
TALKING P|)NTS ON HEALTH CME TASK FORCE (Page 2)
$' •
AN INCLUSI^ PROCESS . . .
|
^
To ensure tha|'ihis process is open and iDC{|sive, the President has structured the system
to encourage participationfromthe American-people, all categories of health care providers,
the business community, and all levels of government In the most open policymaking
process in history, more than 500 peoplefromall over the country are directly involved in
developing policy within the working groups.
. . . HEALTH CARE PROVIDERS AND CONSUMERS CLOSELY INVOLVED...
In an attempt to make health care refonn respond to the concerns both of those who
receive health care and those who provide health care, there are more than 100 health can
professionals - including 60 doctors, 20 nurses and 6 social workers - developing policy
options for the Task Force. A Health Professionals Review Group of more than 40 people
has begun to meet regularly to assess the policy options that are being discussed in light of
their real-world applications. In addition, diverse panels of consumers - many selected
from letters they sent to the Task Force - are brought in regularly to advise the working
groups as they develop their recommendations.
... EXHAUSTIVE OUTREACH PROCESS
-
The White House is actively reaching out for advicefromthe American people, members
of Congress, representativesfromsmall and large businesses, state and local officials, and
organized health care interest groups. All groups have been encouraged to submit written
proposals and more than 400 groups have been brought into the White House to meet
personally with the First Lady, Ira Magaziner and other working group members. In turn,
their written proposals have been distributed to each applicable working group and have
formed the basis for debate and policy development. •
The Task Force operates an intake room to receive the thousands of speaking requests,
policy papers, letters and phone callsfromAmericans concerned about the health care crisis
Since the Task Force was formed in January, more than 50,000 letters have been received
and read. From a hospital administrator's treatise on malpractice reforms to a widow's
handwritten letter expressing outrage at her skyrocketing prescription drug costs, each
inquiry is taken seriously and channeled to the appropriate officials or working groups.
The First Lady, Health and Human Services Secretary Donna Shalala and Tipper Gore who has been advising the Task Force on mental health issues - have been travelling
throughout the nation talking to the American people about their health care concerns. In
the past month, they have attended several roundtable discussions across the country to
listen to the recommendations of all those eager to contribute to health care reform.
The Task Force met for thefirsttime on Monday, March 29. Over the course of 13 hours,
the Task Force members listened to more than 65 organizations - representing diverse
groups of consumers, health care providers, and businesses - present their ideas on healti
care reform. These groups will continue to be closely involved as policy options arc
narrowed and recommendations are prepared for the Task Force in May.
�TALKING POINTS ON HEALTH CARE TASK FORCE (Page 3)
. . . CONGRESSIONAL CONSULTATION
In developing its health care refonn proposal, the Health Care Task Force has based its
research and policy options on the significant foundation of work that many Members of
Congress have laid in the last 20 years. In order to benefitfromthis experience and
expertise - and build strong, bipartisan support - the Task Force has regular, broad-based,
and substantive consultation with Members of Congress, including an extensive bipartisan
outreach effort
Senate Majority Leader Mitchell, House Majority Leader Gephardt, Senate
Republican Leader Dole, and House Republican Leader Michel have been appointed
Congressional Liaisons to the Health Care Task Force;
•
There have been weekly meetings with the House and Senate Leadership, Committee
Chairmen, and other Members of Congress. The First Lady herself has discussed
health care reform with more than 60 Senate Democrats and Republicans, and well
over 100 House Democrats and Republicans - including meetings with the members
of the Black, Hispanic, and Women's Caucuses;
•
The First Lady, Ira Magaziner, and Judy Feder, of the Department of Health and
Human Services, have established a dose cooperative relationship with the
Committees that have primary legislative jurisdiction over health care — holding
numerous one-on-one and group meetings with the House Ways and Means
Committee, the Senate Finance Committee, the House Energy and Commerce
Committee, the Senate Labor and Human Resources Committee, and the House
Education and Labor Committee;
•
Working group leaders have briefed Members and Congressional stafffromboth
parties on specific components of the health care options currently being proposed
and analyzed;
•
In an unprecedented attempt to draft legislation in consultation with Congress, more
than 150 Congressional staff members are actively involved in the day-to-day
development of policy options taking place within the working groups.
�SUCCESSFUL MODEL PROGRAMS
To prepare its health care refonn proposal, the Task Force has been r.xamining the many
successful reforms that have been implemented by states, cities, and companies around the
country. These reforms share several crucial characteristics: all allow choice of doctors; all are
market-based reforms; and all provide a comprehensive package of benefits while controlling costs
and eliminating administrative waste.
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM (CALPERS)
The California Public Employees Retirement System (or Calpers) administers health care plans
for almost 900,000 state and local government employees and their families across California. In
response to premium increases of 21% in 1990, the agency embarked on an ambitious program
to lower costs and eliminate administrative waste.
Calpers - which buys $13 billion of health care each year - demonstrated how large groups of
consumers can use their size for bargaining power when negotiating coverage from competing
plans. Many smaller companies and individuals join Calpers because it gives them leverage they
would otherwise lack. Calpers offers its members a choice among 19 plans, with which it
negotiates rates and comprehensive packages of services. Patients then choose a personal
physician within the plan they select Calpers offers traditional health insurance plans for
members in remote areas.
By pooling large groups of consumers to negotiate among providers, Calpers has been able to
hold annual premium increases in 1992 to 3.1 percent - compared to a state industry average of
132 percent It has also forced its insurers to root out wasteful administrative costs, reduce
inappropriate care, and encourage hospitals and doctors' groups to moderate their rates.
CITY OF ROCHESTER, NEW YORK
Called "a jewel in a sea of health care despair," Rochester is one of the few American cities that
have health care systems that work. The rit/s doctors, hospitals and local businesses have
cooperated to keep the quality of care high, while implementing incentives to control costs.
Through insurance reform, Rochester has been able to serve the needs of its large businesses —
by keeping costs down - while also establishing a structure that enables small businesses and
families to purchase competitively priced insurance. A cornerstone of the Rochester plan is the
single price approach - small and large businesses pay the same monthly premium per person for
equal benefits. No one pays more or is refused coverage because of age, sex or a previous
medical condition. Another central element of the Rochester plan is the involvement of local
industry. Led by regional-giant Fastrnan Kodak, Rochester's small and large businesses cooperate
closely in this unified regional insurance program. This cooperation has also been extended to
the area's hospitals, which have agreed over the years on which institutions should perfonn certain
specialized services - like organ transplants - to prevent expensive duplication.
As a result of these reforms, Rochester's medical costs are 25 percent lower per capita than
national levels, administrative costs are half national averages, and 94% of the population is
insured.
�SMALL BUSINESSES AND HEALTH CARE
•
Small businesses want to cover their employees, and many of them do. In fact,
nearly two-thirds of small businesses currently provide health insurance to their
employees.
•
But as s™aH business premiums continue to skyrocket, it becomes more and more
difficult for small businesses to cover their employees.
•
In today's system, the fewer employees you have, the more you're likely to pay.
And if your employees are older, or if one or two have preoristing conditions,
insurance companies will either charge you exorbitant rates, cancel your coverage,
or refuse to cover your employees.
•
The President's plan will help small businesses by enabling them to Join large
purchasing pools with the powertonegotiate for high-quality care at an
affordable price.
•
The President's plan will cut health costs for small businesses that provide
coverage and providefinancialhelp that makes it possible for other small
businesses to cover their employees.
•
By moving insurance companies toward community rating, the President's plan
will cut the underwriting costs that drive small business premiums ap.
•
Critics are already charging that the President's health plan wQl drive small
businesses under. In fact, the plan will control their skyrocketing costs and help
them cover their employees. Remember, this is a President who offered an
unpredecented set of incentives for small business in his economic package. He
recognizes the vital role that small business plays in the American economy.
The Task Force Process:
•
Ira Magaziner, head of the Task Force effort and a former small business owner,
has personally met with almost all of the major groups representing small
business. He has also spoken before the Retail Federation, the Washington
Business Group on Health and the Small Business Legislative CoundL
•
At the March 29 Task Force hearing, representatives of small businesses including the Small Business Legislative Council, National Small Business United,
National Association of Women Business Owners, and Chamber of Commerce —
all testified. The National Federation of Independent Business was invited but
declined to testify.
Mrs. Clinton has visited small businesspeople in Boston and other communities to
hear their concerns about health care.
�— •*'
OLDER AMERICANS AND HEALTH CARE
•
We know that prescription drags are the largest cost of daily living for almost
half of all people over 65. And more than 5 million Americans over 55 say they
have to choose between buying food and paying for medication. That's wrong.
•
The President has been very strong in taking on the drug companies that charge
outrageous prices for prescription drugs. We believe that making prescription
drugs affordable for all Americans must be a priority of any health refonn
package.
•
The President and I believe that long-term care reform must be included as part
of any comprehensive health refonn package. We understand the need for greater
flexibility for home and community-based services for long-term care patients.
•
We need to change the way government reimburses for care. If home care is more
cost-effective and preferable for people, it should be made more available and
affordable.
•
However, we must be realistic Given the need to control costs, an immediate
solution to all the challenges of long-term care is unlikely.
•
No matter what changes are made, older Americans can be sure that the
fundamental contract between older Americans and the government will be
preserved. Older Americans who currently rely on Medicare will continue to have
the health security they deserve. But the details of how Medicare willfitwith the
President's health reform proposal remain undetermined.
Task Force Process:
•
The President has met with the AARP and the National Council of Senior
Citizens (NCSC).
•
Ira Magaziner, the head of the Task Force effort, has met individually with the
AARP, NCSC, Families USA and the National Committee to Preserve Social
Security and Medicare.
•
Representatives of seniors' groups have been in White House roundtable
discussions about health care, and the long-term care working group has met with
several seniors' groups.
•
Mrs. Clinton attended Florida's Robert Wood Johnson forum that focused on the
needs of older Americans.
At the March 29 Task Force hearing, representatives of the National Council of
Senior Citizens, Families USA, AARP, National Committee to Preserve Social
Security/Medicare and Long-Term Care Campaign testified.
�PEOPLE WITH DISABIUTIES AND HEALTH CARE
•
I understand - and the President understands - that allowing people to choose
their own doctor is a hallmark of American medicine. The President and I believe
that we must preserve thisrightfor all Americans - and we understand how
important this is to people with disabilities.
•
We understand the importance of services such as home and community-based
long-term care, which help people with disabilities to lead independent and
productive lives.
•
Because home or community-based care can help patients, save money and allow
individuals to be more independent, the President and I agree that it must be an
integral part of any health reform package.
•
We recognize that health care for people with disabilities is not just a long term
care issue. The comprehensive benefits package in the President's health care
plan mil recognize the importance of preventive interventions to disabled
Americans. This will both promote independence and decrease costs over the
long-term.
•
In the Oregon Medicaid case, the Administration worked with Oregon officials to
revise its proposal to ensure full compliance with the Americans with Disabilities
Aa. But Oregon's Medicaid program carries no implications for the President's
comprehensive health reform proposal
Task Force Process:
•
The White House held a roundtable discussion with representatives from the
nation's major disability groups.
•
The Task Force working group looking at long-term care has met at least twice
with several disability groups.
•
In addition, Secretary Shalala has met with representatives of Consortium of
Citizens with Disabilities (CCD).
•
The March 29 Task Force hearing was addressed by the CCD and National
Association of Developmental Disability Councils.
�RURAL AMERICANS AND HEALTH CARE
•
Rural Americans - a quarter of the nation's population - are hit hard by our
current system of health care. With fewer doctors and hospitals, very little
preventive care, growing numbers of uninsured, and rapidlyrisingcosts, rural
America experiences the worstflawsin our health care system.
•
Rural Americans truly know what it is to not be able to choose their own doctor.
In 1988, over two-thirds of rural counties did not have enough doctors and 111
rural counties had no physician at all.
•
More rural Americans lack health insurance than the rest of the country as a
whole. Even rural Americans who are insured have fewer choices, worse benefit
coverage, and pay more of their own money for medical care.
•
Rural doctors provide a lot of unpaid health care because their patients don't
have good health insurance. Many rural doctors are discouraged by the
difficulties of practicing in a rural area and their turnover is very high.
•
Rural families and rural doctors will be helped most by the President's plan
because they are hurt most by the nation's current health care crisis.
•
The President's plan will ensure that rural Americans will no longer have to move
to urban areas to get adequate coverage. All Americans will have the security of
a comprehensive package of benefits.
•
The Clinton plan will encourage more doctors to locate their practices in rural
areas so that all rural Americans can choose their own family doctor.
•
Rural families will have access to the highest quality care as the President's
reform sets up computer links between rural areas and big city hospitals to
increase access to the latest medical information.
The Task Fprgg Prpcess
•
Mrs. Clinton attended a roundtable discussion on health care in Iowa that focused
on the special needs of rural Americans.
•
At the public meeting of the Task Force, the National Farmers' Union and the
National Association of County Organizations presented their advice and
suggestions on health care reform. The National Farmers' Union has also been to
the White House to meet with members of the Task Force working group which
is studying the needs of rural Americans.
•
Secretary Shalala and Carol Rasco, President Clinton's Special Assistant for
Domestic Policy, attended a two-day Rural Health Care Conference held in Little
Rock, Arkansas.
•
The working groups advising the Task Force include many rural health care
experts from across the country.
�VETERANS AND HEALTH CARE
•
•
The President and I believe that America's veterans have demonstrated the
service to country that has kept our country secure, and they deserve the security
of knowing that they will never go without the health care services they need. Ihis
Administration will not leave the men and women who won the Cold War out in
the cold.
In today's system, the Veterans Administration covers all costs for providing care
to service-connected and low-income veterans. Under the President's plan, they
will still be guaranteed these benefits, and may have a broader range of choices of
where they can get their care.
•
In today's system, other veterans receive some health servicesfromthe VA.
Under the President's plan, this will still be the case, but all veterans will have the
security of knowing that they are guaranteed a comprehensive package of benefits
and access to the highest quality care.
•
In today's system, the Veterans' Administration is also an important provider of
long-term care services and has special expertise in other areas - like spinal cord
injury and prosthesis. And the VA will continue to play that role.
Task Force Process:
•
The VA has been meeting on an ongoing basis with the major veterans'
organizations on the health care issue.
•
Jesse Brown is a member of the Task Force, and members of his staff are a part
of the Task Force's working groups.
•
In the midst of government spending cuts, the VA received an increase of over Si
billion in funds in part because of the importance of the VA's health-care system
to the administration.
•
The Administration has been working closely with the House and Senate
Chairmen of the Veterans' Affairs Committees, Rep. Sonny Montgomery and Sen.
Jay Rockefeller, on this issue.
�PROVIDERS AND HEALTH CARE
•
The President and I are determined to maintain the best of the American health
care system - the highest-quality care in the world and an individual'srightto
choose a doctor.
•
But we understand that the health care system has grown so overregulated
and bureaucratic that doctors spend more and more time filling out forms
and less and less time with their patients.
•
The President's plan will reduce paperwork by standardizing forms and reducing
insurance company micromanagement
•
We understand that malpractice reform is essential to giving physicians back
professional autonomy and lowering health care costs caused by "defensive
medicine".
Helping Specialists:
•
The President's plan will reform malpractice laws in order to let doctors
determine what course of treatment is best for their patients, not what tests or
procedures have to be done to avoid getting sued.
•
The President's plan will recognize the importance of preserving and promoting
the unique and important relationship between doctor and patient
Helping Primary Care fhysicians:
•
The President's plan will provide incentives for more medical students to become
primary care physicians. By emphasizing preventive health care services, the plan
will place increased importance on the family physician.
TasH Forge Frpgess:
•
More than 100 health professionals - including more than 60 doctors - are on the
Task Force's working groups that are developing policy options. In addition, a
health professionals review panel of more than 40 people, including family
practitioners and specialists, has been charged with reviewing the options
developed by the Task Force.
•
White House officials have also held separate roundtable discussions with both
physicians and nurses. In total. Administration officials have met with more than
30 groups representing health professionals.
•
Ira Magaziner, the head of the Task Force effort, has met repeatedly with
the American Academy of Family Physicians, the American College of
Physicians and the American Medical Association.
•
Mrs. Clinton held a meeting witb representatives of several nurses* groups,
including the American Nurses Association.
�SUCCESSFUL MODEL PROGRAMS (Page Two)
XEROX CORPORATION
Before it reformed its health benefits system, Xerox experienced 20% increases every year in its
health care costs - which wererisinguncontrollably because their employees, isolatedfromthe
costs of their health care, chose very expensive and inefficient health care packages. In what's
been described as "an unheralded breakthrough," Xerox began pegging its contribution to its
employees' health care packages to the cost of the most efficient, or "benchmark", health care
plans.
Xerox offers a menu of health care options and then makes sure that employees either pocket the
savings offered by more efficient plans - or pay for choosing more expensive ones. Competition
among health care plans at each of Xerox's 250 sites across the country is the cornerstone of their
plan. All plans are screened each year to ensure that they meet high quality standards and offer
comprehensive benefits packages. Annual patient satisfaction surveys are conducted on a broad
slice of the work force. Customer satisfaction rangesfrom70% to 95% for a plan in Rochester.
As Xerox hoped, premium increases for all health care plans - especially the benchmarks — have
fallen significantly. Many employees have switched to the benchmark plans, whose average
premium rose only 7.7% in 1992 and willrisea mere 55% in 1993.
�STATE REFORM EFFORTS
In recent years, many states have developed innovative solutions to the health care crisis faced
by their citizens. Several of these, such as Minnesota and Hawaii, have moved far beyond the
pilot stage — enacting comprehensive new laws aimed at providing security to more people and
controlling their health care costs. Well over half of the states have enacted smaller scale changes
- including initiatives for controlling costs, reforming medical malpractice laws, and changing
insurance laws. For example, New York State has already enacted a law to make it easier for
small businesses to purchase health insurance and is now considering fundamental health care
reform. In March, Louisiana unveiled a program to bring medical insurance within reach of
600,000 people who earn too little to afford insurance.
OREGON
Oregon's Medicaid waiver is an effort to give one state the flexibility to design a Medicaid
program that meets the needs of its citizens. Their plan is fundamentally differentfromthe
Clinton proposal because Oregon attempts to extend coverage to more citizens by reducing
benefits. The Clinton plan will not ration health care but will overhaul our health care system
and use these savings to provide security to all Americans.
In March 1993, Oregon was granted a waiver to modify its Medicaid coverage and allow it to
expand health care coverage to more than 120,000 of its working poor - people who have frill
time jobs but remain below the poverty level These families will now be eligible for a standard
benefit package under Medicaid - including doctor care, medication and hospital services. To
provide for this increased coverage, the state ranked 688 medical treatments and conditions
currently covered by Medicaid according to such factors as "seriousness" and "ability of treatments
to improve the quality of life". 568 of these treatments - such as pneumonia, flu, appendicitis and
some cancers, and most organ transplants - are covered, both for current Medicaid beneficiaries
and the additional 120,000. The remaining treatments - such as expensive treatments for
incurable cancer - will no longer be covered.
HAWAII
Hawaii has moved closer to universal access than any other state through reforming and
strengthening its traditional system of private, employer-based health care coverage. It is
estimated that only about 2 percent of Hawaii's population remains uninsured - compared to
estimates of 153 percent nationwide. State officials note that while Hawaii's health care spending
has mirrored the national average, it has continued to provide increased access to health care for
its citizens.
88 percent of Hawaii's non-elderly population receives insurance from their employers as is
required by state law. Hawaii's remaining citizens are either insured by HawaiTs expansive
Medicaid program (which accepts a greater percentage of its low-income population than most
states) or through state-subsidized private health insurance (which is fully paid by the state for
those whose income is under the poverty level). All three programs - employer-funded. Medicaid
and state-subsidized - offer comprehensive benefit packages including medical, hospital, and
laboratory services. Although Hawaii established a "rainy day fund" for small businesses who were
unable to pay for their employees' insurance (as required by law), only 2% of small businesses
have had to use these funds.
�STATE REFORM EFFORTS (Page Two)
MINNESOTA - EMPLOYEE GROUP INSURANCE PROGRAM
In the late 1980s, Minnesota's Employee Group Insurance Program faced a crisis in health care
costs. Most of its employees were enrolled in a traditional Blue Cross/Blue Shield self-insured
health plan, which faced a $50 million deficit in 1988 and demanded a 1989 premium increase of
67 percent. To bring costs under control, the State reformed its approach to health insurance
purchasing.
The Minnesota program now offers six health plans - for which it negotiates rates and
comparable comprehensive benefit packages — to its 140,000 members. The employer
contribution toward the cost of coverage is based on the health plan that offers the lowest family
premium in each county, that plan is available at no cost to any employee. Employees who
choose the most expensive plans, however, must pay the difference. The Program conducts
patient satisfaction surveys to provide employees with information on the relative quality of health
plans.
Since the reforms were initiated, the rate of increase for health insurance premiums has dropped
dramatically - from 42% in 1989 to only 6% in 1992 and 1993. Al the same time, the health
plans with the best premium rates have experienced significant enrollment increases.
�FOREIGN HEALTH CARE SYSTEMS
GERMANY
The German health care system has provided cradle-to-grave health care for all its citizens for
more than a century while controlling health care costs. Germany's system is rooted in the private
sector -not the government - and is based on a publicly-supervised partnership between doctors
and insurers. These are characteristics which will also be part of the Clinton reform plan.
Everybody living in Germany - including the elderly and unemployed - is covered by health
insurance that allows them to choose their own doctor. Coverage is permanent; workers don't
lose insurance if they change jobs or become unemployed and insurance companies can't refuse
to insure a person because of a pre-existing condition. The system isfinancedby contributions
from employers and employees - each of which pay 65% of the worker's monthly salary. There
are no "hidden costs" - such as deductibles or co-payments. Fees for doctors and hospitals are
negotiated by non-profit, independent "sickness funds" - health insurance agencies for each area.
The government sets a yearly limit for the nation's health care spending which has helped to keep
health care cost per person to almost half U.S. levels.
CANADA
The Clinton plan shares many of the goals - cost containment, simplification, guaranteed benefit
package - of Canada's system, but will be significantly different We are committed to
maintaining a uniquely American system — one that builds on its employer-based system and
Tnamtflim the highest quality health care in the world, based on state of the art technology.
Canada's "single-payer" - or government funded - health care system consists of 10 separate
provincial plans with certain mandated features. Health insurance is universal - covering all
medically necessary hospital and physician services. To control costs, the government determines
hospital budgets and regulates both the technology and the prices of physician services. The
federal and provincial governments share the costs,financingthe system primarily through taxes.
There are no deductibles or co-payments, so Omartiam only pay extra for services that are not
covered, such as cosmetic surgery. Critics charge that this system has limited the use of hightechnology diagnostic and surgical procedures, producing waiting lists for some specialty care
services.
THE UNITED KINGDOM
The Clinton plan is w l modeled on the top-heavy British system, which is run entirely by their
government The Clinton plan wfll maintain a system based in the private sector and ensure diat
doctors make health care decisions.
England has a system of socialized medicine. Doctors, dentists and other health care
professionals are employees of the state, which owns and operates more than 2,000 hospitals
nationwide. This federal National Health Service offersfreecradle-to-grave medical care to all
Britons, andfinancesit through general taxation. Each person enrolls with a general practitioner,
who determines when to send the patient to a specialist A new market of private hospitals and
commercial insurers has sprung up for people seeking care outside the NHS; these compete on
price and quality and advertise prices for various procedures.
�HEALTH CARE TALKING POINTS
THE STATUS QUO
•
American families do not have the security they deserve. 100,000 people a month
are losing their coverage, and those who switch jobs or have a pre-existing
condition are not guaranteed coverage.
•
Americans are getting killed by skyrocketing health costs. Without immndiate
reform, the annual cost of health care for American families will more than
double by the end of the decade - to a whopping $14,000 per family.
•
The current system is broken - and it threatens your family's future and the
future of every American business.
•
We must take action now.
THE CLINTON PLAN
President Clinton will present a proposal for comprehensive health refonn to the
Congress in May. His plan will fundamentally overhaul the system while maintaining
your high quality of care and choice of doctor.
The powerful lobbies of the special interests are already lining up to block the
President's plan. But with your support, the President will break the gridlock.
The proposal will be based on the following principles:
1)
Security: The Clinton plan will provide Americans with the security of knowing
that they will have health coverage even if they switch jobs or have a preexisting
condition.
2)
Choice: The Clinton plan will allow you to choose your doctor. And most
Americans will have more choice of health plans. Under the Clinton proposal,
your employer or insurance company won't pick the kind of coverage you get —
you wilL
3)
Continuity: The Clinton plan will maintain the best of the current system: your
ability to get the highest quality care in the world and go to a family doctor.
4)
Affordability: The Clinton plan will make health care affordable again. And it will
control the spiralling costs that are strangling American businesses.
5)
Comprehensiveness: The Clinton plan will guarantee all Americans a
comprehensive benefits package.
6)
Simplicity. The Clinton plan will reduce paperwork for both doctors and patients,
and it will eliminatefraudand abuse. The health care bureaucracy wQl shrink
under the Clinton plan.
�AMERICA'S HEALTH CARE CRISIS: THE FACTS
THE GROWING RANKS OF THE MIDDLE-CLASS UNINSURED:
•
One hundred thousand Americans move into the ranks of the uninsured each month
More than half of the uninsured in 1990 were full-time workers and their families.
tWihrnton
•
I/*/** CSO]
More than one million of those who lost health insurance in 1991 were Americans
earning between $25,000 and $49,000. iHimachtdB m woothnfex, nw Qamtai Bpucak «r
Uniamimnce*, 12/92]
AMERICANS WORRY ABOUT LOSING INSURANCE:
•
One out of every three Americans who earns between $30,000 and $50,000 report that
they or someone in their household stayed in jobs they wanted to leave because they
were afraid of losing their health care coverage. tussJCoUkuk^/n)
•
61 percent of Americans worry a great deal that health insurance will become too
expensive for them tO afford. [Katatr/Commomalth/HaaiM/n]
AMERICAN FAMILIES HURT BY SKYROCKETING COSTS:
•
Health care spending per person has almost quadrupled - from just over $1,000 in
1980 to more than $3,100 last year. [HCFA. BUTTM or EBBOBX AaMiym]
•
If we do nothing, experts estimate that the annual cost of health care for an
American family will more than double by the end of the decade - to a whopping
$14,000 per family. Workers will lose $655 in income each year if health care costs
are allowed to continue to eat up wage increases. [FsmUks us* OMB]
SMALL BUSINESSES HIT HARDEST.
•
Two thirds of small businesses provide their employees with health insurance; the
rest would like to but can't afford the 20 to 50 percent premium increases that only
small businesses face, rwnhinwon PM. 1/26/9* Nitwui smis BMMS iMad]
•
Small companies pay premiums that are one third higher on average than large
employers and these premiums have continued to increase 50% faster than premiums
for larger employers, pfetnu] smo
iwod]
U.S. COMPETITIVENESS AND VS. WORKERS SUFFER:
•
In 1990, GM spent $32 billion in medical coverage for its 1.9 million employees and
retirees. This was more than the company spent on steeL Health care costs add
$1,100 to the price of every car made in America - double the cost added to
Japanese imports. lUotvcaty cr Huup*, 199* TIME, U/B/B)
•
In 1992, American businesses paid almost $4,000 for health care for each employee
- more than twice as much as they paid eight yean before. If the current pace
continues, some estimate that this amount could rise to $20,000 a year for each
employee by the year 2000. ptobeit wood johma; Qnteto sdem* Monitor u/ajn}
�AMERICA'S HEALTH CARE CRISIS: THE FACTS (Page Two)
U.S. DEFICIT INCREASES WHILE OUR INVESTMENT FALLS:
•
If we do sothing, health care spending will risefrom14% of GDP today to an
astonishing 18% of GDP in the year 2000 - meaning that seven yearsfromtoday,
almost $1 out of every $5 earned by Americans will go to health spending. More
than half of the expected $738 billion increase in federal revenue in the next four
years will be absorbed by health care cost increases. (OMKLnMcq
•
The potential "health dividend" is far larger than the "peace dividend". If America
spent the same share of our national resources on health as our main international
competitors - who insure all their citizens - $230 billion (or 4 percent of GDP) in
1992 could have been used for additional investment or to almost completely
eliminate our $290 billion deficit, (OMBJ
�- <
GLOSSARY OF HEALTH CARE TERMS
Academics describe the Clinton plan as a combination of "managed conpetition" and
"global budgets". That means:
•
Giving consumers the power to join together in local health alliances to obtain the
highest quality care at affordable prices.
•
Gradually bringing down health costs to ensure that costs stop risingfourtimes
faster than inflation.
•
Providing a comprehensive benefits package to every American.
The Clinton plan will provide security and peace of mind to American families, so that
you don't have to worry about losing your insurance when you switch jobs or being
denied coverage because you're sick. And it will maintain the highest quality care in the
world and therightto choose your doctor.
Below are definitions of some of the terms often used in talking about health care. We
provide a comprehensive explanation followed by a simple explanation that people can
relate to.
COMMUNITY RATING:
Setting health insurance premiums based on the average cost of paying for services for
all covered people in a geographical area, regardless of their history of (or potential for)
using health services. Although this was the system used successfully by Blue Ooss &
Blue Shield for years, insurance companies do not currently cover people this way.
Translation: Everyone who lives in the same area pays an equal amount for health
insurance. Instead of letting insurance companies make a lot of money off a small
number of people, they will make a little money off a lot of people - doing business like
a supermarket. Insted of avoidingrisk,insurance companies manage risk. Moving
insurance companies toward community rating is one option being discussed for inclusion
in the Clinton plan.
COINSURANCE (COPAYMENT):
Ihe portion of the bill for a medical service that must be paid by the patient
(coinsurance refers to a percentage; co-payments are stated as flat amounts).
Translation: What the patient pays for each medical service received.
COMPREHENSIVE BENEFITS PACKAGE:
The health care services that wQl be covered by every American's insurance.
Translation: The Clinton plan will guarantee a comprehensive benefits packageforevery
American.
�GLOSSARY OF HEALTH CARE TERMS (Page Three)
MANAGED COMPETITION:
An economic theory that organizes health care deliveiy andfinancingin an attempt to
combine the best elements of government regulation andfree-marketcompetition. Those
paying for care are organized into large groups, and providers then compete for their
business.
Translation: A way to put people in the driver's seat so that they can get the care they
want at an affordable price. This idea is influential in the Clinton plan.
PAY-ORPLAY:
An approach to increasing insurance coverage by requiring employers to make a
contribution toward covering workers and their families. They may choose either to
•play" - buy private insurance for their workers - or "pay" a set amount, usually a
percentage of payroll, to help pay for covering the workers in a government-sponsored
plan like Medicare. This is one form of an employer mandate.
Translation: Not the Clinton plan - this tells employers they must either cover the
employees or pay the government to do it for them. Makes employers pay more without
controlling costs.
PRE-EXISTING CONDITION:
A medical condition of an insured individual thatfirstbecomes known before the policy
is issued. Insurers often choose not to cover such a condition, at least for a period, or
may raise rates because of it Pre-existing conditions include such conditions as asthma,
mental illness or allergies.
Translation: A medical problem that insurers often use as an excuse to deny you
coverage under the current system. The Clinton plan is likely to include a way to prevent
peoplefrombeing denied coverage because of pre-existing conditions.
SINGLE PAYER:
A health system - like Canada's - that would designate one entity (usually the
government) to function as the only purchaser of health care services.
Translation: Not the design of the Clinton plan. This is health care paid for and
supervised by the government; the Clinton plan is based in the private sector. However,
states that wish to experiment with this approach may well have the option to do so.
�UNIONS AND HEALTH CARE
•
Health care costs are the number one cause of labor-management disputes in the
country.
•
With a guaranteed, comprehensive benefits package, unions will no longer bee
the tradeoff between health benefits and wage increases.
•
Some fear that what academics call "managed competition" will result in worse
benefits for workers that have done a good job negotiating for comprehensive
benefits from their employers. While iht specifics of the President's plan are not
yet decided, this will not be the case:
•
•
•
Workers, in fact, will likely have a broader range of choices for health care
plans, many of which will be more cost effective than today's plans.
•
The comprehensive benefits package available to every American will be
based on the best of today's benefit plans.
•
American workers will no longer have to fear that losing their job or
switching jobs will mean losing their health care coverage.
Skyrocketing health costs also make it harder for American companies to compete
in a global marketplace:
•
Health care costs add more than $1100 to the price of every car made in
America; that's more than double what the Japanese spend.
•
The U.S. spends twice as much on health care than the average total costs
of the 24 industrialized countries in Europe and North America.
Many labor unions support the single-payer approach to controlling costs. And
single-payer advocates and the President agree: there is an argent need for a
fundamental overhaul of our health-care system.
Task Force Process:
•
Many unions have been included in White House roundtable discussions cm
health care.
•
Mrs. Clinton has met witb the AFLOO executive board to discuss health care
reform.
•
Ira Magaziner, the head of the Task Force effort, has met regularly with
representatives of the AFL-CIO. He has also met with the SEIU and spoken at an
AFSCME meeting.
�SINGLE-PAYER ADVOCATES AND HEALTH CARE
Single-payer advocates and the President agree: there is an urgent needfora
fundamental overhaul of our health-care system.
Many elements of single-payer models - cost containment, simplification, reduced
paperwork, a guaranteed, comprehensive benefit package and universal access are things which the President strongly supports and which will be central to Us
plan.
Like single-payer plans, President Clinton's health reform plan will squeeze the
waste, excess and inefficiency out of our present system and use those savings for
health care reform.
But the President believes that by putting the government in charge of the healthcare system, a single-payer system might create too much government.
The President is committed to maintaining a uniquely American system - one
that is rooted in the private sector, provides the highest-quality care in the world
and preserves therightto choose your doctor.
The Clinton plan is likely to provide states with enough flexibility to design a
single-payer system within theframeworkof the national system if states so
choose.
Task Force Process:
The White House held a roundtable discussion with single-payer advocates,
including AFSCME, Gtizen Action, National Council of Senior Gtizens.
White House officials have met with representatives of more than 20 single-payer
advocate groups.
Ira Magaziner, head of the Task Force effort, spoke at AFSCMFs annual
convention and has met with several groups who have traditionally supported a
single-payer approach.
The March 29 Task Force hearing was addressed by the Ntaional Council of
Senior Gtizens, AFSCME, Teamsters, Gtizen Action and National Council of
Churches - all traditional single-payer advocates.
�.— —
•#
PRELIMINARY WORK PLAN FOR THE INTERAGENCY
HEALTH CARE TASKFORCE
�PRELIMINARY WORK PLAN FOR THE INTERAGENCY
HEALTH CARE TASKFORCE
TABLE OF CONTENTS
Background
1
Work Modules
5
Organization of the Taskforce and Schedule
16
Staffing
21
�BACKGROUND
The United Stales is in the midst of a hcallh care crisis.
Health care costs are Ugh and growing sqndly (14 percent of GDP in 1992, expectrd
to reach at least 18 percent by 2000). Rising health care costs are placing a otmendoni
burden on individuals, businesses, and govenmeots and ait erasing gams in living staadndi.
Rising costs axe also causingfirmsto drop or est healdi care bcuefili and preventing
people with pre-existing conditions or icrious medical needsfromgetting insunnce. Al least
35 million people do not have insurance; many others have inadequate coverage; sdU othen
are at risk of losing coverage.
To meet the objectives of controlling costs and ensuring univenal access, we nuut
move immediately torestructnrethe nanon's health care system.
a
Jhf Carnr ifr" Health Care Plan
The health care plan outlined by President Clinton during his campaign contained dte
following principles for providing universal access to affordable, high quality health cue for
all Americans.
A National Health Board would set a standard comprehensive benefits package for
all Americans.
•
All employers would berequiredto pay a percentage (perhaps 75-80 percent) of
the cost of a standard plan fat their employees and dependents. Hence most
people would continue to have largely employer-financed coverage. The fedexal
government would assist small companies in die early yean so that this
requirement would not cause undue hardship.
•
State-based Health Insurance Purchasing Cooperatives (HIPCs) would manage
compeution among private healdi care plans on behalf of at Inst small businesses
and individuals who lack negotiating dout Businesses not included in HIPCs
would negotiate witb providers to offer the basic package directly to their
employees, much as they do today.
•
Specifically, diese HIPCs would negotiate premiums, distribute infonnarion and
marketing materials to consumers, andrisk-adjustpremiums to prevent advene
selection. Consumers would choose among these plans during an open enrollment
period.
•
The unemployed and odier non-wodceR would be entitled to buy a plan oo a
subsidized basis through the HIPCs.
n-tt-ft
- 1-
�By building on oar existing employer-based system, this scheme would minhnue the
disruption and public cost assodated with expanded access. It favbn consnmer choke and
private provider competition in aQocatmg healdi services.
The plan (often described as managed competition widi global budgets), would provide
a new market structure within which competition could work to ensure efficient care delivery
and control costs.
•
Insurancereforms(standard benefits, no medical underwriting, community sues)
would provide individuals freer duke of plans. HIPCs and large companies
would drive tough bargains with insurers eager to sign qp the ummiirji they
represent
•
Thereformswould stimulate conpetition oo price and quality among insuren;
prevent risk selection and encourage insurers to promote efficiency.
•
Consumen would be given incentives to choose efficient plans. This could be
done through mechanisms such as:requiringconsumen buying more expensive
plans to pay for added costs above a "benchmarkpremium, rather than
employers; or taxing these added payments if made by companies for employees.
1
•
Insurers would be heldresponsiblefor controlling costs. They would likely
replace uncontrolledfee-for-servicesystems with new payment mechanisms (e.g.,
capitated payments, salaried doctors). These systems would likely hold providers
accountable for managing die volume and quality of care.
While this competition and consumer incentives would likely slow die growth of
health costs, global budgets, enforced by the National Healdi Board, would guarantee results.
•
Per capita state budgets would put a limit on HIPC spending, limiting premiums if
competitive bidding Ms short The budgets also would limit premium costs
outside HIPCs. The budgets would be set to bring healdi care inflation in line
with overall economic growth over time.
•
States where competition among plans is not possible or desired may regulate
provider fees in order to meet die budget
Likely Criticisms
Any comprehensive healdirefonnplan will be controversial. Sane criticisms would
apply to any plan; others are specific to thetypecf managed competition widi global budgets
proposed by President Clinton. Qitidsms are likely to center on the following arguments:
1.
Cost containment would be ineffective and have perverse results.
•
Little evidence exists that managed care networks will produce efficiencies and
thus deliver the cost containment werequire;theresultwin berelianceon existing
perverse behaviors (e.g.,riskselection, claims denials) to meet global ceilings.
-2-
�•
2.
Limiting spending on health caretinoaghglobal budgets will lead to
rationing, and interfere widi quality improvements and consumen' traditiooal
freedom to spend.
Universal coverage would involveredistdbutionof income and disrupt satisfactory
arrangements for many Americans. Theremitwould be to increase rather than reduce
many Americans' costs of care.
•
Community rating of insurance prexniuxns would raise costsforcaready insured
populations who are young, flV «Wl healthy.
m
•
"Recapture" or other taxes needed to apply private savings toward access would
tax healthy currcmly insured people.
Taxation of benefits above the nationally mandated package would put a burden
on some woridng middle class fiunilies.
•
3.
4.
Requirements to purchase coverage would lower disposable incomes for
individuals who have gone widiout healdi insurance.
The plan would be cumbersome:
•
Consumers would have to deal with new and unfamiliar agencies ("puichasing
cooperatives") and choosefromamong plans they fed ill-equipped to evaluate.
•
Unanticipated baxriers to service would be erected when people are sick,
•
Unanticipatedfinancialobligations would be imposed on people who wanted to
use providers not included in their plan.
Many small businesses mayfiercelyresistthe proposal.
•
Even with subsidies fortow-wageor newly insuring employers, our plan would
impose premiumrequirementsthat small business groups and other critics will
challenge as:
-
A "payroll tax".
-
A threat to current jobs.
-
A threat to small business development and job creation.
In designing ourreforms,we must take cognizance of these potential criticisms. We
need to allow states flexibility to use alternative models that may make senseforthem.
In developing thereformstrategy, we wiD work closely with Congress and the health
care community to ensure diat we are effectively addressing their policy and pohtical
concerns.
-3-
�This work plan is preliminary. Ii will be revised many times as we progress.
-4-
�WORK MODULES
The goal of die interagency taskforce is to prepare comprehensive healdi care reform
legislation in the next 100 days. This will require detailed policy work and a rffifi—m
outreach effort. This preliminary work planrifrncnifrfffdie wodc to be done.
POLICY ANALYSIS
There are at least seven areas of analysis'necessary to farm die comprehensive healdi
carerefonnpackage.
1.
Defining die structure for die new American healdi care system proposed in the
campaign - Managed Competition Within a Budget
2.
Planning the phase-in of guaranteed universal healdi insunnce under the new
system.
3.
Defining options by which health care cost increases can be controlled during
the next few yean as die new system phases in.
4.
Developing ways for diefederalgovernment tofinancethe new system,
capturing private health care savings to cover universal access and possibly
contribute to deficit reduction.
5.
Devising programs to make short-term improvements in preventive care and in
care for underserved populations.
6.
Defining programs for improving long-tenn care.
7.
Analyzing the economic impact of current health care policy versus our proposed
policies.
1. Managed Competition Within a Budget
The model that President-elect Clinton has proposed for health care in the United
States does not exist anywhere in practice. The campaign proposal, while sensible
conceptually, needs significant definition. Some of die key questions which must be
answered are:
•
What constitutes areasonableguaranteed benefits package? If the chosen
package is too dun, a multi-tier health care system will develop based oo
income; if it is too comprehensive, cost increases may be difficult to control
-5-
�How should budgets and the awxiaiirri premium caps be set? Who should
set them? How should they differ by state? Should there be different
capitations based on the healdi status of individuals and how should they be
detennined? Should there be areinsurancesystem and how should it work?
How should rates of increase be detennined from year to year?
How should a state global budget be set and enforced? How can die plan
discourage the evolution of an elite system which "busts the budget?" How
should taxation for benefits above the guaranteed package be implemented?
How will the state puichasing cooperatives wodc? Will certain cnmpamts be
required to participate? Will Medicaid be folded in? Wjn individual choice
of insurance plans be preserved through the HIPC?
How will states monitor die solvency andreliabilityof insuren and enforce
community rating? How will states guarantee competition wink preventing
"fly-by-night" insurenfromadversely affecting consumen? How will states
be sure that insuren are notfindinghew ways to compete through
underwriting?
How will quality of care be measured and improved? How wQl quality be
ensured without burdensome micromanagement of health care processes?
How can the system move towards meaningful outcome measurements? How
can "best practice" information be collected and disseminated efficiendy?
How can we be sure that cost control does not lead to lower quahty care?
How will administrative savings be realized? How do we create universal
quality andreimbursementforms? How do we create an efficient patient
information system? How do wereconciledie desire of different health care
insuren to control costs and utilization in their own way with die need for
simplification of provider paperwork?
How will the malpractice system work? Whatreviewmechanisms will be
built into health networks themselves? Under what circumstances will
lawsuits be tolerated? Will there be caps on awards? How will malpractice
insurance be sold?
Whatrestrictions,if any, will be placed on die type ofrelationshipwhich can
exist between insurer and provider? Will providen be free to affiliate widi
multiple insuren? WQl hospitals be permitted to deny userightsto
physicians not participating in affiliated plans of that hospital?
How will drug price increases be controlled? Mil this be done nationally?
How can we ensure that innovation is not stifled?
Will states be permitted tofoldtheir woricen compensation health care
systems into the new health care system? How would this work?
-6-
�How will the employer mandates be enforced? WiD cxajipanica be nqmred to
cover part-time employees? What will happen to enntnt retiree
commitments? How wiD seasonal employees or employees oo layoff be
handled? Will individnal insunnce memberships be portable?
To what extent will insuren be penmded to cfier packages which differ from
the nationally guaranteed package? If they can, how can complexity and its
extra costs be avoided?
•
How will the national and state boards be constitsted? How can we
that they will be representative bodies? How will their activities be limited
bylaw? Do we envision the boards or legislatures or some odier mrrhanisms
as agents of system change?
•
How much flexibility will stales be given to operate systems other than
managed competition as long as ihey stay within the global budget? Will a
small state be allowed to operate a Canadian-style single payer model system
if it chooses?
Can doctors, hospitals and nursing homes opt out of die system entirely and
work on a fee-for-service or own insurance basis and befreeof spending
caps? If so, then might we be creating an elite system for those who can
afford to pay more? If not, then are we denying people basic freedoms?
How will we ensure an adequate supply of primary care professionalsforthe new
system?
What will be die underlying ethical guidelines for the system? Will rationing
be explicitly condoned or prohibitedforcertain tests and procedures? Will
living wills or other similar mechanisms berequiredor encouraged? Will
ethicalreviewpanels berequiredforprovider or insurer groups, etc.
•
How should the DOD and VA systems be integrated with the new national health
care system?
These are only a small number of the key questions which Will need answering about
the new system we will be creating. The transition team has done a good job of exploring
answers to some of these and otherrelatedquestions, but a tremendous amount of work is yet
to be done.
The issues raised by diese question can be addressed by diefollowingwork modules:
•
•
•
•
MevmANn-u-n
The Benefits Package
Budgets and Caps and How they will function
Insurance Reforms, Organization of the HIPC and state ovenight of Health
Networks
Health Care Quality Assurance
Administrative savings. Reimbursement Systems, and Patient Information Systems
Malpractice Reform
-7-
�Drug Price Controls
Organization of Employer Mandates and Subsidies to Employers
Organization and Mandatefordie National Board
Ethical Guidelinesfordie System
Integration of VA and IXX) Healdi Cue
Health Care Workforce Development
7. ContmlliTig System Cim TTVTMUM in ftc Short R m
w
m
m
Comprehensivereformof the health care system winrequiretimeto " p** *
However, the current upward trajectoryforhealth care costs suggest that actions must be
taken more quickly to control costs in order not to imperil economic progress.
1
There are no easy options. We must explore the options which do exist and draw up
proposals to control the costs of health care while a new system is being insritnted The
President may or may not choose to adopt such measures, but if he does, they should be past
of the comprehensive bill.
Relatively litde wodc has been done by die transition team on this topic. Some
options which should be explored are:
Various means to institute cost contxols.
•
Ways to extend Medicare rateregulationto private insurance systems or to
institute some other form of all payer rate regulation.
Ways to accelerate the move to managed competition wuhin a budget
•
Ways to introduce global budgets or caps soon even if managed competition
takes more time to phase-in.
Ways to elicit voluntary controlsfromthe health care industry.
•
Ways to provide incentivesforsates and private entities to manage care more
efficiendy.
•
Ways to use tax incentives or penalties to influence otitiration and price of
health care services.
•
Other means not yet identified to control costs.
Any policy option we choose would likely be temporary, and so phase-in and phaseout mechanisms must be createdforeach option.
Each of these options is complex and will lead inevitably to a series of unintended
consequences. Our analysis must explore detailed options for implementation to identify risks
and to design "fall back" mechanisms as appropriate.
-8
�In addition to economic and cost analyses, we should conduct extensive legal and
political analysis of each of these options since most willrequireregnlattaylegislation and
congressional approval against Seme lobbying.
?. phasing-^ Vqivgnal QgvffW
The transition team and most Democratic policy analysts astoriatrd with die campaign
have done much work in this area. As aresult,there is a comprehensive body of analysis
upon which to buOd this part of our wodc
Embedded in all of this work, however, are a series of assumptions which represent
policy choices. Most access proposals include assumptions on increasing Medicaid
reimbursement schedules, extending subsidies to people between 100 percent and 200 percent
of the poverty level, subsidizing small companies as they begin covering their employees, etc.
These must be decoded and separated into discrete piecesforproper decision making.
Access proposals also include crucial assumptions on cost and ntiliiation of care by
those now uninsured and underinsured and about how die insurance market wiD change as
access is phased-in. These assumptions must be examined so that a range of possible cost
outcomes can be projected and risk properly evaluated.
Cost savings realized from universal access should be calculated and weighed against
the extra costs associated with greater utilization. These calculations can only be made in
ranges, but we must understand the boundaries of potential impacts.
Finally, we should create a model which will allow us to analyze alternatives for
phasing-in universal coverage with implications for population served, cost to the system,
budget impacts for states and the federal government, demographics, demandforproviders in
under-served neighborhoods, etc.
Depending on definitions and program stnicture, universal access could mean $30
billion or $90 billion of additional annual expenditure by the government by 1997. Despite a
good start, we have a great deal more work to do to choose our program design and schedule.
4. Federal Financing
As we design both the short- and long-term programs, we should develop options for
recapturing some private sector savingsforfunding universal access and possiblyfordeficit
reduction.
Most system savings under almost any set of policy options will be generated in die
private sector. We must decide what level ofrecapturewe want to affect Then we must
choose among a number of options on how to do it Some possibilities are:
Allowing insurance premiums to go up somewhat faster than intended and
taxing the premiums.
-9-
�•
Raismg a corpome tax to captart part of the savings corporations wQl realize
firom slower premium growth.
•
Taxing benefit plans offering coverage above a certain level
•
Reducing uncompensated care payments.
•
Instituting higher taxes on alcoholic beverages, tobacco products, pollutants,
guns or other products which couuflxue to health problems.
•
Creating a tax on non-critical service usage.
•
About 20 other alternatives.
Theserecapturemechanisms are crucial torealizingpositive effects from healdi care
reform for the federal budget They will be complex to design ecooomically as they must be
efficient and equitable.
They also will be hard to design politically. We will need to crate program designs
which linif private sector savings to the capture mftrfmnifmy and which link die capture
mechanisms to funding of universal care. Methods of linkage win be pan erf the formulation
of each option.
Finally, we will need CBO scoreablerevenueestimates for each of the options we
develop.
5. Short-term Improvements
There are manyrelativelyinexpensive extensions of care which we canrecommendto
be implemented immediately. These will be both good health policy and will also assist us in
designing a package with broad appeal
Some possibilities include:
Immunization programs.
Enhanced funding for community health centers in disadvantaged
communities.
An AIDS program.
More funds for women's health research.
Increased assistance to pregnant women and young children now receiving
inadequate care.
Preventative health programs.
-10-
�•
A dozen othersfromcampaign docoments and leporo of "drink tanks."
We should cieate a detailed analysis of each measme which would include:
•
Demonstration of need for the program.
•
Population to be served.
•
Precedent for the program, if any, in states, cities or other countries.
•
Implementation mechanisms which w»friwT» total program dollars spent for
consumer benefit, notforadmimstranon.
•
Total costs under a variety of program options.
•
Likely supporters and opponents of the program.
Those who will benefit and those who wiD be prnaliird by die program.
Former legislative proposals which resemble the proposal
We should follow a common format so diat we can weigh the advisability and impact
of each of these programs against one another, should we not be able to propose them all
6. lonR-term Care
While fully funding long-term care would be costly, a comprehensive health reform
package without some provisions for addressing long-term care problems may be flawed
economically, socially and politically.
We should research and present a series of long-term care options, some of which
address full phase-in of long-term care insurance and others of which provide shorter-term,
less expensive means of addressing problems now experienced by diefrailelderly and
disabled.
Some include:
•
Establishment of a contributory insurance schemefarpeople to pie-fund kngterm care. This could include tax incentives and/or mandatesforindividuals
to contribute or raises in social security taxes or cuts in OOLAs widi divened
funds used entirelyforlong-term care, or a variety of other options.
•
Increased access to home care as an alternative to nursing home and hospital
care including waivers to allow funding for hmntmakn- services.
Increased funding for community senior centers to enhance their ability to
provide health, transportation andfoodservicesfarneighborhood elderly.
- li-
�r-
Increased drag coverage under MBd aie.
The AARP, Gray Panthers and The Roosevelt Groop have a nomber of other
proposals on the tableforenhancing long-term caie. We shoald analyze them
and prepare to include some in our defiberations, should die President choose
to do so.
7, EwnomiciBBflci
Since any major healthrefonnis almost iby definidoo also a major economic program,
we should analyze die economic effects of currenl policy as well as die efifects of our
recommended policies.
This analysis should include:
•
A definition of the current impact of die healdi sector on the economy and
anudpated impacts if current trends continue.
An analysis regarding the transition issues as we move from the *nni«if situation
to the one contemplated by thereforms.En particular, we should consider such
issues as the nature and impact of efforts toreducedie rate of growth of healdi
costs; and the form and significance of efforts to transfer cost savings. In general
public policy has not considered transitional issues and effects with sufficient care.
With a program this big, we should try.
•
A definition of all the distributional tradeoffs diat will occur so diat we can
answer "who is better off and worse off" questions diat normally accompany
budget or tax changes.
•
A description of the economy diat winresultas a consequence of die reforms.
This analysis should include the effects erf growing health care costs on GDP growth,
personal income growth, wages, the cost levels of U.S. companies, Corporate profits, etc.
This analysis will also be useful for the public campaign the President might have to lead if
one of the more active cost control options is fallowed.
Finally, as President Ointon asked, the analysis should include a comparative
presentation of why U.S. costs are so much higher than costs of our major competitor nations.
This will be useful both for our background planning and for the public campaign.
QVTKEACH
In addition to policy work, the taskforce should plan serious outreach activities. The
policy work cannot be done in a vacuum.
-12-
�Cgitfti^ncY Uaiam
A significant outreach effort will berequiredto secure views from the eoonnous
number of groups interested in healdi care.
At last count, there are at least ISO interest groups who have weighed in each time
health carereformhas been discussed, not ^"*'"g individnal ™^p«m»« or state or local
lobbyists who visit Washington. There are also many health care policy experts and ordinary
Americans who will wish to be heard.
We should develop a capability toreceivediese inputs on a fystemadc basis. Many
may be useful. These people will also help us as sounding boardsforideas and they wQl
help give us information on the political "lay ofthe land."
This activity should be conducted systematically widiregularlyorganized sessions,
formal mechanisms for the submission andreviewof memos and papers, organixed
assessments of who are potential supporters, etc Since time is short, this activity must begin
quickly.
We must alsoreachout to citizens' groups around the country to be sure that not only
the most powerful and loudest lobbyists have impact on our process.
Congre$sipnal and IntsrgpvcTHPeBttl LiWOT
We should involve keyrepresentativesfromrelevantcongressional committees, and
from the governors and mayon as soon as possible in our process. Interaction widi diese
groups should also be systematic and frequent so diat we don't proceed toofordown paths
which are "non-starters" for them. This will also help us build support for the eventual
program.
Communications Effort
Reforming the health care system will involve government-led changes on a scale not
attempted since Social Security. People are callingformassive change, yet their support for
individual plans is very weak. We should convenefocusgroups to conduct research
conducted to test the political appeal of options under discussion. We should ettahliih a
communications effort to begin the process of ertnrating the public about the nature of the
problem and the kinds of changerequired.The public campaign for healthreformcould
involve a health care summit. First Lady visits and satellite tours across die country, a wellproduced half hour infomercial, and other strategies. Once the President decides on the
proposal, the communications group would proceed widi die marketing of die plan.
Taskforce Coordination
The taskforce must accomplish a complex task in a short period of time. Efficient
coordination will be essential
-13-
�Coordinated Analysis nf Fiscal. Health ancf Ftmfnfc IrWTP
Currently the federal government has nmneroos, ovedepping daa coUection and
analysis groups -who will weigh in on healdi reform. HHS has two different groups who can
do analysis of costs and savings, business and economic impacts, and healdi care effects one in HCFA's Office of the Actuary and another in the Agency for Health Cue Policy
Research. In addition. Treasury, Labor, Commerce and OMB can - and will - analyze some
aspects of healthreform.Finally, Congressional Budget Office and ^Congressional Research
Service have their own analytic raparitirs.
In order to avoid having conflicting and competing assesimciitt of difierent reform
ideas, the transition team had already begun the process of coordinating these (fiffercnt
analytic capacities. The analytic operations also need to be roontinatrrl so that individnal
issue area task groups can produce analyses with common assumptions and methodsLegal and Drafting Group
Because this will be a complex bill or set of bills, we wfll need a legal group who can
explore questions ofregulatoryauthority, jurisdiction, interaction widi existing bodies of law,
potential legal challenges to provisions, etc. We don't want tofindlegal problems with our
proposals too far down the line.
Both our potential short-term cost controls and our long-termreformof the system are
likely to make some people very angry. We must be sure that our proposals are not
preempted or overturned due to legal problems.
We should create a legal team to monitor all policy development.
We must have a legislative drafting team which begins work early in order to capture
accurately and comprehensively, the full intent of die policy proposals. We must have
sufficient time to avoid sloppy drafting. Although some drafting flaws can be worked out in
Congress, the administration could lose control of the process if drafting is not done
thoroughly before the bill is submitted.
Audit Group
We should have an audit team which checks all numbers used in oar analysis. The
function of this team is to challenge numbers to be sure that they are accurate. They also
should make clear all assumptions so that decision makers understand therisksinherent in the
numbers upon which policies are formed.
Midway through the process, we should create a group of outsiden to die process
including health care consumers, providers and policy experts to serve as "devils advocates"
to our proposals. They should be asked to cast a critical eye on our woric so that we can
nanm
- 14 .
�improve it or at die very least, understand better oar plan's weaknesses.
Task rorc? Cfrwtimirimi
Since this is a major undertaking, we will need to planforthe nonrrtinarioo of die
taskforce itself. The taskforce will involve repraentativesfromthe Domestic Policy staff, die
Erst Lady's staff, HHS, OMB. Iteasnty, Commerce, Labor, Veterans Affidrs, DOD, Ihe
National Economic Council, White House Concessional Affairs, While House
Communications, White House Public Affairs, White Hoose Iniagovexnmental Relations and
possibly other groups.
A nomber of work teams must operate in parallel Coordination will be —r-^r
-15-
1
�ORGANIZATION OF THE TASKFORCE AND SCHEDULE
While tasks and groupings wiD change as we proceed, I suggest initiaDy organizing
the taskforce into nine clusters and 30 task groups within those dusters. (Exhibit 1) Each
cluster should have a coordinator as should each task group, g^h-jnirf wodc plans,
presentation dates, and monitoring formats shoald be set up for each group.
A small core group of clutter leaden ,fl»pifflnfntalfirrrfqHatrTT amf nm* kry
outside reviewers shouldformthe strategy groop which pulls togedier die wodc of the duster
task groups and which prepares successive drafts of the ultimate report and Irgislarinn
The schedule (Exhibit 2) is organized according to a "toll gate" model ToD pie"
organization models are used in corporationsforrv^f^ planning or product development
projects which must be accomplished at an accelerated pace. TdD gates" are a series of
reviews, each of which has specific defined criteria which must be met by a wodc group.
The seven successive reviews serve as interim deadlines for each duster group. The
group must pass each of these reviews in order to proceed with its activities, hitinsway,
problems can be identified and dealt with in an iterative fashion.
Thefirsttwo "toll gates" involve charter definition and broadening of scope to be sure
all important ideas are pursued and all relevant contracts wiD be made. The middle "toll
gates" involverigorousanalytic hurdles andresultin a narrowing of options and eventual
selection among options.
The last few "toll gates" include:
•
Increasinglyrigorousnumbers checks by auditors and actuaries to ensure that
all numbers used and assumed "add up" and are relevant
•
Legalreviewsto make sure that all proposals meet the test of potential
legal challenge.
Politicalreviewsto ensure feasibility.
Outside constituencyreviewsin a controlled manner.
Throughout thereviews,of course, die President First Lady, Vice Resident, Domestic
Policy Advisor and Cabinet Secretaries wiD be driving the substance of policy formation.
The following rough schedule assumes a 100 day submission date for the biD after die
inauguration. Toll gates" and a more detailed work plan wiD be defined by the week of
February 1. The detailed work plan to be done the week of February 1 wiD speD oat a
weekly "to accomplish" task list for each work group.
The schedule is tight, but can be met
- 16-
�JM
: 11
ORGANIZATION
THE CLUSTER TEAMS
Ouster I • The Loog-tenn Plan
Team IA
IB
IC
ID
IE
IF
IG
m
n
u
JK
IL
The Benefits Package
Budgets and dps aod fktw they will function
Insurance Reforms, Organizatioo of the HIPC and state oversight of
Health Networks
Health Care Quahty Assurance
Administrative savings. Reimbursement Systems, and Patient
Information Systems
Malpractice Refonn
Drug Ptice Controls
Organuation of Employer Mandates and Subsidies to Employers
Organization and Mandatefordie National Board
Ethical Guidelines for the System
Integration of VA and DOD Health Care
Health Care Workforce bines
Cluster n • Short-Term Costs Control Plans
Team EA
HB
nc
Cost Controls
Rate Regulation
Acceleration of Managed Competition and Global Budgets
Use of Incentives of Various Sorts
ED
Cluster HI • Phasing-in Universal Coverage
Cluster IV - Federal Financing Options
Cluster V • Short-term Initiatives
Ouster VI - Long-term Care
Ouster VII > Economic Impacts
Ouster Vm • Liaison
Team VIIIA
vnm
vmc
vmD
Congress
Constituency Groups
State and Local Government
Ouster IX - Management of Taskforce
Team KA
KB
KC
Numbers Audit
Legal Audit
Drafting
-17-
�EXHIBIT 2
SCHEDULE
1 Week of:
January 18
• Choose and assemble cluster leaders.
• Review all transition materials and debrief transition teams.
• Approve schedule and preliminary work plan.
January 25
• Prepare detailed work plan for each task group.
• Secure staff for all teams.
• Conductfirsttask force meeting.
• Form strategy core group from taskforce.
February 1
• Toll Gate 1 - each task noun presents a detailed work olan outlinine the questions thev expecttoexplore,
who they will contact, what data they seek, what their output will look like, etc..
• Analysis begins.
February 8
• Development of outreach plan; review of outreach lists; development of systems for funnelling outreach
aubmlssions to task groups.
• Preparation of Congressional liaison plan.
• Task groups continue analysis.
Febniary 15
• Toll Gate 2 - each task noun tmrents arevisedwork olan. a statement of issues, an oatUne of aotions.
a more detailed methodology for answering all questions needed to "flesh out" the options, etc.
* Outreach meetings begin.
•.Analysis continues.
j Febniary 22
• Formation of legal and drafting groups — development of work plan for background legalresearchon
legislative issues.
* Formation of audit group. Devekjpment offormatsfor audits.
• mnieacn comunies.
* Analysis continues.
18-
|
1
|
�EXHIBIT 2 - SCHEDULE (CONT'D)
Week of:
March 1
• Toll Gate 3 - formal presentation to President. Domestic Policy Advisor, etc. - goal is to be sine that
range of options and conduct of outreach effort arc broad enough and in general line with their wishes.
Preparation of this presentation will force synthesis of task group work.
March 8
• Meetings between task groups and audit and legal teams to communicate formats and expectations.
• Outreach continues.
• Analysis continues.
March 15
• Toll Gate 4 - presentation of draft recommendations and full analysis suimortinE the recommendations. 1
Aim is to makerecommendationsfor narrowing options and to make explicit all analysis, logical links and 11
assumptions explored which support conclusions.
1
• Detailed numbers audits.
• Detailed legal analysis.
• Outreach continues.
March 22
•^Detailed numbers audits continue.
• Detailed legal audits continue.
* Review of drafts by outreach people.
March 29
• Toll Gale 5 - presentation of draft proposals as audited. Meetings of strategy group to integrate task
group work into a comprehensive set of proposals.
• Meetings with outreach people to review political viability of approach.
Aprils
• Meeting with President and others to review toll Gale 5 draft and cbmmenis of political ovtmach groups.
Highlighting of m^or unresolved Issues, options which needtobe changed, expected problems, etc
* Begin preparation of communication plan.
April 12
• Draftrevisionsand additional analysis baaed on presidential meetings.
• OontroUed floating of draft ideas to selected outside individuals and groups.
* Legislative drafting begins.
* Additional numbers audit.
-19-
�EXHIBIT 2 - SCHEDULE (CONT'D)
Week of:
April 19
• Toll Oate 6 - Final draft of program prepared for presidential review - should reflect close to finished
definition of program. Final unresolved issues get resolved. Discussion of communication plan.
• Legislative drafting continues.
• Controlled floating of program continues.
• Congressional discussions commence in earnest.
• Final legal audit
• Final numbers audit
April 26
• Final legislative drafting.
• Congressional consultations continue.
• Communications plan finalized.
May 3
• T9U .Qpte_Z -finalreviewof legislation and communications plan. Legislation ready for rabmiaskm.
-20-
|
|
|
�STAFFING
We need a large number of capable people ID wodc with us diese next 3 1/2 months,
and we need them qmddy. The staff xeqantments chart (Exhibit 3) gives an initial estimate
of numbers. Most participants exist in departments already.
While the sheer numbers probably seem daunting,rememberdiat in all policy
initiatives, there are dozens of often "faceless" Staffers who do the detafled workforthe
secretaries and deputes who show op to meetings.
In this case, however, I don't want than to be "faceless." I want to be able to manage
diem in a "hands on" fashion, questioning their assumptions, helping set their wodc plans and
tracking down the sources of all their numbers.
Many major federal initiatives have hundreds of people working separately in a variety
of departments. For such a comprehensive initiative, this will be arelativelysmall staff.
While most of the staff we will use already work for the government, we need to
bring in a number of others quickly to marshall die knowledge and creativity nowresidentin
the private sector and in the states.
These people could be hired by HHS or OMB either on a temporary or continuing
basis.
We could also secure volunteered servicesfromconsulting groups.
The project must be fully staffed by February 5, 1993.
•emPLMM-u-n
-21-
�EXHIBIT 3
STAFF REQUIREMENTS
POSITIONS
Staff Director
Project Coordination (VUID)
Data Coonlinanon
Sub Total
APFROX.*
PE6FLE
il
1
PLACE OF EMPLOYMENT
Domestic • Ftolicy
Domestic Policy. HHS
HHS. OMB. TVeasury, CBO, CRS,
Team IA Benefits Package
IB Budgets and Caps
IC HIPC Organization
ID Quality Assurance
IE Administrative Savings
IF Malpractice
IG Drug Prices
IH Employer Mandates/Subsidies
II Organization of Boards
U Ethical Guidelines
IK Integration of DOD/Veterans
IL Health Care Workforce Issues
Sub Total
34
Team HA Cost Controls
HB
Rate Regulation
HC Acceleration of New System
ED Incentives
| Sub Total
3
3
3
1
8
CEA, OMB, HHS
HHS, OMB. CEA
HHS
HHS, Treasury. CEA
Team in Universal Coverage
5
HHS. OMB
Team IV Federal Financing
15
OMB, Treasury, CEA
Team V Short-term Initiatives
5
HHS
Team VI Long-term Care
$
HHS
Team VII Economic Impacts
3
CEA
Team VHIA Congress
VilLB Constituency Groups
Vmc State and Local Gov't
3
15
White House, HHS
White House, HHS
White House, HHS
White House, HHS
| Sub Total
Team KA Legal
DCB Audit
K C Drafting
Sub Total
| Total
3
3
12
4
3
3
OMB, HHS, TVeasury
OMB. HHS
HHS
OMB, HHS
HHS
$
3
2
%
3
1
3
i
12
i
3
I
98
-22-
HHS. Gommexce, OMB, Treasury
HHS, OMB
HHS
HHS, Veterans, DOD
HHS, Labor
Domestic Policy, Justice, HHS
Consultants (pro bono)
HHS, Congress
�
Dublin Core
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Title
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Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
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William J. Clinton Presidential Library & Museum
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2006-0885-F
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Paper
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Title
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WH [White House] HCTF [Health Care Task Force] Process
Creator
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
Identifier
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2006-0885-F Segment 2
Is Part Of
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Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
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Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
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Preservation-Reproduction-Reference
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2/6/2015
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42-t-12093080-20060885F-Seg2-023-008-2015
12093080
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https://clinton.presidentiallibraries.us/files/original/49da3dea486e1f9e1da5df14abeb2855.pdf
6e5e34b7027e025ba7ab9cc314eaebb8
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4786
FolderlD:
Folder Title:
[Suggestions] [loose]
Stack:
Row:
s
53
Section:
Shelf:
Position:
3
3
�Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
AND TYPE
SUBJECT/TITLE
DATE
RESTRICTION
001a. letter
Ira C. Magaziner to Douglas H. Paal; re: Unable to Accept Invitation
to Speak (partial) (1 page)
06/16/1993
P6/b(6)
001b. letter
Douglas H. Paal to Ira Magaziner; re: Invitation to Speak Before
Group of Investment Managers (partial) (1 page)
03/09/1993
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number: 4786
FOLDER TITLE:
[Suggestions] [Loose]
2006-0885-F
ip2731
RESTRICTION CODES
Prusidential Records Act - |44 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b)|
PI National Security Classified Information 1(a)(1) of the PRA)
P2 Relating to the appointment to Federal office 1(a)(2) of the PRA]
P3 Release would violate a Federal statute [(a)(3) of the PRA]
P4 Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) of the PRA]
P5 Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA|
b(l) National security classified information 1(b)(1) of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency [(b)(2) of the FOIA)
b(3) Release would violate a Federal statute 1(b)(3) of the FOIA)
b(4) Release would disclose trade secrets or confidential or financial
information [(b)(4) of the FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA)
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells [(b)(9) of the FOIA)
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF ADMINISTRATION
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The attached material was purchased in response
to your request.
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�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
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This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
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�Forty-Eighth Year • No. 10
SEE BENEFIT PLAN
REVIEW
G r o u p Accident A n d
Healfh P l a n s In f 9 9 3
PAGE 12
1
Annual Group Life
Plan
Staiisiies
PAGE 30
Congress Considers
Reform
PAGE 50
Washington
File
PAGE 9
A SPENCER PUBLICATION
�THE WHITE
HOUSE
WASHINGTON
June 28, 1993
Mr. Gregg H. H a l f l e y
Managing A t t o r n e y
N a t i o n a l H e a l t h Law Program, I n c .
1815 H S t r e e t , NW S u i t e 705
Washington, DC 20006
Dear Mr. H a i f l e y :
Thank you f o r your A p r i l 6 l e t t e r and document on
h e a l t h c a r e f o r low-income and underserved p o p u l a t i o n s .
The N a t i o n a l H e a l t h Law Program's c o n t i n u i n g p a r t i c i p a t i o n
i n t h i s process i s much a p p r e c i a t e d .
Making H e a l t h Care Work For A l l : A P e r s p e c t i v e From
Legal S e r v i c e s H e a l t h Advocates For Low-Income People r a i s e s
many o f t h e concerns t h a t we a r e a d d r e s s i n g i n t h e P r e s i d e n t ' s
n a t i o n a l h e a l t h care p l a n . C o n s i s t e n t w i t h t h e p r o p o s a l s
o u t l i n e d i n t h e NHeLP document, we a r e s e n s i t i v e t o t h e need
of low-income and underserved p o p u l a t i o n s f o r a f f o r d a b l e ,
a c c e s s i b l e , and h i g h q u a l i t y h e a l t h c a r e .
While u n i v e r s a l coverage i s o f fundamental importance
i n g u a r a n t e e i n g access t o h e a l t h c a r e , u n i v e r s a l coverage
alone can n o t ensure r e a l access. We i n t e n d t o i n c r e a s e t h e
a v a i l a b i l i t y o f p r i m a r y care and p r e v e n t i v e s e r v i c e s f o r
a d u l t s and c h i l d r e n , support community-based p r o v i d e r s ,
p r o h i b i t balanced b i l l i n g , and s u b s i d i z e c o s t s f o r lowincome people.
We a r e a l s o d e v e l o p i n g a q u a l i t y assurance
program, mechanisms f o r s i g n i f i c a n t consumer p a r t i c i p a t i o n ,
e f f e c t i v e o u t r e a c h i n c l u d i n g t r a n s p o r t a t i o n and t r a n s l a t i o n
s e r v i c e s , f a i r and a p p r o p r i a t e g r i e v a n c e procedures, and
l e g a l p r o t e c t i o n s against d i s c r i m i n a t i o n f o r both i n d i v i d u a l s
and p r o v i d e r s i n o r d e r t o ensure t h a t v u l n e r a b l e and l o w income people r e c e i v e h i g h q u a l i t y care i n a l l h e a l t h p l a n s .
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�Health
Law Program,
Inc.
GREGG H. HAIFLEY
Managing Attorney
1815 H. Street, N.W., SUITE 705
2a
Washington, D.C. 20006'
(202) 887-5310 m Fr>.Y (202) 785-6792
u
�1
1
P ^ ^ ^ H National Health Law Program, Inc
MAIN OFFICE
2639 South La Cienega Boulevard
Los Angeles, Calilornia 90034
(310) 204-6010
Fax#: (310) 204-0891
6
t _
A p r i l
BRANCH OFFICE
1815 H, Street, N.W.Suite 705
Washington, DC. 20006
(202) 887-5310
,
1993
Mr. I r a Magaziner
Senior Policy Advisor t o the President
For Policy Development
Executive O f f i c e of The President
The White House
1600 Pennsylvania Avenue, NW
Washington, D.C. 20500
Fax#:(202)785
Dear Mr. Magaziner:
Thank you f o r your comments a t the Families U.S.A. sponsored
meeting on Friday. I am the f e l l o w who asked you about p r o t e c t i n g
poor peoples' access t o care i n managed care s e t t i n g s and about copayments and government subsidies f o r low-income people.
I
appreciate your having i n v i t e d me t o share the suggestions o f l e g a l
services advocates on these issues.
Enclosed w i t h t h i s l e t t e r i s a document t i t l e d Making Health Care
Work For A l l : A Perspective From Legal Services Health Advocates
For Low-Income People, (please disregard the copy sent w i t h my
A p r i l 2nd l e t t e r as we've done e d i t i n g i t o the paper since then)
prepared w i t h the c o n s u l t a t i o n of l e g a l services advocates
throughout the n a t i o n . Please note thatlpages 19-33 deal w i t h cost
and e l i g i b i l i t y determinations f o r low-income people and pages 3457 deal w i t h p r o t e c t i n g low-income people as they seek access t o
health care.
Our l e g a l services health advocates are on the f r o n t l i n e i n
securing access t o care f o r low-income people who r o u t i n e l y have t o
s t r u g g l e t o get care from unresponsive health care systems.
We
appreciate your w i l l i n g n e s s t o receive our suggestions and we would
welcome the opportunity t o meet w i t h you and others who are
addressing the subsidy/co-payment and p r o t e c t i o n s issues.
Thank you f o r your work on h e a l t h care reform and thank you f o r
being receptive t o our suggestions.
Sincerely,
FUNDED BY THE LEGAL SERVICES CORPORATION
-.
6792
�MAKING HEALTH CARE WORK FOR ALL:
A PERSPECTIVE FROM LEGAL SERVICES
HEALTH ADVOCATES FOR LOW-INCOME PEOPLE
APRIL 1993
NATIONAL HEALTH LAW PROGRAM
1815 H Street, Suite 705
Washington, DC 20006
(202) 887-5310
�TABLE OF CONTENTS
INTRODUCTION
2
\CKNOVVLEDGEMENTS
3
EXECUTIVE SUMMARY
4
HE PROVISION OF SERVICES UNDER A NATIONAL HEALTH CARE REFORM PLAN
Summary of Principles
Introduction
1.
Broad range of services for well-being of each individual
2.
Enhancement of individual's maximum functional capacity
3.
Preventive services
4.
Primary care and rural providers
5.
Services in least restrictive appropriate setting
6.
Services not based on status as "disabled", but on necessity
7.
Simultaneous phase-in for different income groups
8.
Preservation of existing level of publicly-funded
services during the transition
9.
Elimination of racism and ethnic discrimination
10.
Transportation services
Conclusion
7
7
8
8
9
10
12
13
14
15
15
16
17
18
^O ONE SHOULD BE DENIED SERVICES BASED ON THEIR INABILITY TO PAY FOR CARE . 19
Summary of Principles
19
Introduction
19
1.
People with incomes under 200% of the federal poverty level
cannot afford to pay for health care
20
2.
Copayments discriminate against the elderly and disabled
23
3.
Prohibition on balance billing
24
4.
Disproportionately high share of the cost of the health
care bill is paid by low-income people
25
5.
Cost-containment through specification of allowable costs
28
6.
Ability to pay based on "available" income
29
7.
Affordability determinations procedures
31
'ROTECTIONS NEEDED IN HEALTH CARE REFORM
Summary of Principles
Introduction
1.
Universal Coverage
2.
Quality Assurance and Consumer Protection
3.
Consumer-Initiated Enforcement
4.
Clearly Defined Grievance/Benefits Appeals Procedures
5.
Protections in Managed Care Systems
6.
Special Populations
Appendix
34
34
34
35
36
38
39
44
51
56
�INTRODUCTION
The National Health Law Program (NHeLP) is a Legal Services National Support Center which
provides assistance to legal services advocates, private attorneys and health policy advocates on health
issues which affect low-income people. Our areas of expertise include Medicaid, Medicare, AIDS,
private insurance. COBRA extended insurance. Hill Burton, Title VI of the Civil Rights Act, and
various state and local health programs.
The National Health Law Program and local legal services programs see daily the health care problems
that poor people face. In the over 300 local legal services programs which provide legal assistance to
poor people in every county in the United States, the percentage of cases involving access to health
care is substantial. Necessarily, many legal services advocates throughout the country have developed
unrivaled expertise on the subject of health care for the poor. Specialty legal units for elderly clients,
clients with AIDS, and disabled clients have been set up in many of these programs. Legal services
health advocates in many states and regions of the country have organized themselves in task forces
which specialize in health care for the poor.
1
As millions of low income people became eligible for Medicaid and millions more joined the ranks of
the nation's uninsured during the past decade, the National Health Law Program has worked on state
and national health care reform. We have developed a network of legal services advocates in each
state who are working to improve our health care system for the poor. These advocates have
combined their expertise to identify the key elements of health care reform which need to be addressed
in order for low-income people to have access to health care.
2
The priorities for low-income people in the health care reform debate are concentrated in three areas:
Services, Costs of Accessing Care, and Protections. This paper was written with the goal of identifying
the problems low-income people face in each of the three areas as well as identifying solutions or
approaches to reform which will address our clients' health care needs. What should become clear in
the consideration of these papers is the fact that the solutions for the poor are sensible approaches for
addressing the needs of all people in a reformed health care system.
If you would like more information, please contact:
Gregg Haifley
National Health Law Program
1815 H Street. NW
Suite 705
Washington. DC 20006
202/887'-5310
202/785-6792 FAX
1
Over 10 percent of the population (28.3 million people) were eligible for Medicaid in 1991.
Medicaid Source Book: Background Data and Analysis, Congressional Research Service, January 1993.
2
Over 14 percent (35.4 million people) of the population were uninsured in March, 1992.
Medicaid Source Book: Background Data and Analysis, Congressional Research Service, January 1993.
�ACKNOWLEDGEMENTS
Acknowledgement of the many contributors of expenise on the health care issues faced by poor
people is given here not only to identify those who give generously of themselves and their talents,
bui: to identify them as being among the true leaders throughout the nation in the quest to make
access to care a right for low-income persons.
Thanks go to Cindy Mann and Debbie Thomson of the Massachusetts Law Reform Institute in
Boston, Massachusetts; Ann Vining of Evergreen Legal Services in Everett, Washington; Peggy
Hooker of Laurel Legal Services in Greenberg, Pennsylvania; Melinda Bird of Western Center on
U.w tt Poverty in Los Angeles. California; Gordon Bonnyman of Legal Services of Middle
Tennessee in Nashville, Tennessee; Jack Comart and Kit St. John of Pine Tree Legal Assistance in
Augusta, Maine; Alan Hark of Vermont Legal Aid in Montpelier, Vermont; Eugene King of Ohio
State Legal Services in Columbus, Ohio; Linda Lowe of Georgia Legal Services in Atlanta, Georgia;
Bonnie McManus of the Colorado Coalition of Legal Services Programs in Denver, Colorado;
Donna Ross of Mississippi Legal Services Coalition in Jackson, Mississippi; Peter Schilla of the
Western Center on Law & Poverty in Sacramento, California; Pam Silberman of the North Carolina
Health Access Coalition in Raleigh, North Carolina; Nelson Soltman of Legal Assistance
Foundation in Chicago, Illinois; Janet Varon of Evergreen Legal Services in Seattle, Washington;
Ellen Vacknin of Greater Upstate Law Project in Rochester, New York; Dennis Bricking of Legal
Aid Society in Louisville. Kentucky; Anne Ericson of Greater Upstate Law Project in Albany, New
York; Vicki Gottlieb, Trish Nemore and Al Chipiin of the National Senior Citizens Law Center in
Washington. DC; Eugenie Mitchell of Legal Services of Northern California in Sacramento,
California; Lucy Quacinella of Legal Services of Northern California in Chico, California; Mary
Catherine Rabbit of Legal Aid Society of Metropolitan Denver in Denver, Colorado; Elisabeth
Benjamin of Bronx Legal Services in Bronx, New York; Susan Drake of the National Immigration
l^iw Center in Los Angeles. California; Rich Seckel of the Office of Kentucky Legal Services
Programs in Lexington, Kentucky; Gerri Dallek of the Medicare Advocacy Project in Los Angeles,
California; Dennis Frick of the Legal Services Organization of Indiana in Indianapolis, Indiana;
Susan Galbraith of the Legal Action Center in Washington, DC; Mike Isbell of Lambda Legal
Defense Fund in New York, New York; Nancy Lorenz of Greater Boston Legal Services in Boston,
Massachusetts; Joseph Manes of the Mental Health Law Project in Washington, DC; Laura Mitchell
of the Multiple Sclerosis Society in Canoga Park, California; Patricia Siebert of Mid-Minnesota
Legal Asistance in Minneapolis, Minnesota; and Susan Finkelstein of Texas Rural Legal Aid in San
Antonio, Texas.
If for a moment one can doubt that the current system is broken, any one of these people can tell
you of client stories which will prove it. If reform seems too complex to achieve in making a new
system work, these are people who have the ideas and solutions necessary for success.
�EXECUTIVE SUMMARY
SERVICES
1.
A broad range of services should be provided which are geared to attaining or maintaining
the highest practicable physical, mental and psychosocial well-being of each individual.
2.
Services should not just be "medical" in nature, but should include services which enhance an
individual's maximum functional capacity.
3.
"Preventive services" should be defined as including services which prevent physical
deterioration of an existing physical or mental condition as well as services which maintain
good health.
4.
Availability of primary care and rural providers must be increased and maintained to
guarantee access to covered services.
5.
Services should be provided in the least restrictive appropriate setting. Community-based
service delivery should be encouraged, and institutional service delivery should be utilized
only when there is no acceptable and available community-based alternative.
6.
Services should not be tiered or accessed based on an individual's status as "disabled". The
process of establishing disability is expensive, time-consuming, arbitrary and dehumanizing.
Rather than segregate individuals as "disabled" and "non-disabled", services should be
available as necessity requires.
7.
Provision of services should be phased into national benefits packages simultaneously for
different income groups. Any differential phase-in of services will pit groups against each
other on the basis of class, income and race.
8.
The existing level of publicly-funded medical services should be preserved during the
transition to national health care. Specifically, state Medicaid programs should continue to
provide their current level of services for poor families and children, elderly and disabled
individuals until those services are phased into national benefits packages. States should be
encouraged to maintain other state and county programs which provide services during the
transition period.
9.
National health care reform must design a system that will address the problems of the
current system for persons of color. Racism and ethnic discrimination have resulted in
persons of color having a lower health status and needing more intensive services.
10.
Transportation to health care services must be provided to low-income persons to insure
actual access to health care.
�COSTS
1.
Low-income people with incomes under 200% of the federal poverty level cannot afford to
pay for health care. Costs imposed on low-income consumers will deny access and undermine
efforts to control health care spending.
2.
Copayments discriminate against the elderly and people with disabilities. Copayments punish
those consumers who have weakened health statuses and need more health services.
3.
Balance billing should be prohibited. Low-income consumers cannot afford the financial
burden, and balance billing undermines cost control efforts.
4.
Low-income people are already paying a disproportionately high share of the cost of the
health care bill through state and local taxes, and they may be asked to pay more if new or
increased consumption taxes are imposed by the federal government.
5.
Cost-containment should be achieved through specification of allowable costs rather than by
imposing unaffordable cost-sharing on low-income people to purportedly curb consumption.
6.
Determinations of ability to pay should be based on fair procedures, utilizing principles of
"available" income.
7.
Affordability determinations should be administered in a non-stigmitizing manner by the state
agency or authority in charge of health care, using simple forms and streamline verification
systems.
PROTECTIONS
1.
Universal coverage itself is a fundamental protection.
2.
Principles of quality assurance and consumer protection include a mandatory quality focus,
adequate consumer information, a uniform data reporting system, independent oversight, and
consumer representation.
3.
Consumers must have the right to administrative and judicial review of adverse decisions of
their need for health care.
4.
The grievance and benefits/appeals procedures must be clearly defined. Basic due process
principles must be utilized.
5.
Specific protections are needed for consumers in managed care systems.
6.
Special protections issues for special populations must be built into the new system.
�THE PROVISION OF SERVICES
UNDER A NATIONAL HEALTH CARE REFORM PLAN
Summary of Principles
1.
A broad range of services should be provided which are geared to attaining or maintaining
the highest practicable physical, mental and psychosocial well-being of each individual.
2.
Services should not just be "medical" in nature, but should include services which enhance an
individual's maximum functional capacity.
3.
"Preventive services" should be defined as including services which prevent physical
deterioration of an existing physical or mental condition as well as services which maintain
good health.
4.
Availability of primarv care and rural providers must be increased and maintained to
guarantee access to covered services.
5.
Services should be provided in the least restrictive appropriate setting. Community-based
service delivery should be encouraged, and institutional service delivery should be utilized
only when there is no acceptable and available community-based alternative.
6.
Services should not be tiered or accessed based on an individual's status as "disabled". The
process of establishing disability is expensive, time-consuming, arbitrary and dehumanizing.
Rather than segregate individuals as "disabled" and "non-disabled", services should be
available as necessity requires.
7.
Provision of services should be phased into national benefits packages simultaneously for
different income groups. Any differential phase-in of services will pit groups against each
other on the basis of class, income and race.
8.
The existing level of publicly-funded medical services should be preserved during the
transition to national health care. Specifically, state Medicaid programs should continue to
provide their current level of services for poor families and children, elderly and disabled
individuals until those services are phased into national benefits packages. States should be
encouraged to maintain other state and county programs which provide services during the
transition period.
9.
National health care reform must design a system that will address the problems of the
current system for persons of color. Racism and ethnic discrimination have resulted in
persons of color having a lower health status and needing more intensive services.
10.
Transportation to health care services must be provided to low-income persons to insure
actual access to health care.
�Introduction
The provision of services is a critical component of any national health care reform plan. We
cannot achieve the maintenance of good health and optimal functional capacity without providing all
Americans access to the services which are necessary for their care. Unfortunately, this access does
not currently exist for the approximately 36 million individuals who are currently uninsured. Nor
does it exist for the additional millions of Americans who are insured for a limited range of health
benefits or who must meet substantial deductible and copayment charges to receive care.
In order to give meaning to national health reform, a range of services must be provided which are
sufficient to meet the particular health care needs of individuals. These services should be available
as needed to all persons regardless of their income, age, citizenship, employment or health status.
Failure to do so will result in poorer health for Americans who continue to lack access to necessary
care. It will also perpetuate the high costs attributed to lack of preventive care, and will shift cost
increases to service areas not covered by the reform plan. Both on an individual level and on a
system-wide level, the provision of an adequate range of services makes sense.
Rather than focus on the inclusion or exclusion of specific services from a standard package of
benefits available to all Americans, national health reform policy should develop principles against
which the needs of individuals for care should be measured. Issues relevant to particular services
can then be measured against a consistent set of standards which apply equally to all care needs.
This approach will avoid the divisive selection of services based on the political clout or sympathetic
appeal of certain population groups. It will also avoid the evaluation of service cost as the primary
factor m coverage decisions, and in the long run is likely to be as cost-effective as any limitation of
services.
The following principles should guide the development of a covered services package in any national
health reform plan:
1.
A broad range or services should be provided which are geared to attaining or maintaining
the highest practicable physical, mental and psychosocial well-being or each individual.
An adequate range of health care services should be defined by focusing on the health outcome
goals of each health care consumer. Society benefits from the contributions of a healthy and fullyfunctioning individual, and maximum levels of well-being can be best achieved by the individualized
provision of a wide range of necessary health services.
For example, substance abuse services are currently not available to many individuals in need of
care. This causes tremendous physical and psychological suffering, which in turn diminishes worker
productivity, results in increased criminal activity and results in ongoing familial inter-generational
dysfunction for future generations. Numerous studies have concluded that treatment substantially
reduces drug and alcohol use and the serious social and health consequences related to such use. A
recent study sponsored by the National Institute on Drug Abuse (NIDA) found that after a year in
treatment. 75% of the study participants in out-patient drug free programs and 56% of the clients in
residential therapeutic community treatment had stopped using heroin or cocaine, and heroin use by
�methadone maintenance clients declined by 70%. In addition, the post-treatment criminal activity
level for study participants declined substantially.
1
Outpatient mental health treatment is another care modality which is often not available to
individuals in need. Most insurers currently cap outpatient psychotherapy visits as a "cost control"
mechanism. Yet a recent study of patient health outcomes demonstrated that study participants
dramatically decreased their utilization of medical services such as doctor visits, testing and hightechnology procedures following outpatient psychotherapy.
In addition, psychotherapeutic
treatment can significantly improve work-related factors such as job attendance, worker productivity
and job satisfaction.
2
3
Substance abuse and mental health treatment are but two examples of services which contribute
greatly to the overall health and well-being of individuals while reducing the larger social impact of
non-treatment. Rather than engage in cost-conscious decisions to eliminate categories of service
from coverage, it is more effective on all levels to focus on maximizing an individual's ability to
thrive and function with the careful provision of necessary care.
2.
Services should not just be "medical" in nature, but should include services which enhance an
individual's maximum functional capacity.
In recent years a consensus has developed that a comprehensive health care system does more than
treat disease. For instance, it provides services which enable individuals with disabilities or chronic
illnesses to carry out normal activities of daily life as independently as possible. As stated by the
Consortium for Citizens with Disabilities,
In considering the issue of health from the disability perspective, it is essential to refocus our
conception of what being "healthy" really is. For so many people with disabilities, health is
determined by functional capacity. It is the ability to maintain or increase this functional
capacity that is often the measure of the person with disabilities' opportunity to live an
independent life and participate as fully as possible in the life of the community.
4
Such services are critical to preventing costly and unnecessary institutionalization for elderly or
disabled people. An adequate range of services to enhance functional capacity should include, for
example, the provision of personal care attendants and homemakers to assist disabled individuals
who are living and working in the community. These services are not generally performed by
1
"The Need for Specific Coverage for Drug and Alcohol Treatment in National Health Care
Reform," Legal Action Center, (1993).
2
Massad, P.. West, A. & Friedman M., Relationship between utilization of mental health and
medical services in a VA hospital. American Journal of Psychiatry, 141, 1145-1158 (1990).
5
Manuso. J.,"Corporate mental health programs and policies", in Ng, L.K. & Davis, D., Strategies
for Public Health. Van Nostrand Reinhold (1980).
4
Consortium for Citizens with Disabilities, "Principles for Health Care Reform from a Disability
Perspective" (1992).
�medical personnel, and have often been excluded from the traditional range of "medical" care. The
Medicaid program has recognized their importance as a cost-effective guard against
institutionalization by including them in the range of services provided under the Home and
Community-Based Services Waiver program. These types of services are essential to maintain
maximum functional capacity for many individuals and should be part of any new definition of
health care services.
5
Another important type of service which maximizes functional capacity is the provision of a
comprehensive range of durable medical equipment (DME) such as wheelchairs, ventilators and
other assistive devices which enhance the full performance of social, vocational and domestic
activities. Current DME reimbursement policies often focus solely on clinical medical indicators of
need, and do not factor in the individual's physical functional capacity and desire to live
independently. For example. Medicare DME coverage guidelines focus narrowly on the use of
wheelchairs in the home. An individual who requires a power-operated wheelchair primarily to
function independently outside the home is typically denied coverage. State Medicaid programs
often deny coverage for equipment such as mechanical page turners which would assist an individual
with school or work duties. These policies emphasize front-end cost savings at the expense of
individual functional capacity.
The development of a "functional" definition of health care is still in process, and will grow in
importance as more individuals with illness or disabilities live longer and more fully participate in
community life. Our national health program should recognize the multiple social benefits of
maximizing an individual's functional capacity as an essential component of good health care.
3.
"Preventive services" should be defined as including services which prevent physical
deterioration of an existing physical or mental condition as well as services which maintain good
health.
Much discussion has centered around the importance of preventive health care in a health reform
plan. In general, preventive care has been loosely defined to include such services as annual
physical examinations, prenatal and well-baby care, mammograms, inoculations and other services
designed to detect and prevent the onset of acute illness. This is indeed an important element of a
national reform package.
Our national health reform plan should seek to define preventive care based on the needs of the
individual. This is especially important in the case of children. Preventive services for children and
adolescents can enhance their ability to grow and develop with reduced exposure to avoidable
illnesses, and can permanently improve their ability to function as adults. The clearest example of
vhis is childhood immunization against various illnesses; immunization programs have virtually
eliminated such diseases as polio in the United States.
Most child health professionals concur that regular comprehensive screening examinations
throughout childhood and adolescence are necessary to guarantee optimal development and good
health. Such services are provided in the Medicaid program via the Early Periodic Screening,
42 U.S.C. § 1396n(c)(l)(3).
10
�Diagnosis and Treatment Program, and should be maintained in any national reform plan. A
critical screen that is essential to maintenance of health and normal development is that of blood
lead testing. This is a particularly important issue for poor children; recent estimates are that 96.5%
of poor African-American urban children are affected by lead exposure.
7
In addition, specialized education and outreach efforts to teach children and adolescents about
healthful lifestyles and risk prevention strategies are an essential part of a comprehensive preventive
health strategy. Some of the problems adolescents are at risk for include sexually-transmitted
disease, suicide, violence-related injury and death, mental illness, drug and alcohol problems and
unplanned pregnancy. Information about these health risks must be disseminated in a "user-friendly"
and confidential manner in order to effectively prevent them from occurring.
In our new health care plan, preventive care should not be tied to bureaucratic rules which do not
allow appropriate individualized treatment decisions. We need a better definition of preventive
services that would include those services which keep individuals with existing illness or disability
from further deterioration.
The prevention of deterioration is a particularly important issue in the provision of rehabilitative
physical therapy, which under current reimbursement systems is often limited to individuals whose
functional abilities will improve as a result of the therapy. Such therapies are also appropriate to
prevent the further loss of function regardless of capacity for improvement. Individuals suffering
from muscular or neurological disorders, for example, may have no realistic expectation of
"recovering" from their illness, but may need ongoing therapy to maintain current functioning or to
slow the loss of muscular or neurological function. If rehabilitative services are provided, these
individuals are able to maintain their current level of functioning and to maintain their current level
of independence.
/mother example of preventive care which inhibits loss of function or worsening of illness occurs in
the treatment of HIV-related illness. Many of the standard HIV-related drug therapies are
prophylactic in that they prevent the onset of such conditions as Pneumocystis carinii pneumonia.
Recent research indicates that it may be appropriate to begin prophylactic drug therapies as soon as
an individual is identified as HIV-positive and long before symptoms occur.
8
However, the effective treatment of HIV, cancer and other conditions where treatment methods are
rapidly evolving has been hampered by the exclusion of coverage for "off-label" drug treatment. The
limiting of reimbursement to medical uses approved by the FDA impedes the development of "state
of the art" therapies which have not yet gone through the lengthy FDA approval or revision process.
Under national health reform, a better practice would be to include coverage of treatments which in
the opinion of the treating physician are appropriate for the individual.
42 U.S.C. 1396d(r)(l)-(4).
7
Perkins. J. & English. A., "Healthy Futures: Principles for Health Care Reform in the Interest of
Children and Adolescents" (1993).
s
"AIDS found to be active at early stage of infection", Boston Globe, March 26, 1993, p.l.
11
�'All participants in the national health debate concur that preventive care has been a neglected
aspect of American health care. In order to make preventive care optimally effective, it must be
defined in a way that will allow for the timely detection and prevention of illness. In addition, it
must include necessary care to prevent the progression of illness or disability and the maintenance of
m;L\imum individual functional capacity.
4.
Availability of primary care and rural providers must be increased and maintained to
guarantee access to services.
In order to place emphasis on primary and preventive care, the number of primary care providers
must be increased and providers must be distributed fairly across the country. Currently, there is a
shortage of primary care providers. This shortage causes denial of access to care, or delays in the
receipt of primary care, which may have the same results as denial of the service.
The closing of a public hospital in a rural area, a common phenomenon these days, can significantly
impede access to health care and can result in decline in health status. The number of primary
care physicians working in non-rural areas has risen at three times the rate of those working in rural
areas. Although 77 percent of physicians in rural areas (as compared to 45% in non-rural areas)
are primary physicians, they are a "fading breed."" In 1990, half a million rural residents lived in
counties with no physician trained in obstetrics, and 49 million lived in counties with no
psychiatrist. In 1991, at least 111 rural counties had no physician at all.
9
10
12
13
Although their access to care is grossly impaired, rural residents are less likely to have insurance or
to participate in Medicaid. They also suffer higher rates of infant mortality, deaths from injuries,
and more chronic diseases, all related to poor access to care, fewer screening services, and a
tendency not to practice preventive care.
14
15
'' See. Bindman, Keane & Lurie. "A Public Hospital Closes: Impact on Patients' Access to Care
and Health Status," 264 J. Am. Med. Assoc., Dec. 12, 1990.
10
Health Care Information Center, 3 Health Manager's Update, August 23, 1989, citing research
by David Kindig, M.D.. and Hormoz Movassaghi, University of Wisconsin.
11
Alexander, "A Fading Breed: Why So Few Physicians Go Into General Practice," Chico News
and Review. March 11, 1993.
12
Congressional Office of Technology Assessment [OTA], "Health Care in Rural America,"
(1990).
13
Center for Budget and Policy Priorities, "Limited Access: Health Care for the Rural Poor,"
March 1991.
14
OTA, "Health Care in Rural America," at xii; see also, "Rural Help on the Way," 44 Medicine
and Health, October 29, 1990.
15
Ibid.
12
�Federal and state governments must offer incentives for medical students to enter the primary care
field and to practice in rural areas. Incentives could include tax deductions, medical school loan
forgiveness plans, enhanced availability of educational assistance, free and/or aggressive placement
programs, continuing education opportunities at government expense, networking technologies, etc.
Incentives, such as tax rebates or deductions, grants, technical assistance, could be offered to
educational institutions for creating primary care course innovations, for training nurse practitioners,
physician assistants, and nurse midwives, or for aggressive enrollment of students in the primary care
field. Medical schools could be required, as a condition of receipt of federal financial participation,
to establish primary care residency programs and rotations.
States should also be encouraged or required to develop educational criteria and certification
programs for nurse practitioners, physician assistants, and nurse midwives. These professionals
should then be reimbursed under the extant health care packages or programs, or by the govemment
if thev render services in medically underserved areas.
5.
Services should be provided in the least restrictive appropriate setting. Community-based
service delivery should be encouraged, and institutional service delivery should be utilized only
when there is no acceptable and available community-based alternative.
One of the most frequently cited sources of excess cost in our current health care system is the
provision of care in an inappropriate setting. Uninsured individuals frequently receive care at
hospital emergency rooms because they do not have adequate access to a primary care physician.
Elderly individuals are placed in nursing homes because they cannot obtain help with activities of
daily living. In such cases the gaps in our health care network require the provision of care which is
expensive and may not maintain an individual's optimal health and functional capacity.
A growing recognition of the negative aspects of institutional care, as well as its cost, has led to an
increasing effort to provide care that will maintain an individual in the home. For example, the
Health Care Financing Administration has approved home-based care programs in all but three
states for Medicaid recipients who are eligible for institutional care. Hospice care for terminally
ill individuals is now reimbursed by Medicare, Medicaid and many private insurers. Most states
fund the operation of community-based group residences for mentally retarded and mentally ill
individuals. In addition, many states are seeking to develop publicly subsidized and reimbursed
"Assisted Living" programs which provide a combination of housing with care services for elderly
and disabled individuals. Such programs should be preserved and expanded under our national
health care program.
16
17
In order for elderly and disabled individuals to received community-based health care services, a
constellation of supportive services is essential. Such services include transportation, case
management, day care, accessible housing, employment training, personal care and home care
Fatoullah. Ellice, "Medicaid Home Care for the Elderly and Persons with Disabilities", 26
Clearinghouse Review No. 8, p. 891 (December 1992).
17
National Academy for State Health Policy, "Building Assisted Living For the Elderly Into Public
Long Term Care Policy: A Technical Guide for States" (September 1992).
13
�assistance. While not all of these services may be reimbursed by a national health care system,
there should be sufficient case management support to allow for coordination of such services and
assistance in locating them as a reimbursable component of health care.
For some individuals, institutionally delivered care may be the only treatment modality which meets
their needs. For example, most individuals require acute hospitalization at some point in their lives.
For others, institutional care may be necessary for short-term treatment on a recurring basis. This is
particularly true for individuals with illnesses which present a course of "flare and remission", and for
individuals with chronic mental illnesses. Such services must continue to be covered under national
health care reform.
While institutional care must be preserved as a necessary component of health treatment, its use
should be considered very carefully. Particularly when a contemplated institutional placement is for
a long period of time, such as in the placement of an elderly individual in a nursing home, other
services and locations for the provision of services should be considered as the first and preferable
health care option. No individual should be forced into institutional care where there is an available
and appropriate community-based alternative.
For most adolescents, the current health care delivery system does not reach them in a meaningful
way. Adolescents see a physician at a lower rate than any other age group.
School-aged
children may benefit most from school-based health programs in serving their primary care needs.
The Congressional Office of Technology Assessment describes school-based adolescent health
programs as "[t]he most promising recent innovation to address the health and related needs of
adolescents."
Teens trust school-based programs and their respect of confidentiality and are
more willing to seek care there than in private physician offices.
18
17
6.
Services should not be tiered or based on an individual's status as "disabled". The process of
establishing disability is expensive, time-consuming, arbitrary and dehumanizing. Rather than
segregate individuals as "disabled" and "non-disabled", services should be available as necessity
requires.
For many years individuals with disabilities and chronic illnesses have been forced to demonstrate
the existence of their disability in order to qualify for health care benefits. Publicly-funded medical
care programs as well as private insurance plans have established elaborate disability criteria which
individuals must meet in order to access health care. These processes generally take weeks to
months to years to complete, and require extensive medical and legal documentation. During this
period, the individual may have no access to health care. In addition to struggling with the
limitations of disability and illness, it is expected that such individuals or their families will have the
time, money, energy and expertise to complete the disability determination process. In fact, many
individuals give up in despair or die before their application is finally processed.
18
Council on Scientific Affairs of AMA, "Providing Medical Services Through School-Based
Health Programs." JAMA 1939. April 7, 1989.
19
Office of Technology Assessment, Adolescent Health: Volume 1, Summary and Policy Options
1-106, April 1991.
14
�A national health reform plan should abolish the "disability" basis for access to health care
benefits, and should provide services to all individuals in need, regardless of their status as
disabled. This will help to more fully integrate individuals with chronic health or disabilities into
the health care system, and will obviate the need to participate in a dehumanizing disability
determination process. Furthermore, it is essential that the scope of services under national health
care reform be adequate to appropriately meet the needs of every individual.
7.
Provision of services should be phased into national benefits packages simultaneously for
dilTcrent income groups. Any differential phase-in of services will pit groups against each other on
the basis of class, income and race.
The transition from our current system of health care coverage to a new national plan will be
complex. The cost of providing universal coverage almost certainly requires a phase-in of coverage
and/or benefits over a period of time. Decisions regarding implementation will be influenced by
political factors as well as health policy considerations. In order for national health care reform to
succeed, it is essential that all segments of society perceive the reform plan as containing benefit in
return for cost.
The current patchwork of health care coverage in America disadvantages individuals on the basis of
income and health status. Because of the interconnection of poverty, health and race, people of
color receive a disproportionately low level of health care. It makes health and policy sense to
ensure that poor people and people of color receive expanded health coverage as quickly as
possible.
Yet the primary cost of health care reform will in all likelihood be borne by employers and middleclass individuals, who will pay more in taxes to support the expansion of services. If the bulk of
initial coverage expansion does not also benefit these individuals, the broad coalition of Americans
supporting health care reform will be endangered.
In order to preserve our national consensus that health care reform is a necessary and desirable
goal, any phase-in of health care service coverage should occur simultaneously for all eligible
individuals. Although strong arguments can be made that disabled individuals or poor children are
most in need of immediate coverage, a differential implementation of benefits might foster the
impression that national health care reform is primarily designed to benefit certain population
groups. Rather than pit groups against each other on the basis of class, income or race, the
expansion of service coverage should be uniform throughout the general population.
8.
The existing level of publicly-funded medical services should be preserved during the
transition to national health care. Specifically, state Medicaid programs should continue to provide
their current level of services for poor families and children, elderly and disabled individuals until
those services are phased into national benefits packages. States should be encouraged to maintain
other state and county programs which provide services during the transition period.
In the absence of a coherent national health care policy, states have developed their own network of
federally and state-funded health care programs. Such programs include the operation of state
mental hospitals and mental health and retardation programs. They include the operation in many
states of indigent care hospitals and nursing homes; often these institutions are part of county
15
�government systems. They include a variety of state-based disability and elder care programs as well
as a variety of state-based immunization programs and public health services. And of course they
include state-specific Medicaid programs. The combination of available publicly-funded services
varies widely among states.
It is critical that national health care reform not serve primarily to undo the networks of health
care services that currently exist. Most experts agree that it will take several years to implement a
comprehensive national health care plan, and careful thought must be given to maintaining services
during this transition phase. The federal government will incur substantial new costs in the
implementation of universal coverage. At the same time it must protect existing health care
coverage by maintaining its contribution to state-based Medicaid coverage.
States which are laboring to balance their budgets may welcome an opportunity to reduce Medicaid
coverage in anticipation of national health care. Yet this will only hurt the most vulnerable and sick
individuals in America. States should be required to maintain their current level of Medicaidreimbursed services until those services are subsumed in a national benefits plan.
The federal government should devise incentives to encourage the maintenance of existing statefunded health care programs during the transition to national health care. While current systems
may be "jury-rigged", they exist and are utilized by providers and consumers. Any abrupt
termination of funding for these programs will result in confusion about access for consumers and
reimbursement for providers.
For example, Massachusetts has a "free care pool" funded by surcharges on hospital bills which is
available to pay for the hospital care of poor, uninsured individuals. The elimination of "free care"
pending the implementation of national health care reform would bar access to care for many
individuals and would jeopardize the financial health of hospitals with high indigent patient loads.
Such programs must be maintained until they are meaningfully replaced.
The next few years will be critical in proving the success of national health care reform. The
perception of reform must be that of expansion, not of contraction. Our current systems of publiclyfunded health care are a critical lifeline for millions of Americans. Until meaningful reform occurs,
existing health care networks must be maintained.
9.
National health care reform must design a system that will address the problems of the
current system for persons of color. Racism and ethnic discrimination have resulted in persons of
color having a lower health status and needing more intensive services.
People of color receive care and coverage that is unequal to that afforded to whites. Since 1980
people of color have actually been receiving less health care. The care that is available is often
separate and unequal. Whites tend to go to private health care facilities, while people of color
generally rely on public or nonprofit facilities run by charities, churches, or governmental agencies.
People of color, particularly the poor, are from conception onward exposed to greater health risks
than are whites, and are more likely to contract preventable illness, to suffer from chronic conditions
such as diabetes or hypertension or cancer, and to die prematurely.
16
�The infant mortality rate for non-white babies is twice the rate for white babies, and low birth
weight (usually due to inadequate prenatal care) is the leading cause of death of African-American
babies. Children of color do not receive any of the recommended immunizations at the same rate
as white children. In fact, there is a smaller proportion of nonwhite babies immunized against polio
in the United States than the overall rates of 69 other nations.
African-Americans have the highest incidence rate for all cancers combined, and along with Native
Americans, the least favorable overall survival rates. African-American males suffer from
tuberculosis at four times the rate of whites.
Blacks have higher rates of heart disease; yet older black men on Medicare receive heart bypass
surgery about a fourth as often as similarly situated whites. In the South, whites are six times more
likely to have the surgery than blacks. African-Americans with kidney failure are less likely to
receive long-term dialysis or kidney transplants. Blacks are less often accepted for psychotherapy,
are more often assigned inexperienced therapists, are seen for shorter periods, and are treated with
less intensity. Controlling for payment sources, special care needs, and behavior problems, black
Medicare patients spend more unnecessary days in the hospital awaiting discharge to a nursing home
than do whites.
Latino-Americans suffer disproportionately higher incidence of diabetes (three times that of the
general population and with higher rates of serious complications), high blood pressure, kidney
disease, and AIDS. Deaths resulting from cancer of the stomach are twice as high for Latinos as for
non-Latino whites. Latino-Americans also suffer from an excess incidence of cancers of the
esophagus, breast, pancreas, and cervix.
Communities with the greatest number of health-threatening hazardous waste facilities are
overwhelmingly concentrated in communities of color.
In addition, people of color are disproportionately poor. Out of every 100 poor children in America,
.34 are black. 22 are Latino, and 5 are Asian, Pacific Islander, Native American, or Alaskan Native.
Under the present pay-as-you-go health care system, people of color have less access to health care
because they are disproportionately poor.
In deciding what services should be included in the universal health care plan and in applying
utilization review tests to diagnostic and other medical care technologies, the government must be
sensitive to the impact of the choice upon people of color, whose life circumstances and health
experiences may be qualitatively and certainly are quantitatively different from those of whites.
10. Transportation to health care services must be provided to low-income persons to insure actual
access to health care.
The cost and/or lack of transportation is a barrier to health care services for many low-income
persons, both in rural and urban areas of the country. Transportation must be provided to those
who lack the means to get to health care providers.
In rural areas, efforts should be made to minimize transportation needs, by maximizing geographical
access to care either through traditional means or through innovative means, such as computer or
televideo hookups between local practitioners and regional medical centers or health care
17
�diagnosticians or specialists, mobile health care or diagnostic centers, visiting nurses, and the training
and use of nurse practitioners or other health care professionals.
Conclusion
The adequate provision of services is at the heart of any health care system. As America moves to
embrace a national health care program, that program must be crafted in a manner sufficient to
maintain the optimal health and maximum functional capacity of all individuals. Rather than adopt
a limited scope of covered services as a "cost control" measure, a reform plan should cover such
services as are necessary for the care of an individual. Careful attention to individual coverage
needs will be more cost-effective over time. Most importantly, it will best achieve the goal of
meeting the health care needs of all Americans, regardless of age, income, class or race.
18
�NO ONE SHOULD BE DENIED SERVICES
BASED ON THEIR INABILITY TO PAY FOR CARE
Summary of Principles
1.
Low-income people with incomes under 200% of the federal poverty level cannot afford to
pay for health care. Costs imposed on low-income consumers will deny access and undermine
efforts to control health care spending.
2.
Copayments discriminate against the elderly and people with disabilities. Copayments punish
those consumers who have weakened health statuses and need more health services.
3.
Balance billing should be prohibited. Low-income consumers cannot afford the financial
burden, and balance billing undermines cost control efforts.
4.
Low-income people are already paying a disproportionately high share of the cost of the
health care bill through state and local taxes, and they may be asked to pay more if new or
increased consumption taxes are imposed by the federal government.
5.
Cost-containment should be achieved through specification of allowable costs rather than by
imposing unaffordable cost-sharing on low-income people to purportedly curb consumption.
6.
Determinations of ability to pay should be based on fair procedures, utilizing principles of
"available" income.
7.
Affordability determinations should be administered in a non-stigmitizing manner by the state
agency or authority in charge of health care, using simple forms and streamline verification
svstems.
Ilntroduction
In 1990. 33.6 million people in this country had incomes below the federal poverty level, and another
50.5 million people had incomes between 100% and 200% of poverty. At the poverty level, a family
of four has 514.01 per person per day to pay for all household expenses, including housing, utilities,
food. clothinW. transportation, personal care items, household furnishings, and all other expenses of
life. There is general agreement that households with incomes twice that amount have no
disposable in:ome with which to pay for health care.
20
20
The A/ffordability of Health Care for Working Families, December, 1989; Health Care for All,
1988 LivinglBudgets for Low-Income Seniors in Massachusetts", November 1, 1988.
19
�Var purposes of realizing both universal access and effective cost containment, it is critical
that this nation's health care system:
* not impose co-payments, deductibles and premiums on people with incomes below 200% of
the poverty line;
* prohibit balance billing; and
* establish simple, fair and nonstigmatizing systems for evaluating a household's ability to
pay.
1.
Low-income people with incomes under 200% of the federal poverty level cannot afford to pay
for health care. Costs imposed on low-income consumers will deny access and undermine efforts to
control health care spending.
Systems which impose direct cost-sharing on consumers generally rely on one of two justifications for
such policies: that cost-sharing helps to finance the system and that cost-sharing encourages people
to become better health care consumers. While there is no agreement among health care policy
analysts as to whether either of these justifications is valid or represents sound public policy, such
justifications have no validity whatsoever insofar as they are applied to low income households.
The financing justification can be disposed of quickly: whether from the perspective of revenue
adequacy or equity, it makes no sense to look to low income people as a significant source of health
care financing. Indeed, the cost of collecting co-payments and deductibles imposed on low income
people often exceeds the limited amount of revenue raised from such efforts. Georgia eliminated
Medicaid co-payments after finding that co-payments cost the state approximately $1.10 to collect
every $1.00 of co-payments.
21
The second justification - that co-payments and deductibles make people better consumers by
discouraging them from "overusing" the health care system is unsupported by any evidence.
Countries such as Canada which do not have consumer deductibles or co-payments, report no
problems of "overuse." Canada's experience mirrors findings among low-income consumers in
this country. In January, 1985, the President's Council of Economic Advisors stated that the
common perception that poor people abuse their free access to health care under Medicaid was
largely inaccurate. Data from the Rand National Health Insurance Experiment suggest that.
22
23
21
Atlanta Constitution. October 13. 1982.
22
Health Care Secunty for All, p. IV-2 (May 1992).
23
Statement by Jane Perkins before the Montana Committee on Appropriations, Human Services
Subcommittee, March 13, 1985. p. 7.
20
�without co-payments, the poor make about the same number of visits to physicians as the
nonpoor.
24
Even assuming that overuse is a problem and that co-payments and deductibles have some value
curbing such behavior, cost-sharing is an untenable tool as applied to persons who do not have the
ability to pay.
The evidence, both anecdotal and statistical, overwhelmingly demonstrates that the imposition of
deductibles or co-payments leads to the denial of necessary care among low-income consumers and
is counterproductive in terms of overall efforts to promote primary and preventive care, eliminate
cost-shifting and contain costs. As Representative Claude Pepper aptly observed, talking about the
elderly poor:
. For the elderly poor, a fifty cent co-payment which seems insignificant to most of us
can mean the difference between a needed prescription and a quart of milk or a loaf
of bread. What right do we have to ask them to make this choice?
25
Representative Pepper spoke knowingly of the plight of the people we work with each and every
day:
Helen M. from Rochester, New York, whose sole income is $528 in monthly Supplemental
Security Income and Social Security Retirement benefits, is a sixty-eight year old Medicaid
recipient. Ms. M. is an insulin-dependent diabetic who also suffers from chronic psoriasis,
hypertension, arthritis, and kidney and thyroid conditions, all of which require intensive
medications and medical assistance to prevent her from having to be hospitalized.
In 1992. Ms. M. received a notice from the New York State Department of Social Services
stating that she would have to pay so-called "minimal" co-payments for her medications and
doctors' visits. When the notice was explained to her, Ms. M. broke down and cried. She
explained that she had $2.72 in the bank and could not possibly afford the co-payments for
tier medical care. If New York's co-payment system had not been temporarily enjoined by
the courts. Ms. M. would be totally unable to obtain necessary- indeed, critical - medical
care." '
1
:
' Statement by Jane Perkins before the Montana Committee on Appropriations, Human Services
Subcommittee. March 13. 1985. p. 7.
-
House Select Committee on Aging, Committee. Pub. No. 96-181 (1979), p. 28.
:
'' Information from an affidavit submitted by Helen M., a named plaintiff in Sweeny v. Bane, a
lawsuit challenging New York's Medicaid copayment system, which is currently on appeal to the
Second Circuit Court of Appeals.
21
�•A poor couple in San Antonio sought admission to a clinic for the wife's complaints of
coughing and congestion. The clinic turned the couple away because the husband had only
18 cents in his pocket and they could not afford the facility's $3.00 charge. Two days later,
the wife died of double pneumonia.
27
Only last month, a single mother with two children in Boston, earning $100 per week, learned
through a public service announcement that vaccines for children were free in Massachusetts.
She brought her two children to a local health clinic, but the children were never immunized.
While the vaccines were free, the visit cost $7, and she did not have the money to pay.
Tlie evidence is not just anecdotal. Studies conducted in California, Georgia, Ohio, Maryland,
Saskatchewan, Canada, the United Kingdom, France and Germany all conclude that co-payments
imposed on medical services delay and deter access to necessary medical care. These studies
generally show that one-quarter to one-third of individuals subjected to co-payments delay access to
necessary health care for a minimum of a vear. One study found that the risk of dying was ten
percent greater for poor people subjected to co-payments than for poor people whose care was free
of charge." A study cited by the National Governor's Association found that 60% of children
under age six received preventive care when covered bv plans with no cost sharing, but that only
49% of children received such care when cost sharing was imposed.
28
29
0
31
Tlie barriers to health care which are created when cost sharing requirements are imposed on low
income consumers have system-wide fiscal implications. When unaffordable costs delay or deny
necessary care, efforts to contain costs are significantly undermined. A 1975 study by the University
of California at Los Angeles found that the imposition of Medicaid co-payments in California in
1971 directly caused a reduction in needed primary care and over $1 million in increased
2
' Jane Perkins Testimony in Montana, March 13, 1985, p. 6.
28
Affidavit submitted by Geoffrey Gibson, Ph.D.. in Sweeny v. Bane. (E.D.N.Y. 1992), currently on
appeal to the Second Circuit Court of Appeals.
29
See, e^, Brook. Ware, et al.. "Does Free Care Improve Adults' Health?", New England Journal
of Medicine (December 1974); Brian and Gibbens, "California's Medi-Cal Co-Payment Experiment,"
Medical Care (1974).
'" R. Brook. "Does Free Care Improve Adults' Health?", New England Journal of Medicine
(December 1974).
31
National Governors' Association, "Caring for Kids", State Policy Report, 1991.
22
�32
hospitalization costs because necessary care had been delayed. Three years later, an independent
Rand Corporation study drew substantially the same conclusions. Similarly illuminating
pragmatic "studies" were conducted by the State of Idaho, which eliminated Medicaid co-payments
when it determined that they were not cost-effective, and caused patients to delay necessary medical
care.
33
34
2.
Copayments discriminate against the elderly and people with disabilities. Copayments
punish those consumers who have weakened health statuses and need more health services.
Cost-sharing requirements are inevitably more burdensome for people with significant health
problems and, as such, they adversely and disproportionately affect elderly and disabled health care
consumers. Co-payments in effect punish these consumers for their weakened health status and
serve to deny care to those most dependent on medical services.
James Sweeny lives in the Bronx, New York. He is quadriplegic, confined to a wheel chair,
and he requires round-the-clock home health aid. Mr. Sweeney's sole income is Social
Security and Supplemental Security Income totaling $528 per month. On May 1, 1992, he
was notified that under New York's newly adopted co-payment system, he would have to pay
S150 --more than a fifth of his income - i n co-payments in light of his high use of medical
services. Only a temporary court injunction has saved Mr. Sweeny from this dismal
predicament.
Co-payment requirements force elders and disabled people into a cruel dilemma where they must
choose between medical services and other necessities such as food and rent. Even so-called
"minimal" cost-sharing requirements become overwhelming barriers to care. People are often
embarrassed and ashamed by their inability to pay even small sums for health care, and they will
delay or avoid seeking essential medical care. Such delays often exacerbate their already weakened
condition, and paradoxically, only serve to increase the long term costs of these patients' medical
care.
Because cost-sharing has a significant impact on people with chronic medical problems, the
imposition of cost-sharing requirements undermines public health policies and goals. For example,
co-payments are particularly detrimental to people with AIDS and multi-drug resistant tuberculosis.
These complex diseases require intensive prophylactic treatment regimes. Early treatment
interventions directly result in longer and more productive patient lives. Yet people with HIV,
32
Roemer. et al., "Copayments for Ambulatory Care: Penny Wise and Pound Foolish," 13 Medical
Care o (June 1975).
33
Helms, Newhouse, and Phelps. "Copayments and the Demand for Medical Care: The California
Experience.' IX Hie Bell Journal of Economics 1 (Spring 1978).
34
Idaho Medical Care Advisory Committee. May 19,1983, cited in Jane Perkins Testimony, March
13, 1985. p. 10.
23
�AIDS and tuberculosis often receive inadequate heahh care, a situation which is made worse by the
imposition of co-payment requirements. Tuberculosis is currently considered an infectious disease
rapidly expanding to epidemic proportions in many urban Ajnerican cities. Multi-drug resistant
tuberculosis requires a long and unpleasant treatment regime. Any barriers or disincentives to
follow this regime, such as requiring poor and sometimes resistant patients to "co-pay" for their
treatment would be a foolhardy public health strategy.
An additional factor to consider is the effect which co-payment requirements have on the willingness
of providers to serve high-cost patients. Experience has shown that co-payments deter providers
from serving disabled and elderly patients. Providers recognize that it is difficult or impossible for
people to meet their co-payment obligations. It is not uncommon for providers to choose to simply
withdraw their services from these most vulnerable populations rather than face the choice of
forcing patients to pay, or absorbing themselves the loss of the co-payment reimbursement.
3.
Balance billing should be prohibited. Low-income consumers cannot afford the financial
burden, and balance billing undermines cost control efforts.
Low income people have long experienced cost-sharing through the practice known as "balance
billing" where providers seek payment from the covered beneficiary for the difference between the
reimbursement rate and the provider's actual charge.
The financial burden placed on individuals through balance billing is significant, although it varies
depending on utilization patterns and the dollar amount of the balance billed. The Physicians
Payment Review Commission (PPRC) determined that, for Medicare beneficiaries "... in 1990, the
average balance bill for those balances billed was 40 percent of the Medicare approved amount."
Etalances are highest among specialty services, including surgical services, and lowest for office visits.
Although the number of providers who "balance bill" their Medicare beneficiaries declined between
1980 and 1986. the total dollar amounts beneficiaries had to pay almost doubled, from $1.45 billion
to $2.8 billion. ' As with co-payments, balance billing is particularly burdensome to individuals
with a high need for medical services - people with the greatest health care needs inevitably incur
the greatest expenses. Such persons often have severely limited incomes and are least able to afford
the cost of health care.
35
y
Because balance billing undermines efforts to control costs, the federal government and several
states have taken steps to limit the practice in the context of Medicare. An important goal of the
Medicare Statute and its amendments, at least since the Deficit Reduction Act of 1984 (DEFRA),
Pub.L. 98-369, 98 Stat. 494, 2306(c), has been the saving of program costs.
DEFRA created
3 7
35
Physician Payment Review Commission, "Monitoring the Financial Liability of Medicare
Beneficiaries". No. 92-3.
36
37
B
Social Security Bulletin, "Annual Statistical Supplement (1990).
See. AMA v. Bowen. 857 F.2d 267, 268-269 (5th Cir. 1988).
24
�incentives for the "Participating Physicians Program" under which physicians agree voluntarily to
become "Participating Physicians," which means they agree to accept Medicare's reasonable charge
(accept assignment) as payment in full and not "balance bill" for the amount of their fee which
exceeds the Medicare reasonable charge.
Several states have independently recognized the
problems caused by balancing billing and have enacted legislation prohibiting the practice under
Medicare and sanctioning physicians who violate the law's prohibitions.
38
These cost containment measures have helped make health care more affordable for Medicare
beneficiaries. Tlie General Accounting Office (GAO) noted that beneficiaries covered by the state
laws saved on out-of-pocket costs for their health care; savings were greatest in states in which the
law applied to all beneficiaries and to all physician services. Any system which hopes to achieve
the twin goals of universal access and cost, containment must include strong and uniform measures to
assure that all providers accept the system-established charge as payment in full.
39
4.
Low-income people are already paying a disproportionately high share of the cost of the
health care bill through state and local taxes, and they may be asked to pay more if new or
increased consumption taxes are imposed by the federal government.
Any consideration of the affordabilitv of health care should take into account all costs being
imposed by the proposed plan. Tlie overall financing of the health care system and more
specifically, the revenue raising proposals under consideration, should be factored into any analysis
ol affordabilitv. If the proposal includes an increase of the cigarette and alcohol excises, and
possibly even a value-added tax. the impact on low income people will be significant, and the
distribution of any direct cost-sharing for health care should be evaluated in light of such financing
proposals.
10
Poor people are already highly taxed, and tax burdens on the poor have risen sharply in recent years
as state and local governments have repeatedly raised taxes, fees and charges in response to revenue
shortfalls. The General Accounting Office reports that state and local tax burdens rose by almost
42 U.S.C. 1395(h)(1)
GAO, "A Study of the Impact of State Mandatory Assignment Programs on Beneficiaries in
Massachusetts. V ermont. Connecticut, and Rhode Island", GAO/HRD 89-128.
1
" There are considerations other than the distribution of the tax burden which no doubt factor
into the decision to rely on so-called sin taxes. Sin taxes are clearly more "popular" with the public,
and there is an argument that cigarette smokers and alcoholic beverage consumers should bear a
higher burden ot paying for health care services in light of their unhealthy behaviors. (But see, "The
Taxes ol Sin: Do Smokers and Drinkers Pay Their Way?, Journal of the American Medical
Association. March 17, 1989. ) This paper does not address the arguments for and against reliance on
sin taxes, except with respect to how the burden of these taxes are distributed and more precisely, how
given that burden, the imposition of additional costs for low income individuals through copayments
and deductibles would result in the denial of necessarv health care.
25
�41
40% between 1961 and 1990. By 1990, state and local tax burdens were at an all time high.
State and local revenue systems are typically very regressive, and as more and more revenues are
being raised by state and local governments, the burden of financing public services is shifting
markedly to middle and lower income people.
Sales taxes, both general and selective, are the largest type of own-source revenues for states. About
half of all state tax revenue is derived from taxes on consumption - the general sales tax and
selective sales taxes on transactions involving gasoline, utilities, insurance, cigarettes and alcoholic
beverages. On average nationwide, lower and middle income families pay three to four times
greater share of their income in sales and excise taxes than the wealthy. Excise taxes consume seven
times more of the income of the poorest twenty percent of the population than they do of the richest
twenty-percent of the population. In six states, Louisiana, New Mexico, Washington, Tennessee,
West Virginia and South Dakota, sales and excise taxes are so high that these taxes alone consume
more than ten percent of the total income of poor families.
12
43
44
The equity problems presented by regressive state revenue systems have only worsened in recent
years as state and local governments increased tax burdens for lower and middle income people by
enacting new or additional consumption taxes. Between 1985 and 1991, there were 22 separate
increases in state sales tax rates and 62 separate increases in state cigarette taxes. The 1991 tax
45
41
GAO, "Intergovernmental Relations: Changing Patterns in State-Local Finances", March, 1992.
42
Center on Budget and Policy Priorities, and Center for the Study of the State, "States and the
Poor, 1992", February, 1993.
Citizens for Tax Justice. "Nickels and Dimes, How Sales and Excise Taxes Add Up in the 50
States.", March. 1988.
44
Citizens for Tax Justice, "A Far Cry from Fair", April, 1991.
45
Calculations made by Citizens for Tax Justice based on data compiled by ACIR, "Significant
Features of Fiscal Federalism". 1991, Vol. 1.
In 1990 state legislative sessions, twenty four states increased taxes by a total of $8.6 billion for fiscal
year 1991. An additional $2 billion was raised by accelerating the collection of existing taxes,
increasing fees and charges, and postponing planned tax reductions. According to the National
Conference of State Legislatures, consumption taxes were the source of most of the revenue increases
for states and local governments in 1990. Seventeen states raised their sales taxes, eight states
increased cigarette and tobacco taxes, and five states increased alcoholic beverage taxes. (National
Conference of State Legislatures. "State Budget and Tax Actions 1990", September, 1990.)
26
�46
increas'es^vere even more significant -- amounting to the largest dollar increase in history.
Seventeen states increased their sales and use tax. twelve states increased cigarette and tobacco
taxes, and two states increased alcoholic beverage taxes. Although tax increase activity slowed
down considerably in 1992, all states adopting significant tax increases in 1992 relied primarily on
regressive taxes. In the nine states with the largest tax increases, eighty percent of the increases
were in sales and other consumption taxes. Overall, out of $2,980.3 billion in net tax changes,
S864.5 million was raised from the sales tax and $147.5 million was raised from cigarettes and
tobacco excises.
47
48
The impact of these state tax actions on low and moderate income people has been made all the
worse by tax increases levied at the local level. The National League of Cities reports that eightyfive percent of all cities it surveyed in April and May, 1991 had raised or imposed new taxes or fees
in the preceding twelve months. Tlie National Association of Counties similarly reported that about
forty percent of the counties it surveyed raised revenues during the 1992 fiscal years. As is true
at the state level, local governments rely heavily and disproportionately on regressive consumption
taxes.
49
Although there are signs that the recession is ending in certain parts of the country, tax increases at
state and local levels are likely to continue. In most parts of the country, states are still in "grave
fiscal trouble" according to the National Governors' Association. Fiscal year 1993 balances are
"precipitously low" at 1.4% of expenditures, and twenty-one states project FY93 balances below one
percent of expenditures, making more tax increases and budget cuts likelv for fiscal vears 1993 and
1994 *1
The irony is that so much of the added tax burden which has been imposed on low income people
over the past several years is due either directly or indirectly to the escalating costs of health care.
Burgeoning Medicaid budgets are cited by states more often than any other cause of fiscal stress.
Poor people have in fact paid twice for the health care crisis: they have seen their access to care
reduced significantly and they have born a disproportionately high share of the cost of an out of
control health care svstem. Moreover, thev have shouldered this burden at a time when their
National Conference of State LeL',islatures, "State Budget and Tax Actions, 1991", October,
1991.
47
Center on Budget and Policy Priorities and Center for the Study of the States, "States and the
Poor". February, 1993.
IN
National Governors' Association. "The Fiscal Survey of States', October, 1992. Maryland,
Massachusetts . Montana and Wisconsin all increased their cigarette excises in 1992.
4V
50
GAO. "Intergovernmental Relations: Changing Patterns in State-Local Finances", March, 1992.
National Governors' Association, "The Fiscal Survey of States", October, 1992.
27
�51
incomes have been sinking in real dollar terms , and, most dramatically, as compared to the
incomes of the wealthy.
52
Tax policy at the federal level, while growing less progressive over time, has at least consistently
taken into account the "ability to pay" principle. To the extent that the federal government chooses
to reverse national policy and to rely more heavily on consumption taxes, including the so-called sin
taxes, the disproportionate impact on low income people must be considered. Tax payments for
health care must be factored into the affordability equation. Should the financing scheme create
new costs for low income families who are already struggling under higher tax burdens imposed by
state and local governments, additional costs by way of co-payments and deductibles must be
recognized as only adding to an already very difficult - and in many cases impossible- financial
burden carried bv low income health care consumers.
5.
Cost-containment should be achieved through specification of allowable costs rather than by
imposing unaffordable cost-sharing on low-income people to purportedly curb consumption.
The most common reason advanced for the imposition of co-payments, deductibles and other costsharing techniques is that such measures purportedly curb consumption and thereby reduce health
care spending. Cost-containment, however, can be more readily and more equitably achieved by
measures which limit the costs for which providers are reirribursed. The reimbursement system
snould establish strict criteria for determining allowable costs -luxury items, entertainment expenses,
and other perquisites should be excluded. Moreover, reimbursement rates should be designed to
provide incentives for delivering prompt, comprehensive care which complies with quality standards.
Providers should not be compensated and rewarded for poor or unnecessary care.
A 1986 General Accounting Office (GAO) study of Medicaid rate setting for nursing homes is
instructive.
It found that states incur increased expenses when they fail to specify criteria for
allowable and unallowable costs. For example, in states that provided no guidance on the number
53
'' For example, between 1970 and 1992, the purchasing power of families relying on Aid to
Families with Dependent Children benefits was reduced by forty-three percent in the typical state.
(Center on Budget and Policy Priorities, "States and The Poor, 1992", February, 1993.)
2
" During the 1980^, while the incomes of people in the richest quintile grew by close to 15%,
the incomes of people in the poorest quintile declined by almost 5.5%, and for families with children in
the lowest quintile, incomes dropped by 12.5%. The disparity is even more extreme at the highest and
lowest income levels: between 1980 and 1990, the richest five percent of households realized an
average income gam of 45%, while people in the bottom five percent saw their income drop by 9%.
See, Katharine L. Bradbury, "The Changing Fortunes of American Families in the 1980's", New
England Economic Review. Federal Reserve Bank of Boston, July/August, 1990; Center on Budget and
Policv Priorities, "Drifting Apart". 1990, and Center on Budget and Policy Priorities, "Selective
Prosperity", 1991.
53
Medicaid: Methods for Setting Nursing Home Rates Should Be Improved (GAO/HRD-86-26).
28
�and maximum cost of vehicles allowed as reimbursable expenses under their Medicaid program, the
cost of luxury vehicles such as Mercedes Benz and Chevrolet Corvettes were reported as allowable
costs. The GAO found that costs unrelated to patient care, including out of state travel for seminars
and conferences (not all of which pertained to patient care), entertainment expenses, and dues and
license fees, were commonly charged to Medicaid programs in states which did not specify allowable
costs. Moreover, when costs were unspecified through written guidelines the GAO found that
providers (in this case, nursing homes) frequently challenged or appealed determinations of
reasonableness of costs. Such appeals result in higher costs as well as increased expenses related to
a defense of the challenge.
A specification of allowable costs also allows reimbursement systems to encourage good care
practices and quality controls as a means of cost containment. Current reimbursement systems often
fail to keep pace with federal requirements governing quality of care and encourage unnecessary
costs. For example, under the system for Medicaid reimbursement for nursing facilities, states pay
extra to facilities for the care of residents who have pressure sores. This removes any financial
incentive tor nursing facilities to prevent pressure sores, and creates a conflict with the requirements
of the federal regulatory scheme established by the Nursing Home Reform Law. Similarly, although
the Nursing Home Reform Law requires that residents be assisted to maintain the ability to feed
themselves, state reimbursement systems often run counter to this requirement by paying greater
rates for tube feeding.
Cost-containment measures should focus on provider incentives rather than consumer behavior.
Whereas cost-sharing requirements imposed on low-income households deny access and ultimately
drive up costs, properly designed reimbursement systems can contain costs while promoting access to
quality care.
6.
Determinations of ability to pay should be based on fair procedures, utilizing principles of
"available" income.
Assuming that exemptions from cost-sharing or supplemental benefits are made available to people
based on their inability to pay for health care, the question of how household income is to be
evaluated becomes critical. If the income calculation formula considers income which is not actually
available and does not account for a household's mandatory income withholdings, households with
ncomes less than 200% of the federal poverty level may be forced to pay for necessary health care
despite a commitment that persons with incomes below 200% of the poverty level should be exempt
from charges.""
4
The application of the Medicaid program's harsh income calculation rules imposed b^ the Health
Care Financing Administration (HCFA) to Medicaid recipients graphically reveals why any health
care svstem s income calculation rules have to be simple and fair.
>4
It is urged that income, and not resources, be considered. Few low income people have any
resources to report, and the lime, paperwork and bureaucratic barriers which result from resource
evaluations do not justify the analysis. In recent years. Congress has recognized that resource
evaluation is a costly, but unproductive activity and has allowed states to completely dispense with such
evaluations in the context of determining Medicaid eligibility for pregnant women and children under
atje six.
29
�In calculating a Medicaid applicant household's income, HCFA assumes that amounts of money are
available to the household to spend on health care even though these amounts are never made
available to the household for its use. In particular. HCFA assumes that mandatory payroll
deductions, such as withheld federal and state tax withholdings and FICA withholdings, and
payments garnished from a person's paycheck as court-ordered support for the person's dependents,
are available to the individual to pay for his/her medical care even though he/she never receives
this money. This draconian method of pretending that unavailable money is available to the
household leads to irrational, inhumane results:
Craig Himes, from Rochester, New York, is a forty-five year man who is quadriplegic.
He resides at a skilled nursing facility and requires constant medical attention. His
nursing care costs $138 every day, paid for by his Social Security Disability benefits
and the Medicaid program. Mr. Himes has a wife and two young children, as well as
two children from a former marriage. He is under court order to pay $433.33 every
month in child support. After he became paralyzed, Mr. Himes took several computer
courses, and obtained a job as a computer programmer, using a keyboard mouthstick.
Court-ordered support payments, taxes and FICA payments are automatically deducted
from Mr. Himes pay check.
Under Medicaid's income calculation rules, the value of these mandatory payroll
deductions, which Mr. Himes never receives, is assumed available to him to pay for
medical care. As a result, the state Medicaid agency has told Mr. Himes that if he
wants Medicaid to continue to help pay for his skilled nursing care, he must pay
towards his medical care $360 more than he actually receives in his paycheck each
month. Mr. Himes' only recourse is to quit his job to remain eligible for Medicaid
benefits.
55
Delores Scott lives in Buffalo, New York with her two pre-teen sons. Ms. Scott suffers
from ulcers, high blood pressure, and excessive fluid retention surrounding her heart.
To control her illnesses, she must take a number of medications every day, costing a
total of $140 each month, and she must see her doctor at least once a month. Still,
she supports her family by working at the Salvation Army.
After her mandatory payroll tax and FICA deductions, Ms. Scott takes home a
monthly paycheck of $680. After paying for her family's rent, utilities, food, clothing
and other basic living expenses, she is left with just over $50 each month. Yet to
receive Medicaid assistance. Medicaid's income calculation rules require Ms. Scott to
spend $176 each month - more than 25% of her take-home pay - on her and her
family's medical care before Medicaid will pay for any of it. As a result, instead of
quitting her job to receive full Medicaid benefits, Ms. Scott has been taking only half
55
Affidavit of Craig Himes in Himes v. Sullivan. (W.D.N.Y. 1991), currently on appeal to the
Second Circuit Court of Appeals.
30
�the daily dosage of medication prescribed by her doctor to save money. The increased
risks to her health as a result of her actions are enormous.
116
To ensure that low-income households who are entitled to health care without paying for it are not
penalized as a result of restrictive income calculation rules, one simple rule should be applied: only
income that is actually available to a household in any given month should be counted in
determining the household's eligibility for free or lower cost health care.
When Medicaid was created in 1966, the Department of Health, Education and Welfare applied
such a standard in calculating a recipient's income. HEW defined "available" income as "only such
income ... as will be 'in hand' within a [certain time] period." According to HEW:
57
Available income and resources are income and resources which are "in hand" or under the
control of the individual .... Income and resources are not considered as available unless they
will be in hand or under control within [the applicable time period.] Income and resources
are realistically evaluated and are not assumed to be available from sources from which
payments are not in fact received."
8
These income and resource calculation rules, formerly used in determining a household's eligibility
for Medicaid, are simple and fair. The use of any other rules will lead to the creation of a system,
like the current Medicaid system, that merely feigns the provision of free health care access to those
who cannot afford it.
7.
Affordability determinations should be administered in a non-stigmitizing manner by the
state agency or authority in charge of health care, using simple forms and streamline verification
systems.
Studies indicate that enrollment and participation in government programs are hampered by lack of
efficient enrollment and eligibility determination procedures as well as a lack of outreach efforts to
enroll individuals in programs. Additionally, the stigma associated with "welfare" type programs and
going through welfare bureaucracies, loss of privacy and lack of information about eligibility and
(,
• Affidavit of Delores Scott in Himes v. Sullivan (W.D.N.Y. 1991), currently on appeal to the
Second Circuit Court of Appeals.
^ Medicaid Supplement to HEW's Handbook of Public Assistance Administration (1966), §D4220(A)(4).
>8
Medicaid Supplement to HEW's Handbook of Public Assistance Administration (1966), §D4230(4).
31
�59
benefits interfere with achieving universal enrollment in programs. Although Congress has
recently expanded income eligibility guidelines for the Medicaid program, the participation rates
among low-income people remain quite low. Federal efforts to expand access to health care,
particularly for pregnant women and children, have been thwarted by a number of factors, including
overwhelming paperwork barriers and a stigmatizing system which keeps many eligible people from
applying.''
0
Incentives to deny services will escalate with the increasing complexity of eligibility criteria for the
different health plans or programs. Provider participation in eligibility determinations, enrollment
procedures and point-of-service co-payment collections will interfere with provider willingness to
effectively serve low-income populations. Reduced paper work and ease of administration is equally
important to the recipient and the provider. To the extent that there are differing eligibility criteria
for differing plans or programs, there are correspondingly increased potential complications and
inequities in the health care system. Funds otherwise available for provision of health care are lost
on the administrative costs of determining or contesting eligibility.
Migrant farmworkers are a good example of people for whom the enrollment and eligibility systems
fail in the web of insurance and Medicaid. They typicallv do not have employer-provided health
insurance/' Manv qualify for Medicaid, but they face barriers posed by state enrollment
procedures and administrative policies. Some migrant workers leave a state before the 45-day
period allowed for application processing, and many counties exceed the regulatory processing time
limit. Others who are covered in one state are often unable to find health providers in other states
who will accept out-of-state Medicaid cards. Under federal law, states may remove barriers to
Medicaid for migrant workers by recognizing Medicaid eligibility across state lines, but the three
states with the largest migrant worker population (California, Texas, and Florida) do not have such
interstate agreements.
1
62
59
"Elderly Americans, Health, Housing, and Nutrition Gaps Between the Poor and Nonpoor."
GAO Report to the Select Committee on Aging, House of Representatives, June 1992. "Supplemental
Security Income (SSI): Current Program Characteristics and Alternatives For Future Reform", a
background paper by the Subcommittee on Retirement Income and Employment of the Select
Committee on Aging, House of Representatives, August 1988 (Comm. Pub. No. 100-669).
60
Children's enrollment in Medicaid in seven states reviewed ranged from a low of 15.4% to a
high of 69.7% of all eligible children. (National Governors' Association, "Caring for Children", 1991.)
61
Government Accounting Office. "Health Insurance Coverage: A Profile of the Uninsured in
Selected States." 43, February 1991.
62
Government Accounting Office, "Hired Farmworkers: Health and Well-Being at Risk," 25,
February 1992.
32
�Any new system should be sure to avoid these pitfalls. It can do so by:
using the state health care oversight agency, which may then contract with communitybased sites to determine income eligibility for co-payment exemptions and/or service
enhancements. The state welfare agency should not be primarily responsible for such
determinations;
prohibiting excessive demands for verification and relying on proof of eligibility for
other program benefits (eg., food stamps, welfare, WIC and LIHEAP payments) and
self-declarations coupled with random audits (as in the income tax system);
assuring multi-language outreach particularly in low income communities through
uniform requirements and federal cost-sharing; and
prohibiting providers from denying care to persons who state that they are unable to
afford cost-sharing requirements otherwise imposed upon consumers.
33
�PROTECTIONS NEEDED IN HEALTH CARE REFORM
Summary of Principles
1.
Universal coverage itself is a fundamental protection.
2.
Principles of quality assurance and consumer protection include a mandatory quality focus,
adequate consumer information, a uniform data reporting system, independent oversight, and
consumer representation.
3.
Consumers must have the right to administrative and judicial review of adverse decisions of
their need for health care.
4.
Tlie grievance and benefits/appeals procedures must be clearly defined. Basic due process
principles must be utilized.
5.
Specific protections are needed for consumers in managed care systems.
(•>.
Special protections issues for special populations must be built into the new system.
Introduction
Health care reform has the best chance of providing maximum access and quality of care to
consumers if it is one, unified system, offering universal coverage for comprehensive services without
cost sharing by those who cannot afford it, and offering consumers maximum information about and
maximum choice of appropriate service providers. Even in such a system, protections will be
needed to ensure access and quality of care. As a health care system differs from this model,
however, additional protections are needed to ensure that the new system improves and does not
worsen care available to vulnerable members of our society.
Under health care reform, consumers need:
a strong oversight system, with a strong role for consumers within it;
clear, understandable regulations that are readily available to each consumer;
appeal rights and consumer enforcement rights;
protections related to managed care systems; and
special protections for vulnerable populations.
34
�I.
UNIVERSAL COVERAGE ITSELF IS A FUNDAMENTAL PROTECTION
Anything less than universal coverage ot health care is unacceptable public policy. Universal
coverage of health care for all persons in the society is not only humanitarian and equitable, it
eliminates otherwise persistent and troubling problems with the system. Exclusion of portions of our
society cause grave public health concerns, especially over the consequent inability to control
communicable diseases. Failure to cover any group residing in the United States would perpetuate
cost shifting and make cost control mechanisms ineffective. Funds otherwise available for provision
of health care would continue to be lost on the administrative costs of determining or contesting
eligibility. Finally, no member of the societv can feel truly secure about health care access when
parts of our society are excluded. Anyone of us, or our loved ones, could some day be among the
abandoned ones.
Citizenship or immigration status should be irrelevant to health care coverage, for many reasons.
First, more than half of the households headed by undocumented immigrants have United States
citizen and legal permanent resident family members. Protecting those members from
communicable diseases and welfare dependency requires provision of care to the heads of these
households and all household members, regardless of immigration status. Second, no matter
whether the health care financing mechanism turns out be to "sin" taxes, provider taxes, income
taxes, or a combination thereof, all immigrants contribute to these tax revenues and should share in
the services.
Immigrants of all legal statuses live. work, go to school, and pay taxes alongside other members of
their communities. A 1992 Los Angeles County study estimated that recent immigrants in that
county alone contribute $4.3 billion in taxes to the local, state, and federal governments, $2.5 billion
of which goes to the federal government. If immigrants are not allowed to participate in the
reformed health system, local and state governments would be burdened with their health care costs
while the federal government would use immigrants' tax dollars to subsidize care for other residents.
Finally, administration of any health care program will be much more simple and less costly if
citizenship need not be verified.
Seriously ill persons also feel the inequities of the current system. For example, a person can be
poor enough to qualify financially for Medicaid and in desperate need for health care for a chronic
condition but still fail to qualify for any Medicaid. The reason is that such a person may not be in
any category of Medicaid-covered people, such as parents (AFDC-related), aged people (age 65 or
older), or permanently disabled people (adjudicated as disabled under Social Security's stringent
standards).
If health care reform does not solve this problem of universal access, it is not reform.
35
�II.
PRINCIPLES OF QUALITY ASSURANCE AND CONSUMER PROTECTION
63
A.
QUALITY FOCUS: A critical measure of success of any national health care reform
plan must be its ability to ensure quality care for all consumers.
B.
CONSUMER INFORMATION: Empowering individuals with meaningful health care
information is the only way to ensure the full participation of consumers in informed decision
making while building needed bonds of trust between consumer and health care providers. Public
disclosure of comparative health care information will stimulate the internal quality improvement
initiatives of providers and delivery systems. Timely, comparative, and understandable information
must be broadly disseminated to assist consumers in:
1. assessing health care coverage options;
2. selecting providers of care;
3. understanding the risks and benefits of treatment options;
4. understanding expected and actual health outcomes for individuals and populations:
5. understanding the costs of different coverage and treatment options;
b. selecting prevention services and adopting healthy lifestyles;
7. understanding the process, structural limitations, and financial incentives in
contractual arrangements of health care providers that might.influence the provision of
care;
8. resolving questions, complaints, and grievances.
C.
UNIFORM DATA REPORTING SYSTEM: Evaluating the impact of national health
care retorm on the quality of care is dependent on the establishment of a comprehensive and
integrated health care information database. There must be uniform definitions and reporting
requirements for data on the structure, process, outcomes and cost of health care services. Such a
system must capture relevant information for individual patient encounters while protecting patient
confidentiality. At a minimum, such a system must include data concerning:
1. diagnoses, treatment and outcomes by identified provider;
2. functional status;
3. consumer satisfaction;
3
'' This list of principles is largely taken from those adopted by The Gerontological Society of
Amenca. The American Association of Retired Persons, The National Council on Aging, Center for
Medicare Advocacy, Inc., the National Senior Citizens Law Center, and the National Committee to
Preserve Social Security and Medicare.
36
�4. cost;
5. drug utilization;
6. demographics;
7. patient risk factors.
D.
CONSUMER PROTECTION: Formal mechanisms must be established to ensure that
consumers are able to access appropriate medical care while being protected from poor quality care.
At a minimum, consumer protection activities must include:
1. a process of provider licensing and accreditation, and standards for health care
payers;
2. a system of compliance monitoring through pattern analysis of data such as
utilization rates and health outcomes, and case reviews;
3. an oversight system with authority to act promptly to ensure quality of care, with
full subpoena power to gather evidence of potential legal violations and the authority
to employ a full range of sanctions (including correction orders, civil monetary
penalties, appointment of receivers; and termination of authority to operate);
4. authority to initiate the sanction process based on both consumer complaints and
compliance monitoring; and
5. provision of adequate information to consumers about findings and outcomes
resulting from investigations of quality problems.
E.
INDEPENDENT OVERSIGHT: An independent and external system must provide
for quality oversight and consumer protection. This system should include entities free of any
conflict of interest (ijL, such entity shall not pay for or directly provide health care services).
F.
CONSUMER REPRESENTATION: Consumers must have a major role in the
structures responsible for policy making and governance of the system. Public notice and hearing
should be required before adopting significant new policies. The health care system must provide
for diverse and adequate consumer participation in all levels of governance and decision-making,
including provider, payer and quality oversight organizations.
64
G.
CONSUMER INITIATED ENFORCEMENT: Although an oversight organization
should have authority to enforce standards for health care payers and providers, consumers as well
must have the authority to redress violations. Such private right of action should be made explicit in
legislation and should provide for a full range of remedies, including a right of prevailing plaintiffs
to recover reasonable attorneys' fees.
M
See section III of this article, below, for more detail.
37
�65
M.
CONSUMER APPEALS AND ADJUDICATION: Consumer protection requires
establishment of a formal process and a comprehensive system to handle appeals by consumers and
their representatives and to adjudicate decisions concerning such appeals. At a minimum, such a
system must include:
1.
adequate and timely notice to consumers (written simply and in the language of the
consumer) about adverse decisions, such as decisions concerning termination or
reduction of coverage and denials of treatment or services;
2.
a clearly defined appeals and adjudicatory process, including complaint and grievance
procedures with specific timetables, including an expedited review process for denial or
termination of emergency or urgent care, and access to independent and external
review mechanisms, including administrative law judges, the courts, and alternative
dispute resolution forums at the choice of the consumer; and
right to continuation of the status quo pending a hearing affording due process.
III. CONSUMER-INITIATED ENFORCEMENT
The legal rights and duties spelled out in health care reform legislation will mean little without
viable means of consumer-initiated enforcement. Administrative agencies alone will never have the
full information base or resources needed to ensure that all the players in a reformed health care
system obev the law.
Oversight organization reviews should occur regularly, even without consumer complaints. However,
consumers must also have the authority to file complaints and obtain hearings with all relevant
administrative agencies. Such complaints should initiate an administrative investigation and an
attempt to secure voluntary compliance. Oversight agencies should have full subpoena power to
gather evidence concerning potential legal violations. When oversight agencies cannot secure
agreements from offending parties to comply with the law and compensate for injuries suffered
because of past unlawful actions, the agencies should have the authority to issue "cease and desist"
orders, require payment of damages, and levy a broad range of sanctions. Law enforcement
agencies should also be authorized to initiate civil and criminal actions.
Administrative oversight and enforcement is not enough, however, to protect health care consumers.
Existing health care administrative oversight systems have been criticized repeatedly for inadequate
enforcement of legal protections.
6 6
US
See section IV of this article, below, for more detail.
GAO. HCFA Needs to Take Stronger Action against HMOs Violating Federal Standards (Nov.
12, 1991)(HRD-92-l 1) (Criticizes lack of enforcement of the Health Maintenance Organization and
Resource Development Act of 1973.). See also Committee on Government Operations, "Equal Access
to Health Care: Patient Dumping", Union Calendar No. 326 (1988), (Criticizes lack of administrative
enforcement of the Medicare anti-dumping provisions.).
38
�Accordingly, consumers must be given the right to bring their own lawsuits against providers, payers,
health purchasing cooperatives, and all other entities with legal duties under health care reform.
Exhaustion of administrative remedies should not be a barrier to obtaining timely de novo judicial
review, especially given a medically pressing need for prompt care. Consumers should be able to
recover damages compensating them for harm, punitive damages deterring others from illegal
misconduct, and injunctive relief to stop illegal and harmful conduct. Because very few consumers
have the resources to hire their own counsel, the law also must include "private attorney general"
provisions allowing plaintiffs prevailing in such litigation to recover reasonable attorneys' fees and
costs (including experts).
These consumer legal remedies must be made explicit in legislation. Otherwise, the courts are likely
to interpose legal barriers to such private rights of action. For example, federal courts have refused
to allow individuals harmed by nursing home practices to obtain judicial review and have similarly
barred court access to juveniles trapped in adoption assistance programs.
Similar approaches to enforcement have been taken under other statutes. For example, Title VI of
the Civil Rights Act of 1964 forbids recipients of federal funds from discriminating on the basis of
race or national origin. Federal agencies, such as HHS' Office for Civil Rights, both investigate
consumer complaints and conduct their own, regular investigations. Aggrieved plaintiffs may bring
suit before administrative remedies are exhausted, however, provided an administrative complaint
has been filed. A private attorney general statute authorizes prevailing plaintiffs to recover
reasonable attorneys' fees.
IV.
CLEARLY DEFINED GRIEVANCE/BENEFITS APPEALS PROCEDURES
Consumer protection, quality assurance, and clearly defined grievance/benefits appeals procedures
must be linked. When problems and disputes arise, there must be complaint and adjudication
mechanisms that contain formal options for the review and adjudication of complaints about quality
and about the reduction, termination, and/or denial of services. These options must represent
timely and viable problem-solving choices and must include adequate notice and meaningful review,
providing for due process, as described below.
A. CASE EXAMPLES
1. Notice Deficiencies: Medicare HMO
The need for specific standards for appeals is vividly demonstrated by an example drawn from
a case currently pending in the Medicare HMO appeals process:
A Medicare HMO enrollee suffered a massive stroke in November, 1992, for which
she received hospital and then nursing home care, including physical and speech
therapy. The HMO tried to terminate her nursing home services in December, but
continued them after her family protested. It did, however, refuse to order her the
custom wheelchair her physical therapist recommended; and it did so without giving
any notice of denial. Consequently, the woman remained bedridden. In early January
the HMO terminated the patient's nursing home coverage, although her speech
therapist wrote a letter to her HMO doctor explaining that continued daily speech
therapy was appropriate. The patient's family is appealing these denials through an
39
�attorney (which the HMO tried to discourage through its "Patient Advocate"). The
HMO has still issued no decision although the 60 day time limit for decisions has
elapsed. It is likelv that the HMO will affirm its initial denial and the patient
eventually will prevail with the independent decision-makers at higher levels of appeal.
However, the patient cannot afford to pay for the medical equipment and therapy
services needed since January 1993. while she awaits a decision in her favor through
the lengthy appeals process. As a result, she may remain unable to speak or move
from her bed for the remainder of her life.
2. Hearing Rights: California Medicaid Speech Therapy
California's Medicaid program covers speech therapy for children. For some children, these
services make the difference between a productive life and a lifetime of behavior problems
involving significant societal costs. In the mid-1980s, California Medicaid officials with little
background in speech therapy decided that these services would no longer be covered for
children at specified young ages. When several children in Los Angeles had their requests for
speech therapy denied, they received notice and requested a fair hearing, where they were
represented by legal services advocates. At the hearing, experts (including the speech
therapists treating these children) testified to the importance and efficacy of speech therapy
for young children. Cross-examination of the state officials who had decided to deny
coverage made clear the absence of any reasonable factual basis for the policy. The
administrative hearing official ordered the state to provide coverage for the individual
children who came forward at the hearing. The state then changed its policy and provided
coverage to all children in need.
3. Notice and Hearings Rights: Medicaid for Children Aged 18-20
In December 1991, Massachusetts ended Medicaid coverage of poor youth aged 18 to 20 who
lacked other eligibility grounds, such as disability. Young people with coverage terminated
received a notice explaining the basis for termination and availability of other grounds for
coverage. The notice also made clear that fair hearings were available. Many disabled young
people, in fact, had been classified as eligible for Medicaid based on age, as it is easier to
establish age than to go through the Social Security Administration's complex and prolonged
disability-determination process. Because they received a notice and filed a timely appeal,
these disabled youth received Medicaid coverage pending hearings and ultimately were able
to prove their disability, hence their continued Medicaid eligibility. Without notice and
appeal rights, including interim coverage while awaiting appeal, many of these very ill young
people would have suffered serious harm.
4. Notice and Appeal Deficiencies: Medicaid for HMO Enrollees
By contrast, many Massachusetts Medicaid enrollees in HMOs are often denied services
without any notice and appeal rights. Recently, for example, HMOs in Southeastern
Massachusetts have regularly denied coverage of home visits for high-risk, post-partum teen
parents. These HMOs mistakenly contend that Medicaid does not cover such services. In
fact. Medicaid has covered these services for many years and continues to do so. Because
these young people have not been given notice and the opportunity to appeal such denials,
HMOs have been able to continue denying coverage illegally, with impunity. Both these teen
parents and their children are at risk of serious health problems as a result.
40
�5. Notice and Hearing Rights: Medicare Transportation
Stanley Lewis (not his real name) is almost completely bed bound, since both his legs have
been amputated due to diabetes. Due to his frail condition, he needs round-trip ambulance
transportation from his home in Big Clifty, Kentucky, to Woodland Dialysis Center in
Elizabethtown, Kentucky for dialysis treatment. Medicare coverage for transportation service
initially was denied. On appeal, a hearing officer found in Mr. Lewis' favor, citing Health
Care Financing Administration instructions that Medicare should cover ambulance
transportation to a dialysis center. A debt to Manakee Medical Transfer in the amount of
S 14,022.43 was cleared and Lewis was reinstated for current transportation. Without notice
and a fair hearing process, his life itself would have been in jeopardy.
(). Deficient Notice and Hearing Rights: Texas Indigent Care Program
Ms. S. is very poor and thus qualified to receive Texas' County Indigent Health Care Program
(CIHCP) benefits shortly after serious heart problems required several hospitalizations in the
spring of 1992. CIHCP is a local indigent health care program for indigent residents of Texas
counties who do not qualify for Medicaid benefits. CIHCP benefits are similar in scope to
Medicaid benefits.
The CIHCP in the county where Ms S lives reviews each recipient's eligibility each month.
When Ms. S arrived for her November review, CIHCP staff told her that she was no longer
eligible for benefits because she had exceeded the $30,000 limit for the fiscal year. Her
benefits were terminated with no advance notice, no written explanation of the reasons for
the termination nor an explanation of her right to appeal. In fact, this determination was
wrong. Ms. S had only been to her doctor a few times and used three prescription
medications each month during the current fiscal year, which began on September 1.
About six weeks later, Ms. S was referred to a local legal aid agency. The agency
immediately requested review of the termination of Ms. S' benefits. Within one week
benefits were reinstated. In the interim six weeks that Ms. S' benefits were wrongfully
denied. Ms. S' health deteriorated because she did not have medical supervision or needed
medications. Her blood pressure sky-rocketed. She had heart palpitations, night sweats,
headaches, shakiness, and shortness of breath, which her doctor stated were caused by the
lack of supervision and medication. He also stated that she could have suffered disastrous
consequences, such as stroke or sudden death. In addition, Ms. S suffered the anxiety of
knowing that she could not get care and medicine that she needed to prevent the
deterioration of her health. This knowledge was particularly upsetting for her because-according to her doctor- she was religious about following her medical regimen.
41
�ii. APPEALS PROCESS STANDARDS FOR NATIONAL HEALTH CARE REFORM
1.
67
Notices of non-coverage must be given to patients. Such notice should have the following
characteristics:
-Notices should be given by providers as well as by claims administrators when the
provider makes an initial coverage decision.
-Notices should be given when services requested by the patient are denied coverage by the
provider or claims administrator; and
-Notices should also be given before certain important services, e.g., hospital, SNF or home
health services, are terminated. Patient should receive notice in time to allow for a timely
appeal.
-Notices must include clear statements of the reasons for denial of services.
-Notices must include statements of appeal rights and explanations of the process for
obtaining an appeal that make it easy for a patient to secure an appeal.
-Notices should be written in simple language and provided in the language of the recipient.
2.
A meaningful review process must be available for patients who are dissatisfied with decisions
denying, reducing, or terminating coverage and/or services.
-Initial review decisions, as well as subsequent levels of review, must be timely made. If a
decision is not timely made, the patient should be able to go on to the next stage in the
review process or, in appropriate cases, such failure should result in a deemed favorable
decision or the right to pursue judicial relief without exhaustion of further administrative
remedies.
-The review process must make provision for continuation of the status quo pending a
hearing affording due process in cases of reduced or terminated benefits (aid paid pending).
-For services that are medically important and expensive, e.g. hospital, SNF, home health and
surgeries, pretermination (including aid paid pending appeal as described above) or
contemporaneous review should be available.
-The review process should include a limited number of layers, e.g., initial decision,
administrative hearing, and judicial review. Additional layers are unacceptable because they
delay relief to patients.
-The decision-makers in the appeal process should be impartial and have no connection with
the claims administration.
67
These options and standards for review are largely the same as those adopted and approved by
the National Academy of Elder Law Attorneys and The American Bar Association Committee on
Legal Problems of the Elderly.
42
�-Standards for coverage should be properly enacted, through legislation, APA regulations or,
if applicable, the national coverage determination process. The same standards should be
used at every level of decision-making.
-There should be feedback from the appeals process to monitors of program performance
about patterns of error in claims processing.
C. DUE PROCESS NOTICE AND HEARING REQUIREMENTS
The cornerstone of the right to due process is notice and the opportunity for a hearing before a
right or entitlement is terminated. This is a Constitutional right and it is also recognized in the
Medicare and Medicaid ''' statutes and in the Administrative Procedures Act.
68
0
70
1. Societal Interest in Due Process Hearings: Accuracy, Accountability, and Fairness
Courts have recognized valid public policy interests that favor due process hearings to mediate
claims and disputes with respect to entitlements.
71
There seems to be at least three societal goals served by an oral "kind of hearing,"
Wolff v. McDonnell. 4 18 U.S. 539. 557 (1974), the desire for accuracy, the need for
accountability, and the necessity for a decision making procedure which is perceived as
"fair" by the citizens. Most often mentioned by the courts is the notion that an oral
hearing provides a way to ensure accuracy when facts are in dispute, especially if
credibility is an issue ... [e]ven if credibility is not likely to be directly in issue,
personal, oral hearings are an effective way to eliminate misunderstandings and focus
issues.
652 F.2d at 161, 162. The court reiterated this position in Gray Panthers I I . 716 F.2d 23 (D.C. Cir.
1993), at 28.
2. Evaluation of Due Process Hearing Procedures
Matthews v. Eldridge. 424 U.S. 319 (1976), established a three-pronged test for evaluating whether a
hearing procedure meets due process standards for Social Security Act cases:
First, the private interest that will be affected by the official action; second, the risk of
an erroneous deprivation of such interest through the procedures used, and the
probable value, if any, of additional or substitute procedural safeguards; and finally,
the Government's interest, including the function involved and the fiscal and
See Appendix. Part A. for background on Medicare hearing rights.
0
See Appendix. Part B, for background on Medicaid hearing rights.
0
See Appendix, Part C, for background concerning the APA.
71
See, e.g., Gray Panthers v. Schweiker. 652 F. 2d 146 (D.C. Cir. 1986). (Gray Panthers 1).
43
�administrative burdens that the additional or substitute procedural requirement would
entail.
424 U.S. at 334-35.
3. Summary of Due Process Principles Applicable to Health Care
Broad Societal Interests include:
a.
b.
c.
d.
Accuracy
Accountability
Decision-making procedure viewed by public as fair
Continuity of services by avoiding wrongful denial.
Basic Elements of Due Process include:
a. Hearing must be held prior to termination where to do otherwise denies the individual the
means to live pending resolution of the conflict. This principle applies to low-income
recipients of health services.
b. The public must have knowledge of the hearing rights and procedures (language barriers
and education levels must be accounted for).
c. Reasonable notice must be provided the individual, including a clear statement of the
proposed action and reasons for it.
d. The individual must have access to the file to review basis of denial and accuracy of
information in the file.
e. The individual must have the right to appear personally, to be represented, to present
evidence, including witnesses, and to cross-examine adverse witnesses.
f. The individual must have the right to a timely decision, based on the record as a whole.
V.
PROTECTIONS FOR CONSUMERS IN MANAGED CARE SYSTEMS
Health care reform proposals generally incorporate some provisions for managed care. Proponents
of managed care argue it can produce cost savings (through control over beneficiary behavior and
changes in provider incentives) and improve coordination and continuity of care. Critics of such
programs, however, point to evidence that incentives may also result in denial of needed services,
particularly if plans are poorly designed, underfinanced, or poorly monitored, and that cost savings
may be illusory.
Many Medicaid recipients - nearly 12.9% of them as of 1992 - already have been placed in
managed care programs as states have attempted to use this means to control costs. Quality
problems and other abuses in Medicaid managed care programs have led consumer advocates to
72
72
HHS News. U.S. Department of Health & Human Services, Release (Nov. 30, 1992).
44
�suggest'consumer protections needed in such systems. Low income people in particular may need
special protection in managed care programs, as is indicated by a RAND Health Insurance study
indicating that health outcomes for low income people with existing health problems are worse in
managed care systems than for people in fee for service programs.
73
A. Maximize Consumer Choices before Imposing Gatekeepers.
Access and quality of care are enhanced when consumers enrolled in managed care systems have the
maximum possible choice of providers and plans, and when consumers who cannot be served
appropriately in managed care svstems which have gatekeeper provisions are provided with other
options, such as fee for service or other systems. When consumer choices are restricted, additional
protections, standards, oversight, governing structures, grievance and appeal procedures, including an
expedited out-of-plan emergency review process, are needed to protect consumers who otherwise
would be locked into plans which may not provide them with appropriate quality services.
Protections needed include:
1. No one should be required to enroll in a managed care plan restricting choice of providers
unless the person can first be given a real choice among at least three competing plans able
to provide services to the person which meet all applicable standards (see below).
2. All consumers should have the choice of at least one fee-for-service plan.
3. Fee for service programs or other alternative delivery systems should be made available
(under government subsidy without any extra cost sharing) to people with special needs who
cannot be served appropriately in risk based managed care systems with gatekeeper
provisions. Such people include:
a) People in transition who need to change providers too soon or too frequently to
make managed care work, such as homeless people, children in transition to foster
care, newly arrived refugees, migrant and seasonal farmworkers, and some adolescents;
b) People who live in areas without sufficient providers to allow development of a
choice of managed care plans meeting minimum quality standards (including
linguistically and culturally appropriate services), such as people living in certain rural
or urban areas;
c) People with chronic illnesses or special health care needs which cannot be met
appropriately within available plans.
4. Delivery systems should be developed to expand access and choices for underserved and
vulnerable populations by means such as using targeted federal grants to develop or expand
federally qualified clinics or other appropriate delivery systems.
3
J. Ware, Jr., et al.. Comparison of Health Outcomes at a Health Maintenance Organization
with those of Fee For-Service Care (Lancet. May 3, 1986 p. 1017-1022).
45
�B. Protections Needed in Systems with Gatekeepers.
Managed care plans which assume financial risk for health care in general employ "gatekeeper"
provisions to place controls on health care use. Two common gatekeeper provisions are: a)
requiring consumers to have most health care services authorized by a designated primary care
provider, and b) using a "closed system," covering only services of a selected group of providers.
Consumers in such systems need special protection.
1. All managed care plan enrollees should have the right to choose their primary care
provider ("PCP").
2. Enrollees should have the right to change PCPs, although some limit on the frequency an
enrollee changes PCPs may be appropriate.
3. Parents should be able to choose pediatricians (among other primary care providers) as
the PCP for their children. Adults and children should not be required to use the same PCP.
4. Enrollees should be able to choose specialists as their PCPs when they have a chronic
condition that requires specialty care.
5. Enrollees should have a clear right to coverage of services of medically appropriate
specialists not available within their plan.
(>. Enrollees should be able to go out of plan for specialists (or other services) if they are not
able to get an appointment with a participating specialist within a reasonable period of time
(based upon the urgency of the condition).
7. Enrollees should have the right to 2nd opinions by plan providers and 2nd opinions by
non-plan providers in the case of mental health and drug & alcohol or in cases in which care
needs are disputed in a grievance or hearing process.
S. People already served by a health care provider(s) they want to keep should be offered a
plan allowing them to do so.
9. Pregnant women and people with special health care needs in ongoing treatment should
not be required to enroll in a plan with gatekeeper provisions which disrupt their ongoing
care.
10. When a person with special health care problems chooses to enroll in a plan with gatekeeping provisions, the person should be permitted to have primary care provided by a
specialist or by a specialist with the appropriate subspecialty (for example, a neurologist who
specializes in working with multiple sclerosis patients).
1 1. Consumers should have the right to change plans for cause at any time and without cause
at semiannual open enrollment periods.
12. Consumers should have complete access to data collected by any oversight organization
which could be relevant to choosing a plan or provider.
46
�13. Before enrolling in a managed care plan, a consumer should have the opportunity to
receive information in his/her own language, both in writing and face-to-face, concerning the
rules of managed care, the differences between various available plans, and characteristics of
available providers. The agent providing such information should be independent, and should
not have a financial interest in the consumer's selection.
C. Financial structure requirements.
Several types of financial structure requirements are essential to reduce quality of care problems in
managed care systems. Capitation plans reward managed care systems financially for reducing costs.
Thus any financial incentives built into managed care must have components that reward quality
care and appropriate care, not simply less care. Medicare/Medicaid statutory requirements include
some such protections/' These and other protections are needed to protect consumers from
denials of needed care due to incentives to underserve.
Specific protections should include:
1. PCPs and provider groups should not be financially at risk for referrals to specialists for
conditions requiring specialty care.
2. PCPs and provider groups should not be financially at risk for prescribing rehabilitative
services, supplies or equipment where needed to maintain function or improve quality of life.
3. Individual PCPs and their provider groups should be prohibited from making referrals to
medical entities in which they have a financial interest except in special, highly regulated
circumstances (for example, underserved areas which have no other provider choices for such
services).
4. Payments to PCPs and provider groups as an inducement to limit medically necessary
services should be prohibited by law.
75
5. Any other incentive payments or bonuses paid to PCP or provider groups should be
disclosed to the oversight organization (see discussion below) and to consumers in simple,
understandable language.
6. Reasonable medical loss ratio requirements (ratios between medical revenues and
expenses) should be imposed on the plans.
74
42 U.S.C. § l396b(mj(2)(A)(x); 42 U.S.C. § 1395 mm (i)(8). See 42 U.S.C. §
1396b(m)( 1 )(A)(ii) (regarding insolvency protection provisions); 42 U.S.C. § 1396a(a)(30)(a) (re rates
generally under Medicaid). Melden. Managed Care: How to Challenge Inadequate Access for
Medicaid Beneficiaries. Clearinghouse Review. 25(3), 228-237 (1991).
7^
This is already a requirement for Medicaid and Medicare managed care plans. See footnote 74.
47
�7. Stop-loss protection and special monitoring of effects on clients should be required if a
plan places a physician or physician group at substantial financial risk for services not
provided by the physician or physician group.
76
<S. Enhancements should be made to plans' capitated fees for higher-risk patients which are
retroactively adjusted at the end of each year, based on applicable regional experience.
9. Stop-loss protection should be made a part of managed care contracts if there are limits
on medical loss ratios. However, if no mandatory medical loss ratios are imposed, managed
care plans may be required to purchase their own reinsurance. Government paid insurance
should be designed to ensure that consumers' care is covered, not to ensure that private plans
make a profit.
1), Oversight.
In Medicaid managed care programs, the states have an oversight function. In many states this has
been performed very inadequately. Tor managed care to provide quality care, consumers need a
strong, independent oversight organization with authority to require corrective action and impose
sanctions. Individual consumers must also have the right to dispute decisions which relate to them
and to enforce legal standards and requirements, however, to protect themselves and the public in
the event the oversight organization fails to meet all its responsibilities.
1. Governing structure. Governing structures for Health Insurance Purchasing Cooperatives
(HIPCs) as well as for health care oversight organizations (state and federal) must include a
strong role for consumers.
2. Data collection. Proper oversight requires collection of data needed to monitor quality of
care. The oversight organization should be empowered to require reporting of standardized
data needed to monitor access and quality for consumers generally and for low income
people and others with special needs. Data required from managed care systems should
include (for each provider, group, and for the system as a whole) credentialing information,
results of annual focused chart reviews, annual patient satisfaction surveys, grievances and
appeals, rates at which enrollees switch providers, percentages of new enrollees who do not
make or do not receive first choice of provider, requests to enroll or disenroll, utilization
rates for a number of carefully selected services, health outcomes data, and financial and
budget information, including administrative costs.
3. Public reporting of data. Tlie oversight organization should analyze and disseminate a
broad range of this data to consumers in an understandable format, available to each
consumer in his/her own language, to help consumers make informed choices about managed
care plans. All other data collected also should be freely available to the general public.
Medicare and Medicaid managed care plans are now subject to this requirement. See footnote
74.
48
�7
'•i. Standards and review.' Legal standards for purchasing cooperatives, health plans, and
providers within managed care systems should be developed to ensure access and quality of
care, and an independent oversight organization must be empowered and mandated to
monitor and enforce these standards.
Standards related to managed care should include:
a) Practice protocols;
b) Standards for all marketing materials and other consumer information about plans,
including requirements for accuracy, clarity, understandability, and linguistic
accessibility;
c) Access standards, including timely care, telephone accessibility, limits on travel
time/distance to providers, adequate ratio of providers (including specialists) to
patients, and availability of linguistically and culturally appropriate providers;
d) Standards for providing certain specified sensitive services, such as mental health,
substance abuse, home care, prenatal care, emergency room care access, meaningful
case management (including coordination with out-of-plan and even out-of-health-caresvsiem programs such as school-based services, substance abuse programs, special state
and federal programs for disabled children, etc.), and preventive children's care
including immunizations:
e) Consumer Protection, quality and monitoring standards, including requirements for
grievance procedures, quality reviews, client satisfaction surveys (particularly of clients
who are disenrolling) and provider satisfaction surveys (especially providers
disenrolling from plans.)
78
5. Discrimination. Purchasing entities, plans and providers should be prohibited from
practices which have the effect of discriminating on the basis of race, creed, ethnicity,
national origin, sex. sexual preference, or health status.
(i. Technical Assistance. Comprehensive health reform will require plans and providers to
develop or follow standards which either do not yet exist or are not in widespread use. A J I
oversight organization should have responsibility to develop or to assist plans and providers in
developing such standards where needed.
7. Enforcement. An oversight organization(s) should have primary responsibility to review
plans and providers for compliance with applicable standards. The oversight organization or
See also section II. above, concerning quality assurance and consumer protection generally.
s
See GAO report critical of Illinois for failing to survey recipients leaving managed care plan
in large numbers. U.S. General Accounting Office, "Medicaid: Oversight of Health Maintenance
Organization in the Chicago Area." GAO/HRD-90-81 (Aug. 1990). See also Dallek, Harper,
Jimenez & Daw, Medicare Risk - Contract HMO's in California: A Study of Marketing, Quality,
and Due Process Rights". Medicare Advocacy Project. Inc., Los Angeles, CA (January 1993).
49
�some other entity should provide for an ombudsman function. Plans or providers not
meeting standards should be subject to a broad range of potential sanctions, from fines or
orders to provide certain services or make other changes, to temporary limits on new
enrollment, and even to appointment of receivers or termination of authority to operate.
Private rights of action by consumers should be available also to enforce standards, and
consumers who prevail in such litigation should receive reasonable attorneys' fees.
S. Federal Financial Assistance. The functions listed above cannot be accomplished without
federal financial assistance. This must be made available whenever oversight responsibilities
are assigned to the states or some other type of governing body.
E. Protections to avoid loss of safety net providers.
Special organizations have developed to deal with health care needs of special underserved and
vulnerable populations. Such "safety net" providers include Federally Qualified Health Centers
(FQHC). Rural Health Clinics, FQHC "look alike" clinics, school based clinics, and other programs
serving migrant workers, adolescents, and other special populations. Any reform program which
mandates gatekeeping provisions should be designed carefully to avoid disrupting this fragile delivery
system for vulnerable and underserved populations.
Specific protections for these providers should include:
1. Clinics which meet federally-defined quality standards should be offered the opportunity to
participate as managed care providers under arrangements which provide for adequate stop
loss protections, adequate capitalization, and incentives for reducing inappropriate care.
2. Existing safety net providers should be assured continuation of reasonable cost
reimbursement protections available under existing federal laws, and should continue to be
funded to serve people on a fee for service basis.
F. Protections Needed if Reform Does Not Produce a Unified Health Care System.
As discussed, having one unified national health care system rather than a fragmented one would in
itself provide some protection to consumers. If Medicaid patients or low income people are placed
in a system separate from other significant parts of the population, however, this segregation alone
will risk quality and access. In such a situation, special protections will be needed to ensure that
health care "reform" does not expand care to currently underserved people by reducing vital services
to the most needy members of our society who are currently served by needs-based government
assistance programs. Needed protections include:
1. Changing from Medicaid coverage to non-Medicaid, or from a status requiring no cost
sharing to one which does, or from one employer to another or to unemployment, should not
require a person to change health care plans or providers.
The Minnesota Demonstration Project uses an ombudsman. See Everling v. Wynia.
Minnesota Ramsev County District Court Case No. C6-87-494044 (Consent Order April 30, 1990).
Minn. Stat. § 256B.69, Subd. 11 (1989) and Minn. Stat. § 256.045, Subd. 3a.
50
�1. Medicaid beneficiaries should have continued access to medically necessary care currently
covered by Medicaid, including EPSDT services for children. If services extend beyond the
scope of those provided by a post-health-reform plan. Medicaid should "wrap-around"
coverage, either by providing coverage on a fee-for-service basis or by enhancing the provider
fee in return for expanded (and carefully monitored) coverage of the additional services.
3. Attaining Medicaid eligibility (or eligibility for protection from cost sharing) should result
in a guaranteed minimum eligibility period to avoid disruption of care.
4. Low-income consumers should not be subjected to cost sharing.
5. Transportation and language translation services must continue for Medicaid recipients
and should be added for other low-income consumers who otherwise cannot access
appropriate health care.
6. Purchasing cooperatives offering health care to low-income or subsidized health care
consumers should also serve substantial numbers of unsubsidized consumers.
7. Low income/subsidized consumers should have access to all health plans offering coverage
to other consumers served in the same geographic areas.
VI. SPECIAL PROTECTIONS ISSUES FOR SPECIAL POPULATIONS
Problems in accessing appropriate health care faced by members of special population groups have
been addressed throughout this paper as they related to issues concerning services, costs, and
managed care systems. That material is not repeated here. Some special barriers faced by certain
populations as yet unaddressed are discussed below.
A. Race and ethnicity.
Discrimination based upon race and ethnic group is endemic in our society. Its effects are seen in
the health care system in reduced access to care and worse health outcomes. Protections needed to
help address these problems include:
1. All insuring entities, public or private, should be required to have some tie to the federal
government sufficient to subject them to the nondiscrimination provisions of Title V I of the
Civil Rights Act of 1964 or to a similar provision included in the health care reform
legislation.
2. All providers receiving federal financing for provision of health services should be
subjected to a nondiscrimination provision.
3. Aggrieved patients or insured people should have a private right of action against health
care providers or insurers who discriminate upon the basis of race or ethnicity, with statutory
attorney fees available to prevailing plaintiffs.
4. Services made available under any health care reform system programs should not
exclude coverage of services which would disproportionately affect any minority group.
51
�5. "Safety net" providers, such as federally qualified health care centers and other such
providers, which serve minority populations effectively, should continue to receive support
needed to do so.
6. The oversight structure for the health care system should be charged with monitoring
access and health outcomes and other appropriate data specifically to determine effects on
minority groups and should be empowered to foster development of alternative or additional
delivery systems to resolve problems identified.
7. Funding for training and education of health care providers should be designed to
support entry into the field by persons of all racial and ethnic backgrounds and should target
support for providers who will serve underserved groups, including racial and ethnic
minorities.
B. Language.
Language barriers must be addressed to protect access and quality of health care for people who
speak limited English and/or who cannot read English effectively. Multilingual services and
translation services, without cost to those who cannot afford to pay, are needed to allow such people
to access health care benefits, protect their rights under health care programs, and to communicate
effectively with health care providers.
Access problems in our existing health care system caused by language barriers are well
documented. For example, a survey of Medicaid agencies in the seven states with the largest Latino
populations found that most agencies provided only minimal services to assist Spanish-speaking
beneficiaries.
Similarly, the United States Commission on Civil Rights has concluded that the
combination of language and cultural barriers was one of two factors which limited Asian
Americans' access to health care and other public services.
Although the greatest service
demand at Social Security offices (where applications for Medicare are taken) is from individuals
speaking Spanish, Vietnamese, Russian, Chinese, and Korean, the Administration is unequipped to
handle the needs of those speaking the latter four languages.
Agencies charged with providing
public benefits often do not do any outreach to non-English speaking populations.
80
81
82
83
Language barriers impair access to appropriate health care and health care coverage in many ways.
When agencies do not provide translators, non-English-speaking beneficiaries must provide their
own. Children who are saddled with this task on behalf of relatives may be forced to miss school
80
National Coalition of Hispanic Health and Human Services Organizations, "And Access for
AU-Medicaid and Hispanics." 1990.
81
U.S. Commission on Civil Rights, "Civil Rights Issues Facing Asian Americans in the
1990V 163-164. February 1992.
82
House Select Committee on Aging, "Insurmountable Barriers: Lack of Bilingual Services at
Social Security Administration Offices." H.Rep. 869, [1992] 102d Cong., 2d Sess., p. 8.
83
See, Gottlieb & Clark. "Fifteen Reasons Why Low-Income Elderly Clients Don't Get Public
Benefits." 25 Clearinghouse Review 1013, 1017, December 1991.
52
�and may not be adequate to the task. Some applicants may be too embarrassed to convey
accurately highly personal information to their friends and neighbors who agree to act as volunteer
translators. Untrained interpreters, however well-meaning, may not be able to convey complex
information accurately and may omit or misstate important information given by either party.
Even when bilingual written information is available, its availability may not be adequately
publicized. The number of languages in which information or translators are available may be too
limited. Many documents are more easily obtained in Spanish than in some Asian dialects, for
example. Providing multilingual written information is insufficient if the person is illiterate in all
languages. Illiteracy and reading problems are more prevalent among non-English speakers.
84
85
Needed protections include:
1. The details of the structure and benefits available under the new national health care plan
should be widely advertised in multiple languages through multiple media, including various
ethnic media, and a formal outreach campaign should be undertaken to educate people about
it.
2. Health care reform legislation should require that vital information, including marketing
material and quality assurance data, must be published in several languages.
3. Outreach programs should be developed to make sure that the limited-English-speaking
and limited-English-reading people know their options under the new system and are assisted
in enrolling for coverage.
4. All Health Insurance Purchasing Cooperatives or other payer organizations and all health
plans should be required to recruit and hire bilingual staff, to provide notices in the language
of the recipient, and to provide interpreters when needed.
C. Homelessness.
An estimated two to three million persons in America are homeless. Although the homeless
population is diverse, a disproportionate number are African-American and other minorities.
Increasingly, they are families with small children.
Most homeless people are uninsured because they lack categorical linkage to existing health
coverage programs for poor people. Only 14 percent of patients served by health care for the
homeless programs in 1991 were Medicaid eligible, and only 2 percent had Medicare. Even many
families who would be AFDC eligible were not enrolled at the time they sought care at clinics and
outreach sites.
Homeless people suffer from many of the same health problems as others, but their disease rates
are two to six times higher than that of the domiciled population. Crowded, unsanitary conditions in
w
See House Select Committee on Aging, "Insurmountable Barriers: Lack of Bilingual Services
at Social Security Administration Offices," H.Rep. 869, [1992] 102d Cong., 2d Sess., pp. 7, 16.
85
Commonwealth Fund Comm'n on Elderly People Living Alone, "Poverty, and Poor Health
Among Elderly Hispanics," 1989.
53
�which fhey are forced to seek shelter increases exposure to infectious diseases such as tuberculosis.
An increasing number are HIV-infected. Researchers estimate that 20 to 40 percent experience
severe mental illness or substance abuse problems. Homeless children are twice as likely to suffer
from an acute and chronic illness, and often are developmentally delayed.
Protections needed to reduce health care access barriers for homeless people include:
1. Provide health care insurance coverage for people without respect to employment or fixed
residence.
2. Avoid imposing gate-keeping restrictions which are impractical for people without a fixed
residence (see managed care protections section).
3. Continue to provide public financial support for the network of health care for the
homeless programs (PHS Section 340) and the public health departments, community clinics,
public hospitals, and other programs which have been providing services to this population.
4. Provide outreach services. Tlie tiring struggle to find food and shelter, coupled with
information barriers and sometimes with suspicion of established institutions, means that
many homeless people do not seek out needed health care.
5. Provide for multi-disciplinary responses to health care problems of homeless people, with
meaningful case management services. Physicians, social workers, mental health and
substance abuse specialists, outreach counselors, case managers, and patient advocates must
work together to respond to health care problems of homeless people. The goal of such
efforts is not simply to provide medical services but to assist access to other services and
support systems which help homeless people improve their health by restabilizing their lives.
D. Physical and Mental Impairments.
People with physical and mental impairments also experience health care access barriers. This is
not a small group of people. A conservative estimate of the number of persons with disabilities in
this country-- physical or mental disabilities or impairments related to disease, injury, sudden
trauma, aging, or inherited disorders- is about 43 million.
.Many have low incomes and cannot afford to purchase health insurance. Those who can afford such
coverage may have difficulty obtaining it or difficulty obtaining the most needed services due to
common preexisting condition exclusions. Others who could meet financial need requirements for
Medicaid cannot obtain it because they have no categorical linkage to covered groups.
Even when such individuals are eligible for existing health coverage programs such as Medicaid,
many have difficulty securing eligibility due to cumbersome application processes. Application forms
are long and difficult to understand, and require recalling, articulating, and verifying many details.
Persons with mental impairments especially may be discouraged by the process, by the need to make
and keep appointments and find welfare offices. Persons without any mental impairments also may
have difficulty understanding the complex eligibility criteria and may be discouraged from applying
for benefits for which they would qualify because of confusion over complex eligibility criteria.
Rarely are applications, claim notices, or benefits information, whether provided by welfare offices
54
�or private insurance companies, printed in large type for people with visual impairments. Rarer
still are sign-language translators or special equipment to ease non-written communications with
hearing-impaired people.
Needed protections include:
1. The new health care system must require compliance with Americans with Disabilities Act
(ADA) protections for people with disabilities by all parts of the health care system, including
providers, plans, and purchasing cooperatives.
2. Health care plans must not be permitted to engage in practices with a discriminatory
effect on people with mental or physical impairments, such as limiting access to specialty care
needed by such individuals. (See also managed care protections section above.)
55
�APPENDIX
A.
Medicare Hearing Rights
Medicare Hearing Rights are codified at 42 U.S.C. § 1395ff. The Hearing
rights as provided to Social Security Title II beneficiaries. § 1395ff(b)(l).
reasonable notice and opportunity for a hearing, are codified at 42 U.S.C.
are non-adversarial. See, e.g., Richardson v. Perales. 402 U.S. 389 (1971),
is to provide the same hearing
Title I I hearing rights, requiring
§405(b)-(g). These hearings
at 403.
Medicare beneficiary hearing and appeals rights are further defined in 42 C.F.R. §405, Subpart G
(Reconsiderations and Appeals Under Medicare Part A); 42 C.F.R. §473, Subpart B (Peer Review
Organizations - Reconsiderations and Appeals); 42 C.F.R. §405, Subpart H (Review and Hearing Under
the Supplementary Medical Insurance Program - Part B); 42 C.F.R. §417, Subpart Q (HMO/CMP
Beneficiary Appeals).
With respect to the denial, termination, or reduction of services, due process for Medicare beneficiaries
has been approached primarily from a Constitutional protections model as outlined in Goldberg v. Kelly.
397 U.S. 254 (1970). In Goldberg, the opportunity to be heard is identified as the fundamental requisite
of due process, id., at 267. Due process is further defined as including the right to appear personally
(with or without counsel) before an impartial decision maker, to present evidence and to confront or
cross-examine adverse witnesses, id., at 268-69. See also. Bowen v. Michigan Academy of Family
Physicians. 476 U.S. 667 (1986); Kraemer v. Heckler. 737 F.2d 214 (2nd Cir. 1984).
Due process is also important in the context of pre-termination hearings, particularly in the home health
care arena. Benefits and services should not be terminated before an impartial hearing comporting with
due process is provided. See, Martinez v. Richardson. 472 F.2d 1121 (10th Cir. 1972); Martinez v.
Sullivan. 874 F.2d 751 (10th Cir. 1989); Martinez v. Bowen. 655 F. Supp. 95 (D. N.M. 1986). See also.
Sarrassat v. Sullivan. (N.D. Calif. 1989) [1990] Medicare and Medicaid Guide f38,504)(Skilled nursing
facilities must use uniform denial notices that inform residents of their right to request that facilities
submit claims to the intermediary for an initial decision. The notice must also inform them that a facility
cannot bill the resident until the intermediary makes a formal determination.)
Medicare beneficiaries who use HMOs are often denied due process because HMO appeals procedures
are not clearly defined and made known to them. Problems have included the lack of notice or a clearly
defined procedure for review (including timely review by the HMO and access to external review such as
Administrative Law Judge and court review). See, e.g., Levy v. Sullivan. (CD. Calif. 1989) [1989-2]
Medicare and Medicaid Guide ^37,809 (Settlement calling for the processing of HMO reconsideration
requests pursuant to a 30-day timeliness standard and the issuance of a new HMO manual setting out a
30-60 day standard for the HMO stage of reconsideration decision-making.)
Similarly, Congress must act with clarity in writing review and adjudicatory rights into statutes. In
extending Pait B benefits to Medicare beneficiaries in the Omnibus Budget Reconciliation Act of 1986,
§9341, codified at 42 U.S.C. § 1395ff, Congress did not make explicit the procedural steps leading to
administrative law judge review. This resulted in considerable delays in obtaining relief for beneficiaries,
in additional Congressional studies of the problems created, and in protracted litigation. See. Isaacs v.
Bowen. 865 F.2d 468 (2nd Cir. 1989); Abbey v. Sullivan. 785 F.Supp. 165 (S.D. N.Y. 1992).
56
�B.
Medicaid Hearing Rights
Hearing rights are found in the Medicaid statute at 42 U.S.C. §1396a(a)(3) and in the regulations at 42
C. F.R. "§431. Subpart E and in case law. Goldberg v. Kellv. 397 U.S. 254 (1970).
Due process, in the context of Medicaid, a needs based program, requires a pre-termination hearing.
Other hearing rights include requirements that the agency issue and publicize its hearing procedures, that
applicants and recipients receive notice of an adverse agency action, generally in advance of the action
(aid and services pending the appeal), that applicants and recipients have rights to see case files, to
review documents used by the state, to present witnesses, to cross-examine adverse witnesses, and to
receive a decision on the record within a specified time. The Medicaid regulations set forth these
additional requirements in greater detail.
Medicaid recipients must receive notice from the Medicaid agency of provider claims that have been
denied. Tlie agency must provide recipients with written certification that they are not liable for denied
claims. Easley v. Arkansas Depart, of Human Services. 645 F. Supp. 1535 (E.D. Ark. 1986). Recipients
are entitled to limited notice and hearing rights regarding denied provider claims. Daniels v. Tennessee
Depart of Health and Environment, (M.D. Tenn. 1985)[1985] Medicare and Medicaid Guide. 534,562.
C.
The Administrative Procedures Act (APA) (5 U.S.C. §§554-557)
The formal adjudication sections of the APA apply to cases which by statute must be reviewed on the
record after a hearing. These adjudicatory sections set forth Constitutional norms of due process as
follows:
1. A clear statement (notice) of the right to a hearing: generally, this includes a statement that a
hearing is available, the applicable time periods for requesting the hearings, and the steps
necessary to obtain that hearing. §554(b)
2. An opportunity to participate in the hearing: this includes the right to be physically present at
the hearing. §554(c)
3. An opportunity to appear before an impartial hearing officer: the hearing officer should be
free to make an independent judgment of the facts at issue. §554(d) and 556(b)
4. The right of parties to be represented by counsel at hearings: parties should be free to have
either a lawyer or other representative present at hearings. §555(b)
5. Tlie right to present oral and written evidence and to conduct cross-examination: this includes
the right to see and examine all relevant documents prior to the hearing. §556(d)
6. The right to submit proposed findings of fact, conclusions of law, or to note exceptions: this
includes the right of parties to submit oral and written legal arguments in support of their
respective positions. §557(c)
7. The right to a written record or transcript of the hearing: this includes the right to have access
to the transcript of the proceedings in a timely fashion and at affordable costs. §556(3)
57
�HEALTHY FUTURES:
Principles for Health Care Reform
in the Interest of Children and Adolescents
prepared by
National Health Law Program
1815 H Street, N.W., Suite 705
Washington, DC 20006
(919) 968-6308
National Center for Youth Law
114 Sansome Street. Suite 900
San Francisco, CA 94104
(415) 543-3307
March 1993
�HEALTHY FUTURES
Healthy Futures is a set of principles for health care reform designed to
protect the interests of children and adolescents, particularly those from low
income families. Healthy Futures was developed by legal services health
advocates. Healthy Futures stresses the need for preventive care and health
education, as well as universal accessibility of appropriate, community-based
health care services for children and adolescents.
I. KEY PRINCIPLES
Principle One:
Paving Attention to Children's Needs
Health care services including health education must be appropriate for the age,
developmental status, and health condition of the child or adolescent. The health care
benefits that are available through both public and private health care financing systems
must be determined according to the needs of children and adolescents, rather than the
needs of adults.
Principle Two:
Financing that Affords Universal Accessibility
All children -- regardless of age, family income, living situation, or health status
must be able to obtain appropriate and necessary health care services including health
education in a timely manner. Financing and management of this universal accessibility
must be accomplished creatively and consistent with the principles of "shared sacrifice."
Children and adolescents in low-income families should not experience any reduction in
their current level of access to essential health care services.
Principle Three:
Sensitivity to the Needs of Vulnerable Groups
Any comprehensive system for the financing and delivery of health care services
including health education must address the needs of vulnerable children, who are at
particular risk of limited access to or total denial of appropriate services. Groups which are
especially vulnerable include children with chronic illnesses and disabilities, children living
apart from their families, and adolescents.
Principle Four:
Monitoring Service Delivery
Any comprehensne system for the financing and delivery of health care services
including health education must include a formal process to monitor and review the
�adequacy and timeliness of services. The system must be structured so that recipients
receive timely and understandable data about services and service delivery. The standards
for review and the review process must also enable families and their advocates to ensure
prompt receipt of the necessary health benefits to which they are entitled.
Discussion of these principles follows. For additional information contact:
Abigail English
Staff Attorney
National Center for Youth Law
114 Sansome Street. Suite 900
San Francisco, CA 94104
(415) 543-3307 (phone)
(415) 956-9024 (FAX)
The National Center for Youth Law (NCYL) is a non-profit organization
devoted to improving the lives of poor children and adolescents in the United
States. Established in 1970. NCYL is part of the national system of legal
services for the poor and provides specialized assistance, including assistance
on child and adolescent health issues, to attorneys and others working on
behalf of poor children and youth.
Jane Perkins
Staff Attorney
National Health Law Program
1815 H Street. N.W.. Suite 705
Washington. DC 20006
(919) 968-6308 (phone)
(919) 968-8855 (FAX)
The National Health Law Program (NHeLP) is a legal services national
support center which, since 1969. has provided assistance to legal services
and private attorneys and health policy advocates on health issues which
affect low income people, particularly Medicaid. Medicare, Title VI of the
Civil Rights Act. and state and local health care delivery issues.
�1. DISCUSSION AND RECOMMENDATIONS
A.
Paving Attention to Children's Needs
The Healthy I •'mures principles provide the basis for establishing a comprehensive
and coordinated system tor the financing and delivery of health care services including
health education tor children and adolescents. Healthy Futures is designed to ensure that:
(1) the needs of children, rather than adults, guide the determination of which services are
available and in what quantity; (2) preventive care and health education are emphasized:
and (3) comprehensive services are available and care for children and adolescents is
coordinated.
Al.
Needs of Children Paramount
The needs of children and adolescents are distinct and different from the needs of
adults. Childhood and adolescence are periods of rapid growth and development which
must be supported and nurtured to promote achievement of optimal health status throughout
life. Both for preventive care, and for treatment of acute and chronic conditions, children
and adolescents require specific services in specific amounts that vary from the needs of
adults.
A2.
Ala.
A health benefits package should be specified which recognizes the
special needs of children and adolescents, the specialized knowledge
and methods of providing care for children, and the central role of the
family in providing this care.
Alb.
The benefits package should be defined at the national level to avoid
interstate and intrastate inequities in the coverage of services.
Ale.
The services included in the benefits package should be provided in an
amount, duration, and scope that is consistent with healthy child and
adolescent development and addresses the variation in needs of
individual children and adolescents.
Aid.
The benefits package should stress preventive care, including the
provision of health education to children.adolescents. and their
families, and age-specific anticipatory guidance.
Preventive Focus
Preventive sen-ices for children and adolescents can increase the likelihood of
normal growth and dev elopment and decrease the incidence of avoidable illnesses and
adverse health conditions. Providing timely preventive services for children and
�adolescents is also cost effective. Preventive services include both general services, such as
comprehensive health assessments provided on a regular basis or anticipatory guidance, and
specific services, such as immunizations and lead screening.
A2a.
Ceneral Prevention Efforts
All possible steps should be taken to ensure that the system established for the
financing and delivery of health care services for children and adolescents is as effective as
possible from the dual perspectives of reducing costs and improving health outcomes. This
will not occur without a broad-based prevention effort that extends beyond the direct
provision of health care services. Information about the importance of prevention and the need for healthy lifestyles is not available on a widespread basis, particularly in poor and
minority communities, and its effectiveness is overshadowed by the continuing
advenisement. often directed at poor and minority communities including poor and minority
children and youth, of products such as cigarettes and alcohol with documented adverse
health effects. This situation should be reversed through a comprehensive effort, with
national leadership.
A2a-1.
Ongoing national, state, and local media campaigns should
inform families and adolescents about the need for healthy lifestyles and the
availability of preventive health care services.
A2a-2.
President Clinton and Vice-President Gore should provide
national leadership for a physical fitness campaign with a special focus on
children and adolescents.
A2a-3.
Health care professionals should directly educate their patients,
including children and adolescents, about the importance of prevention and
the availability of preventive health care.
A2a-4.
Outreach efforts should be developed and implemented in ways
that are both culturally sensitive and appropriate for children and youth.
A2b.
Comprehensive Health Assessments & Anticipatory Guidance
At least until very recently, health care financing for children, particularly under
employment based private insurance plans, has not provided coverage for such critically
important preventive services as "well child" visits, comprehensive health assessments, or
anticipatory guidance. The Early and Periodic Screening Diagnosis and Treatment
component of the Medicaid program has covered these services for eligible poor children,
but they have not been fully implemented.
A2b-1.
Every child and adolescent under the age of 21 should be
entitled to regular and comprehensive health assessments which, at
�minimum, meet the standards for the early and periodic screening mandated
by the Medicaid Act (in 42 U.S.C. 1396d(r)(l)-(4)).
A2b-2.
Comprehensive health assessments must include well-child
medical check ups, immunizations, and vision, hearing and dental check ups.
The frequency of these health assessments should be determined according to
the Guidelines for Health Supervision II of the American Academy of
Pediatrics. Where specialty pediatric professional organizations (for vision,
hearing, and dental care) recommend more frequent assessments, those
standards should control.
A2b-3.
Reimbursement or other financial support should be available
for assessments on a more frequent basis than specified in A2b-2. above, if
necessary to diagnose and treat a suspected health, vision, hearing, or dental
problem.
All health care providers who conduct comprehensive health
A2b-4.
assessments or "screens" for children and adolescents, including health
maintenance organizations and other managed care providers, should be
required to maintain and submit to the federal Department of Health and
Human Services patient-specific data on the nature and frequency of screens
provided.
The federal Department of Health and Human Services should
A2b-5.
certifv a mental health assessment tool and require its use during each
periodic comprehensive health assessment.
A2c.
Immunizations
The United States is failing to immunize its children against preventable diseases
like polio, measles, and meningitis. During the 1980s, the proportion of immunized
American preschoolers fell to fewer than one-half. As with many health problems, the poor
are bearing the brunt of this statistic. Vaccine cost (which for some vaccines tripled) and
vaccine shortage (due to shrinking public clinic resources and increased demand) are chief
underlying problems.
In the short term, state Medicaid agencies and pharmaceutical
A2c-1.
manufacturers, as a co ndition of receiving federal funds, should be required
to participate in bulk vaccine purchasing systems.
A2c-2.
In the long term, the Centers for Disease Control (CDC) should
be authorized to develop and administer a universal vaccine program for all
children, reeardless ot familv income.
�A2d.
Lead Screening and Abatement
Lead is the number one envirc:nmental hazard for children. Recent estimates show
96.5% of the poorest African-American, inner city children are affected by lead exposure.
There is strong consensus in the medical community that abatement is the most effective
form of treatment. Lead exposure in children should be detected and abated.
A2d-1.
Universa blood lead testing should be phased in. with testing
of all poor children to Degin immediately. Poor children should be tested
according lo the CDCs periodicity schedule for "high risk" children.
A2d--2.
Children meeting the current CDC definition for lead poisoning
should receive medical follow up, nutritional and avoidance counseling, and
environmental investi gitions as pan of their health benefits package. These
benefits should be added to the Medicaid program as federally reimbursable
benefits and should be included in any future health care financing that may
substitute for Medicaid
A2d-3.
State Mejdicaid programs should be allowed to include
abatement as a "home adaptation" service in the homes of children
developmentally disabled by lead and. as a result, receiving home and
communitv based waiver services.
A2d-4.
Areas and population groups in which children are at especially
high risk for lead exposure should be targeted for culturally sensitive outreach
and education to health care providers, children, and their families.
A2d-5.
The Department of Housing and Urban Development should
immediately promulgatk regulations to implement Title X of the Residential
Lead Poisoning Prevention Act of 1992 and to guide spending of the $100
million appropriated for public housing abatement.
A2d-6.
A "youtli conservation corp" of inner city youth should be
trained on. and conduct, abatement activities.
A3.
Comprehensive Services and Coordination of Care
There is strong consensus in the medical community that children and adolescents
need access to continuous, compreheijisive and coordinated care. Such care is particularly
important to meet the needs of special groups of children and adolescents such as infants
bom exposed to alcohol and other drugs, children and adolescents with HIV infection. Too
many children are receiving care in hospital emergency rooms and have no ongoing care
�provider. Many community-based p ograms that have the capacity to provide
comprehensive and coordinated care have been hampered by low rates of reimbursement
and fragmented categorical funding sources. Funding for case management services has
been unavailable or inappropriately restricted.
B.
A3a.
A full continuum of care from preventive and primary care through
tertiarv care must be available for all children and adolescents.
A3b.
I lealth care services including health education should be delivered in
community settings, whenever possible.
A3c.
Reimbursement must be available for school-based or school-linked
health clinics and community health clinics that provide continuous
and coordinatec medical, educational, and social services to children
and adolescents
A3d.
Reimbursement must be available for services such as case
management that facilitate the provision of coordinated and continuous
care for children.
A3e.
To the extent that health care services are provided through capitated
managed care systems, these systems must ensure the availability of
primary care thtit is appropriate for children and adolescents and must
include provisions for coordination of care.
A3f.
Contracting arrangements with these systems should ensure the
continued viabi ity of health care providers such as community clinics
and federally qI aalified health centers that have traditionally provided
care for the poor, as well as school-based and school-linked health
centers.
A3g.
A regional health planning system should ensure the appropriate
availability of tertiary care and technological equipment and should
develop a system for assuring transportation to tertiary care sites.
Universal Accessibility
The principle of universal accjessibility of health care services for children is best
served through a four part approach to ensure that: (1) all children and adolescents, and
especially all poor children and adolescents, are covered; (2) costs are affordable; (3)
adequate numbers of prov iders are available; and (4) care is provided at community-based
sites.
�Bl.
Universal Eligibility
Nearly 12 million children and adolescents in the United States have no public or
private health insurance. Many poor children and adolescents over the age of 10 currently
do not qualify for Medicaid. In additpn. older adolescents or young adults ages 21-24
encounter serious obstacles in obtainiijig health insurance. Even those children and
adolescents with some public or private insurance coverage frequently experience
interruptions in eligibility (particularly for Medicaid) and changes in scope of coverage
(particularly with private insurance).
B2.
Bla.
To the extent that health care financing for the poor continues to be
provided through the existing Medicaid program, all children,
adolescents, and young adults up to age 24 whose families incomes
are less than 133% of the federal poverty level should be eligible on a
continuous basis beginning immediately.
Bib.
To the extent that a plan for national health care reform phases in
coverage for those who are currently uninsured, children, adolescents,
and young adults up to age 24 should be added first and their
coverage should begin immediately.
Affordabilin
Studies have documented that the poor on average incur greater out-of-pocket
expenses for health care than those in higher income groups. Even families who are not
poor experience difficulty in paying cut-of-pocket costs for health care. Co-payments and
other cost-sharing provisions often act as a deterrent for children and adolescents to receive
necessary care unless the amount of those payments is reasonable in relation to family
income.
B2a.
Children and adolescents up to age 21 living below 200% of the
federal poverty evel should receive health care services including
health education at no cost.
B2c.
Any co-payments or cost-sharing for young adults ages 21-24 and for
children and adolescents living in families with incomes above 200%
of the federal poverty level should be determined according to a
sliding scale based on ability to pay.
�B3.
Availability of Adequate Numbers of Providers
A lack of adequate numbers of primary care providers plagues the current health
care delivery system. In some urban zip code and rural areas there are no providers at all.
In other areas, providers refuse or strictly limit the number of low income people whom
they will accept. The American Academy of Pediatrics estimates that fully 62% of
pediatricians place quotas on or refuse service to Medicaid recipients altogether. People of
color are disproportionately affected, in part because of the underrepresentation of people of
color among health care professionals. African-Americans, for example, comprise 12% of
the general population, but only 3% of physicians.
B3a.
B3b.
Providers of primary pediatric care should be compensated at rates
which are adequate to ensure that a sufficient number of providers are
available to serve children of varying ages, health conditions, and
socio-economic backgrounds.
Compensation for pediatric primary care providers must be adequate
whether health care is provided through a fee-for-service system or a
capitated managed care system. Reimbursement methodologies in
capitated systems which are currently based on existing, inadequate
fee-for-service rates should be unlinked from the fee-for-service rates
as soon as possible.
B3c.
Compensation to primary care providers should be conditioned upon
their meeting and maintaining appropriate credentialing, quality of
care, and service standards.
B3d.
Loan forgiveness programs and other incentives should be established
to encourage physicians and other health care professionals to enter
primary care specialties such as pediatrics and family practice.
B3e.
Reimbursement or other compensation should be available for services
provided by health care professionals other than physicians, including
nurse practitioners, physicians' assistants, and nurse midwives.
B3f.
Use of school-based health personnel, community volunteers, and
peers should be encouraged to ensure adequate, community-oriented
staffing at primary care settings.
B3g.
The national health service corps should be expanded to ensure that
adequate numbers of providers are available to serve in low-income
urban and rural areas.
B3h.
As a condition to receipt of federal funds, medical schools should be
required to implement primary care residency programs and rotations.
�B3i.
B4.
The U.S. Departments of Health and Human Services and Education
should develop a plan for restructuring our educational system to
encourage increased minority enrollment in the health professions.
(Such a plan could be based on existing models such as the University
of Chicago's I'M READY program.)
Accessibility and Convenience
Comprehensive primary care services that are delivered in community-based and
community-oriented settings can be effective in promoting the health of children and
adolescents. These models minimize transportation barriers which are particularly severe
for poor and low income children and adolescents. In addition, home-based care has been
shown to be important and effective for children and adolescents, whose growth and
development can be adversely affected by unnecessary institutionalization.
C.
B4a.
Comprehensive primary care services should be available in
community-based settings including school-based and school-linked
health centers and community clinics.
B4b.
financing should be available for home-based services, and financing
incentives should be designed to encourage care of children in their
own homes rather than in hospitals.
B4c.
Transportation services must be available to assist children and
adolescents.
B4d.
Providers in the health care system — particularly capitated managed
care plans — must be geographically accessible (in terms of distance,
and travel and waiting time) and culturally and linguistically
accessible (in terms of African-American and non-English speaking
persons). Standards for such accessibility should be set nationally by
a panel which would include legal services advocates.
Sensitivity to the Needs of Vulnerable Groups of Children
Certain groups of children are particularly vulnerable within the health care system,
either because of their financial circumstances, their health conditions, their living
situations, or their age and developmental status. At minimum, the particular needs of three
vulnerable groups must be addressed: (T) children with chronic illnesses and disabilities; (2)
children who are living apart from their families; and (3) adolescents.
�CI.
Children with Chronic Illnesses and Disabilities
Children and adolescents with chronic illnesses and disabilities are particularly
vulnerable within the health care system. They are disproportionately from poor families
but are not all eligible for Medicaid. They also encounter severe, often insurmountable
obstacles in obtaining and maintaining private health insurance coverage. Their needs for
services include a broad range of non-medical health related services such as physical
therapy and in-home care. In addition, there is growing recognition that family-centered,
community-based, coordinated care is the most appropriate and effective way of caring for
children with chronic illnesses and disabilities. The services necessary to provide this
model of care have been traditionally excluded from insurance coverage, however.
Strategies are needed to reduce the incidence of "new morbidities" such as perinatal drug
exposure and HIV infection and to ensure that children and adolescents affected by them
receive appropriate care.
Cla.
Comprehensive and coordinated care must be available to address the
needs of children with chronic illnesses and disabilities.
Clb.
Reimbursement or other financial support should be provided for
medical case management and other care coordination services to
ensure that children with chronic illnesses and disabilities receive
comprehensive and coordinated care.
Clc.
Reimbursement or other financial support should be provided for the
full range of services that are necessary for the care of children and
adolescents with chronic illnesses and disabilities, including early
intervention, physical therapy, speech therapy, occupational therapy,
and other rehabilitative services, home health care, hospice care, and
other long-term care.
CId.
Reimbursement or other financial support should be provided for
specialized services such as HIV prevention or substance abuse
treatment that are designed to prevent the incidence of perinatal drug
exposure and pediatric HIV infection.
Cle.
Strategies should be developed and implemented on a widespread
basis to increase access to primary care for infants suffering from
perinatal drug exposure or pediatric HIV infection.
Clf.
Capitated case management systems should honor the ongoing medical
relationships of vulnerable children, to the maximum extent possible.
Such systems should also recognize that the preventive health care
needs of these children are often ignored and should assure that
preventive care is provided.
�C2.
Children Living Apart From their Families
The poor health status of children and adolescents living apart from their families
has become increasingly apparant during the past decade. Children in foster care have
much higher rates of physical and emotional illness and developmental problems than other
children of the same age. Physical examinations have shown only 15% of these children to
be entirely "normal." Half have physical abnormalities and up to 80% have moderate to
severe psychological problems. Although most foster children are covered by Medicaid,
many do not receive appropriate health care. Some health care providers are reluctant to
serve children with multiple problems when reimbursement is not available for the case
management and other care coordination services they need.
Children in the juvenile justice system also have high rates of serious health
problems, but their access to appropriate care is often severely compromised. Children in
most juvenile justice facilities are not eligible for Medicaid and the scope of care available
to them is thus determined by the budgets of local and state juvenile justice or public health
agencies. Many children in juvenile justice facilities receive grossly inadequate health care.
Homeless children and adolescents also experience high rates of serious health
problems. Homeless youth, for example, are at seriously increased risk for HIV infection.
These children and adolescents often experience difficulty in qualifying for Medicaid, even
if they are eligible, due to a variety of factors related to the application process. Thus they
are often unable to receive care or do so, if at all, in hospital emergency rooms.
C2a.
Children in state-supervised care (including foster family homes,
group homes, residential treatment centers, congregate care facilities,
and other institutions) should be covered immediately up to age 21
under Medicaid or any new comprehensive system for financing the
delivery of health care services.
C2b.
Children in juvenile justice facilities (including detention centers, other
county facilities, and state correctional institutions) should be covered
immediately up to age 21 under Medicaid or any new comprehensive
system forfinancingthe delivery of health care services.
C2c.
Homeless children and adolescents who are living apart from their
families should be covered immediately up to age 21 under Medicaid
or any new comprehensive system for financing the delivery of health
care services and must be able to receive care in settings other than
emergency rooms.
C2d.
A "medical passport" should be developed and accompany each child
in out-of-home placement. Each child should receive case
management services to coordinate the medical, social, psychological,
and mental health services needed by the child, including preventive
care.
10
�C4.
Adolescents
Adolescents are more likely to be uninsured than any other age group in the
population. All poor adolescents will not be covered under Medicaid until 2002 according
to current eligibility phase-in schedules. At the same time, for developmental reasons
adolescents are affected by a broad range of health problems including chronic and physical
illnesses, nutrition and fitness problems, accidental injuries, dental and oral health problems,
HIV/AIDS and other sexually transmitted diseases, pregnancy, mental health problems,
including suicide, alcohol, tobacco, and drug abuse. For developmental and situational
reasons, many adolescents need access to health care to address these problems on an
independent and confidential basis. Despite the broad range of serious health problems
affecting adolescents, their needs are often given low priority in publicly funded programs .
and private health insurance frequently omits services critically important for this age group
from its benefit package.
D.
C4a.
The basic package of benefits must include services that are necessary
to address the special health and developmental needs of adolescents,
including, at minimum: screening and treatment for sexually
transmitted and contagious disease, including HIV; family planning
and reproductive health care; outpatient as well as inpatient counseling
and treatment for substance use and abuse (including alcohol and
cigarette smoking); and outpatient as well as inpatient mental health
services.
C4b.
Preventive services must be available to adolescents at least as
frequently as recommended by the Guidelines for Adolescent
Preventive Services of the American Medical Association.
C4b.
Services for adolescents must meet the minimum standards for access
to health care recommended by the Society for Adolescent Medicine,
including availability, visibility, quality, confidentiality, affordability,
flexibility, and coordination.
C4c.
Capitated managed care systems should provide for subcontracting or
other mechanisms of financing for care provided to adolescents in
school-based and school-linked health clinics and other communitybased centers.
Review for Denials of Services
Situations will inevitably arise in which children and adolescents will be denied
necessary health services or will experience delay in receiving those services. It is essential
that children's families or others advocating on their behalf have knowledge of the problem
and be able to seek review when denials or delays occur. A quality monitoring and review
mechanism should be established that, at minimum, includes: (1) practice guidelines; (2)
11
�monitoring; and (3) review of individual denials.
Dl. Practice guidelines
Dla.
The adequacy of preventive services should be measured against
widely accepted professional practice standards.
Dlb.
Practice guidelines should apply to all pediatric care providers.
D2. Monitoring of care
D2a.
Uniform data reporting requirements should be established and applied
to all providers -- including capitated care providers -- that would
allow for the collection of information on the extent and effect of
preventive care and health education services. This information
should include outcome measures that are appropriate for children and
adolescents of different ages, health conditions, and developmental
status.
D2b.
Capitated at-risk providers should be subject to strict data reporting
and monitoring of quality of care. Capitated managed care plans
should be required to collect and disseminate early and periodic
screening and treatment data by individual enrollee and by individual
provider.
D2c.
Contracts entered into between governmental entities and providers
containing the terms and conditions for the delivery of services should
be in the public domain and should not be subject to privilege on the
basis of proprietary information or for any other reason.
D2d.
Providers and subcontracting providers should be subject to annual onsite and medical record auditing. Such audits could be conducted
more frequently, if necessary to ensure the provision of quality care.
D2e.
Capitated plans should not be allowed to engage in door-to-door
marketing of their plans.
D2f.
Health care providers, drug companies, medical equipment
manufacturers, and health insurers should be required to submit
uniform, provider- identified data regarding profits.
12
�D3.
Review of Individual Denials
D3a.
A mechanism must be established that would enable any child or
adolescent to seek review when a request for service or for
reimbursement for a service is denied.
D3b.
The review mechanism must provide for review by an independent
fact finder, whether the child or adolescent is covered under a private
indemnity plan, an ERISA plan, or a capitated, at-risk, managed care
plan. Children and adolescents whose care is paid for through public
insurance - Medicaid, Medicare, or replacement programs — must
have their due process rights to appeal through independent
governmental hearing procedure preserved regardless of any
alternative mechanism that is adopted for reimbursing or financing
their care.
D4c.
When the services denied are needed on an urgent basis a mechanism
must be provided for speedy review by a decisionmaker who is
independent of the health insurer or health plan administrator.
Everyone should be entitled to appeal service denials. The process
should be clearly explained and allow for speedy out-of-plan review in
urgent situations.
13
�THE
WHITE H O U S E
WASHINGTON
June 16, 1993
R. Gordon Hepworth, M.D., FRCSC, FACS
Hepworth Associates
660 Highland Drive
Point Roberts, WA
98281
Dear Dr. Hepworth,
Thank you for the thorough proposal for health care reform
developed by you and your colleagues. The comprehensive health
care reform we w i l l propose demands the best ideas from a l l of us
and we are grateful for the input of concerned c i t i z e n s . When we
release our plan to the public i n the near future, I hope that
you w i l l see that we are committed to many of the same goals.
I appreciate the extensive input and hope that we can work
together to achieve real health care reform.
Regards,
i
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICM:mb
�THE WHITE H O U S E
WASHINGTON
May 12, 1993
Anne Johnson
AARP/VOTE Nebraska
l e t Cong. D i s t r i c t Coordinator
1909 K Street NW
Washington DC
20049
Dear Ms. Johnson:
I want to thank you for sending the Health Care Task Force
the video tapes of the Nebraska health care reform TV programs.
They w i l l be very helpful to the Task Force as we t r y to ensure
that reform addresses the rural needs of our diverse country.
Thank you again for your assistance to our e f f o r t s and
please pass on my appreciation to Corinne Jochum and Dr. Keith
Mueller. I hope we can work together to achieve r e a l health care
reform.
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICMrmb
�THE WHITE
HOUSE
WASHINGTON
May 12, 1993
Stephen Rosenfeld
Boston Risk Management Corporation
100 Summer Street
Boston, MA
02110-2104
Dear Mr. Rosenfeld:
Thank you for your a r t i c l e on integrating workers'
compensation and employee health benefits. I have passed i t on
to Gary Claxton, a member of the Task Force who i s focusing on
workers' compensation issues. I would l i k e to assure you that we
w i l l recommend the inclusion of the medical cost component of
workers' compensation i n health care reform.
Thank you again for your input to this process.
Regards,
C
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICM: mb
�B
O
S
T
O
N
RISK MANAGEMENT
C
O
R
P
O
R
A
T
I
O
N
March 23, 1993
I r a Magaziner
D i r e c t o r , Health Policy Task Force
White House
Washington, D.C.
Re:
Solving the Problems of Workers' Compensation
Part of Health Care Reform
as
Dear Mr. Magaziner:
I have read i n recent a r t i c l e s of your statements t h a t
workers compensation costs w i l l be addressed as p a r t of the
e f f o r t s of the Task Force t o create a comprehensive system f o r
c o n t r o l l i n g health costs.
This i s a subject t h a t I have been
working on since leaving government i n 1991. U n t i l t h a t time I was
Chief Secretary t o the Governor i n t h e Dukakis A d m i n i s t r a t i o n i n
Massachusetts.
1
I am enclosing a b r i e f a r t i c l e I completed r e c e n t l y , p u t t i n g
i n simple terms the f i r s t steps toward i n t e g r a t i n g workers'
compensation and employee health b e n e f i t s . As an example, there
are f a i r l y basic and innocuous changes t o ERISA t h a t could go a
long way i n helping both t o expand b e n e f i t s and lower costs. I
would be pleased t o t r y t o be of assistance t o the Task Force, i f
t h a t seemed a t a l l u s e f u l .
I n any event please accept my wishes f o r success i n t h i s
i n c r e d i b l y important challenge you and your colleagues are f a c i n g .
Sincerely,
Stephen Ro
Enclosure
as'
0-
'
100 Summer Street
Boston, MA 02110-2104
tel. (617) 951-1570
fax. (617) 951-1595
�/Jo<; Ai
THE WHITE H O U S E
WASHINGTON
May 12, 1993
Lee Williams
Public Strategies Washington, Inc.
1455 Pennsylvania Avenue
Washington, DC
20004
Dear Mr. Williams:
I would l i k e to thank you for asking Mack McLarty to pass on
the health care proposals of your doctor, Maurice S i s l e n .
Please assure Dr. S i s l e n that we share his concerns about the
problems of the current health care system and the necessary
goals of reform. With the input and advice of practitioners such
as Dr. Sislen, we are working better to achieve health care
reform.
Thank you again for your input to t h i s process.
Regards,
C <Ki—
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICM:mb
cc: M. McLarty
- /
�ROUTING SLIP
FROM:
Mack McLarty
Chief o f S t a f f
DATE:
3>/lc>;i3>
TO:
Rahm Emanuel
John Podesta
_
Marcia Hale
Carol Rasco
_
A l e x i s Herman
Bob Rubin
_
Nancy Hernreich
E l i Segal
_
Anthony Lake
George Stephanopoulos
Bruce Lindsey
C h r i s t i n e Varney
Regina Montoya
David Watkins
Bernie Nussbaum
Maggie Williams
Howard Paster
OTHER
FOR YOUR:
Action
See me
^
InformatitnT
_
_
•
—rv<*-tr>vt .
3
�p.i
MAR 10 '93 04:12PM PUBLIC STRATEGIES DC
Facsimile Cover Sheet
Please deliver the following pages to:
Name:
Company:
Fax Number:
^1?]'M<^d/l£^,
^-C
P - ^ g-
^ / S ^ - // Z
/
From:
Date:
V/e are transmitting a total of •' pages including this cover sheet. If you
do not receive all the pages., please call us at (202) 783-2596. Our rax number is
(202) 62.8-5379.
�LEE WILLIAMS S f / e / f Z
PUBLIC STRATEGIES WASHINGTON, Inc.
The Witlnfd, 1*53 Penmylvwii Av«oc, N.W., Wuhaiften, D.C. 20004
�M A U R I C E A. S I S L E N , M. D.
G I L B E R T M. E I S N E R , M. D.
R I C H A R D M. K A U F M A N , M. D.
J A M E S N . RAMEY, M. O.
M O R T O N A. K A V A L I E R , M. D.
C A R O L E E. H O R N , M. D.
March 2, 1993
1143 • 1 9 T H STREET, N. W. SUITE 60S
WASHINGTON, D. C 2 0 0 5 8
TELEPHONC
2»«-0670
Lee Williams
Public Strategies Washington, Inc.
1455 Pennsylvania Avenue
Washington, DC 20004
Dear Lee,
!
The
hard and somewhat unpleasant proposals 1 of the new
administration have heartened me. As I am sure yo\ii remember, my
health care proposals seemed p o l i t i c a l l y hazardouk i n the past
and were promptly discounted.
Let me b r i e f l y r e i t e r a t e my
thesis.
THE PROBLEMSt
1.
Health care uses an extremely large and growing portion
of the G.D.P.
2.
37,000,000 individuals are uninsured and i n large part
are deprived of health care or are using l e r y expensive
urgent interventional care.
3.
B i l l i o n s of dollars are spent to administer and i n
large measure police health care paymentsJ
4.
The success of these cost control methods leave much to
be desired.
5.
Similar amounts of money are spent attempting to comply
with and "game" the system. No health product results
from t h i s and the above expenditures.
6.
Some b i l l s paid by Medicare for laboratory services far
exceed what I pay the same laboratory for the same
service.
7.
Linkage of insurance to employment has l i n i t e d the most
e f f i c i e n t deployment of workers and industries.
I
CAUSES OF THE PROBLEMS:
1.
Heath insurance i s a tax deductible cost to the
employer and a tax free benefit to the employee.
2.
This d i f f e r s from retirement funds which are taxed upon
withdrawal.
3.
Policing from afar i s unsatisfactory and djegrading.
4.
The patient i s the only one who can tru:.y police the
system,
�MAR 10 '93 04=13PM PUBLIC STRATEGIES DC
P.4
March 2 1993
Page two
r
GOALS:
1.
2.
3.
4.
5.
The patient must be motivated to control costs.
The administrative costs which produce no health care
product" should be reduced.
Transferability of insurance should be! maximized to
have the least negative effect on industijy.
Funds should be developed with the minimum of
appropriation to provide for the uninsured and the
underinsured.
The federal government should pay as l i t t l e as any
other purchaser for identical services.
FLAN:
1.
2.
3.
4.
5.
All premiums for health insurance withih limits shall
be tax deductible, whether paid by individuals or
employers.
j
With appropriate caps, all benefits paid by third party
shall be considered as income to the beneficiary.
Transferability of insurance shall be guaranteed.
All tax derived from the taxation of benefits shall go
into a trust fund and this fund shall be used to
provide benefits for the uninsured and ujnderinsured.
All health care providers to the fedeial government
must certify that they are not providing similar
services to any entity at a lower price. ,
Sincerely and hopefully,
J
fatoz/ ^ ^ ^ ^ ffi
^
Maurice A. S i s l e n , M.D.
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001a. letter
SUBJECT/TITLE
DATE
Ira C. Magaziner to Douglas H. Paal; re: Unable to Accept Invitation
to Speak (partial) (1 page)
06/16/1993
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number: 4786
FOLDER TITLE:
[Suggestions] [Loose]
2006-0885-F
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)|
Freedom of Information Act -15 U.S.C. 5S2(b)|
PI National Security Classified Information 1(a)(1) of the PRA|
P2 Relating to the appointment to Federal office 1(a)(2) of the PRA|
P3 Release would violate a Federal statute 1(a)(3) of the PRA|
P4 Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) of the PRA]
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA]
b(l) National security classified information 1(b)(1) of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) of the FOIA]
b(3) Release would violate a Federal statute |(bX3) of the FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information [(b)(4) of the FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells |(bX9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRIM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�THE WHITE
HOUSE
WASHINGTON
June 16, 1993
Douglas H. Paal
Dear Mr. Paal:
I would like to thank you for your invitation to speak with
the group of investment managers you assembled and I am sorry for
the very belated response. Although I was unable to attend due
to time constraints, we are very cognizant of the important
contributions new private investors w i l l offer to a successful
reform effort.
Thank you again for your invitation and I hope you w i l l
continue to stay in touch.
Regards,
J
Ira C. Magaziner
Senior Advisor to the President
for Policy Development
ICM:mb
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001b. letter
SUBJECT/TITLE
DATE
Douglas H. Paal to Ira Magaziner; re: Invitation to Speak Before
Group of Investment Managers (partial) (1 page)
03/09/1993
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number: 4786
FOLDER TITLE:
[Suggestions] [Loose]
2006-0885-F
JE2731
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)|
Freedom of Information Act - [5 U.S.C. 552(b)|
PI National Security Classified Information 1(a)(1) of the PRA|
P2 Relating to the appointment to Federal office 1(a)(2) of the PRA|
P3 Release would violate a Federal statute |(aX3) of the PRA|
P4 Release would disclose trade secrets or confidential commercial or
financial information [(a)(4) of the PRA]
P5 Release would disclose confidential advice between the President
and his advisors, or between such advisors [a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA)
b(l) National security classified information |(bXl)of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) of the FOIA]
b(3) Release would violate a Federal statute |(bX3) of the FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) of the FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions [(b)(8) of the FOIA|
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concerning wells |(bX9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
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�t
March 9, 1993
Mr. I r a Magaziner
Senior Domestic Policy Advisor
Room 216, O.E.O.B.
The White House
Washington, D.C. 20500
Attention: Ms. Molly Brostron
Dear I r a :
This note i s to offer you an opportunity to speak to a small
group of influential investment managers on March 17. I know
they would be very interested to hear your thoughts on the work
of your task force; I cannot judge how their claim on your time
weighs against your other priorities, however. Let me just t e l l
you something about them and give you a chance to decide.
The Washington Research Group, to which I am an advisor, provides
policy-related infonnation to large institutional investors.
Periodically the fund managers are invited to Washington for
updates in person. For example, I will speak to them at dinner
on March 16 on opportunities in Asian markets. They hope you
might be able to find thirty minutes for them, off the record, no
media, anytime on March 17.
The group i s likely to be fewer than twenty. Among them w i l l be
managers of the following pension and other funds: Banker's
Trust, Brinson Partners, Chancellor Capital Management, CREF,
Delaware Investment, Equitable Life, IDS Financial Services,
Institutional Capital, J.P. Morgan, Kemper, Omega Advisors and
Wellington Report. Clearly, these people have a strong interest
in where your work i s leading policy. They would like to hear
from you, i f you can spare the time.
Thanks very much for your attention, and good luck.
Sincerely,
Doug
�T H E WHITE
HOUSE
WASHINGTON
June 16, 1993
Jeffrey Finkle
Executive Director
National Council for Urban Economic Development
1730 K Street NW
Suite 915
Washington, DC
20006
Dear Mr. Finkle,
Thank you for forwarding the piece by Richard Ward on the
importance of urban medical centers i n not only maintaining the
quality of health care i n inner c i t y communities but also i n
economic development. The comprehensive health care reform we
w i l l propose demands the best ideas from a l l of us and I
appreciate your contribution to this process.
Thank you again and I hope that we can work together to
achieve meaningful health care reform.
Regards,
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICMrmb
�National Council for Urban Economic Development
1730 K Street, N.W., Suite 915. Washington, D.C. 20006 • Telephone (202) 223-4735 • Fax (202) 223-4745
Jeffrey A. Finkle, Executive Director
April
2 3 , 1993
Mr. I r a Magaziner
Advisor t o t h e President
The White House
Washington, DC 20500
Dear Mr. Magaziner:
The N a t i o n a l C o u n c i l f o r Urban Economic Development (CUED) i s
pleased t o p r o v i d e i n s i g h t i n t o t h e r o l e o f h e a l t h care
f a c i l i t i e s i n urban areas. Since 1967, CUED has been p r o v i d i n g
i n f o r m a t i o n t o i t s members who b u i l d l o c a l economies t h r o u g h t h e
t o o l s used t o c r e a t e , a t t r a c t , and r e t a i n j o b s . CUED i s a
membership o r g a n i z a t i o n s e r v i n g p u b l i c and p r i v a t e p r a c t i t i o n e r s
who have e x t e n s i v e e x p e r i e n c e i n i s s u e s p e r t a i n i n g t o urban
economic development.
Ms. M o l l y Brostrom i n your o f f i c e suggested t h a t we p r o v i d e
i n f o r m a t i o n t o you about t h e r o l e o f urban h e a l t h care f a c i l i t i e s
i n l o c a l economies. We asked Mr. R i c h a r d Ward, a CUED board
member w o r k i n g w i t h c i t i e s i n r e t a i n i n g t h e i r m e d i c a l f a c i l i t i e s ,
t o p r o v i d e a b r i e f overview o f t h e i s s u e . Mr. Ward i s one o f
CUED's 1200 members who i n c l u d e t h e n a t i o n s t o p c i t y , s t a t e , and
county economic development p r o f e s s i o n a l s i n a d d i t i o n t o chamber
o f commerce d i r e c t o r s , bankers, c o n s u l t a n t s , i n v e s t m e n t bankers,
d e v e l o p e r s , academicians, and u t i l i t y e x e c u t i v e s .
We hope t h a t t h i s background i n f o r m a t i o n i s h e l p f u l .
not h e s i t a t e t o c a l l us f o r a d d i t i o n a l i n f o r m a t i o n .
Sincerely,
J^fWeyfA.
*
Finkle
Executive D i r e c t o r
Please do
�DEVELOPMENT STRATEGIES, INC
CONSULTANTS IN ECONOMIC, COMMUNITY AND Kl-AL ESTATE DEVEl.OI'MI-NT
Economic,
Attitudinal
Market
and
Research
Land Use and
Facility
Planning
Real Estate
Counseling
and
Appraisal
THE CRITICAL ROLE OF URBAN MEDICAL CENTERS
IN ECONOMIC DEVELOPMENT
by
Richard C. Ward, CRE.AICP
President
The urban medical center is a critical element of the economic base of many
central cities across America. In addition to its all important service role of providing
accessible health care for those who live in the urban core, it provides direct jobs for
city residents and contributes to both the economic and fiscal base of the community. Its
multiplier effects spread both employment and fiscal benefits across the region, as well
as the local economy, both through the expenditures of its employees and its purchases
of a wide variety of goods and services.
If the urban medical center incorporates the teaching and research components of
a major university, it can serve as a key catalyst for the attraction and incubation of a
wide array of other businesses and institutions. Many of these will represent cutting
edge technologies contributing to: the design and manufacture of pharmaceuticals;
biotechnology products; diagnostics; and medical and surgical instrumentation,
equipment and imaging devices.
Health care has grown to represent over 13 percent of the nation's total economic
product (GNP). While it is understood that a continuation of this trend toward an ever
increasing share of our economy being devoted to health care threatens our national
economic well-being, the fact is that there are important economic benefits that flow
Richard C. Ward
Larry Marks
Robert M. Lewis
Barry Hague
D. Michael Gaeke
91 I \V:isliin^Iun A v e n u e
• SuilL- 620 • Si. Louis. Missouri d S K l l
• O H ) 421-2800
•
<i21-3-iOI
�from this industry. Central cities are often the unique beneficiaries of this economic
activity. While certainly there are many examples of hospitals that have followed their
traditional service populations from the central cities to the "greener pastures" of
suburbia, the cost of replicating the sunk investment in expensive facilities has caused
many others to stay and grow in older urban areas. This is especially the case with
research and teaching medical centers with their complex and interconnected array of
both research and testing laboratories, inpatient treatment as well as outpatient clinics,
classrooms, hospital beds, residences for employees and students and all of the related
services of a small city. One needs only to think of the location of the great majority of
the nation's leading research and teaching medical centers to recognize this important
influence. For example: Rush Presbyterian/St. Luke's/Cook County Hospitals together
with the University of Illinois Medical School in downtown Chicago; Yale University
Medical School and Hospital in central New Haven; Washington University and St.
Louis University Medical Centers in St. Louis; the University of Pennsylvania Medical
Center and the Philadelphia Center for the Health Sciences in Philadelphia; The Texas
Medical Center in Houston; Baylor University Medical Center in Dallas; the New
England and Harvard University Medical Centers in Boston; the University of California
Medical Center in San Francisco; the New Orleans Regional Medical Center (Tulane and
LSU Medical Schools): University of Minnesota Medical Center in Minneapolis, and the
list goes on.
A good example of the important economic role of urban medical centers can be
found in the City of St. Louis. Since 1970 the City has experienced dramatic losses of
both population and jobs - with population declining from 622,000 in 1970 to an
estimated 381,000 in 1993, a drop of 241,000 people or 39%; total jobs in the city
declined from 336,400 in 1980 to 270,000 in 1993, an employment drop of 66,400, or
20%. However, during this same period of overall decline, there were two areas in the
City of St. Louis that showed positive employment growth - downtown where the
region's burgeoning service sector drove an increase from 84,000 employees in 1980 to
about 93,000 today, a gain of 7,000 or 8%, and the two teaching medical centers, which
DF.VELOPMENT STRATEGIES
2
�together grew from about 18,000 employees to more than 26,000 today, a gain of 45%
over the same period of time. Thus, the combined dynamic growth of the St. Louis
University and the Washington University Medical Centers helped along with the
downtown office district to offset a city-wide pattern of declining employment in
industrial, warehouse, and distribution activities, as well as a decline in retail jobs that
accompanied the loss of population and a decline of the effective buying power of those
remaining in the city.
This contribution of the St. Louis urban medical center to its economic base is a
scenario that has been replicated successfully in many central cities throughout the
United States over the past 25 years. The role of the urban medical center continues to
be a critical element in economic development.
DEVELOPMENT STRA T EG IES
�HEALTH, HOSPITALS AND
ECONOMIC
DEVELOPMENT
Forging a New Partnership
By Terry F. Buss and W. Robert Kennedy
Hospitab are beginning lo recognize tliat a. healthy
local, economy ultimately means a larger local population and more consumers for health services. An attractive and dynamic neighborhood will also make it easier
to recruit staff in a highly competitive market. A local
hospital cannot turn around an entire community
unaided, bid it can make a difference. The St.
' caltli and economic rlcvcloprnenl are strongly
linked; a lieallhy society
is productive and inno. valive. Meeting demands
for health care has become an enornious and rapidly growing industr y. We
spend one in 10 dollars that we earn on
health. In every urban area, jobs are
growing faster in health ser vices than in
almost any other sector. Scientific and
technological advances are annually
spawning new industries. Yet, local development agencies and community hospitals overlook each other completely.
Community hospitals treat local residents, but are not involved with larger
community development issues. Load
development agencies work with local
bankers and real estate developers, but
not with hospitals. Hospital administrators serve on health agency boards, but
not on chambers of commerce. Development pract it ioners concern themselves
with investments in new manufacturing
plants, but not in new health facilities.
Now, though, two forces are bringing
together the two communities. Developers are broadening their views of how
economic development occurs. With very
few new branch plants, they have recognized that tax abatements and lowinterest rale loans are not the only components of the local business climate.
Development policy has become peopleoriented. Education reforms and cusTcrry F. Buss, Ph.D., is professor of urban
studios at the University of Akron. Dr.
Buss, who participated in the development
of the SEHMC program, remains a consultant to the hospital. W. Robert Kennedy,
Ph.D., is Director of Medical Education at
St. Elizabeth Hospital Medical Center. The
authors would like to thank Roger Vaughan
for his comments and criticisms of this
article.
18 COMMENTARY / Summer 1988
Elizabetli. Hospital, and Medical. Cenier in Youngstown,
Ohio, has initialed, a. unique program—investing
its
resources in activities tliat have improved the health of
the community, strengthened its physical apf>earance
and improved the housing stock. Time activities are
also linking St. Elizabeth's services with those of oilier
public and private providers.
lomized training are now boasted above
more traditional inducements. Amenities—including the appearance of neighborhoods and the quality of health services—are important in retaining and
attracting the people whose entrepreneurial energy or high productivity propels local development.
From the hospital's side, the stringent
measur es to conttol costs of the Medicaid and Medicare programs and private
insurance vendors have changed the
bottom line on involvement in the development of the local community. Hospitals are finding ways to reach nontraditional consumers for their services.
They arc also beginning to recognize
that a healthy local economy means,
ultimately, a larger local population and
more consumers for health services. An
attractive and dynamic neighborhood
will also make it easier to recruit staff in
a highly-competitive national market. In
some instances, their large real estate
holdings offer further encouragement
to promote community growth.
If development officials and medical
practitioners take the lime to learn about
each other's business, they may uncover
better ways of doing their own. Both are
handicapped by the way they view the
world. People promoting economic development lend to view economic growth
as the product of a few major, visible
projects—the convention center, the airport expansion, or the new industrial
park. They overlook the importance of
the thousands of individual decisions—
enrolling in further' education, advancing a loan to a new business, or testing
the market for a new service—that, cumulatively and invisibly, account for a
far larger share of growth than all the
flagship projects taken together.
Physicians,, for their pari, also view
the world as a series of cases—physician
The SL Elizabeth Hospital and Medical Center capital plant in Youngstown, Ohio.
�and nurse Lrcaiinga sped lit health problem. They overlook how the patient's
own habits and education can prevent
or treat problems and how prevailing
economic and social conditions can affect the patient's resilience.
By broadening these respective viewpoints, and by harnessing resources, hospitals can conlt ibule to economic development in their community, and
economic development can promote the
health of local hospitals. One such effort
is under way itr Youngstown, Ohio.
St. Elizabeth Hospital and
Medical Center
St. Elizabeth Hospital and Medical
Center (SEHMC) in Youngstown, Ohio,
is working to harness its resources for
local economic development. Since
1977, waves of steel plant closings in
the region have eliminated over half of
the core of the economy. This has
created fiscal and economic crises that
have affected the hospital. The population has declined by 40,000, houses
have been abandoned in nearby streets,
and the number' of indigern patients
has risen.
SEHMC is an SOO-lxxl Catholic teaching hospital, centrally located in a poor
neighborhood, offering the full range
of acute care and ambulatory ser vices to
27,000 patients annually. It is affiliated
with the Northeastern Ohio University
College of Medicine (NEOUCOM), offering medical student clerkships, residency training in many specialties and
fellowship training in geriatrics. It has
its own school of nursing and employs
3,200 people, making it the city's largest
employer.
SEHMC responded to its changing
environment by developing a six-point
program, investing its r esources in activities that have improved lhe health
of the community, strengthened its
physical appearance and improved lire
housing stock. These activities are also
linking St. Elizabeth's ser vices wit h those
of other public and private providers.
To our knowledge, this is the first
attempt of its kind to link a community
hospital with initiatives in economic
development.
Investing in Neighborhoods
St. Elizabeth, like many longestablished community hospitals, is surrounded by distressed neighborhoods,
yet must continue investing millions in
the maintenance and expansion of its
physical plants—$40 million in the 1980s.
Investments in the surrounding neighborhood can complement and protect
this investment. But finding the right
channels is not easy.
SEHMC began by helping to organize
local merchants into an economic devel-
An old mansion restored by SL Elizabeth's
to house the Educational Research and
Development Center to facilitate research
and publication among residents, in-house
professional staff and fellows. The Center
also develops and revises curriculum
offerings in the hospital education programs.
opnient corporation (EDC). The EDC
then produced a plan for the recover y
of the distr ict. Sl. Elizabeth participated
in the plan in thr ee ways:
1. Spending $4 million acquiring a
vacant building, once a trade union hall,
and converting il into the corporate
systems management offices.
2. Negotiating with federal agencies
to acquire a closing public community
mental health center to expand its ambulatory clinic facilities. This will relieve
the community of the liability of another
abandoned facility.
3. Acquiring neighborhood properly
from willing sellers. Property is maintained and held in a "private land bank,"
which reduces vandalism on vacant properiy—a major problem in distressed
neighborhoods.
Local business confidence has been
raised sharply, driving up properly values. These ef for ts have been backed by
several hundred thousand dollars allocated by the city of Youngstown through
Community Development Block Grants
(CDBG) to improve infrastructure in
the district.
SEHMC and Youngstown Stale University are jointly preparing a community development plan to attack residential problems in the district.
sysiem, which allows personal computer users across the community lo
share information. The sysiem—
I 'r eeNet—was developed by AT&T and
oilers access at no charge. The system
was originally designed to allow people
in the region to ask healllr-related qucslions of professionals al lhe facility. As
FrecNet became established, system operators discovered that many businesses
and public agencies were communicating through lhe system. Viewing this
as a community-wide resource, SEHMC
expanded the sysiem and encouraged
"non-lradilional" users to participate.
About 1,000 local businesses and or ganizations are now "on-line."
With the assistance of St. Elizabeth,
the Private Industry Council, Welfare
Department, Bureau of Employment
Services and Vocational Education arc
developingsoliware for FreeNct to share
caseload information among agencies.
Funded by public giants totalling
$100,000 over three years, the system
will eliminate duplication as clienls arc
registered, improve the chances of referring clienls to suitable programs and
facilitate client follow-up—all major factors in reducing dependency.
Enhancing Communication
In Youngstown, as in most communities, it is difficult to share information
among the many public organizations.
There arc 20 public organizations concerned with revitalization and hundr eds
of private organizations—lending institutions, accounting firms, developers,
realtors and attorneys. How can these
disparate groups share information?
One way was discover ed al St. Elizabeth. It recently installed a computer
Creating Research Capacity
Neighborhood groups need help in
planning, designing and carrying out
projects and programs. Although demand is great, funding is often not.
Hospital staff embody many specialized skills—computer, marketing, development (f und r aising), finance and
management—that can be applied to
solve community problems. Of ten these
jrofessionals have not participated in
telping lo solve these problems because no one has asked them. The
COMMENTARY I Summer 1988 19
�dren participate annually in lhe program. Sl. Elizabeth and local foundations fund the initiative.
Promoting Community Image
Members of SEHMC's Explorers Post receive instruction in CPR.
following examples show how staff can
contribute.
• Sf.HMC is responding lo a requesl
from local merchants to prepare a neighborhood revitalization strategy. Merchants fear that the neighborhood's decline will endanger their businesses. St.
lilizabeth is preparing the strategy with
modest ($3,500) funding from the city's
CDBG program.
• In studying the economic impact of
the Butler Institute of American Ait—the
nation's largest such museum—SEHMC
was able to document that the arts bring
millions of outside dollars into the region.
St. Elizabeth is contributing about $5,000
in staff time to complete the study.
and women work closely with professionals to gain first hand experience in
the health field. The project is successful
because il provides a way to make health
fun to youngsters. Because of the program's popularity, a second Explorers
Post is being added.
3. Health Education Center. Many
schools in poor neighborhoods have inadequate health education programs because costs are prohibitive. Over the
long-term, poor health contributes to
poverty, making economic development
even more difficult. Realizing this,
SEHMC created a center where school
districts can send children lo learn about
special health topics. About 1,000 chil-
Successf ul economic development depends upon effectively promolinga comnnmity as a place to live and work.
Marketing is expensive, and so all major
institutions musl participate in "selling"
lhe community. Communily hospitals
are constantly marketing themselves and,
indirectly, I heir communities.
Nationwide, nearly one-third of hospital expendilures are attributable lo
some aspect of marketing. For example,
hospitals compete for the best medical
school graduates to fill residency and
fellowship training programs. Fhey must
also compete when hiring other staff at
all levels from the limited local and
national pool of qualified people.
SEHMC hires 30 to 50 professionals
annually—interviewing hundreds and
spending hundreds of thousands of dollars traveling across the country. Because recruits are concerned with where
they are !o live, communily image is
critical.
In addition, hospitals musl promote
their own image to project the quality of
their services through published research, professional convention presentations, publication of newsletters and
journals, etc. In this respect, they are
much like universities. The average hospital spends well over $100,000 annually for printing such documents.
Yet in most places, hospital marketing
is completely divorced from communitywide marketing. St. Elizabeth is changing this.
Improving Quality of Life
Economic development should improve the quality of life for all members
of lhe community. Community hospitals
located in poor areas arc well-placed to
direct the resources where they are most
needed and can be most effective. For
example, SEHMC has initiated three
programs.
1. Adopt a school. Corporations arc
"adopting" local schools and providing
them with equipment, summer jobs and
even management help. St. Elizabeth is
pursuing a similar program al an elementary school serving youth from public housing projects. Physicians provide
students with positive role models by
periodically meeting with them in school
and at the hospital to describe health
careers and to motivate them. Several
hundred children participate annually
in these programs.
2. Explorers Post. SEHMC has established an Explorers Post concentrating on health care. As in the case of the
adopted school effort, 27 young men
20 COMMENTARY/ Summer 1988
Elementary school children from a neighboring school view a puppet show at St
Elizabeth's to promote good health.
�• In partnership with the chamber of
commerce and oilier organi/.alions, the
facility has integrated a community logo
and development information into its
marketing materials. About $ 100,000 in
initial funding for the project was raised
by the chamber of commerce (i om local
foundations.
• SF.HMC incorporates community
promotion into all of its recruitment
efforts. Flospital recruiters act as salespersons, not only for the hospital, but
also for the communily.
Stemming the Brain Drain
e
Distressed communities suffer "brain
drain"—the loss of their most mobile,
young and, often, the most educated
people. Attracting others to replace
them is not easy. Most professionals
are part of a two-worker household
and a slow local labor market often
makes it difficult f or two people to find
suitable work.
Because they hire dozens of people
annually, hospitals can play a role in
reversing the brain drain. St. Elizalieth
is participating with other large local
employers in a collateral recruitment
initiative. Operating as an employment
agency, employers find jobs for the
spouses of people they have hired either
in their own organization or in other
organizations. Recruiters also promise
prospects help in settling into the community. SEHMC assists new staff in joining service clubs, gaining board appointments, or affiliating with cultural
institutions.
Hard-to-Reach Populations
Improving quality of life and creating
employment op|X)rtuniiics f or poor people are essential components of a development strategy. The human service
delivery system, charged with attaining
these goals, is continually frustrated because it reaches only a small proportion
of the population needing help. Many
people simply do not turn to public
agencies.
Hospitals, unlike any other human
service, eventually serve all but a handful of the people in a community. In
Youngstown, for example, acute care
facilities (not including other health
services) annually treat 42,000 people
out of a total population of 260,000.
Over three years, one-third of the families in the area visited an emergency
room. However, hospitals focus exclusively on health care, assessing only
their patients' health care needs. Referrals and follow-up contact with nonhealth agencies is rare. Community
hospitals could link service providers
with people in need. In partnership
with other agencies, including the
St Elizabeth's spent $4 million acquiring
a vacant building that was once a trade
union hall (top photo). It is now
converting the building into the corporate
systems management offices (bottom
drawing).
United Way, local government, and
human service providers, SEHMC! is
participating in a task force to forge
those links.
These projects alone raised nearly
$200,000.
Management
and
Funding
The economic development projects
undertaken by SEHMC would seem beyond the capacity of most institutions.
How arc the projects managed and
funded?
SEHMC created the Educational Research and Development Center
(ERDC) lo facilitate research and publication among residents, in-house professional staff and fellows. ERDC also
develops and revises curriculum offerings in the hospital education programs.
It is staffed bv a full-lime grantsperson,
data analyst, health education professional, clerical workers and a consultant
experienced in both economic development and health care.
Staff have raised funds through grants
in non-health related areas. Grants were
obtained to study poverty, health policy,
entrepreneurship, and other areas that
linked economic development and
health. Foi instance, SEHMC and Youngstown Slate University received $15,000
from the Ohio Board of Regents to
conduct policy research on indigent care
programs for displaced workers.
Demand for hospital participation has
become so great that SEHMC has begun
to work with the University of Akron
and Youngstown Stale University, as well
as the state medical school (NEOUCOM),
to work on cooperative research projects.
One, for example, f unded by the Ohio
Board of Regents, is developing policies
to reduce |X)verty and dependency.
Getting Hospitab Involved
Economic development is not pro bono
work by hospitals. I l is work that will
appear on the institution's bottom line
as surely as investments in its own plant
and equipment or in procedural changes.
Unless hospitals develop the projects as
if they were business ventures, they may
not conduct them well. The key to successful collaboration between a development agency and hospitals is to identify
those projects of mutual interest. The
list of SEHMC projects could serve as a
starling point.
Participating in economic development should not obscure the fact that a
hospital's reason for being is lo improve
t he physical well-being of its community.
Better pre-natal and neo-natal care can
not only reduce the infant mortality
rale, but will also dramatically reduce
the incidence of birth defects and learning disabilities. Nothing could contribute more than this care to overall economic vitality as well as to improved
well-being among the poor. The solution will challenge hospitals' marketing
techniques—to reach people it does not
typically reach—and will require a more
holistic approach to medicine.
A community hospital cannot turn
around an entire community unaided.
But it can make a great difference. It
can invest in the physical environment.
A community hospital can also create a
communications system that links public
and private resources. It can solve local
project-specific problems. I lean enhance
the quality of life. And the hospital can
market the community.
COMMENTARY I Summer 1988 21
I
�THE
WHITE H O U S E
WASHINGTON
June 16,
1993
Martin T. Byrne
International Association of
Bridge, Structural and Ornamental Iron Workers
1750 New York Avenue NW, Suite 400
Washington, D.C.
20006
Dear Mr. Byrne,
Thank you for sharing your concerns about health care reform
and please excuse my delay i n acknowledging your correspondence.
The reform that i s required for the future of our health care
system demands the best ideas from a l l of us and I appreciate
your suggestions and the material you forwarded to me.
Thank you again for your input to this process.
Regards,
X
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICM:mb
�THE
WHITE H O U S E
WASHINGTON
June 16,
1993
Ronald Bronow, MD
President
National Organization of Physicians Who
215 E. Quincy, Suite 305
San Antonio, TX
78215
Care
Dear Dr. Bronow:
Thank you for your l e t t e r s and thoughts over the past few
months. The structural reform that i s required for the future of
our health care system demands the best ideas from a l l of us and
I appreciate your suggestions and those from Physicians Who Care.
I am also pleased that you have had the opportunity to discuss
your concerns with Dr. David Jackson of the Task Force.
I would l i k e to assure you I share your belief that for any
reform proposal to be successful i t must address the deeply
rooted concerns shared by most Americans: security of access to
necessary health care services must be assured; patients' choice
of provider must be retained; and reform must respond to concerns
about the escalating costs of health care and the bewildering
array of paperwork that confronts both patients and
professionals.
As the Task Force and ultimately the President make the
series of decisions on the specifics of the reform proposal,
these concerns w i l l be at the center of considerations. I hope
you w i l l review our proposal when i t i s introduced and work with
us to ensure that v i t a l l y necessary health care reform occurs.
Again, my thanks for your continuing interest i n t h i s
important on-going debate.
Regards,
I r a C. Magaziner
Senior Advisor to the President
for Policy Development
ICM:mb
�AsswrQual, inc.
5025 Arlington Centre Blvd.
Suite 570
Columbus, Ohio 43220
Ba([(tK((H|B
Tel. (614) 451-1670
Fax (614) 451-1764
t'li'iiMlWri'i";
To:
Fax Number: iB^-^Jlo^-V^l
From: Z D ^ L D J S B C & M
D a t e : . ^ / T i m e :
Pages (including cover): _^
Remarks:
.
I f you did not r e c e i v e all o f t h e pages in
good condition, please call &14/451-1570
�1
DRAFT
May 12,
01
4;
S
c
5; ^ - i ' f
1993
Ronald Brownow, M.D.
President, Nat. Org. o f Physicians Who Care
Suite 305; 215 E. Quincy
San Antonio, Texas 78215
SS ^
3
X\
Dear Dr. Brownow:
Thank you f o r your l e t t e r of A p r i l 26. The s t r u c t u r a l reform t h a t
i s r e q u i r e d f o r the f u t u r e of our h e a l t h care system demanis the
best ideas from a l l of us *^in^tha"-t^righ.t., I appreciate! your
sharing your suggestions and those from Physicians Who Care^on-the
seties-of—i.s.sjues_a.t_the-core-of_.the_heal.th_care--re-form-debate.
<
7
TV ' High technology medicine does help create a s t r i k i n g c o n t r a s t i n
American medicine - the exponentially expanding d e f i n i t i o n o f the
" p o s s i b l e " balanced against the l i m i t a t i o n of access t o these new
technologies caused by the r a p i d l y increasing cost o f h e a l t h care,
[mproved technology assessment^effective community d i s t r i b u t i o n o f
^fehe—expensive technologies, and—the powerful—forces—of—managed
cpmpetIt ign^an"d improved -produet-i-v-i-ty/enhanced—i-nnovation-al-l—must
be lia^fiessed i f we are t o meet successfully the challenge o f
h e a l t h care reform.
-
;J a i i H ^
Cc
•Ho
O
c
.,,,
v \
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{
For any reform proposal t o be successful, i t must address the
deeply rooted concerns shared by most Americans:
- •feha^fe—lbhre 'security of t h e i r access t o necessary h e a l t h care
services i s threatened and must be increased^'
- Addi-tionall-y-,—a-s-i-gn-i-fi-cant—element- of - success fu-l—re-form
mus.t-al-so-be--to,..preser.v.e_as_much~-as-possi-bl-e -f reedom of
choice—re-:_heal.th_car.e_pr-ov-i-de-2rS. T U - i e . Y Ut-^ +<—- o^h'«>- Reform must-ai&o respond t o the concerns about the ^"^^ ^ p^e s c a l a t i n g costs of health care and the o f t e n b e w i l d e r i n g
array of paperwork t h a t confronts both p a t i e n t s and
professionals.
1
As t h e Task Force and u l t i m a t e l y the President make the s e r i e s of
decisions on the s p e c i f i c s of the Reform proposal, these p-r-i-nci-p-l-es CCJV^LAS
w i l l be a t the center of^the" considerations. Again, my thanks f o r
your c o n t i n u i n g i n t e r e s t i n t h i s v i t a l l y important on-going debate.
Yiaue's—truiy,
Ir^Magaziner
Senior
Domes-tri-c-Po"ri"cy Advisor
r
0/
A
/
-j/u/ J o ' ' j l e ^ J L t ^ - ^ ^
�AssurQual Inc.
5025 Arlington Centre Blvd.
Suite 570
Columbus, Ohio 43220
May 13,
Tel. (614) 451-1670
Fax (614) 451-1764
1993
Ms. Molly Bostrom
White House
Dear Ms. -Bostrom:
As we discussed please find enclosed the l e t t e r of May 12, 1993 to
Dr. Ronald Brownow.
I f you have any further questions,
contact me.
Yours t r u l y , / i
David L. Jackso
CEO & President
DLJ/fh
, Ph.D
please do not hesitate to
�AssurQual Inc.
5025 Arlington Centre Blvd.
Suite 570
Columbus, Ohio 43220
Tel. (614) 451-1670
Fax (614) 451-1764
MEMORANDUM
Date:
TO:
A p r i l 19,
1994
Molly Brostrom
FROM: Dave Jackson
SUBJECT: Discussions
w i t h Dr. Ronald Brownow, Physicians Who
Care
1. As per our conversations, I had two phone conversations w i t h Dr.
Ron Brownow, the President of Physicians Who Care. The tone of the
conversations was open and generally f r i e n d l y . He g e n e r a l l y i s
supportive of a c o n t i n u a t i o n of the fee f o r service system presently
i n place i n h i s own p r a c t i c e . He stated t h a t he was not going t o
permit insurance companies " t e l l me how I can take care of my
p a t i e n t s " . He expressed serious concern about the a b i l i t y of "large
insurance company HMO's) t o permit the f l e x i b i l i t y i n physician care
t o adequately p r o t e c t q u a l i t y and p a t i e n t freedom of choice.
2. At the end of our f i r s t conversation, I asked i f he would t h i n k of
any approach t h a t might be compatible w i t h a managed competition
framework t h a t would adequately address the issues of highest l e v e l
concern f o r him and h i s colleagues at Physicians Who Care. He c a l l e d
back 3 days l a t e r w i t h the f o l l o w i n g suggestions: He s t a t e d t h a t he
could support a system t h a t permitted any "plan" t o create two
options, one w i t h a low deductible (more t r a d i t i o n a l "HMO" s t r u c t u r e )
and a second o p t i o n w i t h a higher deductible, but w i t h o p t i o n a l
access t o a more physician-driven system ( e s p e c i a l l y r e : r e f e r r a l s to
s p e c i a l i s t s ) which also had broader consumer freedom of choice of
providerR.
Ho
d i d n o t h a v e a e p p c i f i c r e e p o n e e t o th©
question
I
r a i s e d r e : whether such a system might create i n c e n t i v e s t h a t would
lead t o a two t i e r r e d h e a l t h care system.
3. I then asked him i f he would consider supporting a system t h a t
would permit innovative "networks" of l o c a l p r o f e s s i o n a l s and
f a c i l i t i e s t o come together and o f f e r the n a t i o n a l package of
services a t a " f i x e d per c a p i t a " p r i c e t o the l o c a l payer community,
but which could be organized i n t e r n a l l y t o permit reimbursement of
the i n d i v i d u a l providers on a fee f o r service fee schedule. This
would r e q u i r e i n t e r n a l plan budget d i s c i p l i n e and p r o f e s s i o n a l
u t i l i z a t i o n oversight (perhaps u t i l i z i n g stop-loss reinsurance f o r
c e r t a i n h i g h cost/low p r o b a b i l i t y episodes).
4. Dr. Brownow continued t o p r e f e r h i s i n i t i a l approach, but d i d not
r e j e c t the suggested option out of hand ( I emphasized t h a t the
suggestion was a r e a c t i o n t o h i s option, and was not n e c e s s a r i l y an
approach being considered by the Task Force).
5. Please d i s t r i b u t e t h i s t o any i n d i v i d u a l s / w o r k i n g groups you f e e l
might be appropriate. Please :\o not h e s i t a t e t o c a l l i f you have any
questions (614-451-1670). Thanks f o r a l l your help!
�National Organization of Physicians Who Care
"Preserving Quality and Equitabiliti/ in American Medicine"
Ronald Bronow, M . D .
President
Los Angeles, CA
May
17,
1993
Stephen C. Cohen, M . D .
Vice President
San A n t o n i o , TX
Cordon M . Goldman, M.D.
Secretary
St. Louis, MO
Mr. I r a Magaziner
The White House
1600 P e n n s y l v a n i a Ave., N.W.
Washington, D.C. 20500
Paul T. Elliott, M . D .
Treasurer
Richardson, TX
Robert A . Bcltran, M . D .
Los Angeles, CA
Dear Mr. Magaziner:
Octavio R. C h i r i n o , M . D .
W i t h t h e d i r e c t i o n t h e H e a l t h Care Task Force has
t a k e n , you have a p p a r e n t l y you have decided t o g i v e t h e
j o b o f r a t i o n i n g American m e d i c a l care t o t h e l a r g e
h e a l t h maintenance o r g a n i z a t i o n s . A c c o r d i n g t o a
r e c e n t i t e m i n t h e New York Times, U.S. H e a l t h Care's
1991 r e p o r t s t a t e d t h a t i t spent $183 m i l l i o n on
a d m i n i s t r a t i o n , m a r k e t i n g and o t h e r o p e r a t i n g c o s t s ,
w h i l e p o s t i n g a p r o f i t o f $151 m i l l i o n . How can these
added c o s t s , which used t o go toward p a t i e n t c a r e , h e l p
t o c u r b h e a l t h care i n f l a t i o n ?
St. Louis, M O
T o m Clark, M.D.
H a r l i n g e n , TX
Robert P. Gervais, M . D .
Mesa, A Z
H o w a r d S. Glazcr, M . D .
Madison Heights, MI
Emerita T . Gucson, M . D .
[lensalem, PA
Randy Rosctt, M . D .
Albuquerque, N M
P h y s i c i a n s Who Care has w r i t t e n t o you about how
we f e e l t h a t g u i d e l i n e s f o r care w i l l c u r b p h y s i c i a n
o v e r - u t i l i z a t i o n o f t e s t s and procedures. Y e t , i t
appears, from r e p o r t s I have r e a d , t h a t you blame
American p h y s i c i a n s f o r h a v i n g improper f i n a n c i a l
i n c e n t i v e s and have assigned t h e r o l e o f policeman t o
t h e mega-giants o f t h e i n s u r a n c e i n d u s t r y . We see a
s e r i o u s e t h i c a l problem here t h a t c o u l d c e r t a i n l y c o s t
you t h e s u p p o r t o f p r a c t i c i n g p h y s i c i a n s across t h e
country.
Sincerely,
Ronald Bronow, M.D.
President
National Organization of
P h y s i c i a n s Who Care
215 E. Quincy, Suite 305 • San Antonio, Texas 78215 . (210)226-1400 • 1-800-545-9305 . FAX (210) 225-6159
Joel A. Schneider, M . D .
Springfield, IL
S e l h G . Spolnitz, M . D .
Gadsden, A L
K a t h r y n A . Sutton
Hxecutive Director
San A n t o n i o , TX
Ronald Pearson
Representative
Washington, D.C.
�National Organization of Physicians Who Care
"Preserving Quality and Equitability in American Medicine"
Ronald Bronow, M.D.
Prcsidenl
Los Angeles, C A
S t e p h e n C. C o h e n , M . D .
Vice President
A p r i l 26,
1993
San A n t o n i o , TX
Cordon M. Goldman, M.D.
Secretary
St. Louis, M O
Mr. I r a Magaziner
The White House
1600 Pennsylvania Ave., N.W.
Washington, D.C. 20500
Paul T. Elliott, M . D .
Treasurer
Richardson, TX
Robert A. Beltran, M . D .
Los Angeles, C A
O c t a v i o R. C h i r i n o , M . D .
Sl. I-ouis, M O
Dear Mr. Magaziner:
T o m Clark, M.D.
H a r l i n g e n , TX
As you know, I have been discussing our proposals w i t h Dr.
David Jackson during the past month. I n the course of our
discussions, he asked i f I would suggest ways to incorporate our
ideas with those of managed competition.
In the discussions, I r e i t e r a t e d the view of Physicians Who
Care that managed competition w i l l have no s i g n i f i c a n t e f f e c t on
health care i n f l a t i o n . This i s simply because we have a system
which i s overwhelmed by i t s own medical advances. American
technology, w i t h a continuous new supply of treatments and t e s t s ,
.. i s what feeds the i n f l a t i o n monster. As I know you are aware, the
number of coronary bypass operations rose from 14,000 i n 1970 to
265,000 i n 1991. Each new b/eakthrough i n biotechnology adds f u e l
to the f i r e . I f published figures are correct, 12 of the
' • population u t i l i z e s 302 of annual health care costs, 102 uses 702
•IX/M*'.; ••:•;,.?£. . t * money and 502 only spends 32 of the resources. What e f f e c t
" • | ^ v ^ ^ ^ ^ w i l . l managed competition have on the use of advanced technology on
i ^ ^ . ^ ^ - i ' j t h o s e w i t h serious or catastrophic illnesses? I believe the
®^5|Spi.effect w i l l be n e g l i g i b l e . We f e e l that the onlj
l y answer t o t h i s
,J|#i5^;P.roblem i s that technology should be evaluated on the basis of
'•vf^i^need and value t o society. A n t i - t r u s t laws must be changed so
' i / ^ " ' t h a t hospitals can share expensive technologies.
16
Two separate plans should be set up w i t h i n a l l accountable
health plans, one capitated and one fee-for-service. Both plans
should cover basic health care benefits and preventative health
care and should be completely tax deductible. State mandated
benefits should be eliminated^ Employees should be allowed to
purchase extra insurance, containing a d d i t i o n a l b e n e f i t s ,
u t i l i z i n g after-tax dollars.
In the fee-for service plan, the patients should have d i r e c t
access t o any q u a l i f y i n g physician of t h e i r choice. They should
be allowed to cross over to other plans and should not have to
sever t i e s with t h e i r personal physicians. They should also be
215 E. Quincy, Suite 305 • San Antonio, Texas 78215 • (210) 22fr-14nn . i.finn.-4q.9i05 • FAX (210) 225-6159
R o b e r t P. G e r v a i s , M . D .
Mesa, A Z
H o w a r d S. C l a z e r , M . D .
M a d i s o n Heights, M l
Emerita T. Cueson, M.D.
Bensalem, PA
R a n d y Rosett, M . D .
Albuquerque. N M
Joel A . S c h n e i d e r ,
M.D.
Springfield, IL
Seth G. Spotnitz, M.D.
Gadsden, A L
Kathryn A. Sutton
Executive Director
San A n t o n i o , TX
R o n a l d Pearson
Representative
W a s h i n g t o n , D.C.
�e n t i t l e d to seek r e f e r r a l s i n any other plans i n order to s a t i s f y t h e i r
p a r t i c u l a r needs, as determined by the patient and the r e f e r r i n g
physician.
The q u a l i f i e d physicians i n the fee-for-service plan must agree to
follow therapeutic guidelines based on standards developed by those i n
his or her f i e l d , with l o c a l community v a l i d a t i o n allowed. U t i l i z a t i o n
review, where necessary, should be performed by l o c a l physicians working
i n the same specialty. This system would be both economical and
e f f e c t i v e , and be a great improvement over the current system.
Now,
physicians are harassed and f r u s t r a t e d by telephone c a l l s from
registered nurses or r e t i r e d physicians from other s p e c i a l t i e s . They
often c a l l from other states, using 800 numbers. The undisclosed,
computerized guidelines often seem more geared to u t i l i z a t i o n review
company p r o f i t s rather than to q u a l i t y of care.
Patients should be allowed to pay physicians f o r services not
covered by the basic plan (or should be allowed to purchase insurance
f o r the b e n e f i t s ) . I am sure you are aware of the f r u s t r a t i o n s of both
physicians and p a t i e n t s created by the Medicare RBRVS system.
Patients choosing the fee-for-service plan should pay a $1,000 (or
higher) deductible and have a medical IRA which can be used to e i t h e r
fund the deductible or accumulate, tax-free, u n t i l age 65. At t h i s
time, i t could be used to purchase long-term care insurance or to pay
f o r uncovered medical expenses. Low income p a t i e n t s , i f they desire to
choose the fee-for-service plan, should be given tax c r e d i t s to help
fund the deductible. Both capitated and fee-for-service plans must be
community rated. We believe that our ideas incorporating community
rated, high deductible health insurance with a medical savings account
are the only ones presented so f a r that address the issue of p a t i e n t
o v e r - u t i l i z a t i o n . I f we are to have any hope of paying f o r American
technology, then the patients must do t h e i r share. Coverage f o r t r i v i a l
i l l n e s s e s i s both wasteful and counter-productive.
I n e a r l i e r l e t t e r s to you, I explained the reasoning behind a l l of
our proposals, so I w i l l not repeat them at t h i s time. Physicians Who
Care believes that p a t i e n t s should be allowed to choose e i t h e r an HMOs t y l e or f e e - f o r - s e r v i c e plan, depending on t h e i r personal preferences
or t h e i r f i n a n c i a l s i t u a t i o n . This would t r u l y preserve choice i n a
p l u r a l i s t i c system. A large percentage of patients i n t h i s country are
u n w i l l i n g to give up the r i g h t to choose t h e i r physicians, as recent
p o l l s have shown. A l l we are asking i s that p a t i e n t s have the r i g h t t o
remain p r i v a t e p a t i e n t s w i t h complete freedom of choice, i f they so
desire.
Sincerely,
Ronald Bronow,
President
M.D.
�National Organization of Physicians Who Care
"Preserving Quality and Equitability in American Medicine"
Ronald Bronow,
M.D.
President
U K Angfles, CA
S t e p h e n C. C o h e n , M . D .
A p r i l 26,
1993
Vice President
San A n t o n i o , TX
Cordon M. Goldman, M.D.
Secretary
St. Louis, M O
Mr. I r a Magaziner
The White House
1600 Pennsylvania Ave., N.W.
Washington, D.C. 20500
Paul T. Elliott, M . D .
Treasurer
Richardson, TX
Robert A.
Beltran, M . D .
Los Angeles. C A
O c t a v i o R. C h i r i n o , M . D .
St. Louis, M O
Dear Mr. Magaziner:
T o m Clark. M.D.
H a r l i n g e n , TX
As you know, I have been discussing our proposals w i t h Dr.
David Jackson during the past month. I n the course of our
discussions, he asked i f I would suggest ways to incorporate our
ideas with those of managed competition.
R o b e r t P. G e r v a i s , M . D .
Mesa. A Z
H o w a r d S. G l a z e r , M . D .
M a d i s o n Heights, M I
vv-
In the discussions, I r e i t e r a t e d the view of Physicians Who
Care that managed competition w i l l have no s i g n i f i c a n t e f f e c t on
health care i n f l a t i o n . This i s simply because we have a system
which i s overwhelmed by i t s own medical advances. American
technology, with a continuous new supply of treatments and t e s t s ,
is what feeds the i n f l a t i o n monster. As I know you are aware, the
number of coronary bypass operations rose from 14,000 i n 1970 to
265,000 i n 1991. Each new breakthrough i n biotechnology adds f u e l
to the f i r e . I f published figures are correct, IX of the
population u t i l i z e s 302 of annual health care costs, 102 uses 702
•.' 1.
.of the money and 502 only spends 32 of the resources. What e f f e c t
:ompetition have on the use of advanced technology on
rious or catastrophic illnesses? I believe the
P & i e i i e c t w i n oe n e g l i g i b l e . We f e e l that the only answer t o t h i s
l§^*^%!^;PJft'.lem i s that technology should be evaluated on the basis of
'|?f^} .^'''-?ed and value t o society. A n t i - t r u s t laws must be changed so
' 'i/ ' t h a t hospitals can share expensive technologies.
0
!
n
Two separate plans should be set up w i t h i n a l l accountable
health plans, one capitated and one fee-for-service. Both plans
should cover basic health care benefits and preventative h e a l t h
care and should be completely tax deductible. State mandated
benefits should be eliminated. Employees should be allowed t o
purchase extra insurance, containing a d d i t i o n a l b e n e f i t s ,
u t i l i z i n g after-tax dollars.
In the fee-for service plan, the patients should have d i r e c t
access t o any q u a l i f y i n g physician of t h e i r choice. They should
be allowed to cross over to other plans and should not have to
sever t i e s with t h e i r personal physicians. They should also be
215 E. Quincy, Suite 305 • San Antonio, Texas 78215 • (210) 226-14nn . i ^ o n . r j q . q ^ n s • FAX (210) 225-6159
Emerita T. Gueson, M.D.
Bensalem. PA
R a n d y Rosett, M . D .
Albuquerque. N M
Joel A . Schneider,
M.D.
Springfield, IL
S e t h G . Spotnitz, M.D.
Gadsden, A L
Kathryn A. Sutton
Executive Director
San A n t o n i o , TX
R o n a l d Peareon
Representative
W a s h i n g t o n . D.C.
�i n t e r e s t i s the p a t i e n t . I think I can give the viewpoint which
otherwise might be lacking. I would welcome the opportunity t o
continue t h i s dialogue with the health care task force, i n the
s p i r i t of true cooperation.
Sincerely,
Ronald Bronow, M.D.
President
Physicians Who Care
�National Organization of Physicians Who Care
"Preserving Quality and Equitability in American Medicine"
Ronald Bronow, M.D.
President
Los Angeles, C A
Stephen C. Cohen, M.D.
A p r i l 26,
1993
Vice President
San A n t o n i o , TX
C o r d o n M . C o l d m a n , M.D.
Secretary
St. Louis, M O
Mr. I r a Magaziner
The White House
1600 Pennsylvania Ave., N.W.
Washington, D.C. 20500
Paul T. Elliott, M . D .
Treasurer
Richardson, TX
Robert A. Beltran, M.D.
Los Angeles. CA
O c t a v i o R. C h i r i n o , M . D .
St. Louis, M O
Dear Mr. Magaziner:
Tom Clark, M.D.
H a r l i n g e n , TX
As you know, I have been discussing our proposals with Dr.
David Jackson during the past month. I n the course of our
discussions, he asked i f I would suggest ways to incorporate our
ideas with those of managed competition.
In the discussions, I r e i t e r a t e d the view of Physicians Who
Care that managed competition w i l l have no s i g n i f i c a n t e f f e c t on
health care i n f l a t i o n . This i s simply because we have a system
which i s overwhelmed by i t s own medical advances. American
technology, with a continuous new supply of treatments and t e s t s ,
is what feeds the i n f l a t i o n monster. As I know you are aware, the
number of coronary bypass operations rose from 14,000 i n 1970 to
265,000 i n 1991. Each new breakthrough i n biotechnology adds f u e l
to the f i r e . I f published figures are correct, \ l of the
population u t i l i z e s 302 of annual health care costs, 102 uses 702
of the money and 502 only spends 32 of the resources. What e f f e c t
w i l l managed competition have on the use of advanced technology on
those with serious or catastrophic illnesses? I believe the
e f f e c t w i l l be n e g l i g i b l e . We f e e l that the only answer to t h i s
problem i s that technology should be evaluated on the basis of
need and value to society. A n t i - t r u s t laws must be changed so
that hospitals can share expensive technologies.
Two separate plans should be set up w i t h i n a l l accountable
health plans, one capitated and one fee-for-service. Both plans
should cover basic health care benefits and preventative health
care and should be completeJ-y tax deductible. State mandated
benefits should be iTiminated. EmpToyees should be allowed to
purchase extra insurance, containing a d d i t i o n a l benefits,
u t i l i z i n g after-tax dollars.
_
In the fee-for service plan, the patients should have d i r e c t
access to any q u a l i f y i n g physician of t h e i r choice. They should
be allowed to cross over to other plans and should not have to
sever t i e s with t h e i r personal physicians. They should also be
215 E. Quincy, Suite 305 • San Antonio, Texas 78215 • (210)226-1400 • 1-800-545-9305 • FAX (210) 225-6159
Robert P. Gervais, M.D.
Mesa, A Z
Howard S. Glazer, M.D.
M a d i s o n Heights, M I
Emerita T. Gueson, M.D.
Bensalem, PA
R a n d y Rosett, M . D .
Albuquerque, N M
Joel A . S c h n e i d e r , M . D .
Springfield, IL
Seth G. Spotnitz, M . D .
Gadsden, A L
Kathryn A. Sutton
Executive Director
San A n t o n i o , TX
R o n a l d Pearson
Representative
W a s h i n g t o n , D.C.
�e n t i t l e d to seek r e f e r r a l s i n any other plans i n order to s a t i s f y t h e i r
p a r t i c u l a r needs, as determined by the patient and the r e f e r r i n g
physician.
The q u a l i f i e d physicians i n the fee-for-service plan must agree to
follow therapeutic guidelines based on standards developed by those i n
his or her f i e l d , with l o c a l community v a l i d a t i o n allowed. U t i l i z a t i o n
review, where necessary, should be performed by l o c a l physicians working
i n the same specialty. This system would be both economical and
e f f e c t i v e , and be a great improvement over the current system.
Now,
physicians are harassed and f r u s t r a t e d by telephone c a l l s from
registered nurses or r e t i r e d physicians from other s p e c i a l t i e s . They
often c a l l from other states, using 800 numbers. The undisclosed,
computerized guidelines often seem more geared to u t i l i z a t i o n review
company p r o f i t s rather than to q u a l i t y of care.
Patients should be allowed to pay physicians f o r services not
covered by the basic plan (or should be allowed to purchase insurance
f o r the b e n e f i t s ) . I am sure you are aware of the f r u s t r a t i o n s of both
physicians and patients created by the Medicare RBRVS system.
Patients choosing the fee-for-service plan should pay a $1,000 (or
higher) deductible and have a medical IRA which can be used to e i t h e r
fund the deductible or accumulate, tax-free, u n t i l age 65. At t h i s
time, i t could be used to purchase long-term care insurance or to pay
f o r uncovered medical expenses. Low income p a t i e n t s , i f they desire to
choose the fee-for-service plan, should be given tax c r e d i t s to help
fund the deductible. Both capitated and fee-for-service plans must be
community rated. We believe that our ideas incorporating community
rated, high deductible health insurance with a medical savings account
are the only ones presented so f a r that address the issue of p a t i e n t
o v e r - u t i l i z a t i o n . I f we are to have any hope of paying f o r American
technology, then the p a t i e n t s must do t h e i r share. Coverage f o r t r i v i a l
illnesses i s both wasteful and counter-productive.
In e a r l i e r l e t t e r s to you, I explained the reasoning behind a l l of
our proposals, so I w i l l not repeat them at t h i s time. Physicians Who
Care believes that p a t i e n t s should be allowed to choose e i t h e r an HMOs t y l e or fee-for-service plan, depending on t h e i r personal preferences
or t h e i r f i n a n c i a l s i t u a t i o n . This would t r u l y preserve choice i n a
p l u r a l i s t i c system. A large percentage of patients i n t h i s country are
u n w i l l i n g to give up the r i g h t to choose t h e i r physicians, as recent
p o l l s have shown. A l l we are asking i s that patients have the r i g h t to
remain p r i v a t e patients with complete freedom of choice, i f they so
desire.
Sincerely,
Ronald Bronow,
President
M.D.
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Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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Health Care Task Force Records
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White House Health Care Task Force
Is Part Of
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Identifier
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2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
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Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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Suggestions [Loose]
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
Identifier
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2006-0885-F Segment 2
Is Part Of
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Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
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Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
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Adobe Acrobat Document
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Preservation-Reproduction-Reference
Date Created
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2/6/2015
Source
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42-t-12093080-20060885F-Seg2-023-007-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/b74cd1c0648828da03e5c72054195320.pdf
0c0398828481a2b632f363b135810b1b
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
4786
OA/ID Number:
FolderlD:
Folder TitleMedicare Cuts (& Deficit)
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
3
3
�ID:
NOV 18'93
15:06 No.014 P.01
DATE:
TIME:
Executive Office of the President
Office of Management and Budget
Health Policy
725 17th Street, NW, Room 7021
Washington, DC 20503
FAX: (202)395-3910
Voice: (202) 395-3844
To: J W v d Ox^S
F A X #:
Voice #:
From
Notes:
Number of Pages (including cover sheet):
�CM
O
CL.
o
Chart 1 - Medicare Spending
Proposed Changes Under Health Care Reform V
o
o
Fiscal year
to HI Outlays
^SMI Outlays
' OfEsetting Receipts 21
o Medicare Baseline (Net Current Federal)
Annual Growth
2
Average Annual Growth Rate (1980-2000)
Average Annual Growth Rate (1980-1995)
Average Annual Growth Rate (1996-2000)
Reform Baseline
Annual Growth
Q Average Annual Growth Rate (1980-2000)
~ Average Annual Growth Rate (1980-1995)
Average Annual Growth Rate (1996-2000)
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
23802 28916 34354 38005 41476 47841 49018 49976 52022 57433 65912
10152 12351 14813 17493 19475 21808 25166 29937 33682 36867 41498
-2935 -3340 -3856 -4253 •4942 -5562 -5739 -6520 -8798 -11590 -11607
31,019 37,927 4531 51,245 56,009 64,087 68,445 73^93 76,906 82,710 95,803
22.27 19.47 13.10
9.30 14.42
6.80
7.23
4.79
7.55
15.83
11.27
11.79
9.71
31,019 37,927 45,311 51,245 56,009 64,087 68,445 73^93 76,906 82,710 95,803
22.27
19.47
13.10
9.30
14.42
6.80
7.23
4.79
7.55
15.83
10.69
11.79
732
�o
9
o
o
KO
o
in
cn
co
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
68705 80784 91404 101738 111248 121367 131867 142485 153962 166433
45514 48627 54942 62170 71593 80190 89851 100524 112410 125674
-12154 -132^2 -15143 -17429 -19912 -20426 -23199 -26319 -29867 -33152
102,065
6.54
102^)65
6.54
116479
13.83
116479
13.83
131003
12.93
131,203
12.93
14M79
11.64
146,329
11.53
162,929
11.23
161,899
10.64
181,131
11.17
198,519
216,690
236^05
9.60
9.15
9.14
179,333
196,556
10.77
9.60
204,307
3.94
258^55
9.49
216,431
232,385
5.93
7.37
�o
3
^ Notes from HFB
Fiscal year
£ Proposed Law: Health Care Reform
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
in
Drugs w/Rebate
Advanced Practice Nurses
ro $124 8. Package; Ver I •
- $124 B. Package; Ver D *
2 $124 B. Package; Ver ffl*
Total Proposed Medicare Baseline 4/
<w/$124 b. Ver 0
<w/$124b. Ver ID
(w/$124b.VernD
Reform Baseline
31,019
37,927 45,311
51,245
56,009 64,087 68,445
73,393 76^06
82,710 95,803
.. * Not on Bob Anderson tables; reflects most recent HCFA pricing of options, submitted 10/29/93
Q
t-H
(Medicare Outlays include Administrative Costs)
1/ MEDICARE OUTLAYS 1980 -1992, HISTORICAL TABLES OF FY 1994 BUDGET; 1993-1999 ARE FROM FY 1995 HCFA BUDGET JUSTOICATION
2/ OFFSETTING RECEIPTS FOR 1980 -1992 TAKEN FROM HISTORICAL TABLES; FOR 1993 -1999, TAKEN FROM BUDGET JUSTTFIOATTON
3/ ESTIMATES FOR YEAR 2000 DERIVED BY APPLYING 1999 GROWTH RATES TO ARRIVE AT 2000 FIGURES
4/ EFFECT OF HEALTH CARE REFORM TAKEN FROM BOB ANDERSON TABLES, EXCEPT WHERE NOTED
�IT)
O
0)
T—t
o
o
1994
1995
1996
1997
1998
1999
2000
16,214
2,040
<8A05)
3,700
{40,919)
{40^34)
(41,544)
o
in
to
co
aso)
(ISO)
(150)
1,450
0830)
(2340)
<1£30>
6,594
13/499
O/WO)
2,800
(10,192>
(10,202}
llOfiiZ)
<3^00>
2,900
{15,432)
014,562)
(14,582)
14,240
15,220
2^00
1,470
(8/395) (8.100)
3/400
3,150
(23,378) (32^84)
(22,908) (32,S44)
OSJOOS) (32^44)
146,329
146,329
146,329
162349
161,539
16^549
179^33
179^23
179,483
196,486
197A56
197,336
204,077
204^47
204/447
216,141
216/481
216,181
231^85
231,970
231,260
146,329
161^99
179^33
196,556
204,307
216,431
232^85
�O
QT-H
Chart 2 -- Federal Share for Medicaid
o
o
o
IT)
to
03
Fiscal year
Medicaid Baseline
Annual Growth
1980
1981
1982
1983
1984
1985
1986
1987
1988
13,957 16,833 17,391 18,985 20,061 22,655 24,995 27,435 30,462
20.61
3J1
9.17
5.67
12.93
1033
9.76
11.03
Average Annual Growth Rate (1980-2000)
Average Annual Growth Rate (1980-1995)
Average Annual Growth Rate (1996-2000)
Reform Baseline Net Non-Cash Groups
Annual Growth
13.74
14.23
1235
13,957
Average Annual Growth Rate (1980-2000)
Average Annual Growth Rate (1980-1995)
Average Annual Growth Rate (1996-2000)
Source: OMB, Using HCFA, OACT estimates, November 1993
16^33 1 7 3 1 18,985 20,061 22,655 24,995 27,435 30,462
20.61
3.31
9.17
5.67
12J»
1033
9.76
11.03
11.33
14.23
2.64
�9
o
o
o
O
in
Medicaid (continued)
1994
1991
1992
1993
1995
1996
1997
1989
1990
1998
1999
2000
34,604 41,103 52,533 67,827 75,663 87,400 99,900 112,000 126,000 141,000 159,000 178^00
11.90 12.77
13.60 18.78 27.81 29.11 1135
1531
14J0 12.11 1230
11.95
00
CD
34,604 41,103 52^33 67,827 75,663 87,400 99^00 107,400 111^35 105^35 104,460 113,030
13.60 18.78
27^1
29.11
11.55 1531
1430
731
4.13
-5.37
-1.30
8.20
�00
o
T-H
O
o
CO
o
ID
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2)
- 'Year
1993 1994 1995 1996
1997 1998 1999 2000
Bob Anderson
FY
Medicare Total
Per Capita
Medicaid
Per Capita
113
9.4
16.4
13.5
10.9
9JZ
15
11.9
9.5
7.9
12.5
11.1
9.8
8.4
11.7
9.2
9.8
8.6
11.1
8.9
9.6
8.6
11
8.7
9.4
8.4
11
8.7
CY
Medicare Total
Per Capita
Medicaid
Per Capita
11.2
9.4
16.1
13.1
10.6
8.9
14.4
11.7
9.6
8.0
123
10.6
9.8
8.5
11.6
9.1
9.8
8.6
11.1
S3
9.6
8.6
11.0
8.7
7.1
63
83
8.7
201782
222005
243185
268134
294734
10.4
10.0
9.5
103
9.9
cn
oo
a
HCFA's -- Post OBRA 93 Estimates \a
FY
145190
164066
182792
Medicare
% Increase
11.4
13.0
#Benes
33.7
Per Capita
Medicaid
% Increase
# Recipients \b
Per Capita
75000
33.0
34.3
MA
3S.2
35J6
35.9
36.2
36A
11.0
9.8
9.1
8.8
8.6
93
93
87400
99900
111600
124500
138400
1S37O0
170500
16.5
143
11.7
11.6
11.2
11.1
10.9
34.4
35.7
36.7
38.0
39J
40.7
11.7
10.1
8.6
7.9
7^
73
7.4
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\b = HCFA, OACT, revised July 1993
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�To: Gene
Fr: Jason
Re: Medicare/Medicaid savings in alternative plans
Date: November 10, 1993
Medicare/Medicaid savings
1996-2000
Chafee/Dole
Source: Chafee's office, Democratic Policy Committee
$213 billion
Cooper
$219 billion
Source: The Medicare number ($40 billion) comes from Cooper's office and Cooper
on Meet The Press on 10/31; the Medicaid number ($179) comes from last year's legislation •
- CBO estimate (These Medicaid numbers seem the least solid)
Gramm/McCain
Source: Their legislation
$174 billion
Stark
$104 billion
Source: HHS estimates
McDermott/Wellstone
Source: HHS estimates
$208-$275 billion
Note:
I would concentrate on comparing ours to Chafee, Cooper, and Gramm plans. The singlepayer don't present their numbers in terms of Medicaid/Medicare savings since Medicare and
Medicaid will no longer exist.
Attached is the following documentation:
1) HHS estimates of the cost of alternative proposals
2) two pages from the Gramm/McCain legislation
3) Democratic Policy Committee comparison of the different plans
4) Cooper stuff
�ESTIMATED
IMPACT
OF VARIOUS
ON MEDICARE
(Note:
HEALTH
AND
CARE
M_S
PROPOSALS
Hill Proposals Have not Beta Officially
Admuufttratvoti
Proposal
Ctofoe
Proposal
\
MEDICAID
Costod
Git)
xMcDciutt ' \
Impact
,
[
Proposal
J
McDerawtt
Proposal
Scenario 2
Start
Proposal
$274.9 W»on
$104.0 bfflion
Medicare & Medicaid Savings
$ i ? 3 j j i i m o i i _ -$207^bilU0»v
199^2000
$2303 bHHon
Medicare Savings
1996 2000
$116.3 billion*
$119.3 billion
$127 9binion
^$148>t>H»on-
$104.0 Union
Medicaid Savings
1996 2000
$114 0 billion
$74 3 billion
$79 9 billion
$126 1 billion
N/A
1996 2000
6 7%
7 4%
76%
6 6%
8 4%
Average Annual Growth
Medicare
1996 2<XX)
7 4%
7 0%
7 2%
6 6%
6.5%
Average Arm ual Growth
Medicaid
1996 21JU0
5 6%
8.1%
8 3%
6 6%
11.3%
Growth Rate in the year 2000
Medicare A Medicaid
7 8%
7.0%
8 2%
6 4%
8.1%
Growth Rate m the year 2000
\
Medicare
9.2%
6.9%
8 1%
6 4%
6.0%
GnWth Rate in the year 2000
Medicaid
5.5%
7.2%
84%
64%
11.1%
Average Annual Growth
Medicare A Medicaid
|
Dons not include $8.1 billion revenue proposal requiring Slate and Local Employees lo pay HI lax. Including Ihis
±
�ia- U - 93
u cn • .
ct.t»« u/Auld chen be given theflexibilityto insutme the
and the nik classes they fall imo. Sutes ^
^ ^
by the increase
reforms outlined in section vm. The payment to states womo uro
ir. ihs medical price inflation index.
u
d
m
0
e a c h
y c a r
pavings
(in billions of S)
1994
1995
1996
1991
1998
"999
TOTAL
$74
$13.8
$198
$26 3
$33.5
r..a.
$100 7
Medicaid
Savings from
Capitation and
State
Flexibility
Second, with the introduction of pnce compeuuon in health ^ Ojrough
cho^e conta:ned in sectons 0 and m the airrent ^ ^ ^ J
^ „ %™7ov five
inflttion index and the consumer price index u projected to decrease oy one-hmi over
years The resulting Medicaid savings are as follows
3
0
c
W
Savinga
(in billions of $)
1994
Medicaid
Savings from
Lower Medical
Inflation
1995
1996
1997
1998
1999
TOTAL
$3
$9
$2.0
$3 8
n.a.
$7
T^rd with the mtrocuction of a high-risk individual subsidy and a universal tax exclusion.
m ^ ' M e l ^ d r^ents will be bought under private plans. The resulting savings are as
follows:
Suing*
(in billions of $)
1994
Transfer out of
Medicaid to
Private
Insurance
1995
$6
1996
$1 3
Page 7
1997
$1 4
1998
$1 5
1999
n.a
TOTAL
$48
�B) MEDICARE
;
The ntroducaon of price competiuon in health care generated by the reforms in aecucns II and
vm'is assumed to cut the current difference between the rate of growth in Medicare and the
medical pnce index in half over five years With ths change, we assume savings of only naif
of the Medicare savings assumed by the ?resdem
;
Savingii
(ir. billions of S)
Medicare
Savings
1994
1995
$3.5
$7 5
$11
1997
1993
1999
TOTAL
$16.5
$23
n.a.'
$61.5
C) OTHER OFFSETS
With creation of die nsk pool coverage and universal access to catastrophic health care
coverage, the use of the present deduction of health care costs in excess of 7.5% of income
will drop dramaticail;- This estimate assumes a total reduction of 50%.
Savings
(in billions of $)
Less Use of
Medical
Deduction
199';
1995
1996
1997
1998
1999
TOTAL
$2.8
$2.9
$3 1
S3 3
$3 6
n.a."
$15 7
TOTAL SAVINGS (in billions of $)
1994
1995
1996
1997
1998
1999
TOTAL
$13 7
$15 I
$36.1
$49.5
$65 3
n.a.*
$189.7
S4S.S Billion
Deficit Reduction
* "p..a." refers to not applicable Savings in the sixth year are not applicable because the first five
years of achieved savings will be used to fund benefits paid in each of the following years.
Cost and savings esuma:es and assistance provided by the National Center for Policy Analysis
using the NCPA/Piscal Associates Health Care Model, stauc estimates
Page 6
�i
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A M
mCONG
M I K E
A N D R E W S
HJL 59M, MANAGED COM?ETmON ACT OF 1992 51
TABLE 7.
ESTIMATED BUDGETARY EFFECTS OF RR. 5936
(Byfiscalyear, in bULionj of dollan)
1995
1996
1997
1998
1999
2000
131
141
149
158
171
Outlay*
Low-Income AMlsiance
For people in poverty
95
For people with Income between 100
percent and 200 percent of poverty .1
Subtotal
99 .
Repeal of Medicaid
Assistince for Long-Term Care
Authorizations of Appropriations^
Total, Outlays
141
-2
152
12
Ji
163
175
JI
190
J2
-75
1
-1
•113
1
•126
1
_a
-a
-142
a
-1
•160
0
_i
-179
0
_l
25
30
27
22
15
11
10
15
17
18
19
20
-3
•10
-11
-11
•12
-12
•1
-2
-2
-2
•2
-3
•1
•1
-1
•2
-2
-3
_2
_7
8
10
10
-a
u
11
22
17
12
5
•1
Revenues
Income and Payroll Taxes
on Additional Income
Deduction of Employee Share
of Health Insurance Premiums
Deduction of Health Insurance
for the Self-Employed
Tax Deductions for the
Previously Uninsured
Repeal of Limit on Earninp
Subject to Medicare Tax
Total, Revenues
11
-i
Dcfldt
Total Effect of RR.S936
14
SOURCE! Cowyduuil B<idf«! Oder Joint Coaaluec oa TacKioo.
i.
Loa than SSOO afflloa.
b.
Th««<aant««ouldoo(»«eouAUdforpty^yeu-io teeriai tutdor iho Btidt«i Bnfertiaam Act.
�1 I\^-u>< 0 ^ - I \ j . r i .
JRESS/ ARMEY,
/
x
i\iiiir^i\i.'^
COOPER, STARK
PAGE 6 10/31/93<
x x Indeed. <
MR. BRODER:
Are you j u s t abandoning t h a t now?<
REP. STARK: No, indeed n o t . Last year Dick Gephardt and I p u t
i l l t o g e t h e r . We c o u l d n ' t g e t t h e managed c o m p e t i t i o n people t o n e g o t i a t e
Tth us, b u t I w i l l support any b i l l t h a t w i l l g e t t o t h e p r e s i d e n t ' s g o a l s .
Our committee i s g o i n g t o have t o work on r a i s i n g t h e money f o r most any b i l l
and we may have o t h e r p a r t s o f t h e b i l l . And I t h i n k t h a t t h e r e ' s no one b i l l
now t h a t c o u l d pass. Nobody has 100 v o t e s . And so we're g o i n g t o have t o take
pieces o f each b i l l and p u t them t o g e t h e r t o g e t c o s t containment and
u n i v e r s a l coverage and f i g u r e o u t how t h e American people w i l l agree t o pay
f o r t h i s . I t ' s g o i n g t o be tough.<
<
MR. BRODER: As an e x p e r t i n t h i s whose committee has t o pay
the b i l l , a r e you convinced t h a t t h e p r e s i d e n t ' s p l a n does now l e g i t i m a t e l y
f i n a n c e what he i s p r o p o s i n g t o g i v e t h e American people?<
<
REP. STARK: I n s o f a r as anybody knows, and we w i l l n o t know
t h a t u n t i l CBO has t h e numbers. A l l these o t h e r numbers a r e i r r e l e v a n t . CBO
numbers a r e t h e ones t h a t a l l t h r e e o f us have t o march to.<
<
MR. BRODER: Could I ask Armey and Cooper j u s t t o comment on
the f i n a n c i n g o f t h e p r e s i d e n t ' s plan? Does i t add up? You're an economist --<
<
REP. ARMEY: No, i t hasn't added up. Nobody b e l i e v e s i t adds
up. Q u i t e f r a n k l y , even t h e Democrat chairman o f t h e Senate Finance Committee
s a i d t h e y were f a n t a s y numbers. The f a c t o f t h e m a t t e r i s t h a t we have a
b a s i c process by t h e White House, p u t t o g e t h e r a happy t a l k t h i n g , and then
l e t t h e hard core numbers t r i c k l e o u t over time.<
REP. COOPER: David, we're w o r r i e d t h e p r e s i d e n t ' s p l a n assumes
$124 b i l l i o n i n Medicare c u t s t h a t w i l l s i m p l y n o t be enacted by Congress and
p r o b a b l y s h o u l d n ' t be enacted by Congress. So t h a t ' s a r e a l f l a w i n t h e
president's plan, a t least at t h i s point.<
<
MR. RUSSERT:
Your p l a n assumes how much i n cuts?<
<
REP. COOPER: W e l l , see, o u r p l a n i s a l o t more a f f o r d a b l e .
Ours c o s t s about 25 --<
<
MR. RUSSERT:
But you assume -- how much do you --<
<
REP. COOPER: About $40 b i l l i o n over f i v e years as opposed t o
the p r e s i d e n t ' s $124 b i l l i o n over f i v e years --<
.ETX<
MEET THE PRESS/ARMEY,COOPER,STARK
.STX<
PAGE 7 10/31/93<
MR. RUSSERT: Congressman S t a r k r a i s e d t h e CBO, t h e
Congressional Budget O f f i c e . . T h e y say, Congressman, your p l a n w i l l c r e a t e -c o n t r i b u t e $70 b i l l i o n over f i v e years t o t h e d e f i c i t , and t h a t 22 m i l l i o n
Americans w i l l be u n i n s u r e d . Do you b e l i e v e every American has a fundamental
r i g h t t o h e a l t h care?<
<
�3UDGET
Horn Budget Amendment Would Cut $361 B i l l i o n ...
Freshman Rep. Stephen Horn, R - C a l i f . , has j o i n e d a growing
—
l i s t o f would-be budget c u t t e r s by p r o p o s i n g an amendment
r e q u i r i n g a c r o s s - t h e - b o a r d spending c u t s of 1.65 p e r c e n t i n a l l
but seven f e d e r a l programs i n FY94 and i n each of the next seven
f i s c a l years. A summary of Horn's amendment r e l e a s e d by h i s
o f f i c e c l a i m s i t would save $361 b i l l i o n over f i v e years and $798
b i l l i o n over the seven f i s c a l years t h r o u g h FY2000. C u t t i n g 1.65
percent each year from the p r i o r year's spending would balance
the budget by the year 2000, Horn claimed. Medicare, S o c i a l
S e c u r i t y , m i l i t a r y and v e t e r a n s pensions, c i v i l s e r v i c e
r e t i r e m e n t , Head S t a r t and i n t e r e s t on the n a t i o n a l debt would be
exempt from c u t s under the p l a n .
Horn hopes t o o f f e r the p l a n Nov. 20, the same time Reps. Tim
Penny, D-Minn., and John Kasich, R-Ohio, o f f e r t h e i r $103 b i l l i o n
b u d g e t - c u t t i n g amendment t o a much s m a l l e r a d m i n i s t r a t i o n proposed c u t s package. A group headed by Reps. Barney Frank, DMass., Jolene Unsoeld, D-Wash., and C h r i s t o p h e r Shays, R-Conn.,
t h i s week u n v e i l e d a $22 b i l l i o n , f i v e - y e a r b u d g e t - c u t t i n g p l a n
t h a t slashes f i v e programs, i n c l u d i n g the space s t a t i o n and "Star
Wars."
To h e l p p r o t e c t s m a l l e r f e d e r a l programs from a b s o r b i n g the
same s i z e c u t as l a r g e r programs, Horn's amendment g i v e s the
p r e s i d e n t the f l e x i b i l i t y t o i d e n t i f y programs and exempt them
from a l l o r p a r t o f the 1.65 p e r c e n t annual c u t . But i f he does
so, he has t o c u t o t h e r programs by an equal amount. " I n no case
can the p r e s i d e n t cut more than 4 p e r c e n t of a program beyond t h e
new, lower l e v e l , " s a i d the Horn amendment summary. "Also, no
more than 30 p e r c e n t o f the aggregate d o l l a r r e d u c t i o n s made by
the p r e s i d e n t may come from any one program, thus c r e a t i n g a
f i r e w a l l t o a v o i d r a i d i n g any one account."
The Congress D a i l y
Friday
November 12, 1993
,
.
/\f\ij^\( f\{\j~v
/
�^ W i l l GOP Doom Penny-Kasich? I f t h e $103 b i l l i o n budget c u t t i n g
amendment spearheaded by Reps. Tim Penny, D-Minn., and John
' Kasich, R-Ohio, f a i l s t o pass i n a scheduled House f l o o r v o t e
Nov. 20, freshman Republicans may be p a r t l y t o blame. Rather t h a n
l i n i n g up b e h i n d t h e Penny-Kasich p l a n , "maybe h a l f " o f t h e 48member GOP freshman c l a s s 'is b a c k i n g a l e s s s p e c i f i c , $361
b i l l i o n f i v e - y e a r , a c r o s s - t h e - b o a r d b u d g e t - c u t t i n g amendment
c r a f t e d by freshman Rep. Steve Horn, R - C a l i f . , a House GOP source
s a i d . "The problem w i t h these freshman Republicans i s t h e y want
t o c u t something out b u t t h e y don't want t o be accountable f o r
a n y t h i n g , " the GOP source s a i d . "They don't want t o p r o v i d e any
s p e c i f i c s . " The danger, s a i d the GOP source -- who backs t h e
Penny-Kasich p l a n -- i s t h a t " i f t h e Republican freshmen don't
s t i c k t o g e t h e r and pass something, then, i n e f f e c t , t h e y j o i n t h e
[Democratic Penny-Kasich] opponents and the end r e s u l t w i l l be no
cuts a t a l l . "
I f a l l 175 House Republicans backed Penny-Kasich, t h e
amendment would o n l y need 43 Democratic v o t e s t o reach a m a j o r i t y
of 218 -- and t h a t g o a l appears t o be r e a c h a b l e . But i f a couple
dozen House Republicans l i n e up behind Horn's amendment i n s t e a d ,
the p r o s p e c t s f o r Penny-Kasich p a s s i n g dim.
Why would GOP freshmen -- t h e g r e a t m a j o r i t y o f whom a r e
w i d e l y b e l i e v e d t o be d e f i c i t hawks -- r e j e c t Penny-Kasich? I t ' s
simple, a House GOP source s a i d . Many o f t h e more p a r t i s a n GOP
freshmen don't want t o h e l p p r o v i d e p o l i t i c a l cover t o Democrats
who v o t e d a few months ago f o r P r e s i d e n t C l i n t o n ' s huge d e f i c i t
r e d u c t i o n p l a n and t h e $250 b i l l i o n i n new taxes i t c o n t a i n e d .
Some freshman Republicans f e e l "the Democrats who v o t e d f o r t h e
C l i n t o n taxes a r e now g e t t i n g cover" i f t h e y v o t e f o r PennyKasich' s a d d i t i o n a l c u t s , t h e source s a i d . The source s a i d many
GOP freshmen t h i n k t h a t keeping Penny-Kasich from p a s s i n g would
help e l i m i n a t e t h a t p o l i t i c a l cover. But t h e Penny-Kasich backers
s-ee i t a n o t h e r way. "Penny guaranteed cover f o r a l l those people
the moment t h e speaker agreed t o t h e second v o t e [on a d d i t i o n a l
spending c u t s ] , " s a i d a source.
The Congress D a i l y
Friday
November 12, 1993
�A Note on Medicare and Medicaid
1.
2.
Medicare - Medicare w i l l be l a r g e l y u n a f f e c t e d by h e a l t h
care reform. The only changes are:
•
There w i l l be cuts of about $124
•
Employers w i l l pay f o r Medicare people who are working
("Medicare o f f s e t " ) .
Medicaid
•
-
billion.
Medicaid w i l l be changed more s u b s t a n t i a l l y .
Where the people go:
Noncash
Medically Needy*
Pregnant Women**
Children**
Off
Medcaid
Cash
AFDC r e c i p i e n t s
SSI r e c i p i e n t s
On Medicaid; choose
A l l i a n c e plans
Elderly
Nursing Home***
Unaffected
* People who are on Medicaid because they have h i g h
medical b i l l s and are thus poor when income net of
medical b i l l s i s considered.
** Congressional action over the 1980s expanded
e l i g i b i l i t y f o r Medicaid t o pregnant women and c h i l d r e n
who are not r e c e i v i n g cash assistance. There w i l l be
some "wrap around" services t o disabled c h i l d r e n who
would otherwise lose r e h a b i l i t a t i o n s e r v i c e s because
they are not covered i n the plan.
*** E l d e r l y people who "spend down" w h i l e i n a n u r s i n g
home.
Remaining cash r e c i p i e n t s
These people w i l l be " i n the A l l i a n c e " . They w i l l
choose plans l i k e everybody else, and Medicaid w i l l
c o n t r i b u t e i t s current payment f o r them. Medicaid
b e n e f i t s f o r two reasons: ( i ) the slower growth r a t e of
costs i n the A l l i a n c e ; and ( i i ) some of t h e payments
f o r these people are c u r r e n t l y t o pay f o r the uninsured
(Disproportionate Share Payments = DSH), which w i l l be
eliminated [ t h i s i s e f f e c t i v e l y j u s t a lower p e r - c a p i t a
payment over t i m e ] .
�(§1
MEDICARE BENEFIT OUTLAYS*
Growth With and Without President's Health Reform
(Effect of $123.4 Billion Savings Package Only)
Dollars in Billions
-14.7%,
$260
-13.0%/
$240
Without Reform
a.
33
W
a.
$220
-10.0%-
33
33
-7.0%
$200
.
.i
With Reform
CM
O
I-
-4.8%
$180
$160
-1.6%
.
Average Annual Growth (1995-2000}:
Without Reform = 1 1 . 1 %
With Reform = 8 . 0 %
$140
1994
i
i
1995
1996
1997
Fiscal Year
• Net of Offsetting Receipts
IDOM Not Inclode Effect of State Employes Revenue Proposal}
i
i
1998
1999
2000
�MEDICARE BENEFIT OUTLAYS*
Growth With and Without President's Health Reform
(Effect of Savings, Drug Benefit, and Worker Offset]
Dollars in Billions
$260 $240 -
$140
1994
1995
1996
1997
Fiscal Year
Nat of Offsetting Receipts
(Does Not Include Effect of State Employee Revenue Proposal!
1998
1999
2000
11/3/83
�fsf CM.
ro
MEDICAID BENEFIT OUTLAYS*
Oi
Growth Before and After President's Health Reform
CD
Dollars In Billions
ro
o
ro
^1
CJ
ro
33
BS
CO
>
cn
TJ
CU
\
93
"13
Average Annual Growth (1996-2000):
- Before Reform = 12; 5%
After Reform = 7.8%
$85
1994
1995
1996
J
i
i
1997
Fiscal Year
1998
1999
2000
* Based on 10/23 detailed table. Does not include administrative savings.
IS
O
o
�To:
Fr:
Re:
Gene
Christine
Medicare/Medicaid savings in other plans (5 year numbers)
Medicare/Medicaid savings
1996-2000
1
Chafee/Dole
$193 .6 billion
Cooper
S 40 billion
($70 billion added to deficit)
Gramm/McCain
$189.7 billion
($45.5 b to deficit reduction)
Stark*
$104 billion
(see attached back-up)
McDermott/Wellstone*
$208 - 275 billion
2
3
* both of these are savings calculations based on the budgeted growth rates for the whole
health care system under these bills, versus projected growth in these programs. The
single-payer people get upset, however, when we refer to their plans as cutting projected
spending from programs that would no longer exist under reform.
1
See attached HHS analysis
2
As per Cooper on Meet the Press (documented in the transcript)
3
See attached pages from their plan
�ESTIMATED IMPACT OF VARIOUS HEALTH CARE PROPOSALS
ON MEDICARE
AND MEDICAID
J i ^
(Note: H i l l Proposals Have not Beat OffidaUy Costed Out) ^
Impact
^
t
/
/^cDennotl
\
McDermott
Propoul
)
Propoul
^ J -
Scenario!
Stark
Propoul
$274^11100
$104.0 billion
$148>ttWon-
$104.0 billion
$79.9 billion
$126.1 billion
N/A
7 4%
7.6%
6.6%
8.4%
7.4%
7.0%
7 2%
6.6%
6.5%
5.6%
8.1%
8.3%
6.6%
11.3%
7.8%
7.0%
8.2%
6.4%
8.1%
9.2%
69%
8.1%
6.4%
6.0%
5.5%
7
8.4%
6.4%
11.1%
Administration
Chafee
j
Proposal
Proposal
$230.3 billion
$193.6 btllkm
$207.8 biUion
$116.3 billion-
$119.3 billion
$127.9 billion
S i 14 o billion
$74.3 billion
6.7%
Medicare & Medicaid Savings
1996-2000
Medicare Savings
1996-2000
X
Medicaid Savings
1996 2000
Average Annual Growth
Medicare &. Medicaid
1996 2000
Average Annual Growth
Medicare
1996-2000
Average Annual Growth
Medicaid
1996-2000
Growth Rate in the year 2000
Medicare & Medicaid
Growth Rate in the year 2000
\
Medicare
1
Growth Rate in the year 2000
Medicaid
nnos not include $8.1 billion revenue proposal requiring Slate and Local Employees to pay HI lax. Including this
S
-
^
�i o : 02
and the risk classes they fall into. States would then be given the flexibility to insutme the
reforms outlined in section vm. The payment to states would grow each year by the increase
ir: the medical price inflation index
Savings
(in billions of $)
Medicaid
Savings from
Capitation and
State
Flexibility
1994
1995
1996
1997
1998
1999
TOTAL
$7.4
$13.6
SI9.8
$26 3
$33.5
n.a."
$100 7
Second, with the introduction of price competition in health care through expanded consumer
choice contained in sections n and Vm, the current differential between the medical price
inflation index and the consumer price index is projected to decrease by one-hau over five
years. The resulting Medicaid savings are as follows
(in billions of $)
1994
Medicaid
Savings from
Lower Medical
Inflation
1995
1996
1997
1998
1999
TOTAL
$3
$.9
$2.0
$3.8
n.a*
$7
Third, with the introduction of a high-risk individual subsidy and a universal tax exclusion,
many Medicaid recipients will be brought under private plans. The resulting savings are as
follows:
Samoa
(in billions of $)
1994
Transfer out of
Medicaid :o
Private
Insurance
1995
$.6
1996
$1 3
Page 7
199?
1998
1999
$1 4
$15
n.a/
TOTAL
$4.8
�19/14, SI
IS: 22
NO.355
MEDICARE
The introduction of price competition in health care generated by the reforms in sections II and
Vm is assumed to cut the current difference between the rate of growth in Medicare and the
medical pnce index in half overfiveyears. With this change, we assume savings of only half
of the Medicare savings assumed by the President
Savings
(in billions of S)
Medicare
Savings
1994
1995
1996
1997
1993
1999
TOTAL
$3.5
$7.5
$11
$16.5
$23
n.a.'
$61.5
C) OTHER OFFSETS
With creation of the nsk pool coverage and universal access to catastrophic health care
coverage, the use of the present deduction of health care costs in excess of 7.5% of income
will drop dramatically This estimate assumes a total reduction of 50%.
Savings
(in billions of $)
Less Use of
Medical
Deduction
1994
1995
1996
1997
1998
1999
TOTAL
$2 8
$2.9
$3 1
$3 3
$3 6
n.a.«
$15.7
TOTAL
fOTAL SAVINGS (in billions of $)
1994
1995
1996
199:
1998
1999
$13.7
$25.1
$36.1
$49.5
$65 3
n.a.
$189.7
$45.5 Billion
Deflcit Reduction
* "n.a." refers to not applicable. Savings in the sixth year are not applicable because the first five
years of achieved savings will be used to fund benefits paid in each of the following years.
Cost and savings estimates and assistance provided by the National Center for Policy Analysis
using the NCPATiscal Associates Health Care Modei, static estimates
Page 8
Si I
�SPECIFIC MEDICARE SAVINGS
i: What are the s p e c i f i c Medicare savings proposals?
Ansvey:
• There are a large number of proposed changes to the
Medicare program that w i l l reduce the rate of growth i n
Medicare expenditures. Some of the changes are l i s t e d
below.
• reduce the hospital market basket update
• reduce payments for hospital inpatient c a p i t a l
• phase down the Disproportionate Share Hospital
adjustment by 1998
• reduce Indirect Medical Education adjustment
• establish cumulative expenditure goals for physician
expenditures
- 78 -
�Other Medicare Cost Savings
• expand centers of excellence
• use r e a l GDP to adjust for volume and intensity
• extend freeze on updates to routine service costs fo
s k i l l e d nursing f a c i l i t i e s
• reduce the Medicare fee schedule conversion factor for
1995
• impose limitations on payment for physicians' services
furnished by high-cost hospital medical s t a f f s
• use Medicare incentives for physicians to provide primary
care
• eliminate formula-driven overpayments for certain
outpatient hospital services
• contract competitively for a l l Part B laboratory services,
except in r u r a l areas
• competitively bid other Medicare Part B services
• extend the Medicare Secondary Payor data match with
and IRS
SSA
• e s t a b l i s h a threshold of 20 employees for Medicare
Secondary Payor for the disabled
• extend Medicare Secondary Payor provisions for ESRD
patients
• improve HMO
payment
• require a 10% coinsurance on certain home health v i s i t s
• e s t a b l i s h a 20% coinsurance
for laboratory services
• set Part B premium into law
- 79 -
�Medicare Cuts Backed to Fund Health Plan
Trimming $124 Billion OveyFive Years Would Not Put Elderly at Risk, Ptinel Is Told
liorate rather than worsen" the problem of
doctors avoiding Medicare patients, he said.
Reps. Thomas J. Wiley Jr. (R-Va.) and J.
Medicare administrator Bruce
Alex McMillan (R-N.C) questioned the accutestified yesterday that the Medicare program racy of the Medicare savings projecUons in
can be cut $124 billion overfiveyearstohelp view of past errors in estimating the cost of
finance President Clinton's health plan without various health proposals by the Congressional
"putting Medicare beneficiaries at risk."
Budget Office and others.
The cuts, mainly in payments to hospitals
Vladeck said the estimates relating to Mediand doctors, "will only reduce the growth in care had been done by the office of Medicare
Medicare spending from triple the inflation
rate to double " he told a House Energy and
Commerce subcommittee.
"In the context of a plan that will bring
down private-sector costs, we can achieve
Medicare savings without shifting costs or
endangering beneficiaries' access to services,"
Vbdeck said as he provided Congress with a
detailed list of the proposed cuts for the first
time.
actuary Roland E. "Guy" King, who is,"very
"I am disturbed by the magnitude of these conservative in his estimates."
cuts," said Rep. Henry A. Waxman (D-Calif.).
Bliley called the Clinton plan a "guarantee for
chairman of the subcommittee on health and insolvency." He said it could vastly increase the
: the environment. 1 believe they are excessive use of health care while limiting what the govand could adversely affect the quality and ernment and various insurers have to pay.
availability of services for beneficiaries."
The American Medical Association said the
Watrtttiraakf that Medicare already pays proposed Medicare cuts reflect "cynicism about
doctors 30 percent less than private-sector physicians as 'deep pockets' from which either
insurers pay and asked who will treat Medi- reduction in the deficit or health system reform
tcare patients if payment rates are cut even can be funded."
tnore?
The American Hospital Association said,
\ "That's why we want to do it only in tan- "Faced with Medicare cuts of the size proposed
dem" with controls over the growth of costs in by President Clinton," on top of the $56 billion
the private sector, Vladeck said. In that way over five years just voted as part of the budget
the differential between Medicare and private bill, hospitals "might have to reduce their work
fees will "shrink" instead of grow, and "ame- forces, reduce services or both."
By Spencer Rich
By far tlie biggest Medicare cuts in the $124
billion package come from hospitals. The administration proposes to: reduce annual hospital
payment increases ($18 billion); reduce special
bonuses for the training of interns and residents
($17.8 biltkm); reduce Medicare payments to
cover hospitals' capital expenditures ($10.3 billion); change the payment formula for outpatient
services to eliminate an overpayment in the current formula ($12.6 billioafc and phase down
special payments to hospitals with a disproportionate share of low-income and uninsured patients ($14.6 billion). Vladeck said the latter will
be needed less as the Clinton health plan covers
all people now uninsured, so that insurance pays
their hospital bills.
Doctors also would face cuts in Medicare payment levels; patients would have to pay more,
including copayments for home health services
and clinical lab services and a higher premium if
they have incomes over $90,000 ($115,000 for
couples).
As Vladeck was testifying. Sen. Don Nickles
(R-Okla.) and 23 other senators announced a
proposal to provide refundable tax credits—in
effect, vouchers—to help Americans buy health
insurance policies, with eased rules to prevent
exclusions. The credits would be financed by
eliminating employer deductions for health insuraaoe costs and by $141 billion in cuts in
tfcdfcffe aad Medicaid over the next five years.
Akio ynterday, congressional aides said the
presideot's Health Security Act, which Clinton
announced in a speech in September and "relaunched" three weeks ago, will be introduced
formally "within days."
The biggest reductions in
the package would come
from hospitals.
�MEDC
IARE TO STOP
PUSHING PATIENTS
TO ENTER ma's
GREATER COSTS ARE SEEN
In Discovery With Bearing on
Health Plan, Study Finds
Flaw in Setting Payment
By ROBERT PEAR
Special loThc New York Timei
WASHINGTON, Dec. 26 - In a significant policy change, Clinton Administration officials say they will not prod
elderly Medicare patients to join health
maintenance organizations, In part because they have discovered that the
Government loses money on people
enrolled in such private health plans.
Bruce C. Vladeck, head of the Federal Health Care Financing Administration, which runs Medicare, said he
would not aggressively promote
H.M.O.'s for beneficiaries until he
could guarantee consistent high-quality care and had a better way of paying
for il.
"Our payment methodology is so
primitive that it doesn't save money,"
Mr. Vladeck said in an interview. "We
are losing money on H.M.O. patients.
Before we undertake aggressive promotion of H.M.O.'s for Medicare beneficiaries, we have io make progress on
both issues: payment methodology and
quality assurance."
The Problem With H.M.O.'s
In the Reagan and Bush Administrations, Medicare officials insisted that
H.M.O.'s would both raise the quality of
care for elderly people, by coordinating
services, and save money for the Government.
But a new study by Mathematica
Policy Research, a private consulting
concern, said the Government paid 5.7
percent more for Medicare patients in
H.M.O.'s than it would have paid If
those people had been in the regular
Medicare program. Medicare "is not
achieving its goal to save money"
through H.M.O.'s, said the study, done
under contraci to the Government.
The problem, essentially, is this:
while Medicare paid the H.M.O.'s a
per-capita fee close to the cost of services used by the average Medicare
beneficiary, the patients who enrolled
in the H.M.O.'s tended to be healthier
than the average, meaning that they
would probably have used fewer services anyway.
The report does not discuss President Clinton's plan to remake the nation's health care system, which seeks
to hold down health spending by Inducing large numbers of consumers to
enroll in H.M.O.'s and other forms of
managed care But the findings suggest that it may be difficult to achieve
the large savings that his plan enviContinued on Page A}4, Column 4
ConUmted From Page Al
deemed to have a high risk of costly
illness. Medicare covers everyone entitled to benefits,regardlessof illness or
skms.
"HMO's reduce utilization and disability, and one of Mr. Clinton's major goals in his health plan is to end the
4on1 seem to cut the quality of care," widespread
practice of discrimination
•aid Randall S. Brown, chief author of against sick people by private insurers.
the Mathematica study. "But if you
Under Federal law. Medicare benefiwant to reap any savings, you better ciaries still have the option of joining
set the payments right"
H.M.O.'s, and the Government is not
Under Mr. Clinton's plan, organiza- discouraging this option. Indeed, Meditions known as regional alliances care officials say beneficiaries may get
would buy coverage for large numbers excellent care from some H.M.O.'s. But
of people in a particular area. Just as elderly people have beenreluctantto
the Government has not found a reli- join. Fewer than 2.5 million of the 36
able way of adjusting its payments to million Medicare beneficiaries are in
H.M.O.'s toreflectthe expected health H.M.O.'s, and Mr. Vladeck said the
needs of Medicare beneficiaries, so the Government would not "actively realliances may have difficulty adjusting cruit elderly folks" for such plans at
their payments to networks of insurers, this time.
doctors and hospitals to reflect the
Disclosure of the Mathematica study
needs of alliance members.
comes two months after the General
Proponents of an alternative to the Accounting Office, an investigative
President's plan argue that instead of arm of Congress, said there was "little
seeking elusive savings through managed care, all Americans should be
lumped into a Government-run "single
payer" plan like the one in Canada.
But Administration officials argue
that the nation is not yet ready for a
health care system financed entirely
by taxes — or the tax increases such a
system would require — and that the
market forces that would be unleashed
by the President's plan would succeed
in holding down costs.
Health maintenance organizations
normally charge a flat sum, fixed in empirical evidence" of savings from
advance, for each member, regardlessH.M.O.'s and other forms of managed
of how much care the person uses. By care used by employers for their workcontrast, under traditional fee-for- ers. Two trade groups that represent
service arrangements, which most H.M.O.'s, the Group Health Association
Medicare beneficiaries use, doctors of America and the American Manare paid separately for each service or aged Care and Review Association, disprocedure. Many health policy experts pute those findings. They say that presay these arrangements give doctors a paid group plans achieve substantia)
financial incentive to perform extra savings.
services.
There is some evidence that people
The four-year Mathematica study under 65 behave like people 65 and
said that the Medicare payment rates over. The data are open to different
to the H.M.O.'s did not fully reflect the interpretations, but Mr. Brown of
makeup of the people who chose to Mathematica said, "Some employers
enroll. Had these people obtained their have found that younger, healthier
care through fee-for-service, the Gov- workers are more likely to choose
ernment would have paid less than it H.M.O.'s than older, sicker workers."
Medicare patients with a history of
paid the H.M.O.'s.
After more than a decade of experi- cancer, heart disease and stroke are
ence with H.M.O.'s in the Medicare less likely to join H.M.O.'s, apparently
program, the study said, the Govern- because they want complete freedom
ment has not found a completely satis- to consult doctors they have used in the
factory way of adjusting payments to past, the study said.
The Government's primary goal in
reflect the health status and medical
needs of the people who join a particu- establishing the H.M.O. program for
lar plan. Under Mr. Clinton's proposal, Medicare beneficiaries was to save
the Government would devise a formu- money for the Government while exla to make such adjustments, but actu- J
aries and other experts say this will not ]
be easy, and many H.M.O.'s complain
that Medicare payments are already
too low.
The study said that H.M.O.'s ap
peared to reduce the intensity and f re
quency of medical services used, espe
cially hospital stays, without harming
the quality of care. But it found that
Medicare paid an average of $413 a
month for each person in an H.M.O., or
J22 more than it would have paid for
the same person in the regular Medicare program, even taking into account
the additional services that that patient
would presumably have used in a fee
for-service arrangement
H.M.O.'s provide Medicare beneficiaries with all the services covered
under the standard Medicare program
and may offer additional benefits like
preventive care or prescription drugs,
at little or no additional cost.
The Government does not approach
Medicare with the actuarial sophistication of private insurance companies,
which ofteh refuse to cover people
A hard look at
H.M.O.'s topples
a long-held hope
for cutting costs.
�panding choices for pa tier cs. By design, the program should lower Federal costs 5 percent because, under a
statutory formula, the Government
pays health maintenance organizations
95 percent of the average per capita
cost for people enrolled in the regular
Medicare program.
But the Mathematica study said the
people in H.M.O.'s were so healthy that
the Government would have spent even
less — about 90 percent of the average
per capita cost — if they had been in
the regular Medicare program.
"Thus," the study said, "rather than
saving 5 percent as intended, the
Health Care Financing Administration
spends 5.7 more" when Medicare beneficiaries get their care through
H.M.O.'s.
Mr. Vladeck was deeply involved in
developing President Clinton's proposal to control health costs and guarantee coverage for all Americans. Before he took office in May,"Mr. Vladeck '
was president of the United Hospital
Fund of New York, a philanthropy that
does health services research.
•We Are Not Ready'
"The Bush Administration invested
heavily in the marketing of H.M.O's,"
Mr. Vladeck said. "We are not ready to
do that. 1 don't want to get into a big
marketing campaign until we can tell
beneficiaries that" quality is really
good, that every H.M.O. is doing a good
job by our beneficiaries.
"We're trying to get past the idea
that managed care is good or evil," Mr.
Vladeck said. "The question is: How do
we tell the good from the bad, and
eliminate the bad?"
Mr. Vladeck said he wanted to encourage new hybrid forms of managed
care that would attract elderly people.
"H.M.O.'s earned their spurs taking
care ol young employed populations,'*
he observed. "They do a lot of maternity care and pediatrics." But to serve
Medicare beneficiaries, he said, "they
need to enlist more orthopedists, cardiac surgeons, ophthalmologists, urologists and oncologists."
Gail R Wilensky, head of the Health
Care Financing Administration wider
President George Bush, said that increasing Medicare enrollment
in
H.M.O.'s had been a major goal for her
and her predecessor, Dr. William L.
Roper.
"The quality and coordination of
care can be much better in managed
care than when services are provided a
la cane, on a fee-for-service basis,"
she said.
2
A
�
Dublin Core
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Health Care Task Force Records
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White House Health Care Task Force
Is Part Of
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
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Medicare Cuts (and Deficit)
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White House Health Care Task Force
Paul Jamieson
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Entitlement Conference
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53
3
3
3
�PHOTOCOPY
PRESERVATIOiV
�THE WHITE HOUSE
Office of the Press Secretary
(Bryn Mawr, Pennsylvania)
For Immediate Release
December 13, 1993
REMARKS BY THE PRESIDENT
IN ADDRESSING THE FUTURE OF ENTITLEMENTS CONFERENCE
Bryn Mawr College
Bryn Mawr, Pennsylvania
10:45 A.M.
EST
THE PRESIDENT:
Thank you very much.
Ladies and gentlemen, i t ' s a pleasure for me to be
here. I have looked forward to this conference with great
anticipation for some time. I want to thank congresswoman
Margolies-Mezvinsky for getting this together and for inviting me
here. I thank President McPherson and this wonderful i n s t i t u t i o n
for hosting us. (Applause.) I'm delighted that Speaker Foley
and Congressman Penny are here for the Congress; and senator
Kerrey and Senator walker, your own senator, are here to talk
about these important issues.
I want to also thank a l l the people who helped to
put t h i s conference together and to a l l the people in our
administration who were invited and are here participating. w«
pretty much shut the town down in Washington today and just sort
of came up here to Pennsylvania to talk about entitlements.
(Laughter and applause.)
This i s a very serious subject, worthy of the kind
of thoughtful attention that i t w i l l be given today. I hope
there w i l l be a great national discussion of the issues that we
discuss today, and I hope that this w i l l be the beginning of a
debate that w i l l carry through for the next several years.
I ran for President because I thought our nation was
going in the wrong direction economically, and that our society
was coming apart when i t ought to be coming together. I wanted
to work hard to create jobs and raise incomes for the vast mass
of Americans; and to t r y to bring our country back together by
restoring the bonds of family and c i v i l i t y and community, without
which we cannot hope to pass the American dream on to the
students who are here at Bryn Mawr or the students who w i l l come
behind.
To do t h i s , we must a l l ~ without regard to party
or philosophy — at least agree to face the real problems of this
country: 20 years of stagnant wages; 30 years of family decline,
concentrated heavily among the poor; 12 years in which our debt
has quadrupled, but investment in our future has lagged leaving
us with twin d e f i c i t s , a massive budget d e f i c i t and a less
publicized investment d e f i c i t
the gap between what we need to
invest to compete and win, and what we are receiving in terms of
new s k i l l s and new opportunities.
These things are linked. Creating jobs in growth
requires that we bring down both the budget d e f i c i t and the
investment d e f i c i t . High government d e f i c i t s keep invest —
interest rates high, they crowd out private demands for c a p i t a l ,
they take more government money to service the debt. A l l this
tends to reduce investment, productivity, jobs and ultimately,
l i v i n g standards.
s t
The d e f i c i t increased so dramatically over the l a
12 years because of things that happened on tha spending side and
�- 2-
on the revenue side. Defense increased dramatically until 1987,
but i t ' s been coming down since then quite sharply. However, the
place of defense, as we'll see later, has been more than
overtaken by an explosion in health care cost going up for the
government at roughly three times the rate of inflation.
Interest on the debt is obviously increased more when interest
rates were high than now, but always when the accumulated
national debt goes up. And the larger number of poor people in
our country has inevitably led to greater spending on programs
that are targeted to the poor.
On the revenue side, the tax cut of 1981 wound up
being roughly twice the percentage of our income that was
originally proposed by President Reagan as the President and the
Congress entered into a bidding war. And then in 1986 we adopted
indexing, a principle that is clearly fair, but reduced the rate
of growth of federal revenues by adjusting people's taxes
downward as inflation pushed their incomes upward. And finally,
a prolonged period of very slow growth has clearly reduced
government revenues and added to the deficit.
I f you look at this chart, you will see that we
inherited a deficit that was projected to be actually
when I
took office, for the fiscal year that ended at the end of
September — above S300 billion. I t was obvious that — and i t
was headed upward. This was the line
the blue line here i s
what I found when I became President. I t was clear that
something had to be done. I asked the congress to pass the
largest deficit reduction package in history. I t had $255
billion in real enforceable spending reductions from hundreds of
programs. Now, let's make i t clear what you mean, when you hear
the word spending reductions or cuts in Washington terms, i t can
mean two things. One is a reduction in the rate of increase in
government spending from the previous five-year budget, which i s
s t i l l an increase in spending, but not as much as i t would have
been had the new reduction not taken place.
The second thing i t might mean is what you mean when
you say cut, which i s you spend less than you did before you used
the word. (Laughter.) And i t i s important to know which one
you're talking about. However, both are good in terms of
reducing the deficit over a five-year period. We not only
reduced the rate of increase, but actually adopted hundreds of
cuts this year. The budget year that started on October i s t has
less spending than the previous year in 342 separate accounts of
the federal budget.
Adjusted for inflation, this means a discretionary
spending cut of 12 percent over the next five years, more than
was done under the previous two administrations. I f this
continues, according to the wall street Journal, then by 1998,
discretionary spending — that is the non-entitlement spending
and discounting interest on the debt, the things that we make
decisions on every year — w i l l be less than 7 percent of our
annual income; about half the level i t was in the 1960s.
In addition to the discretionary spending cuts, our
budget did reduce entitlements, making reductions in agricultural
subsidies, asking upper-income recipients of Social security to
pay more tax on their income, lowering reimbursements to Medicare
providers, making other adjustments in Medicaid and in veterans*
benefits. Now, a l l these cuts are already on the books, we are
also cutting -- with the help of the Vice President's National
Performance Review — over 250,000 positions from the federal
payrolls, largely by attrition and early retirement over the next
five years. We're finally attempting to reform the system in
ways that w i l l permit us to save billions of more dollars in
discretionary spending through reform of personnel budgeting and,
most importantly, procurement systems -- i f the Congress will
authorize a l l three of those systematic reforms.
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We also passed some taxes — a modest 4.3 cents-agallon gas tax which, so far, has been barely f e l t because we
have the lowest price in o i l in many, many years so the price of
gasoline has actually dropped since the gas tax was put on. we
also asked the top 1.2 percent of Americans to pay higher income
taxes because their incomes went up the most and their taxes
dropped the most in the previous 12 years. The corporate income
tax on corporations with incomes above $10 million a year was
raised. Middle-class families w i l l pay s l i g h t l y less taxes
because, again, of the adjustments for i n f l a t i o n . And taxes were
cut for 15 million families who worked for very modest wages as a
dramatic incentive to get them to continue to chose work over
welfare.
When Congresswoman Mezvinsky and her colleagues
voted for this economic plan, they voted for your economic
future, for lower d e f i c i t s , higher growth and for better jobs.
They did vote to cut spending. They did not vote to raise taxes
on the middle c l a s s . And, frankly, the kinds of radio ads that
have been — this i s the only p o l i t i c a l thing I'm going to say
today (laughter) -- but the kind of radio ads that have been run
against here in this d i s t r i c t do not serve the public interest
because they do not t e l l the truth. (Applause.)
I f somebody wants to say that we should not have
raised income taxes on the top 1.2 percent of the American
people, l e t them advertise that on the radio. I f someone wants
to say that the corporate income taxes above $10 million a year
in income should not have been raised, l e t them advertise that on
the radio. I f someone wants to say that the gas tax was unfair,
let them advertise that on the radio. But do not try to t e l l the
American people there were no budget cuts and they paid a l l the
tax increases, because that i s simply not true. And we have a
lot of work to do in this country and a lot of honest
disagreements to have, we need not expend our energy on other
things. And i f you don't believe that read the front page of the
Wall street Journal thie morning. That i s hardly the House organ
of my administration. (Laughter.)
Read the front page of the Wall Street Journal t h l i
morning talking about the unprecedented cuts that this budget
made. I t does not do anybody any good to continue to assert
things about that economic plan that are not true. The markets
had i t figured out. That's why interest rates are down and
investment i s up. That's why Inflation i s down and more jobs
have come into this economy in the l a s t 10 months than in the
previous four years. The markets figured i t out. A l l the smoJte
and mirrors and radio ads in the world couldn't confuse the
people that had to make investment decisions and read the fine
print.
(Applause.)
That's the good news. Now l e t ' s talk about the
continuing problems, the real problems. The economic plan which
the Congress adopted represents the red line. That's how much
less the d e f i c i t w i l l be. And the aggregate amount between these
two lines i s how much less our total debt w i l l be by 1998.
The
yellow line represents where we can go, by conservative
estimates, i f the health care plan i s adopted. You s t i l l have an
operating d e f i c i t , and the national debt w i l l s t i l l increase by
this amount, but not by that amount.
So we are c l e a r l y better off with the economic plan.
We w i l l have to make further cuts, by the way, to meet this red
line. We're not done with that. We w i l l be better off s t i l l i f
we do something about health care -- I ' l l say more about that in
a minute — but there i s s t i l l more to be done. The debt of this
country now i s over $4 b i l l i o n . That means our accumulated debt
i s more than two-thirds our annual income. I t i s important that
the debt, as a percentage of our annual income, go down. I t i s
way too high, much higher than i t has been outside of war time.
I t i s important that the annual d e f i c i t , as a percentage of our
income, go down. I t w i l l go down under this plan, but we can do
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more to try to reduce the aggregate debt and the d e f i c i t as a
percentage of our income. Both of them are too high.
Now, l e t ' s look at the next chart here. I think you
a l l have i t out in the audience. This chart Just basically shows
where you money goes, when you pay federal taxes, or when the
government — on your behalf — borrows money, in debt, we spend
47.4 percent in entitlements -- that i s what we're here to talk
about today
about 21 percent on defense, i t ' s going down, as
you'll see in a minute; about 18 percent on non-defense,
discretionary, which i s being held constant; and about 14 percent
in interest on the national debt.
Let's look at the next chart now.
This chart gives
you an idea of which spending categories are headed in which
direction. Average annual real growth -- now, I want to t e l l you
what t h i s means. I haven't lived in Washington very long so I
s t i l l use ordinary meanings for words. (Laughter.) When you see
real on a government chart, that means adjusted for i n f l a t i o n .
(Laughter.) You'll never find that in a dictionary, but that i s
what i t means, in other words, these are the numbers adjusted
for i n f l a t i o n at a projected inflation growth of more or less
three and a half percent a year. I f you look at that you see
defense i s going down. Frankly, we're reducing i t as much as I
think we responsibly can; and, in fact, more than we responsibly
can unless congress w i l l pass the procurement reform so the
Defense Department can buy what i t needs for our national defense
at more e f f i c i e n t prices. But I hope that w i l l happen.
Other entitlements -- we'll come to that in a minute
what those other entitlements are -- they're also going down
r e l a t i v e to inflation. That i s b a s i c a l l y the entitlements for
the poor and the veterans' benefits and agriculture benefits.
Non-defense discretionary i s a l i t t l e under zero, as
you see. That's a l l the investments for education, for training,
for technology, for defense conversion, for you-name-it, anything
for infrastructure, for roads; anything we spend money on that we
have an option not to spend money on that -- we'll come back to
that — i s going down r e l a t i v e to Inflation. I f there were no
i n f l a t i o n numbers here, i t would actually be just a tiny b i t
above the l i n e , but i t i s functionally zero. For a l l p r a c t i c a l
purposes, i f I want to increase the amount of money, for example,
we spend on Head Start in Pennsylvania by a million dollars, we
have to cut something else by a million dollars, we are not
increasing the aggregate amount of this kind of discretionary
spending. Net interests w i l l go up and, again, this i s adjusted
for i n f l a t i o n , so i t i s continuing to r i s e because the amount of
the debt i s continuing to r i s e .
s o c i a l security w i l l go up, again, adjusted for
i n f l a t i o n . This i s about -- this i s the population increase,
effectively, in Social Security. There aren't new benefits being
added, so there w i l l be a couple of percent growth in population
between now and 1998. So i t w i l l go up by the amount of
increasing numbers of people on Social Security.
And look what happens to health entitlement. I t ' s
going up more than twice as much as Social Security, more than
three times as much as net interest, and everything else i s going
down. Now that's what's happening. Let's go on to the next
chart.
As the chart shows here, this i s the new revenues
we're getting in this year. Now, the new revenues include the
tax increases that we j u s t talked about. They're about 40
percent of that revenue growth. The rest of i t ' s just ordinary
increases in tax revenues to the government coming from
increasing employment or increasing incomes. So i t ' s — every
year -- and inflation -- so every year we get some revenue
growth. This revenue chart i s about 60 percent ordinary revenue
growth, 40 percent new taxes. As you can see, the whole thing
�- 5-
goes to d e f i c i t reduction, interest increases and entitlement
increases. That's where the money went.
Eighty percent of the new revenues, including taxes
and revenue growth went to d e f i c i t reduction and interest
increases; 20 percent of i t went to entitlement increases. As
you can see, that does not leave a great deal of room for any
kind of future investments. This i s something that presumably
both Senator Kerrey and Congressman Penny w i l l talk about today.
But there i s , I think i t ' s f a i r to say, a broad consensus in the
Congress among Republicans and Democrats, among l i b e r a l s and
conservatives, that there are some things on which we are not
spending enough money to get us to the 21st century. We have put
ourselves in a box after the l a s t
trying to work our way out
of this d e f i c i t business, so that we do not have the f l e x i b i l i t y
to make those kind of growth-oriented investments in the public
sector.
That i s a dilemma. So we have two continuing
dilemmas, i f you w i l l -- one, we s t i l l got a d e f i c i t and a debt
problem; two, there are things which l i t e r a l l y over 80 percent of
the Congress — both parties — would agree we should invest more
in that we simply cannot invest more in because of the problem we
have with the budget.
Could we go on now into the next chart?
go into the next chart.
Let's
Now, t h i s gives you a picture of entitlement
spending. And I know Alice R i v l i n talked about this a l i t t l e
before — and she knows a l o t more about i t than I ever w i l l —
but I think i t ' s worth going back over because this i s an
entitlements conference.
So I t ' s worth focusing on what an
entitlement i s . And when you hear people use that term, what
they are.
So look at t h i s . These entitlement programs are
programs that provide benefits for people that have certain
c h a r a c t e r i s t i c s . People who meet the test of e l i g i b i l i t y for the
program get i t , notwithstanding some previously budgeted amount
for that program. That's why they're called entitlements.
For example, someone who has paid into the Social
Security Trust Fund, along with his or her employer, who i s 65
becomes "entitled" to Social Security. You just go to the Social
Security office with the documents that prove you're e l i g i b l e and
you're going to get the check no matter how many other people
qualify for Social Security. Since i t ' s hard to know in advance
exactly how many people w i l l apply for benefits, Congress doesn't
set aside a specific amount of money as i t does for the
discretionary spending programs. Instead, i t simply directs to
Treasury to make payments to everybody who applies and q u a l i f i e s
for the benefits under the laws.
There are two main kinds of entitlements. And you
can just see by looking up here what they are. They are the
contributory entitlements; that i s . you're entitled to something
because you paid into i t . I t ' s contract oriented, social
Security i s a contributory entitlement. Medicare i s a
contributory entitlement. Federal retirement i s a contributory
entitlement. You did the work, you put the money aside, you get
i t back.
Then there are the entitlements for those in need,
or entitlements that are in a special category because you can't
predict how much i s going to be needed every year. The
entitlements for those in need would include AFDC, supplemental
security income, the Medicaid program, medical care for the poor.
Agriculture i s in a separate category. I t has been treated as an
entitlement partly because i t ' s so caught up in the global
economy, i t ' s impossible to predict from year to year how much of
the support subsidies w i l l be needed.
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Now, the contributory retirements are sometimes
called middle-class entitlements because they benefit everybody.
The middle c l a s s , or Mr. Peterson w i l l t e l l you in a few minutes,
the upper-middle-class or the wealthy -- i f you pay in, you get
i t back plus a cost of l i v i n g increase. Now, the poor people's
entitlement, I said, are mostly in the category of like AFDC and
food stamps and Medicaid. But l e t me show you something about
these entitlements, because most people, I think, don't know
t h i s . Social Security i s 43 percent of the t o t a l . Medicare i s
18 percent. Medicaid i s 11 percent, federal retirement i s 8
percent, unemployment i s 5 percent — obviously i t goes up or
down, depending on what the unemployment rate i s and how long
people are unemployed. Food stamps are 4 percent, other i s 11
percent.
In the other you have agriculture, veterans,
supplemental security income -- which i s for lower-income elderly
people — and AFDC. The welfare program of this 11 percent i s 2
percent. The average monthly welfare benefit in America i s
actually lower today, adjusted for i n f l a t i o n , than i t was 20
years ago. The program i s more expensive because there are more
poor people. But I think i t ' s quite interesting to point that
out. Most people are surprised to know that the welfare budget
i s about two percent of the entitlements, or about one percent of
the overall federal budget.
Now, the entitlement programs for the needy, as you
can see, make up about 12 percent of the whole budget; or about a
quarter of the entitlement spending. The biggest entitlements
are s o c i a l Security and Medicare. They are about 61 percent of
the t o t a l . When you add federal c i v i l i a n retirement and military
retirement, you've got over two-thirds of the retirements there
— of the entitlements there.
Now, I think i t ' s important to point out, just in
passing, that behind every one of these entitlements there's a
person. That's why i t ' s so controversial when they're debated in
Congress. I t ' s not just organized interest groups, there are
people who believe they are l i t e r a l l y e n t i t l e d to receive
something back that they paid into. I t i s the middle-class
entitlements, that have united us and brought us together, that
also have the strongest constituencies and provoke the biggest
controversies when we get into dealing with t h i s . And these
programs are also very important in human terms. And I just
might mention, too, the — i f you look at Medicare, before
Medicare, there was a good chance that Americans, when they got
older, would need charity care, would simply do without health
care. Today nearly 34 million people go to see a doctor, or get
medical care because of the Medicare program.
social security has changed, l i t e r a l l y , what i t
means to be old. in the beginning of 1985, for the f i r s t time in
our history, the percentage of our elderly people who were above
the poverty line was better than the percentage of the population
as a whole. In other words, the poverty rate for the elderly was
lower than the poverty rate of the general population.
I t i s very d i f f i c u l t to say that this was a bad
thing. That was — I argue -- a good thing, we should not view
this whole program, in other words, as welfare. I t i s not a
welfare program. Does that mean that there should be no changes
in i t ? No.
I t just means that we should be very sensitive about
the fact that this i s something that has worked. Because of
these programs, we are a healthier people, we are a more unified
country, we treat out e l d e r l y with greater dignity by having
allowed them to earn a decent retiremient and to maintain a
middle-class standard of l i v i n g , independent of whatever their
children are required to do, and to make them more independent
over the long run. This i s a huge deal in a country where the
fastest growing group of people, in percentage terms, are people
over 80 years of age.
(Applause.) This i s a big deal.
(Applause.)
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Now, I recommended exposing more of the incomes of
the top 10 or 12 percent of Social security recipients, somewhere
in that range, to taxation, and Congress adopted a modified
version of that plan. That was an entitlements move. I thought
i t was an appropriate thing to do because a lot of people in
upper-income levels, by definition, have other sources of income,
too, and will get back what they paid into social security plus
reasonable interest growth in a reasonably short period of time,
so I thought i t was fair to do that.
We recommended upper-income people pay more for
Medicare benefits. I think that i s reasonable to do because the
Medicare payment i t s e l f only covers a small percentage of the
total cost of Medicare, where I think we should draw the line,
however, i s in trying to have happen to the elderly middle class
what is happening to the non-elderly middle class. All over the
world today, and certainly in a l l the advanced countries of the
world, the middle class i s under assault. Earnings inequality
has increased in the last 12 years. I t i s becoming very
difficult for working people to sustain a middle-class way of
l i f e . We are going to have to a l l change, we've got to change
our government policies. People are going to have to acquire
much higher levels of s k i l l and be committed to training for a
lifetime. There are a lot of things that have to be done. But
the general policy point, I think, i s valid, we do not want to
deal with a problem like the deficit which i s aggravated because
middle-class people's incomes have stagnated by having the same
sort of income stagnation for the middle-class elderly.
so I think there are things we can do to deal with
this. They will be discussed later. We did some things to deal
with the entitlements in the last budget. But let us not say
that i t was a bad thing to dramatically reduce poverty among
elderly people, or that i t i s a bad thing for our consumer
economy to maintain a large number of middle-class people in
their retirement years. That means that we have to have honest,
specific and clear discussions of this, as unencumbered as
possible by these sort of rhetorical bombs flying in the air from
the left and the right.
Just talking i t through and listening to each other
and asking ourselves what w i l l be the practical impact of
proposed change A, B or C; and will we a l l be more secure, will
our children and our grandchildren be better off; will this help
to stabilize and increase the middle class ballast of our
society? And I think we are on the verge, perhaps, of having
that discussion in no small measure because of this kind of
conference.
Now, let's go on and let's look at what I think the
real problem in the entitlements i s , i s clearly the danger signal
for the long run. Let's look at the next chart. As you can see,
20 years ago health spending and entitlements — Medicare and
Medicaid -- 13 percent of the total; 1983, 19 percent of the
total; 1993, 30 percent of the total; 2003, 43 percent of the
total.
Keep in mind — and this i s with the number of elderly
people going up like crazy, so the population of people drawing
Social Security i s going way up, right? And s t i l l , look at that.
So, clearly, that i s the portion of government
spending that i s out of control. That i s the portion of
entitlement spending that is out of control. Now let me just
illustrate i t by a couple more charts, real quickly. Let's go to
the next one.
Non-defense discretionary outlays are going down as
a percent of our income. Social Security outlays as a percentage
of our income i s solid, stable here. I t could go up some in the
next century, is projected to when a l l the baby boomers go in. I
heard Ms. Rivlin refer to that as the President's generation.
(Laughter.) I am the oldest of the baby-boomers.
�- 8-
But s t i l l , you see, i t ' s a stable as a percentage of
the gross national product. And the Congress, in 1983, after the
Bipartisan commission on Social Security made recommendations for
fixing Social Security, attempted to keep this number stable by
gradually raising the retirement from 65 yo 67, by about a month
a year over a prolonged period of time starting just in the next
century.
Now l e t ' s go on to the l a s t one. This chart shows
you that unlike Social Security and discretionary spending,
medical spending i s going up l i k e a rocket. Medicare and
Medicaid have t r i p l e d since 1982. Medicare and Medicaid w i l l
soon cost more than Social Security. And next year for the f i r s t
time — in large measure because Medicaid i s a state-federal
matching program, so that every state has to put in money along
with the federal government -- next year, for the f i r s t time,
states w i l l spend more money on health care than education. And
since we — and since I supported this, I see other present and
former governors around this table — in the 1980s we said to the
national government, "You've got a problem with the d e f i c i t ,
we'll spend more on education. You do what you have to do to
deal with your other problems." This i s a very serious danger
signal. I f you want the states to spend more educating people,
getting children to the point where they can compete, training
the work force — to have the states a l l of the sudden spending
more on health care than education i s a very serious danger
signal for the distribution of r e s p o n s i b i l i t i e s between the state
and the federal government.
Now, we have some options. I f we want to control
Medicare and Medicaid spending, b a s i c a l l y we have some options.
And to be f a i r , again I want to say during the 1980s under the
Reagan and Bush administration — the two administrations and the
United States Congress did try to cooperate on several things to
control Medicare and Medicaid spending. They took total pricing
controls away from hospitals and doctors. They t r i e d to do a
number of things. But what happened? I f you control the price
of a given product in this environment, what happens? Providers
can provide more products, I mean, more of the same product,
right? You increase the volume i f you lower the price, and the
money s t i l l goes up. That's one problem, secondly, poverty
increased in the '80s and i s continuing to increase among the
poor and the -- both the idle and the working poor
and that
drives the Medicaid budget up. so controlling unit prices didn't
work. The other thing you could argue that we could do i s to try
to control the categories within Medicare and Medicaid;
b a s i c a l l y , just spend l e s s . In other words, even though they're
entitlements, just say we are going to spend less on certain
categories by both controlling volume and price, i s there a
problem with that? Yes there i s . what i s i t ? Any doctor or
hospital w i l l t e l l you that there has been a lot of cost shifting
in this health care system, and i t ' s one of the causes of r i s i n g
prices and inefficiency. Cost shifting largely occurs in two
ways — when hospitals have to care for people who don't have any
insurance, or when they provide government funded health care at
less than their cost of providing the service, they s h i f t the
cost onto the private sector.
So we could bring this d e f i c i t down — we could do
this — I want to — l e t ' s •fess up, we could do this, we could
just cut how much we're going to spend on Medicare and Medicaid,
even though i t ' s an entitlement, in terms of price per unit and
volume. We can just take 'er down. But i f we do that, what w i l l
happen? Those costs w i l l be shifted by the health care providers
to the people who already are providing insurance? with the
impact that i t w i l l be a hidden tax increase on businesses and on
employees. Employees w i l l probably see i t in not getting pay
raises they otherwise would have gotten. Businesses w i l l see i t
in spending more on health insurance premiums and having less to
reinvest in the business or to take in p r o f i t s . I don't think i t
i s f a i r thing to do. That i s why our administration has argued
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that i f you r e a l l y want to solve this problem, you have to go
back and have comprehensive health care reform. This i s the only
country in the world that doesn't find a way to solve that issue,
that doesn't give — the only advanced nation, that i s
that
doesn't give basic health care to a l l i t s c i t i z e n s within a
framework that controls costs in the public and private sector.
We're spending 14.5 percent of our income on health
care. Nobody else i s over ten; Germany and Japan are at nine.
The health outcomes of other countries are roughly similar to
ours. We can't get down to where they are because we spend more
on technology and more on, b a s i c a l l y , costly treatments than
other countries do, and more on medical research. And that's
fine. And we can't get down to where they do because we have
more violence and higher rates of AIDS and other very expensive
diseases than other countries. But we could do better. And
unless we do better in an overall way, in my judgement, we are
going to be in trouble.
Now we had a nonpartisan analysis by the respected
firm of Lewin-VHI l a s t week about our health care plan. This
company does research on the economics of health care for
businesses, unions, consumer groups. I t includes people who
served in the Reagan and Bush administrations as budget and
health o f f i c i a l s . They say that our plan w i l l reduce the
d e f i c i t . We think i t w i l l reduce i t even more than they w i l l . I
won't get into the details of that today. We're here to talk
about entitlements. The point I want to make i s I believe you
don't entitlement control, you don't get ultimate d e f i c i t control
unless you do something about Medicare and Medicaid. I believe
you don't get that done just by cutting Medicare and Medicaid
unless you want to hurt the private sector. Therefore, I think
we have to have some sort of health reform. That's what I
believe. You have to decide i f you believe that, but I think
i t ' s important. (Applause.)
Let me just close with t h i s . This i s the lead
e d i t o r i a l in this morning's Washington Post. I t says — on the
entitlements mess — and i t says as follows: "Nor have a l l the
entitlements been badly behaved in recent years in terms of
costs. The health care programs are the budget busters. By
contrast Social Security costs have risen in "stately fashion•
with population and i n f l a t i o n . And the costs of a l l the other
entitlements taken together, including those that support the
poor has declined in real terms" -- remember what "real" means
in Washington, less than the rate of i n f l a t i o n . "The real
federal budget problem" — that's the normal word " r e a l " . Here
they mean real l i k e you do. (Laughter.) "The real federal budget
problem i s n ' t entitlements, i t ' s health care."
,
So I say to you we can talk about these other
entitlements and we should. As we talk about them, l e t us not
make our middle-class squeeze problem worse than i t i s already.
That's one of the profound problems that i s driving this countryOne of the reasons that Senator wofford i s in the senate today,
i s because of the anxieties of middle-class workers in
Pennsylvania.
Let us continue to work on this d e f i c i t . Let us
r e a l i z e the d e f i c i t i s too big and the debt i s much too large as
a percentage of our gross national product. Let us realize that
there are two problems with i t . one i s the d e f i c i t and the other
i s we aren't investing enough. But on the entitlements issue, I
would argue the real c u l p r i t i s health care costs, and we can
only address i t i f we have comprehensive health care reform.
And l e t me close by saying one more time, i f Marge
Mezvinsky hadn't voted for that budget, we wouldn't be here
celebrating economic progress or talking about entitlements,
we'd s t i l l be back in Washington throwing mudballs at each other.
And I respect her for that and I'm glad to be here today.
(Applause.)
END
11:24 A.M.
EST
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
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William J. Clinton Presidential Library & Museum
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2006-0885-F
Text
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Paper
Dublin Core
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Entitlement Conference
Creator
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
Identifier
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2006-0885-F Segment 2
Is Part Of
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Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
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Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
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Adobe Acrobat Document
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Preservation-Reproduction-Reference
Date Created
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2/6/2015
Source
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42-t-12093080-20060885F-Seg2-023-005-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/24994e1cde64f92133ffccef2878ed16.pdf
0bec013deee3c03758a9c3c203013739
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4786
FolderlD:
Folder Title:
Abortion
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
3
3
�May 20, 1993
American Public Health Association
Ira Magaziner
Senior Advisor to the President
for Policy Development
The White House
Old Executive Office Building
Room 216
Washington, D.C. 20500
1015 Fifteenth Street, NW
Washington, DC 20005
202/789-5600
William H. McBeath, MD, MPH
Executive Director
Dear Mr. Magaziner:
The American Public Health Association (APHA), the oldest
and largest organization of public health professionals in
the world, b.elieve that it is" essential to include complete
coverage pf abortion seryices^in any standard health care
benefits package proposed by the Administration. Our
Association stron^ly believes that abortion is a medical
service that should be available to every woman regardless
of her ability to pay.
Abortion is currently included in the private health
insurance policies that most women have and offering it in
a basic benefits package would simply continue that
existing coverage. Excluding abortion from the package
would therefore result in a reduction in benefits for
millions of women as well as further stigmatize doctors
who perform the procedure, intensify the current shortage
of providers, and make it more difficult if not impossible
for women to find doctors to perform privately funded
abortions.
The Association urges you to remain firm on this issue and
to continue your commitment to.the inclusion of abortion
services in the national health care reform package.
Very truly yours,
William H. McBeath, MD, MPH
Executive Director
�•I
NEW
MEXICO
RIGHT TO CHOOSE/
N A R A L
Affiliate
National
Abortion Rights
Action League
P.O. Box 14126
Albuquerque
NM 87191
505-294-0171
April 29, 1993
President B i l l Clinton
White House
1600 Pennsylvania Ave.,
Washington, DC 20500
NW
Dear President Clinton,
On behalf of New Mexico Right to Choose/NARAL and i t s 2500 members
across the state, we applaud your efforts to eliminate the discriminatory
abortion funding provisions in the FY 1994 budget and urge your strong support
and commitment to including abortion in the benefit package for national
health care reform.
For more than a decade, a two-tiered system of reproductive health
services has existed. We w i l l work with you to ensure that the U.S. Congress
does not add restrictions that w i l l deny women an equal opportunity to
exercise their constitutional right to choose whether or not to terminate a
pregnancy. The past discriminatory abortion restrictions undermine the goals
of the federal programs intended to provide assistance to poor women and their
families. Together, these restrictions affect programs on which an estimated
50 million Americans rely for their health care or health insurance.
Over 32 million Americans are e l i g i b l e for government-supported health
care under the Medicaid program. Poor women have been the subject of discrimination under the Hyde Amendment. Prior to the Hyde Amendment, which cut o f f
v i r t u a l l y a l l federal funds for abortion, state and federal funds paid for
medically necessary abortions. Once the Hyde Amendment is removed, this
equitable and just policy should be reinstated. I t is crucial that the
resumption of funding not be predicated on the state in which the Medicaid
recipient lives.
In addition, we urge you to include abortion coverage in the benefits
package for national health care reform. Excluding abortion from the benefits
package under national health care reform would eliminate coverage for
millions of women whose current health plans include coverage for abortion
services. Excluding abortion would further stigmatize doctors who perform the
procedure, intensify the current shortage of providers, and make i t s i g n i f i cantly more d i f f i c u l t — and often impossible — for women to find doctors to
perform even privately funded abortions.
�We pledge to work with you to ensure that funding for a l l reproductive
health services i s restored to women who rely on the federal government
programs or federal health insurance for their medical care and to fight for
the inclusion of abortion in the national health care reform package.
Sincerely,
Nancy Ellefson
Executive Director, New Mexico Right to Choose/NARAL
cc:
Hillary Rodham Clinton
Ira Magaziner
Rahm Emanuel
Alexis Herman
Carol Rosco
Howard Pastor
Joyce!yn Elders
�') i.
May 3, 1993
TN-NARAL
Ihe'l'mnmc ajfiluue o\
the National Abortion Rights
President
Aciion league
P.O. Box 120871
Nashville, TN 37212
Bill Clinton
White House
1600 Pennsylvania Ave., NW
Washington, DC 20500
CC
615'327-082l
Dear President Clinton,
On behalf of Tennessee-NARAL and its over 5,000 supporters
across the state, we applaud your efforts to eliminate the discriminatory
abortion funding provisions in the FY 1994 budget and urge your strong
support and commitment to including abortion in the benefits package for
national health care reform.
For more than a decade, a two-tiered system of reproductive
health services has existed. We will work with you to ensure that the
U. S. Congress does not add restrictions that will deny women an equal
opportunity to exercise their constitutional right to choose whether or not
to terminate a pregnancy. The past discriminatory abortion restrictions
undermine the goals of the federal programs intended to provide
assistance to poor women and their families. Together, these restrictions
affect programs on which an estimated 50 million Americans rely for their
health care or health insurance.
Over 32 million Americans are eligible for government-supported
health care under the Medicaid program. Poor women have been the
subject of discrimination under the Hyde Amendment. Prior to the Hyde
Amendment, which cut off virtually all federal funds for aboriton, state and
federal funds paid for medically necessary abortions. Once the Hyde
Amendment is removed, this equitable and just policy should be
reinstated. It is crucial that the resumption of funding not be predicated
on the state in which the Medicaid recipient lives.
In addition, we urge you to include abortion coverage in the
benefits package for national health care reform. Exculding abortion
from the benefits package under national health care reform would
eliminate coverage for millions of women whose current health plans
include coverage for abortion services. Excluding abortion would further
stigmatize doctors who perform the procedure, intensify the current
shortage of providers, and make it significantly more difficult -- and often
impossible - for women to find doctors to perform even privately funded
abortions.
Formerly TKALS Tennesseans Keeping Abortion Legal and Safe
�We pledge to work with you to ensure that funding for all
reproductive health services is restored to women who rely on the federal
government programs or federal health insurance for their medical care
and to fight for the inclusion of abortion in the national health care reform
package.
Sincerely,
Catherine M. Fenner
Executive Director
Tennessee-NARAL
cc:
Hillary Rodham Clinton
Ira Magaziner
Rahm Emanuel
Alexis Herman
Carol Rosco
Howard Pastor
Joycelyn Elders
�MP
NARAL
IOWA
I r a Magaziner
White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500
1
Dear Mr. Magaziner,
On b e h a l f of t h e N a t i o n a l A b o r t i o n R i g h t s A c t i o n League of
Iowa and i t s seventeen hundred members and s u p p o r t e r s across t h e
s t a t e , we applaud your e f f o r t s t o e l i m i n a t e t h e d i s c r i m i n a t o r y
a b o r t i o n f u n d i n g p r o v i s i o n s i n t h e FY 1994 budget and urge your
s t r o n g support and commitment t o i n c l u d i n g a b o r t i o n i n t h e
b e n e f i t s package f o r n a t i o n a l h e a l t h care reform.
For more than a decade, a t w o - t i e r e d system of r e p r o d u c t i v e
h e a l t h s e r v i c e s has e x i s t e d .
We w i l l work w i t h you t o ensure
t h a t t h e U.S. Congress does n o t add r e s t r i c t i o n s t h a t w i l l deny
women an equal o p p o r t u n i t y t o e x e r c i s e t h e i r c o n s t i t u t i o n a l r i g h t
to choose whether or n o t t o t e r m i n a t e a pregnancy.
The past
d i s c r i m i n a t o r y a b o r t i o n r e s t r i c t i o n s undermine t h e goals of t h e
f e d e r a l programs i n t e n d e d t o p r o v i d e a s s i s t a n c e t o poor women and
t h e i r f a m i l i e s . Together, these r e s t r i c t i o n s a f f e c t programs on
which an estimated
50 m i l l i o n Americans r e l y f o r t h e i r h e a l t h
care or h e a l t h i n s u r a n c e .
Over 32 m i l l i o n Americans a r e e l i g i b l e f o r governmentsupported h e a l t h care under t h e M e d i c a i d program.
Poor women
have been t h e s u b j e c t of d i s c r i m i n a t i o n under t h e Hyde Amendment.
P r i o r t o t h e Hyde Amendment, which c u t o f f v i r t u a l l y a l l f e d e r a l
funds f o r a b o r t i o n , s t a t e and f e d e r a l funds p a i d f o r m e d i c a l l y
necessary a b o r t i o n s .
Once t h e Hyde Amendment i s removed, t h i s
e q u i t a b l e and j u s t p o l i c y should be r e i n s t a t e d .
I t i s crucial
t h a t t h e resumption of f u n d i n g n o t be p r e d i c a t e d on t h e s t a t e i n
which t h e Medicaid r e c i p i e n t l i v e s .
In a d d i t i o n , we urge you t o i n c l u d e a b o r t i o n coverage i n t h e
b e n e f i t s package f o r n a t i o n a l h e a l t h care reform.
Excluding
a b o r t i o n from t h e b e n e f i t s package under n a t i o n a l h e a l t h care
reform would e l i m i n a t e coverage f o r m i l l i o n s of women whose
c u r r e n t h e a l t h plans i n c l u d e coverage f o r a b o r t i o n
services.
E x c l u d i n g a b o r t i o n would f u r t h e r s t i g m a t i z e d o c t o r s who p e r f o r m
the procedure, i n t e n s i f y t h e c u r r e n t s h o r t a g e of p r o v i d e r s , and
make i t s i g n i f i c a n t l y more d i f f i c u l t -- and o f t e n i m p o s s i b l e -f o r women t o f i n d d o c t o r s
t o p e r f o r m even p r i v a t e l y funded
abortions.
Consequently, t h e r i g h t t o choose would become a
meaningless s k e l e t o n , n o t a r e a l i t y .
National
Abortion Rights
Action League
of Iowa
P.O. Box 25007
West Des Moines, Iowa 50265
515-225-0731
�We pledge t o work w i t h you t o ensure t h a t f u n d i n g f o r a l l
r e p r o d u c t i v e h e a l t h s e r v i c e s i s r e s t o r e d t o women who r e l y on the
f e d e r a l government programs or f e d e r a l h e a l t h i n s u r a n c e f o r t h e i r
medical care and t o f i g h t f o r t h e i n c l u s i o n of a b o r t i o n i n t h e
n a t i o n a l h e a l t h care reform package.
Sincerely,
K a r i n McElwain
Executive Director
Iowa
cc:
National
President B i l l C l i n t o n
H i l l a r y Rodham C l i n t o n
Rahm Emanuel
A l e x i s Herman
Carol Rosco
Howard Pastor
Joycelyn E l d e r s
Walter D e l l i n g e r
David Wilhelm
Abortion
Rights
Action
League of
�CARAL
CAUFORNIA ABORTION RIGHTS ACTION LEAGUE - SOUTH
225 SANTA MONICA BLVD., SUITE 406, SANTA MONICA, CA 90401 (310) 393-0513 FAX (310) 395-8650
May 4, 1993
Ira Magaziner
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Dear Mr. Magaziner:
On behalf of California Abortion Rights Action League-South and its 25,000 members in Southern
California, we applaud your efforts to eliminate the discriminatory abortion finding provisions in the FY
1994 budget and urge your strong support for and commitment to including abortion in the benefits
package for national health care reform.
For more than a decade, a two-tiered system of reproductive health services has existed. We will work
with you to ensure that the U.S. Congress does not add restrictions that will deny women an equal
opportunity to exercise their constitutional right to choose whether or not to terminate a pregnancy. The
past discriminatory abortion restrictions undermine the goals of the federal programs intended to provide
assistance to poor women and their families. Together, these restrictions affect programs on which an
estimated 50 million Americans rely for their health care or health insurance.
Over 32 million Americans are eligible for government-supported health care under the Medicaid
program. Poor women have been the subject of discrimination under the Hyde Amendment. Prior to
the Hyde Amendment, which cut off virtually all federal funds for abortion, state and federal funds paid
for medically necessary abortions. Once the Hyde Amendment isremoved,this equitable and just policy
should be reinstated. It is crucial that the resumption of funding not be predicated on the state in which
the Medicaid recipient lives.
In addition, we urge you to include abortion coverage in the benefits package under national health care
reform. Excluding abortion from the benefits package would eliminate coverage for millions of women
whose current health plans include coverage for abortion services. Excluding abortion would further
stigmatize doctors who perform the procedure, intensify the current shortage of providers, and make it
significantly more difficult - and often impossible - for women to find doctors to perform even privately
funded abortions.
We pledge to work with you to ensure that funding for all reproductive health services isrestoredto
women who rely on federal govemment programs or health insurance for their medical care and to fight
for the inclusion of abortion in the national health carereformpackage.
Sincerelv,
Kate Harris
Executive Director
V I ;S I B L E
*
-V O C A L
V O
T I N G
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 2
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Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
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Clinton Presidential Records: White House Staff and Office Files
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Health Care Task Force
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FolderlD:
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[Democratic National Committee Material] [loose] [3]
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S
53
3
3
2
�*
-
i
Jmver^P
WASHINGTON
DC
CENTER von HFAITH POLICY RESEARCH
FAMILIES AND NATIONAL HEALTH REFORM
A COMPARISON OF FAMILY PREMIUM PAYMENT RESPONSIBILITIES UNDER
CURRENT LEGISLATIVE PROPOSALS
Prepared for the Kaiser Commission on the Future of Medicaid
Sara Rosenbaum, Senior Staff Scientist
Julie Darnell, Research Associate
February 10, 1994
2021 K STREET. N.W., SUITE ROO • WASHINGTON. DC 200S2 • (202)296-6922 • FAX (202)785-OIH
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�OVERVIEW OF MAJOR FINDINGS
No aspect of the current health reform debate is more fundamental than assuring
that families' health insurance premiums will be affordable. This study reviews the issue
of affordable premiums under the President's plan, the Cooper/Breaux bill, the
Chafee/Thomas bill and the Wellstone/McDermott bill from two perspectives. First, it
calculates the amount of assured premium support provided to families under each
measure. Second, in light of the important connection between health reform and
welfare reform it measures the extent to which each measure's premium assistance
provisions act to either encourage or discourage work.
Findings
Premium affordability:
Both the President's bill and the McDermott/Wellstone bill assure families
that their premiums will be affordable. Under the President's plan no family
working full time and with earnings under $40,000 will pay more than 3.9
percent of income for an average plan. A family earning $18,000 will pay
only $696. A family earning about $29,000 will pay $780. Under the
McDermott/Wellstone plan, a family earning $18,000 would pay nothing,
while a family earning $29,000 would pay $352.
Under the Chafee bill a family earning $18,000 could be left with bills as
high as $1400 (7.8 percent of income). A family earning about $29,000
could pay as much as $3900 (13.1 percent of income).
Under the Cooper bill a family earning $18,000 could be left with bills as
high as $1950 (10.9 percent of income). A family earning $29,000 could
pay $3900 (13.1 percent of income). A family earning slightly less than
$24,000 could pay $3900 (16.4 percent of income).
Impact on Work
Because the President's plan and the McDermott/Wellstone bill provide assured
premium financial support for both low and middle income persons, both bills encourage
families to make the welfare-to-work transition. Health coverage is assured regardless of
whether a family receives welfare or not, and coverage is assured to be affordable. On
the other hand, the Cooper and Chafee plans create powerful work disincentives.
•
A worker earning a poverty-level wage who increases her earnings by 50
percent could lose over 23 percent of her wage increase to higher
premiums under Chafee/Thomas.
Center for Health Policy Research
Tlxe George Washington University, February 1994
�Under the Cooper/Breaux plan, the wage earner could lose one-third of her
increased earnings to higher premiums.
When the loss of premium support is combined with the phase-out of the
Earned Income Tax Credit, a low-income wage-earner could lose almost 43
percent of her wage increase to lost tax credits and higher premiums under
the Chafee/Thomas plan.
In the case of the Cooper/Breaux plan, the worker could lose more than
half of her additional earnings to the loss of the credit and higher insurance
premium payments.
Center for Health Policy Research
Vie George Washington University, Febntan 1994
�Draft -- For Review Purposes Only
Table 9. Premium Subsidies Under H.R. 3704; Employee Does Not Bear Employer Premium
(Persons With Full Time Job And Current Employer Contribution)
Percent
of Poverty
(1)
Average
Family
Income
(2)
Average
Insurance
Premium
(3)
Average
Employer
Share 1/
(4)
Average
Family
Premium
(2)-(3)
(5)
Average
Family
Subsidy
(6)
Subsidy as a
Percent of
Familyl Premium
(5)/(4)
(7)
(8)
Average
Net Premium
Family
as a percent of
Net Premium Family Income
(4)-(5)
(7)/(I)
Under 100%
$6,592
$3,472
$2,690
$782
$782
100.0%
$0
0.0%
100- 125%
$14,423
$3,949
$3,077
$872
$872
100.0%
$0
0.0%
125-150%
$15,929
$3,687
$2,862
$825
$825
100.0%
$0
0.0%
150- 175%
$18,349
$3,814
$2972
$842
$834
99.0%
$8
0.0%
175 - 200%
$20,541
$3,704
$2,932
$772
$769
99.5%
$4
0.0%
200 - 225%
$23,458
$3,691
$2,917
$774
$640
82.7%
$134
0.6%
225 - 250%
$26,077
$3,787
$2991
$795
$136
17.1%
$659
2.5%
Over 250%
$64,239
$4,182
$3,331
$851
$4
0.5%
$846
1.3%
Total
$57,871
$4,116
$3,273
$843
$92
10.9%
$751
1.3%
1/ In this short-run analysis, the employer share of the premium has been excluded from the cost to families of health insurance.
In the long-run, we would expect workers to bear a high percentage of the employer's cost, net of employer subsidies.
�Draft - For Review Purposes Only
Table 10. Premium Subsidies Under H.R. 3600; Employee Does Not Bear Employer Premium
(Persons With No Full Time Job)
0)
Percent
of Poverty
Average
Family
Income
(2)
Average
Insurance
Premium
(3)
Average
Employer
Share 1/
(4)
Average
Family
Premium
(5)
Average
Family
Subsidy
(7)
(8)
(6)
Net Premium
Average
Subsidy as a
Family
as a percent of
Percent of
Familyl Premium Net Premium Family Income
(5)/(4)
(4)-(5)
(7)/(I)
Under 100%
$5,457
$4,298
$1,131
$2,990
$2881
96.4%
$108
2.0%
100- 125%
$13,442
$4,501
$2,017
$2081
$1,643
78.9%
$438
3.3%
125- 150%
$15,701
$4,394
$2,099
$1,876
$1,265
67.4%
$612
3.9%
150- 175%
$18,654
$4,376
$2232
$1,677
$911
54.3%
$767
4.1%
175 - 200%
$21,331
$4,543
$2280
$1,736
$871
50.2%
$865
4.1%
200 - 225%
$24,886
$4,616
$2301
$1,728
$740
42.8%
$988
4.0%
225 - 250%
$27,143
$4,512
$2193
$1,796
$718
40.0%
$1,078
4.0%
Over 250%
$60,134
$4,897
$2,415
$1,725
$520
30.1%
$1,205
2.0%
Total
$31,988
$4,598
$1,978
$2113
$1,356
64.2%
$757
2.4%
1 / In this short-run analysis, the employer share of the premium has been excluded from the cost to families of health insurance.
In the long-run, we would expect workers to bear a high percentage of the employer's cost, net of employer subsidies.
�Draft -- For Review Purposes Only
Table 7. Premium Subsidies Under H.R. 3704; Employee Does Not Bear Employer Premium
(Persons With No Full Time Job)
Percent
of Poverty
(1)
Average
Family
Income
(2)
Average
Insurance
Premium
(3)
Average
Employer
Share 1/
(4)
Average
Family
Premium
(2) - (3)
(5)
Average
Family
Subsidy
(6)
Subsidy as a
Percent of
Familyl Premium
(5) / (4)
(7)
(8)
Net Premium
Average
Family
as a percent of
Net Premium Family Income
(4)-(5)
(7)/(I)
Under 100%
$5,457
$4,298
$0
$4,298
$4,298
100.0%
$0
0.0%
100- 125%
$13,442
$4,501
$0
$4,501
$4,183
92.9%
$318
2.4%
125-150%
$15,701
$4,394
$0
$4,394
$3,413
77.7%
$981
6.2%
150- 175%
$18,654
$4,376
$0
$4,376
$2667
61.0%
$1,709
9.2%
175 - 200%
$21,331
$4,543
$0
$4,543
$1,932
42.5%
$2,611
12.2%
200 - 225%
$24,886
$4,616
$0
$4,616
$1,096
23.7%
$3,520
14.1%
225 - 250%
$27,143
$4,512
$0
$4,512
$320
7.1%
$4,192
15.4%
Over 250%
$60,134
$4,897
$0
$4,897
$91
1.9%
$4,806
8.0%
Total
$31,988
$4,598
$0
$4,598
$2,013
43.8%
$2,585
8.1%
1/ In this short-run analysis, the employer share of the premium has been excluded from the cost to families of health insurance.
In the long-run, we would expect workers to bear a high percentage of the employer's cost, net of employer subsidies.
�Draft - For Review Purposes Only
Table 8. Premium Subsidies Under H.R. 3704; Employee Does Not Bear Employer Premium
(Persons With Full Time Job. But No Current Employer Contribution)
Percent
of Poverty
(1)
Average
Family
Income
(2)
Average
Insurance
Premium
(3)
Average
Employer
Share 1 /
(4)
Average
Family
Premium
(2)-(3)
(5)
Average
Family
Subsidy
(6)
Subsidy as a
Percent of
Familyl Premium
(5)/(4)
(8)
(7)
Average
Net Premium
Family
as a percent of
Net Premium Family Income
(4)-(5)
(7)/(I)
Under 100%
$12152
$5,709
$0
$5,709
$5,709
100.0%
$0
0.0%
100- 125%
$19,115
$5,739
$0
$5,739
$5,275
91.9%
$464
2.4%
125- 150%
$22,175
$5,720
$0
$5,720
$4,436
77.6%
$1,284
5.8%
150- 175%
$26,799
$5,789
$0
$5,789
$3,493
60.3%
$2296
8.6%
175 - 200%
$30,292
$5,765
$0
$5,765
$2465
42.8%
$3,300
10.9%
200 - 225%
$33,168
$5,720
$0
$5,720
$1,495
26.1%
$4,226
12.7%
225 - 250%
$37,963
$5,777
$0
$5,777
$362
6.3%
$5,414
14.3%
Over 250%
$79,642
$5,735
$0
$5,735
$48
0.8%
$5,687
7.1%
Total
$69,503
$5,737
$0
$5,737
$619
10.8%
$5,119
7.4%
1 / In this short-run analysis, the employer share of the premium has been excluded from the cost to families of health insurance.
In the long-run, we would expect workers to bear a high percentage of the employer's cost, net of employer subsidies.
�Draft - For Review Purposes On'y
Table 5. Premium Subsidies Under H.R. 3222; Employee Does Not Bear Employer Premium
(Persons With Full Time Job, But No Current Employer Contribution)
Percent
of Poverty
(1)
Average
Family
Income
(2)
Average
Insurance
Premium
(3)
Average
Employer
Share 1 /
(4)
Average
Family
Premium
(2)-(3)
(5)
Average
Family
Subsidy
(6)
Subsidy as a
Percent of
Family Premium
(5)/(4)
(7)
(8)
Average
Net Premium
Family
as a percent of
Net Premium Family Income
(4) - (5)
(7)/(I)
Under 100%
$12152
$5,709
$0
$5,709
$5,709
100.0%
$0
0.0%
100-125%
$19,115
$5,739
$0
$5,739
$4,961
86.4%
$778
4.1%
125- 150%
$22175
$5,720
$0
$5,720
$3,612
63.2%
$2107
9.5%
150- 175%
$26,799
$5,789
$0
$5,789
$2,153
37.2%
$3,635
13.6%
175 - 200%
$30,292
$5,765
$0
$5,765
$667
11.6%
$5,098
16.8%
200 - 225%
$33,168
$5,720
$0
$5,720
$0
0.0%
$5,720
17.2%
225 - 250%
$37,963
$5,777
$0
$5,777
$0
0.0%
$5,777
15.2%
Over 250%
$79,642
$5,735
$0
$5,735
$0
0.0%
$5,735
7.2%
Total
$69,503
$5,737
$0
$5,737
$403
7.0%
$5,334
7.7%
1/ In this short-run analysis, the employer share of the premium has been excluded from the cost to families of health insurance.
In the long-run, we would expect workers to bear a high percentage of the employer's cost, net of employer subsidies.
�Draft -- For Review Purposes Only
Table 6. Premium Subsidies Under H.R. 3222; Employee Does Not Bear Employer Premium
(Persons With Full Time Job And Current Employer Contribution)
Percent
of Poverty
(1)
Average
Family
Income
(2)
Average
Insurance
Premium
(3)
Average
Employer
Share 1/
(4)
Average
Family
Premium
(2)-(3)
(5)
Average
Family
Subsidy
(6)
Subsidy as a
Percent of
Family Premium
(5)/(4)
(7)
(8)
Net Premium
Average
Family
as a percent of
Net Premium Family Income
(4)-(5)
(7)/(I)
Under 100%
$6,592
$3,472
$2,690
$782
$782
100.0%
$0
0.0%
100- 125%
$14,423
$3,949
$3,077
$872
$295
33.8%
$577
4.0%
125- 150%
$15,929
$3,687
$2,862
$825
$29
3.5%
$796
5.0%
150- 175%
$18,349
$3,814
$2,972
$842
$0
0.0%
$842
4.6%
175- 200%
$20,541
$3,704
$2,932
$772
$0
0.0%
$772
3.8%
200 - 225%
$23,458
$3,691
$2917
$774
$0
0.0%
$774
3.3%
225 - 250%
$26,077
$3,787
$2,991
$795
$0
0.0%
$795
3.0%
Over 250%
$64,239
$4,182
$3,331
$851
$0
0.0%
$851
1.3%
Total
$57,871
$4,116
$3,273
$843
$13
1.6%
$830
1.4%
1 / In this short-run analysis, the employer share of the premium has been excluded from the cost to families of health insurance.
In the long-run, we would expect workers to bear a high percentage of the employer's cost, net of employer subsidies.
�yy m m ir u
Table 3. Distribution of Employment-Based Policyholders
(thousands of persons)
Percent
of Poverty
Total
Policy
Holders
Polices With Employer Contribution
Policies
That Cover:
With No
Other Family
Employer
Employee
Contribution
Only
Members
Under 100%
1.337
178
532
627
100-125%
1.175
89
440
646
125-150%
1,474
119
609
745
150- 175%
1.932
153
810
969
175-200%
2,351
119
957
1274
200 - 225%
2,726
196
1.098
M32
225 - 250%
2,856
169
1,150
1538
Over 250%
52,387
2,041
21.453
28,893
Total
66.238
3.063
27 049
36,125
Percentage Distribution
Under 100%
2.0%
5.8%
2.0%
1.7%
100- 125%
1.8%
2.9%
1.6%
1.8%
125-150%
2.2%
3.9%
2.3%
2.1%
150- 175%
2.9%
5.0%
3.0%
2.7%
175 - 200%
3.5%
3.9%
3.5%
3.5%
200 - 225%
4.1%
6.4%
4.1%
4.0%
225 - 250%
4.3%
5.5%
4.3%
4.3%
79.1%
66.6%
79.3%
80.0%
100.0%
100.0%
100.0%
100.0%
Over 250%
Total
Source: March 1993 Current Population Survey
�Draft -- For Review Purposes Only
Table 4. Premium Subsidies Under H.R. 3222; Employee Does Not Bear Employer Premium
(Persons With No Full Time Job)
Percent
of Poverty
(1)
Average
Family
Income
(2)
Average
Insurance
Premium
(3)
Average
Employer
Share 1 /
(4)
Average
Family
Premium
(2)-(3)
(5)
Average
Family
Subsidy
(6)
Subsidy as a
Percent of
Family Premium
(5) / (4)
(7)
(8)
Average
Net Premium
Family
as a percent of
Net Premium Family Income
(4)-(5)
(7)/(I)
Under 100%
$5,457
$4,298
$0
$4,298
$4,298
100.0%
$0
0.0%
100- 125%
$13,442
$4,501
$0
$4,501
$3,919
87.1%
$582
4.3%
125- 150%
$15,701
$4,394
$0
$4,394
$2757
62.8%
$1,636
10.4%
150-175%
$18,654
$4,376
$0
$4,376
$1,639
37.4%
$2,737
14.7%
175 - 200%
$21,331
$4,543
$0
$4,543
$584
12.9%
$3,959
18.6%
200 - 225%
$24,886
$4,616
$0
$4,616
$0
0.0%
$4,616
18.5%
225 - 250%
$27,143
$4,512
$0
$4,512
$0
0.0%
$4,512
16.6%
Over 250%
$60,134
$4,897
$0
$4,897
$0
0.0%
$4,897
8.1%
Total
$31,988
$4,598
$0
$4,598
$1,736
37.8%
$2862
8.9%
1 / In this short-run analysis, the employer share of the premium has been excluded from the cost to families of health insurance.
In the long-run, we would expect workers to bear a high percentage of the employer's cost, net of employer subsidies.
�may raise the premium percentage is the required contributions of early retirees (55 to 64) for
part of the "employer" share, in addition to their 20 percent individual share.
Table 11 shows the subsidies for families with a full time worker, but who do not have a plan
where the employer contributes under current law. In this case, the net premium cost (as a
percentage of family income) is 2.5 percent for families in poverty. The cost ranges between
3.0 and 3.4 percent of income for families between 100 and 225 percent of poverty.
The results in Table 12 are similar to those shown in Tables 10 and 11. Table 12 shows the
impact of H.R. 3600 for families who currently have a full-time worker and also have a health
plan to which their employer contributes. The net cost of insurance is equal to about 3 percent
of income for families below the poverty line, and is between 3.0 and 4.0 percent of income in
the range from 100 percent to 200 percent of poverty.
15
�Table 2. Distribution of Individuals. By Primary Insurance Coverage
(thousands of persons)
Percent
of Poverty
Total
Families
Total
Persons
Employment
Based
Individual
Insurance Insurance
Medicare
Medicaid
Uninsured
Under 100%
18483
40403
5,999
2.089
5,320
15591
11505
100- 125%
5.954
12526
3,974
720
2,721
1543
3,488
125- 150%
5456
12.052
4555
675
2521
1,068
3234
150-175%
5402
12,047
5586
711
2,337
565
2,849
175-200%
5.386
12,491
6,703
680
2,342
445
2,321
200 - 225%
5.383
12,388
7^56
744
2,043
205
2,132
225 - 250%
4.908
12514
7,474
683
1,870
227
1,761
57.358
140,098
107,011
8,830
13,505
719
10X133
108,529
254.240
148,566
15,130
32.659
20543
37,423
Over 250%
Total
Percent Distribution
Under 100%
17.2%
16.0%
4.0%
13.8%
16.3%
75.5%
31.0%
100- 125%
5.5%
4.9%
2.7%
4.8%
8.3%
8.0%
9.3%
125-150%
5.0%
4.7%
3.1%
4.5%
7.7%
5.2%
8.6%
150-175%
5.0%
4.7%
3.8%
4.7%
7.2%
2.7%
7.6%
175-200%
5.0%
4.9%
4.5%
4.5%
7.2%
2.2%
6.2%
200 - 225%
5.0%
4.9%
4.9%
4.9%
6.3%
1.0%
5.7%
225 - 250%
4.5%
4.7%
5.0%
4.5%
5.7%
1.1%
4.7%
52.9%
55.1%
72.0%
58.4%
41.4%
3.5%
26.8%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Over 250%
Total
Source: March 1993 Current Population Survey
�In Table 7, we show the subsidies for families with no full-time employee. Again, the subsidy
is 100 percent of the premium for families with income below 100 percent of poverty. Under
the Chafee bill, the premium subsidy schedule is more generous and extends over a longer
income range (up to 240 percent of poverty) than H.R. 3222 (the Cooper Bill). (We should
stress that in our analysis we assume the Chafee bill is fully phased in.) In the 200 percent 225 percent of poverty range, individuals are still receiving a subsidy of about 24 percent of
their premium. Because of its more generous subsidies, the net cost of insurance (premium less
subsidy) as a percent of family income is somewhat less under the Chafee Bill than under the
Cooper Bill. For example, the maximum cost (as a percentage of income) is 15 percent under
the Chafee Bill (for incomes between 225 percent and 250 percent of poverty), and is 19 percent
(for the 175 - 200 percent of poverty class) under the Cooper bill (See Table 4).
The subsidies for families with a full time worker (but no employer contribution) are shown in
Table 8. The results are quite similar to those in Table 7, primarily because we have assumed
no employer premium contribution. Under H.R. 3704 insurance coverage is mandated, but
employer contributions remain voluntary.
In Table 9 we show the premium subsidies for workers whose employer contributes 80 percent
of the premium amount. In this case, the premium subsidy and the net cost of insurance is the
same as the Cooper Bill for individuals with income under 100 percent of poverty. As shown
in Table 9, for individuals between 100 percent and 250 percent of poverty, we show a larger
subsidy and lower net cost to individuals under the Chafee Bill because the schedule of subsidies
13
�is more generous in its level and it extends further up the income scale. The full 100 percent
subsidy extends to about 200 percent of poverty because the 80 percent employer contribution
acts to augment the ordinary subsidy provided by the in the bill.
Premium Subsidies Under H.R. 3600 (Health Security Act)
Tables 10 through 12 show our subsidy calculations under the proposed Health Security Act.
Table 10 shows the premium subsidies for families with no full-time employee. In the tables
we do show a modest employer contribution because the Bill requires prorated employer
contributions for part-time workers who work an average of 9 hours or more per week. The
subsidy under H.R. 3600 is less than 100 percent (96 percent) for families below 100 percent
of poverty because the subsidy schedule only provides a complete subsidy at an income level of
$1,000. Between $1,000 and 100 percent of poverty, the subsidy schedule calls for individuals
to contribute (on a sliding scale basis) up to 3 percent of their income. In addition, selfemployed persons are required to pay a portion of the employer's portion. In Table 10, the net
cost of insurance ranges from 2.0 percent of income (for families below 100 percent of poverty)
to 4.1 percent for families with incomes between 150 and 200 percent of poverty.
The net premiums are greater than 3.9 percent of income (the cap specified for families between
150 percent of poverty and $40,000) for families below $40,000 in income because of the partial
payment of premiums by the self-employed in lieu of employer premiums. Another factor that
14
�MM!
Increased health insurance costs may also be passed along by businesses to consumers in the
form of higher prices. In this case, the distributional impact is less clear because its effect
would come in the form of lower real incomes resulting from higher prices. Moreover, to the
degree that government transfer programs are indexed, the impact of the rise in prices on
recipients may be somewhat tempered.
In Table 4, we show the premium subsidies where the family does not have a full-time employee
and must pay the full premium. Because the Bill does not mandate insurance coverage, the
premiums and subsidies are the average amounts that individuals would pay if they were to elect
insurance coverage under HR 3222. The average insurance premium at each poverty level
reflects the average insurance cost for the families in each poverty category. Because the
premiums vary depending on the composition of the families (singles, couples, single-parent
families, two-parent families) in each group, average premiums tend to vary somewhat across
poverty categories.
As shown in Table 4, the subsidy is 100 percent of the premium for families with income below
100 percent of poverty. (Although the Cooper bill refers to individual state poverty levels, we
have used the Federal poverty level in the tables.) The premium subsidy (as a percent of the
total premium) declines steadily to zero percent when family income exceeds 200 percent of
poverty. As a percent of family income, the net cost of the insurance coverage rises from zero
percent for those with incomes below 100 percent of poverty to a maximum of about 19 percent
at 175-200 percent of poverty. For those families between 125 and 200 percent of poverty, the
11
�£71
net cost of insurance will exceed 10 percent of family income. Because the Cooper Bill retains
the option of turning down insurance coverage, we would expect many families in this income
range to decline coverage because of its expense.
The results for H.R. 3222 in Table 5 are very similar to those shown in Table 4. This similarity
is due to the fact that in both sets of tables there is no employer contribution. Therefore, for
individuals who elect coverage, the individual (and family) must bear the entire cost of insurance
coverage. In both Tables 4 and 5, the cost to the individual (as a percentage of income) is
greatest when subsidy phases down to zero at 200 percent of poverty.
Table 6 shows a family with an employed person where we have assumed the employer pays 80
percent of the premium and the family pays the remainder. In this case, we show the net cost
of the premium to be zero percent for those individuals below the 100 percent poverty line.
Because it is assumed that the employee does not bear the cost of the employer premium, we
show the net cost of insurance averaging between 3 and 5 percent of family income in the 100
percent to 200 percent of poverty classes.
Premium Subsidies Under H.R. 3704 (Chafee)
Tables 7 through 9 show our similar calculations of the premium subsidies under HR 3704.
12
�nearly 80 percent of policy holders where there is an employer contribution who are in families
with incomes above 250 percent of poverty. For employer policies where the employer makes
a contribution (in part or in whole), the majority cover other family members, as well as the
employee. Of those policies that cover just the employee, many are for single individuals where
there are no other family members. These data are presented to provide a context for the
analysis of the distribution of premium subsidies, across poverty levels, under each bill.
Tables 4 through 12 show the distribution of premium subsidies under each health reform bill
using a common set of assumptions. These assumptions include the same basic premium
structure and policy coverage. The premium structure consists of four different types of
policies, those for: single individuals; childless couples; single-parent families; and two-parent
couples. The premium rates are based on those reported in Lewin-VHI, Inc.'s The Financial
Impact of the Health Security Act (p. 25). The results are shown in 1998 dollars, assuming that
each bill has been fully phased-in. Specifically, we assume that the premium subsidy schedule
under HR 3704 (the Chafee bill) has been fully phased-in, even though the bill does not call for
a full phase-in of the premium subsidy schedule until 2005. For all three bills, we have also
assumed that there are sufficient Federal dollars to finance 100 percent of the subsidies specified
in each of the bills. For this analysis, we have excluded single individuals who are covered by
Medicare and families where both spouses are covered by Medicare because Medicare is
generally outside the scope of all three health reform bills.
�Man
Premium Subsidies Under H.R. 3222 (Cooper)
Tables 4 through 6 show our calculations of the premium subsidies under HR 3222. The three
tables are intended to illustrate families in three different circumstances.
1
Table 4 shows premiums and subsidies for families with no full-time equivalent employee.
These tables also include families whose workers are self-employed. Table 5 shows families
with at least one full-time equivalent employee, but whose employer does not contribute to a
health insurance plan. (This definition includes those individuals who have an employersponsored health plan to which the employer does not contribute.) Table 6 shows the results for
families with at least one full-time equivalent employee whose employer does contribute to a
health insurance plan. The tables show each family type under the assumption that the employer
bears the economic cost of the employer's premium. As such, they represent the short-run
impact of each health reform proposal. In general, we view the long run impact of employer
contributions to health insurance - or any other fringe benefit - as being ultimately borne by
the employee. This cost may be borne in the form of lower wages, reduced raises or loss of
employment. The potential for job loss is greatest for workers who hold minimum (or near
minimum) wage jobs and for which the employer share of the premium is a sizable percentage
of total labor compensation.
1
A full time equivalent employee can be either one full time (27 hrs/wk) worker or two
part-time workers whose combined weekly hours exceed 27 hours.
10
�WW
(5)
For those individuals who are covered by Medicaid, primary coverage is
Medicaid.
(6)
For those individuals who are covered by private nongroup insurance, primary
coverage is Individual Insurance
(7)
Those individuals fitting none of the above categories are considered uninsured.
Individuals are classified according to their family income in 1992. The CPS covers the entire
noninstitutionalized US population.
Table 2 shows that 16 percent of the population is in families with income below the poverty
level and an additional 19 percent are between 100 percent and 200 percent of poverty. Fiftyfive percent of the population is in families with income above 250 percent of poverty.
Currently, most people - 72 percent - with employment-based insurance are in families with
incomes over 250 percent of poverty. Of those who purchase individual policies, 58 percent are
above the 250 percent poverty level, but nearly 14 percent are beneath the poverty standard.
For those individuals who are covered by Medicaid, 76 percent are in families with income
below 100 percent of poverty. An additional 18 percent are in families with incomes between
100 percent and 200 percent of poverty, and the remaining 6 percent are in families above 200
percent of poverty. In some health reform proposals, Medicaid recipients above the poverty line
may not be eligible to receive a full subsidy of their insurance premium. For example, the
Cooper Bill (H.R. 3222) folds Medicaid recipients into the private insurance system and provides
100 percent premium assistance to families with incomes under 100 percent of poverty.
�Lastly, looking at uninsured individuals, we find that 31 percent of the uninsured are in families
with income below 100 percent of poverty. An additional 32 percent are in families with
incomes between 100 and 200 percent of poverty; the remaining 37 percent are in families with
incomes above 200 percent of poverty. In all three health reform bills, persons with incomes
above the 100 percent of poverty line will not receive 100 percent assistance and will have to
contribute some portion of their insurance premiums. For example, the 27 percent of the
uninsured with incomes in excess of 250 percent of poverty will have to pay most (if not all) of
their premiums under all three health reform bills. Where insurance coverage is not mandatory,
we expect a large number of these individuals to choose to remain uninsured.
Table 3 provides additional data on employer-provided policies, as reported by the CPS. Table
3 includes only policy holders who are currently working more than 20 hours per week, thereby
excluding most employment-based medigap or retiree health policies. Of the 66.2 million holders
of employment-based policies, most (79 percent) are in families with income above 250 percent
of poverty. Only 2 percent of policy holders are in families with incomes below the poverty
line.
Only a small share - 3.1 million or about 5 percent - of these employment-based policies are
policies where the employer makes no contribution. In general, for those policies where there
is no employer contribution, the policy holders have lower income than for those policies where
the employer does contribute.
About 67 percent of policy holders (with no employer
contribution) are in families with income above 250 percent of poverty. This compares to the
8
�families up to 200 percent of poverty. At 225-250 percent of poverty, the net cost is 2.5
percent of family income. The primary reason for this effect is that the employer
contribution augments the premium subsidy provided under H.R. 3704. Under H.R.
3222 the net cost is zero percent for families under the poverty line and rises to 5.0
percent of income for families with income in the 125-150 percent of poverty range. The
cost steadily declines thereafter. The net cost under H.R. 3600 is 3 percent of income
for families in poverty, and is in the 3.0-to-4.0 percent range for families with income
between 100 and 225 percent of poverty. Thus, where the employer contributes 80
percent, the net cost under H.R. 3704 is less than under either of the alternative
proposals.
�Detailed Results
In this section we report the detailed results from our analysis of the premium subsidies for each
of the three health care reform proposals. For each proposal, we show the results for three
separate groups of families depending on the employment status of the parents.
Insurance Coverage of Low-Income Families
Table 2 presents tabulations from the March 1993 Current Population Survey (CPS) that show
the distribution of the population at different income levels relative to the national poverty
standard, by type of insurance coverage. Where a person is covered by multiple types of health
insurance, the type of insurance coverage is based on the primary coverage of individual.
Primary coverage is determined by the following procedures in order of priority:
(1)
For those individuals who are covered by employer-provided policies and who are
full time workers (more than 30 hrs/week), primary coverage is EmploymentBased.
(2)
For those individuals covered by Medicare, primary insurance coverage is
Medicare. This category includes part-time workers covered by employerprovided policies, as these policies are assumed to be medigap policies. In
addition, individuals with dual Medicare and Medicaid coverage are considered
to have Medicare as there primary insurance coverage.
(3)
For those individuals who are covered by CHAMPUS, primary coverage is
Employment-Based.
(4)
For children who are covered by private group insurance, primary coverage is
Employment-Based.
�of poverty.
H.R. 3600 shows a different pattern, with the cost of insurance running
from 2 percent of income for families below the poverty line to 4 percent of income for
families at 175-200 percent of poverty. H.R. 3600 does require some premium payment
by families with incomes between $1,000 and the poverty line, where H.R. 3704 and
H.R. 3222 do not. H.R. 3222 also caps the family premium share at 3.9 percent of
income for those with incomes under $40,000.
Under H.R. 3222, the net cost of
insurance is zero percent for families under the poverty line and rises to 19 percent of
income at 175-200 percent of poverty. Overall, for families with no full-time worker,
H.R. 3704 and H.R. 3222 are much less generous than H.R. 3600.
Families with a full time worker (no current employer contribution) - For families
in this group, the subsidy pattern is much the same as above. Under H.R. 3704 the net
cost of health insurance is zero percent for families with incomes below the poverty line,
rising to 14 percent of income at 225-250 percent of poverty; under H.R. 3222 the net
cost is zero percent for families with incomes under the poverty line and is 15 percent
of income at 225-250 percent of poverty. H.R. 3600 has a cost of about 2.5 percent of
income for families in poverty and remains in the range of 3.0-to-3.4 percent between
100 and 225 percent of poverty.
Families with a full time worker (with current employer contribution) - For families
in this group, the subsidy pattern is much different. The net cost of health insurance
under H.R. 3704 is zero percent for families in poverty and remains zero percent for
�Draft -- For Review Purposes Only
Table 1. Summary of Premium Subsidies; Employee Does Not Bear Employer Premium
(Net Premium as a Percent of Family Income 1/)
Persons With No Full Time Job
Persons With Full Time Job.
But No Current
Employer Contribution
Persons With Full Time Job.
And Current
Employer Contribution
Percent
of Poverty
H.R. 3704
H.R. 3222
H.R. 3600
H.R. 3704
H.R. 3222
H.R. 3600
H.R. 3704
H.R. 3222
H.R. 3600
Under 100%
0.0%
0.0%
2.0%
0.0%
0.0%
2.5%
0.0%
0.0%
3.0%
100- 125%
2.4%
4.3%
3.3%
2.4%
4.1%
3.3%
0.0%
4.0%
3.6%
125- 150%
6.2%
10.4%
3.9%
5.8%
9.5%
3.4%
0.0%
5.0%
4.0%
150- 175%
9.2%
14.7%
4.1%
8.6%
13.6%
3.3%
0.0%
4.6%
3.7%
175 - 200%
12.2%
18.6%
4.1%
10.9%
16.8%
3.3%
0.0%
3.8%
3.4%
200 - 225%
14.1%
18.5%
4.0%
12.7%
17.2%
3.0%
0.6%
3.3%
3.0%
225 - 250%
15.4%
16.6%
4.0%
14.3%
15.2%
2.8%
2.5%
3.0%
2.9%
Over 250%
8.0%
8.1%
2.0%
7.1%
7.2%
1.4%
1.3%
1.3%
1.3%
Total
8.1%
8.9%
2.4%
7.4%
7.7%
1.5%
1.3%
1.4%
1.4%
1 / In this short-run analysis, the employer share of the premium has been excluded from the cost to families of health insurance.
In the long-run, we would expect workers to bear a high percentage of the employer's cost, net of employer subsidies.
�Summary
This paper summarizes the health insurance premium subsides under three alternative health
reform bills -- H.R. 3222 (Cooper/Breaux), H.R. 3704 (Thomas/Chafee) and H.R. 3600
(President Clinton). Under each bill we have analyzed the direct household premium subsidies
for three groups of families depending on their employment status: (1) families who have no fulltime worker or are self-employed; (2) families with at least one full-time worker, but whose
employer does not currently contribute to a health insurance plan; and (3) families with at least
one full time worker who is currently covered by a health insurance plan to which the employer
contributes. In general, the household premiums and subsidies are different for families whose
employer contributes versus those where the employer does not.
Our analysis compares each health reform proposal using a common set of assumptions. These
assumptions include the same basic premium structure and policy coverage. In addition, we
show the results in 1998 dollars, but assume that each of the bills has been fully phased-in. For
each of the three bills, we have also assumed that there are sufficient Federal dollars to finance
100 percent of the subsidies specified in each of the bills. We have also limited our scope to
the premium subsidies paid directly to households. In particular, for H.R. 3600 we have not
analyzed the employer subsidies contained in the bill, but we realize that these subsidies will
have an important impact on the net cost of insurance to low income families. While these
subsidies would reduce the net cost of insurance to some degree, they may be poorly targeted
because they apply to an employer's full employment base, not just low-wage workers.
�One major assumption that we make in our analysis is that our analysis is short-run in nature.
The major implication of this assumption is that the economic cost of the employer's share of
insurance premiums is not assigned to workers. While we recognize that in the long run the
economic cost of employer contributions to health insurance - or any other fringe benefit - is
ultimately borne by the employee, in the short-run changes in labor costs may be borne by
employers through lower profits or by consumers through higher prices. To the extent that
increased health insurance costs are passed along by businesses to consumers in the form of
higher prices, the distributional impact is unclear because its effect would come in the form of
lower real incomes resulting from higher prices.
General Findings
The summary measure we use to quantify the cost of health insurance under each bill is the ratio
of net (after-subsidy) family premiums to family income. Based on this measure, our results
indicate that H.R. 3600 tends to have the more generous premium subsidies when the employer
does not contribute to the policy costs. Under both H.R. 3222 and H.R. 3704 employer
contributions to heath insurance remain voluntary. For workers whose employer contributes 80
percent of the insurance cost, H.R. 3704 provides more generous premium subsidies for low
income individuals (See Table 1).
Families with no full time worker - Under H.R. 3704 the net cost of health insurance
is zero percent for families in poverty, rising to 15 percent of income at 225-250 percent
�COMPARISON OF PREMIUM SUBSIDIES UNDER
THREE HEALTH REFORM PROPOSALS
Prepared for:
THE KAISER COMMISSION ON THE FUTURE OF MEDICAID
Prepared by:
KPMG Peat Marwick
2001 M Street N.W.
Washington DC 20036
February 18, 1994
�.1111
iii
m
c
�The deduction is not available unless coverage is bought through an alliance.
The deduction Is available only If the purchase is actually made and thus is of limited use
to lower income families who cannot afford the purchase.
The deduction would reduce the cost of insurance only by a portion. Assuming that an
average plan costs $4400 and the low priced plan costs $4000, then the deduction is
capped at $4000. Moreover, If the person chose the $4500 plan the real cost of the plan
would still be about $3400, assuming the Individual is in a 28% tax bracket and takes the
$4,000 deduction.
McDermott/Wellstone:
Financing for coverage is derived from a number of sources, including a payroll tax and an increase
in individual and corporate taxes. For individuals, the principal tax Increases are as follows:
Payroll tax:
•
•
Employer (large) 8.4%
Employer (small) 4.0%
Income tax of 2.1 percent Is applied against taxable income rather than adjusted gross Income.
Center for Health Policy Research
The George Washington University, February 1994
�In addition to the allowable employer contribution on a tax excluded basis, the Cooper bill adds for
persons itemizing medical expenses a new deduction for AHP premium expenses. See (c) below.
b.
Application of the formulas.
1. Calculate the AHP discount price (premium adjustment) for low-income persons.
AHPs (whether closed or open) must discount their premiums for very low (< 100% of poverty) and
moderately low Income (100%- 200% of poverty).
Income is defined as family adjusted total income, which is the sum of AGI, tax exempt interest,
and Social Security income normally exempt from gross income.
The term "low income" would no longer mean the federal poverty level, but the state adjusted
poverty level. The sum total of all state adjusted poverty levels may not exceed 1.
For very low-income persons (<100% of poverty), the discount on the AHP's charge equals:
[(the base federal premium amount) + (10% of the amount by which the AHP premium
exceeds the reference premium)]
The base federal premium amount Is equal to:
[(the reference premium rate) x (national subsidy percentage)]
Thus, if the national subsidy percentage equals 100%, the base federal premium amount would
equal the reference premium. Conversely, since there is no floor on the national subsidy percentage, the
base federal premium could fall dramatically below the reference premium. We assume that this possibility
intentionally has been left open under Cooper, since otherwise the subsidy would have been at the reference
rate amount.
The national subsidy percentage equals the total amount available to spend on federal assistance
(capped mandatory spending) divided by the amount that would be spent If the subsidy amount
equalled to reference premium rate. This amount is expressed as a percentage. Thus, if the
reference premium is $4000 but funds are available to pay only 85% of this amount, then the base
federal premium would be set at 85% of the reference premium. There is no statutory floor on the
national subsidy, although there appears to be a ceiling.
The individual's applicable federal assistance amount (the actual subsidy) is then credited against this
amount owed.
Thus, if the AHP's premium j§ at the reference premium amount, it would simply charge the base
federal premium amount. If the AHP premium is over the reference premium, then the discounted charge
would be the federal premium amount plus 10% of the difference between the AHP premium and the
reference premium for the HPCC.
In the case of moderately low-income persons (100- 200% of poverty), the discounted charge
equals the sum of the following:
[(the applicable low-income premium amount) + ((the greater of either the individual
responsibility percentage^ 10 percentage points) x (the amount by which the AHP premium
exceeds the reference premium))]
Center for Health Policy Research
Tlie George Washington University, February 1994
5
�As with very low-income persons, the plan must credit the federal premium assistance subsidy
amount against its discounted price in determining what the person owes.
Since the federal premium amount is potentially greater than the reference premium, the federal
assistance cap for very low-income persons is potentially less than the reference premium.
2. Calculate the applicable federal assistance amount.
To calculate the actual federal premium assistance amount for very and moderately low-income
persons, the following steps are required.
The applicable federal assistance amount subsidy for low-income persons is expressed as
follows:
•
For a very low-income person the assistance amount is equal to the base Federal premium
amount. Thus, a very low-income person would owe nothing unless the plan selected had a price
higher than the federal premium amount. Conversely, a very low-income individual will always pay
something if the plan they chose charged more than the reference premium. (In our case we
posited that the family chose a plan that charged the reference premium rate by assuming that the
average priced plan equalled the reference premium.)
•
For moderately low-Income persons, the federal assistance amount equals:
(applicable low-income premium amount) - (base individual premium)
The applicable low-income premium amount equals:
[(base Federal premium amount) + ((the individual responsibility percentage) x (reference
premium rate minus the base Federal premium amount))]
The base individual premium equals:
(individual responsibility percentage) x (reference premium rate)
The individual responsibility percentage equals:
very low-Income persons = 0 percentage
moderately low-income persons =
the number of percentage points greater than the applicable poverty level
3. Calculate what the family pays.
In figuring out how much to actually collect from the Individual, the AHP would subtract the federal
assistance amount from this discounted price.
c.
Calculations for tax deduction (applies only if filers itemize their medical and dental expense
deduction).
The deduction is available regardless of whether the cost of the plan exceeds 7.5% of AGI.
The deduction is available for any portion of the AHP paid by the enrollee (does not have
to pay the entire cost).
The deduction is taken against gross income instead of AGI.
However, the deductibility of the premium is capped at the lowest priced plan In the
alliance.
Center for Health Policy Research
Vie George Washington University, February 1994
�Premium Assistance Formulas
CHAFEE:
Table 1:
Phase-in by year of federally-administered voucher program
Il
Phase-in Percentage
Calendar Year
1997
90 % of poverty
1998
110 % of poverty
1999
130 % of poverty
2000
150 % of poverty
2001
170 % of poverty
2002
190 % of poverty
2003
210 % of poverty
2004
230 % of poverty
2005
240 % of poverty
Table 2: Voucher Percentage
Year
Poverty
Level
Voucher percentage
[100 - ((percentage above 100) X (100/140))]
1997
90
100 percent
1998
110
93 percent
1999
130
79 percent
2000
150
64 percent
2001
170
50 percent
2002
190
36 percent
2003
210
21 percent
2004
230
7 percent
2005 *
240
0
Center for Health Policy Research
T)ie George Washington University, February 1994
�Additional assumptions for Chafee:
•
The full subsidy range Is phased-in by 2005.
•
Enough savings have occurred to implement the full subsidy range (the Chafee subsidy is available
only to the extent that there are savings to pay for it).
CLINTQN:
•
Amount of premium paid by a full-time employed family member enrolled through a regional alliance
equals 20% of average weighted premium.
•
Discount for families with taxable incomes (AGI) below 150 percent of poverty equal to:
full discount if AGI <$1000 income or receiving AFDC or SSI (not applicable in our model).
20% family share capped at 3.9% of AGI, if AGI is > 150% of poverty but <$40,000.
no cap on 20 percent family share if income exceeds $40,000.
If family's AGI is > $1000 but < 150% of poverty for family of that size, then family pays the
SUM of (a) and (b):
a.
Inrtial marginal rate: [(3% of 100% of the poverty level) divided by (100 % of the
federal poverty level minus $1,000)]. The initial marginal rate then is multiplied by
(100% of the federal poverty level for family size minus $1000).
b.
Final marginal rate: (((the 20% family share) minus (3% of 100% of the federal
poverty level)) divided by (50% of 100% of the federal poverty level)]. The final
marginal rate then is multiplied by (the family's AGI minus 100% of the federal
poverty level for a family of that size).
COOPER:
The subsidy for low-income persons (with family incomes <200% of poverty) works as follows:
•
A mandatory discount is provided by accountable health plans.
Direct federal payment (the federal assistance amount) is paid to the plan for very low and
moderately low-income persons.
The federal subsidy is related to (but presumably less than) the reference premium which is also
the measure used to determine the cap on the employee tax exclusion. The reference premium is the
lowest premium in the HPCC area (by premium class) that is offered by an open AHP (one not limited to
large employers) and which enrolls a threshold proportion of HPCC members. The threshold is set by the
Commission. (We assume that the threshold rule is to avoid using as the reference premium an amount
charged by a plan that virtually no one selects).
Since the tax exclusion for workers with employer contributions is related to the reference premium,
for workers with contributing employers, the maximum Income exclusion is equal to the lowest priced health
plan in which a certain percentage of eligible persons enroll. This enrollment threshold could be set high
or low, depending on how strict the Commission wants to be on the value of the tax exclusion.
Center for Health Policy Research
The George Washington University, February 1994
4
�APPENDIX
Assumptions for Each Bill
The Chafee/Thomas plan: To calculate the Impact of the Chafee/Thomas bill on families, the study made
several assumptions:
•
Assumption 1: Cost savings are sufficient to phase in the full subsidy program up to 240 percent
of poverty. In the event that cost savings are not achieved, the bill provides for termination of the
subsidy program at a lower income level. It is therefore possible that if no savings are achieved,
the bill would provide no subsidy at all.
•
Assumption 2: The program is fully phased in (the program is not scheduled for full phase-in until
the year 2005).
•
Assumption 3: The average premium used in this study is low enough to fall within the lower half
of all premiums offered in the representative families' health care coverage area. Were the
hypothetical premium to exceed this level, the relative value of the Chafee/Thomas family subsidy
would be overstated. For example, if the lower average cost premium In the family's health care
coverage area is $3300 rather than $3900, as in the study, the voucher value would be lower and
the family's out-of-pocket responsibilities greater if it selects the hypothetical plan.
President Clinton's plan: To calculate the effects of the President's formula on families, we made the
additional assumptions:
•
Assumption 1: The premium used equals the average weighted premium for the alliance in which
the family is enrolled. In the case of premiums exceeding the average weighted premium the family
share would equal 20 percent plus the entire difference up to the actual price of the plan (that is,
there would be no mandatory employer contribution beyond the average weighted premium).
•
Assumption 2: The worker in our example is employed on a full -time basis and therefore qualifies
for an employer contribution of 80 percent of the average weighted premium. (If the worker were
employed on a pan-time basis, additional government assistance would be available under a
separate formula in the event that his or her unearned income did not exceed 250 percent of the
federal poverty level).
•
Assumption 3: The family is enrolled in a regional alliance health plan.
The Cooper/Breaux plan: To calculate the effect of the Cooper/Breaux bill on families we made the
following assumptions:
•
Assumption 1: The premium used is the lowest priced premium. The family therefore has selected
a health plan whose cost does not exceed the lowest priced plan for the HPPC In which It resides.
•
Assumption 2: The family's income is its family adjusted income and no one in the family receives
Social Security.
•
Assumption 3: The discounted price for lower income families amounts to 90 percent of the lowest
Center for Health Policy Research
The George Washington University, February 1994
\
�priced premium (this figure is relatively representative of Medicaid price discounting today, although
it may be somewhat generous).
•
Assumption 4: The federal poverty level is the applicable poverty level. In a state with an applicable
poverty level that is either higher or lower than the federal poverty level the dollar value of both
health plan discounts and direct subsidies also would change.
•
Assumption 5: The families do not itemize their tax deductions and thus do not qualify for the
added incremental value of the new deduction for health plan purchases in the bill.
The McDermott/Wellstone plan: For the purpose of calculating the impact of McDermott/Wellstone on
families, the study assumed the following:
•
Assumption 1 The families have no excess unearned income.
•
Assumption 2 The family income levels shown are their earnings.
•
Assumption 3 The families work for large employers subject to the 8.4 percent tax.
Center for Health Policy Research
The George Washington University, February 1994
�PERCENT OF WAGE INCREASE DEVOTED TO PREMIUMS UNDER SELECTED HEALTH REFORM PROPOSALS
FOR LOW AND MODERATE INCOME FAMILIES AS THEY INCREASE THEIR INCOME
Thomas/Chafee
McDermott/Wellstone m Clinton
Cooper/Breaux
100.0% -r
90.0% +
E
•|
80.0% -
o
70.0% -
1
>
60.0%
-
50.0%
--
40.0%
-
Q
a
32.8%
32.8%
32.8%
30.0%
|
18.7%
20.0%
$11,890 to $17,835
$15,457 to $21,402
$17,835 to $23,780
Increase in Income
1
For the McDermott/Wellitone propoul, familiet muit pay • 2.1 % tax on taxable income iiutead or a premium
$23,780 to $29,725
�PERCENT OF WAGE INCREASE DEVOTED TO PREMIUMS UNDER SELECTED HEALTH REFORM PROPOSALS AND
LOSS OF EARNED INCOME TAX CREDIT FOR
LOW AND MODERATE INCOME FAMILIES AS THEY INCREASE THEIR INCOME
McDermott/Wellstone m Clinton
Cooper/Breaux
-J Thomas/Chafee
100.0% T
E
3
E
CL,
52.1%
•3 "8
.s •§
§
5
|i
29.2%
S
$11,890to$17,835
$15,457 to $21,402
$17,835 to $23,780
Increase in Income
' For th
Vrmotl/Wellstone propoul, familici muit pay a 2.1 * Ux on taxable income instead c
•mium
$23,780 to $29,725
�AMOUNT SPENT ON PREMIUMS UNDER SELECTED HEALTH REFORM PROPOSALS
Low to Moderate Income Working Family Chooses Average-Priced Premium ($3,900)
McDermott/Wellstone *—*— Clinton
$4,000
|
Thomas/Chafee
Cooper/Breaux
T
$3,500
e
<u
ti
$3,000
£ $2,500
!
a $2,000
tn
£ $1,500
{2 $1,000
c
3
O
<
$500
-
$0
$11,890
$15,457
$17,835
$21,402
$23,780
Family Income
1
For the McDermott/Wellstone proposal, families must pay a 2.1 % Ux on taxable income instead of a premium
$29,725
$35,670
$47,560
�PERCENT OF FAMILY INCOME SPENT ON PREMIUMS UNDER SELECTED HEALTH REFORM PROPOSALS
Low to Moderate Income Working Family Chooses Average-Priced Premium ($3,900)
McDermott/Wellstone "H Clinton
•
Thomas/Chafee
M Cooper/Breaux
16 4*
$11,890
$15,457
$17,835
$21,402
$23,780
Family Income
1
For 1} termott/Wellitone propoul, familici muit pay a 2.1 % tax on taxable income iiutead <
•.mium
$29,725
$35,670
$47,560
�Table 4B
TAX LIABILITY
UNDER THE MCDERMOTT/WELLSTONE (HR 1200/S 491)
HEALTH REFORM PROPOSAL FOR
LOW AND MODERATE INCOME WORKING FAMILIES
Change in Income
as a Percent of
Poverty
Dollar Amount of
Increase in Income
Dollar Amount of
Additional Increase
Ln Tax Liability for
Family
Percent of Wage
|
Increase Devoted to |
Tax Liability
2
1
2
3
100 -> 150
5,945
103
1.7
130 -* 180
5,945
125
2.1
150 -> 200
5,945
125
2.1
200 -> 250
5,945
125
2.1
1
The Federtl poverty level ii used for a family with 3 persons, including a mother with two dependent children
' A 2.1 percent ux on uxable income i> assessed on all families
' The family qualifies for s sundard deduction of $12,950; therefore income io not Uxable until this threshold is reached
Center for Health Policy Research
The George Washington University
�Table 4C
IMPACT OF TAX LIABILITY UNDER
THE MCDERMOTT/WELLSTONE (HR 1200/S 491)
HEALTH REFORM PROPOSAL
AND THE
EARNED INCOME TAX CREDIT (EITC) ON
LOW AND MODERATE INCOME FAMILIES
AS THEY INCREASE INCOME
| Change in
Income as a
Percent of
Poverty'
Dollar
Amount of
Increase in
Income
Dollar
Amount
Reduction
in
EITC 2 3
Percent
of New
Earnings
Lost to
Reduced
EITC
Dollar
Amount of
Increase in
Annual
Tax
Liability
for
Family
Total
Income
Lost to
Extra Tax
Liability
and
Reduced
EITC
Percent i-f
New
Earnings
Lost to
Extra Tax
Liability
and
Reduced
EITC
4
5
150
5945
1146
19.3
103
1248
21.0
130 -> 180
5945
1146
19.3
125
1271
21.4
150 -> 200
5945
1146
19.3
125
1271
21.4
200 -> 250
5945
621
10.4
125
746
12.5
100
1
The Federal poverty level ii used for a family with 3 penons, including a mother with two dependent children
' The Earned Income Tax Credit assumes full phase-in but is deflated to 1993 dollars by assuming 3% growth in the CPI
' Family qualifies for 2 or more child credit
A 2.1 percent Ux on uxable income is assessed on all families
' The family qualifies for a sundard deduction of $12,950; income is not Uxable until this threshold is reached
4
Center for Health Policy Research
The George Washington University
�Table 3
IMPACT OF ANNUAL PREMIUM ASSISTANCE UNDER SELECTED HEALTH REFORM PROPOSALS
AND EARNED INCOME TAX CREDIT (EITC) ON
LOW AND MODERATE INCOME FAMILIES
AS THEY INCREASE INCOME
Family Chooses Average-Priced Health Insurance Plan ($3,900)'
Effect of Increased Income on E I T C
Chaof* ia
Inconw •>
• ftrccat
ofPovcity'
DoUar
Amoui*
of
Incicaac
ia
locoinc
Dollar
Amourt
Reduction
in E I T C ' *
Percent of
New
Eamingi
Lott to
Reduced
EITC
Thomas/Chafee
HR 3704/S 1770
Clinton/Gephardt/Mitchell
HR 3600/S 1757
Dollar
Amount of
Inc re a ie in
Annual
Premium
Liability for
Family
Total Income
L o * to Extra
Premium
Liability and
Reduced
EITC
Percent of
New
Eaminga
Lost to Extra
Premium
Liability and
Reduced
Dollar
Amount of
Increaae in
Annual
Premium
Liability for
Family
Total Income
Lost to Extra
Premium
Liability and
Reduced
ETTC
Errc
Cooper/Bream
HR 3222/S 1579
Percent of
New
Earnings
Lost to Extra
Premium
Liability and
Reduced
EITC
Dollar
Amouia of
Increaae In
Annual
Prenuuin
Liability for
Family
Total Income
Lost lo Extra
Prenuuni
Liability and
Reduced
EITC
Percent of
New
Eaminga
Lost to
Extra
Premium
Liability and
Reduced
Errc
100-150
5945
1146
19.3
339
1485
25.0
1393
2539
42.7
1950
3096
52.1
130-110
5945
1146
19.3
228
1374
23 1
1393
2539
42.7
1950
3096
52..
150-200
5945
1146
19 3
»4
1230
20.1
1393
2539
42.7
1950
3096
52.1
200 - 250
5945
621
10.4
0
621
104
1114
1735
29.2
0
621
10.4
1
Baaed on HCFA'a estimate of Ihe 1994 avenge premium cost ($3,894) of a health inaurance plan for a one adult family, deflated to 1993 dollars by assuming 5% growth in the medical component ofthe CPI
' The Federal poverty level is used for a family with 3 persons, including a mother with two dependent children
' The Earned Income Tax Credit assumes lull phase-in but is deflated to 1993 dollars by assuming i % growth in Ihe CPI
Family qualifies for 2 or more child credit
4
Center for Health Policy Research
The George Washington University
�Table 4A
OUT-OF-POCKET COSTS FOR HEALTH CARE FOR
LOW AND MODERATE INCOME WORKING FAMILIES UNDER
THE MCDERMOTT/WELLSTONE (HR 1200/S 491)
HEALTH REFORM PROPOSAL
Poverty
Level
Family'
Income
Subsidy
100
11,890
n/a
130
15,457
150
Firm Pays
Plan
Pays
Family
Pays
% of
Family
Income
n/a
n/a
0
0
n/a
n/a
n/a
53
.3
17,835
n/a
n/a
n/a
103
.6
180
21,402
n/a
n/a
n/a
177
.8
I 200
1 250
23,780
n/a
n/a
n/a
227
1.0
29,725 -
n/a
n/a
n/a
352
1.2
300
35,670
n/a
n/a
n/a
477
1.3
400
47,560
n/a
n/a
n/a
727
1.5
2
5 6
1
34
Family include! a mother with two dependent children
Federal poverty guidelinci for 1993; adjuMed grou income
' A 2.1 percent tax on uxable income ii aiietaed on all familici
Family qualifiei for a fUndard deduction of $12,950; income ii not Uxable until thii threihold it reached
Median income for all houicholdi in 1991 wai $30,126, Sutitlicil Abitract ofthe U.S.. 1993: 61 6 million people are between 100 and
250* of poverty and 128.5 million people are between 250 and 400% of poverty, Analvaii of the March 1993 Current Population
Survey bv The Urt>an Initituie. Kaiier Commiuion on the Future of Medicaid
* 16.3 million unimured or 43% are between 100 and 250% of poverty, Analvaii ofthe March 1993 Current Population Survey bv
The Urban tnititute. Kaiier Commiuion on the Future of Medicaid
1
4
5
Center for Health Policy Research
The George Washington University
�Table 1
ANNUAL PREMIUM ASSISTANCE FOR LOW AND MODERATE INCOME WORKING FAMILIES UNDER
SELECTED PREMIUM-BASED HEALTH REFORM PROPOSALS
1
Family Chooses Average-Priced Health Insurance Plan ($3,900)
1
PoTerty and
Income Levels
Poverty
Level
1
Family
Income
Cooper/Breaux
HR 3222/S 1579
Thomas/Chafee
HR 3704/S 1770
Clinton/Gephardt/Mitchell
HR 3600/S 1757
Subsidy
Firm
Pays
Plan
Pays
Family
Pays
% of
Family
Income
Subsidy*
Finn
Pays
Plan
Pays
Family
Pays
% of
Family
Income
Subsidy
1
7
Finn
Pays*
Plan
Pays
Family
Pays
% of
Family
Income
tt 100
11.890
423
3120
0
357
3.0
3900
0
0
0
0
3510
0
390
0
0
| 130
15.457
228
3120
0
552
3.6
3064
0
0
836
5.4
2457
0
273
1170
7.6
150
17.835
84
3120
0
696
3.9
2507
0
0
1393
7.8
1755
0
195
1950
10.9
ISO
21.402
0
3120
0
780
3.6
1671
0
0
2229
10.4
702
0
78
3120
14.6
200
23,780
0
3120
0
780
3.3
1114
0
0
2786
11.7
0
0
0
3900
16.4
250
29.725°
0
3120
0
780
2.6
0
0
0
3900
13.1
0
0
0
3900
13.1
300
35.670
0
3120
0
780
2.2
0
0
0
3900
10.9
0
0
0
3900
10.9
47.560
0
3120
0
780
16
0
0
0
3900
8.2
0
0
0
3900
8.2
1
400
1
Bated on CBO'i eMimate of Ihe 1994 average preniurn con ($4,095) of • health insurance plan for i one-adult family, deflated lo I99J dollara by aiauming S% growth in the medical component of Ihe> ICPI
Family of three; full-time working mother with two dependent children, not receiving AFDC or SSI
Federal poverty guidelines for 1993; adjusted gross income
* Median income for all households in 1991 waa $30,126. Statislkal Abstract of the U.S.. 199.1. 61 6 million people are between 100 and 250* of poverty and 128 5 million people are between 250 and 400* of
poverty. Analysis ofthe March 1993 Currenl Population Survey by The Urban Instilule. Kaiser Cummissinn on ihe Future of Medicaid
' 16.3 million uninsured or 43* are between 100 and 250* of poverty. AIJIV»H of the Manli IW.t Curicnl I'opulalion Survey hy The Urban Institute. Kaiser Commission on the Future of Medicaid
' Assumes full phase-in of subsidy
' Calculated atauming 90* national subsidy andreferencepremium is equal lo average premium
" Assumes no voluntary employer contribution Inward cost nf premium
1
1
Center for Health Policy Research
The George Washington University
�Tible 2
IMPACT OF ANNUAL PREMIUM ASSISTANCE UNDER
SELECTED PREMIUM-BASED HEALTH REFORM PROPOSALS
ON LOW AND MODERATE INCOME FAMILIES
AS THEY INCREASE INCOME
Family Chooses Average-Priced Health Insurance Plan ($3,900)
POTerty and
Income Levels
Clinton/Gephardt/Mitchell
HR 3600/S 1757
Dollar Amount of
Additional Increase
in Annual Premium
Liability for Family
Percent of Wage
Increase Devoted to
Annual Premium
5.7
1393
228
3.8
5,945
84
5,945
0
Percent of Wage
Increase Devoted
to Annual
Premium
23.4
1950
32.8
1393
23.4
1950
32.8
1.4
1393
23.4
1950
32.8
0
1114
18.7
0
0
Dollar
Amount of
Increase in
Income
Dollar Amount of
Additional Increase
in Annual Premium
Liability for Family
Percent of Wage
Increase Devoted to
Annual Premium
100- 150
5,945
339
130-+ 180
5,945
150-200
200-250
1
Cooper/Breaux
HR 3222/S 1579
Dollar Amount of
Additional Increase
in Annual Premium
Liability for Family
Change in
Income as a
Percent of
Poverty
1
Thomas/Chafee
HR 3704/S 1770
Band oa CBO't e Hi mate of the 1994 avenge premium coat ($4,09$) of a health insurance plan for a one-adult family, deflated to 1993 dollars by assuming 5% growth in the medical component of the CPI
' The Federal poverty level is used for a family with 3 persons, including a mother with two dependent children
Center for Health Policy Research
The George Washington University
||
�Table 4B shows that because family payments are low to begin with, as income
increases, workers earning additional wages lose only between 1.7 percent and 2.1
percent of their additional earnings to increased tax liability for health coverage.
Moreover, the bid creates virtually no additional "cliff" effect beyond the EITC cliff.
CONCLUSION
This study shows that only two bills -- the President's health reform plan and the
plan sponsored by Representative McDermott and Senator Wellstone assure families
that their health coverage will be affordable and that the funds they need to pay for health
coverage will be there. Of the more than 36 million Americans who were uninsured in
1992, over 30 million (83 percent) had family incomes below $40,000. For these families,
the cost of private insurance is prohibitive without assured support. A guarantee of
universal "access" has little meaning if the financial supports needed to make access real
are not present.
6
Uninsured Americans, 84 percent of whom are workers and their family members,
need an assured source of premium financial assistance to obtain insurance coverage.
This assistance can come from numerous sources as the Health Security Act and the
American Health Security Act show. But it most certainly cannot come from the families
themselves without further impoverishing them.
Moreover, no health insurance scheme should penalize work. To do so, and to
thereby leave working Americans unable to afford coverage, in our opinion completely
defeats any hope of meaningful welfare reform effort. Yet only the President's plan and
the Wellstone/McDermott measure reward, rather than penalize work. Both the Cooper
and Chafee plans would make welfare reform extremely difficult to achieve, since their
assistance formulas discourage, rather than foster, increased work effort.
The Cooper plan has been advanced as a means of assuring universal access to
insurance coverage. Yet the data presented in this study suggest that the bill would -and could -- have only a limited impact on coverage. Even the most optimistic
assumptions about the effect of pure managed competition on insurance costs (as well
as what we consider to be highly unrealistic assumptions under Cooper about the amount
by which even low priced plans can be further discounted for lower income persons)
cannot reduce the cost of health insurance enough to make it affordable without an
assured subsidy. Under Cooper, only the very poorest families would receive sizable
assistance. Lower and moderate income working families would be left with thousands
of dollars in health insurance premium costs to bear.
6
Employee Benefit Research Instilule, Sources of lleallh Insurance and Characteristics of the Uninsured; Analysis of the
March. 1993, Current Population Survey (January 1993) p.25.
Center for Health Policy Research
The George Washington University, February 1994
]]
�The Chafee/Thomas bill, while raising fewer problems for lower and moderate
income families than the Cooper/Breaux plan, also leaves low and moderate income
families without a sufficient level of assured premium assistance. The loss of the subsidy
is more gradual under Chafee/Thomas.
Moreover, unlike the Cooper plan,
Chafee/Thomas does not rely on large (and unlikely) health plan discounts below even
levels charged by extremely efficient plans. Yet the Chafee/Thomas subsidy is not
assured, and it is not sufficient to bring family premium costs down to realistic levels as
both the President's plan and the Wellstone/McDermott plan do.
Much attention has been paid to what is "on" or "off' the federal budget. In our
opinion, the real budget that should count as Congress develops a national health reform
plan, is the family budget. This study shows that, regardless of whether we speak of
"assuring" access or "guaranteeing" access, the basic task facing policy makers is
selecting a financing approach that makes the promise real for families.
Center for Health Policy Research
Vie George Washington University, February 1994
12
�Moreover, the Cooper plan proposes to redefine poverty to a state-adjusted level
and thus would lower the poverty threshold in many states. Families with incomes
between 100 and 200 percent of the federal poverty level, who qualify for a subsidy and
discount in our model, could find that they are unable to qualify for a subsidy at all under
a revised definition of the federal poverty level. In addition, families with a member
receiving Social Security Old Age Assistance or disability benefits would be required to
declare those benefits as available to help meet other family members' health insurance
needs, even if the Social Security benefits are not available for this purpose.
Part 2: The Effect of Increased Work on Premium Assistance under the Plans
Table 2 shows the effect of increased earnings on the amount of premium support
available under the three premium-based plans. Just as in the case of basic premium
support, the differences are striking. The President's bill is designed to maintain a
substantial level of premium assistance for moderate income families and to avoid
earnings "cliffs". Cliffs refer to the loss of premium assistance (subsidy) and the income
over which the range occurs. The premium assistance in the President's plan is most
visible as earnings increase.
For example, at 100 percent of the poverty level a worker has health insurance
premium payments under the President's plan equal to 3 percent of adjusted gross
income (AGI). This percentage increases slightly to 3.9 percent of AGI at 150 percent of
poverty (Table 1). Therefore, under the President's plan, a working mother whose pay
increases from $11,890 (100 percent of poverty) to $17,835 (150 percent of poverty)
would lose only 5.7 percent of her wage increase to higher premium payments under the
President's plan; the dollar.yalue of her additional premium payments would be $339
(Table 2). Because the President's plan assures substantial financial assistance with the
cost of health insurance and does so for both lower and moderate income families, the
measure's work incentive is strong.
The Chafee and Cooper measures, on the other hand, both contain strong work
penalties; the Cooper bill is particularly punitive. Under the Chafee bill, nearly $1400 of
our worker's $5900 wage increase (over 23 percent of her wage increase) would be spent
just to replace her lost health insurance subsidy. Put another way, a pay raise that
otherwise would raise her family's income to 150 percent of poverty would in fact leave
her at only about 140 percent of poverty once her added insurance premiums were
deducted. For every three steps forward, the Chafee bill would exact another step back
because the subsidy would drop so precipitously.
The drop is even more precipitous under the Cooper bill, however. Moving from
100 percent of poverty to 150 percent of poverty will cost the wage earner in our example
$1950 in lost premium subsidies (Table 2). This represents about one dollar lost for every
Center for Health Policy Research
Tlie George Washington University, Febntary 1994
9
�three additional dollars earned.
The work disincentives created by the Cooper and Chafee plans take on even
greater significance when the "cliff" effect under these measures caused by increased
earnings is combined with the wage earner's loss of the EITC as her wages increase
Table 3. The EITC is a special negative income tax that provides low wage earners with
a refundable tax credit in order to ensure that full-time work is rewarded, even if the
worker's actual wages are low. As a worker's wages increase, the EITC is gradually
phased out. Particular attention is paid to the "cliff" issue when the EITC is revised (as
was the case in 1993), in order to avoid the creation of earnings disincentives.
As is shown on Table 3, far from being mindful of the cliff, the Cooper and Chafee
bills greatly exacerbate the problem. The first set of columns on Table 3 shows that a
wage increase from 150 percent to 200 percent of poverty creates an EITC "cliff' of 19.3
percent. In other words, for every new dollar in earnings, our wage earner loses slightly
more than 19 cents to the reduction in the EITC.
Tables 2 and 3 also show that under the President's bill, the cliff for this wage
earner increases only slightly to 20.1 percent as a result of a 1.4 percent increase in
premium payments as a percentage of family income. Virtually no additional family
support is lost to increased health insurance premiums.
The Chafee/Thomas and Cooper/Breaux bills greatly exacerbate the EITC cliff,
however. Under Chafee/Thomas, a wage increase from 150 to 200 percent of poverty
results in a 23.4 percent loss in premium subsidies. Added to the 19 percent EITC cliff,
the total loss to the wage earner is more than $4.00 for every $10.00 she earns.
The results for Cooper/Breaux are even greater. For every dollar in increased
earnings, a worker moving from 150 percent of poverty to 200 percent of poverty loses
30 percent in reduced health insurance premium assistance. When this loss is added to
the EITC cliff, the worker in our example is faced with a 52 percent loss. For every ten
dollars she earns, five dollars are immediately lost to a combination of the phased-out tax
credit and higher health insurance premium costs.
The McDermott/Wellstone plan: Unlike the President's bill or the Cooper and
Chafee bills, the McDermott/Wellstone plan provides public insurance financed through
a payroll tax system plus a 2.1 percent tax on individuals' and families' taxable incomes.
Table 4A shows the impact of the measure at different family income levels. At no point
does a family earning under $48,000 pay more than 1.5 percent of family income for
health coverage. Moreover, because the tax is levied on taxable income rather than
adjusted gross income, families with incomes low enough to have no federal income tax
liability (assuming application of the standard deduction) pay virtually nothing for
coverage.
Center for Health Policy Research
Tlie George Washington University, Febntary 1994
]0
�I
to provide. The discounts are calculated in relation to the amount of funding available to
provide low-income assistance. Because the amount of public funding available to
provide such assistance is capped and varies in accordance with total budget savings,
in any given year the subsidy could be well below even the lowest priced plan in many
cooperatives, and the discount would necessarily fall as well.
Thus, much of the guaranteed assistance under the Cooper/Breaux plan comes,
not from governmental or employer-provided assistance, but through sizable cost-shifting
within health plans themselves.
The subsidy received by each family with "family adjusted income" under the
"applicable " poverty level ranges from 100 percent of the discounted price to 0 percent
of the discounted price. The subsidy phases out at a level significantly lower than that
used under the Chafee/Thomas bill.
The McDermott/Wellstone plan: The American Health Security Act
would extend government-administered health insurance coverage to all U.S. citizens and
legal residents. In the case of working age Americans, the cost of coverage would be
borne through an 8.4 percent payroll tax on large employers, a 4.0 percent payroll tax on
small employers, and a 2.1 percent tax on individuals' taxable incomes. A variety of "sin"
taxes also would be imposed.
Findings for the three premium based measures (Clinton, Chafee and Cooper)
appear on Tables 1 - 3. Because the McDermott/Wellstone bill does not rely on premium
financing or the purchase of private health insurance, we present separately on Tables
4A - 4C our findings regarding the bill's effect on the family's out-of-pocket expenses and
how the family's tax liability and earned income tax credit is affected by increased
earnings.
FINDINGS
Part 1: Assured Premium Assistance Levels
Table 1 shows the size of a family's premium responsibility at various income levels
under the Clinton, Cooper and Chafee plans. At each level of family income the Clinton
plan provides the greatest level of assured premium support. This is because under the
Clinton plan no family working full-time and with adjusted gross income under $40,000
would face a premium burden greater than 3.9 percent of family income.
The Cooper and Chafee plans place a far greater burden on families. Moreover,
at every income level up to 240 percent of poverty, the Cooper plan places the greatest
burden on families, since the Cooper plan uses a steeper subsidy/discount phase-out
Center for Health Policy Research
Tl\e George Washington University, Fehmaiy 1994
7
�schedule than Chafee/Thomas (phase-out at 200 percent of poverty rather than 240
percent).
The potential premium payment exposure faced by low and moderate income
wage earners and their families under the Cooper plan is enormous. A family earning
about $18,000 (150 percent of poverty) would face insurance premiums of $1950 - nearly
11 percent of the family's income. A family earning slightly more than $21,402 (180
percent of poverty) would face premium payments of nearly $3120 (14.6 percent of
income). A family earning $24,000 (200 percent of poverty) would potentially pay the
entire premium of $3900 -- over 16 percent of family income.
The Chafee premium burden is great, as well. Families at 180 percent, 200 percent
and 250 percent of poverty would face premium burdens of 10.4 percent, 11.7 percent
and 13.1 percent of family income, respectively. This level of payment responsibility is so
large that it is highly unlikely that lower income families could comply with the Chafee
mandate to buy health insurance. Indeed, universal coverage (whether mandatory or
voluntary) would be virtually impossible to achieve without a system for compensating for
what otherwise would be billions of dollars in unpaid premiums by low and moderate
income families.
Table 1 also shows that the impact of the lack of assured premium support under
the Chafee and Cooper plans is not felt at only low-income levels. At $36,000 (300
percent of poverty) a family of 3 would use only 2 percent of its family income to buy an
average-priced health insurance premium under the President's plan, since the remainder
would come from the employer. Under both the Cooper and Chafee bills, however, the
same family would have to devote potentially nearly 11 percent of income to health
insurance premiums alone - a more than five-fold difference in payment responsibility and
a major burden on middle income families.
Moreover, our assessment of the Chafee/Thomas and Cooper/Breaux bills may
overstate the level of assistance each furnishes to families. The Chafee subsidy is
conditioned on achieving savings in Medicare and Medicaid spending cuts as well as
other health spending reductions. If these savings are not achieved, the burden on
families would be far greater, because the level of assured premium assistance would be
far lower. In the case of the Cooper plan, even at its most generous levels, the Cooper
subsidy depends on deep discounts from health plans, even those plans selling at the
lowest price in their HPPC area. However, federal funds available for low-income
assistance may well be substantially less than the amount required to pay 90 percent of
the lowest priced premium (the subsidy level that we have assumed in this study). In
such a case, health plans would have to offer such deep discounts that it is highly unlikely
that any plan would be able to afford to enroll subsidized patients. Many families would
have to pay more out-of-pocket to find even a single plan that would accept them. Others
would not be able to locate affordable insurance at all.
Center for Health Policy Research
Vie George Washington University, February 1994
�STUDY METHODOLOGY
In this study we measure the amount of each bill's assured premium assistance
level by comparing each measure's statutory premium assistance formula against the cost
of an average premium for a full-time working family consisting of a single adult with two
children. The study assumes that virtually all income for our hypothetical families is
derived from earnings. The health insurance premium used is the premium for a single
parent household with children, as calculated by the Congressional Budget Office, and
deflated to 1993 dollars. We selected 1993 as the study year and used 1993 federal
poverty guidelines issued by the Commerce Department. The EITC formula used in Part
2 is the methodology that will take effect in 1996, deflated to 1993 dollars.
5
The Appendix to this study contains a description of the various statutory premium
assistance subsidy formulas contained in each bill and the assumptions that we made in
performing the calculations. Below is a brief overview of each plan's family premium
assistance provisions.
The Chafee/Thomas plan: The Chafee/Thomas bill provides a federallyadministered voucher program for individuals and families with incomes under 240
percent of the federal poverty level. The voucher program, which would apply toward the
cost of private insurance, would be fully phased-in by the year 2005. Depending on family
income, each family eligible for voucher assistance would receive a voucher worth a
certain value. This value of the voucher would be a percentage of the lesser of either the
actual annual premium paid by the family or the "voucher percentage". The "voucher
percentage" equals the average premium cost of the lowest priced one-half of all standard
benefit plans offered.
Under the statutory formula the vouchers range in value from 100 percent of the
upper voucher limit for families with taxable incomes under the federal poverty level to 7
percent of the upper limit for families with incomes at 230 percent of poverty. For
example, a family of three with taxable income of $17,835 (150 percent of the federal
poverty level) would receive a voucher worth 50 percent of the lesser of the actual cost
of the health plan it selected or the average cost of the lower half of all health plans
offered in the family's "health care coverage area". A family of 3 with taxable income of
$27,347 (230 percent of poverty) would receive a voucher worth 7 percent of the lesser
of the value of the plan chosen or the average lower cost plan.
Since no measures except the President s bill and the McDerniotl/Wcllslone bill contain a defined benefit package, the
premium chosen may overstate or undcrsialc the cost of a health plan. For example, if coverage were less generous than the
President's bill, the premium would be lower. However, oul-of-pocket payments might rise significantly for many families, leaving
them in a situation which is worse overall.
Center for Health Policy Research
Tlie George Washington University, Febnian* 1994
5
�President Clinton's plan: The Health Security Act would achieve
universal coverage by 1998 for all U.S. citizens and legal residents not eligible for
Medicare through a system of subsidized private group health coverage. Private
insurance costs for individuals and families would be borne by a combination of employer,
individual, and government contributions. In the case of full-time workers, employers
would contribute 80 percent of the average cost of a group health plan premium, and
workers would be responsible for the remainder (known as the "family share"). Additional
financial assistance would be available for lower and moderate income working families
with incomes under $40,000 to further reduce the cost of the family's share of the
premium.
Under the President's plan, a full-time wage earner who does not receive either
AFDC or SSI benefits would receive a premium contribution from his or her employer
toward the cost of coverage equal to 80 percent of the weighted average premium for the
regional alliance through which the individual is enrolled. The individual or family is
responsible for paying the remaining cost of the plan chosen, which would be 20 percent
of the premium if an average cost plan is selected .
In addition to the guaranteed employer contribution, the President's bill provides
for a contribution toward the family share in the case of low and moderate income
families. The contribution is designed to ensure that full-time working families with
incomes below $40,000 pay no more than 3.9 percent of family income for their premiums
and that working families with taxable incomes above $1000 but below 150 percent of
poverty pay a somewhat lesser amount.
The Cooper/Breaux plan: The Managed Competition Act seeks to make private
health insurance coverage more widely available to working age Americans and their
families through a series of reforms designed to reduce the cost of group health
insurance. The bill also contains certain regulatory and subsidy provisions (including
mandatory price discounting by health plans and direct financial subsidies for certain low
and moderate income families) designed to reduce the cost of private coverage.
The Cooper/Breaux plan's financial assistance methodology is unique. Unlike the
other bills considered here, the plan relies heavily on both direct assistance to families
and a system of mandatory discounts by health plans. Even those health plans whose
premiums represent the lowest recognized price in health plan purchasing cooperatives
would be required to further discount their prices below this level for low-income families.
All families with "family adjusted incomes" (earnings plus exempt interest payment plus
Social Security benefits) below 200 percent of the "applicable poverty level" (a state-based
poverty measure that replaces the federal poverty measure) would be eligible for these
mandatory discounts.
Moreover, there is no statutory floor on the discounts that the plans are required
Center for Health Policy Research
Tlie George Washington University, Febnian' 1994
6
�INTRODUCTION
No aspect of the current health reform debate is more fundamental than assuring
that families' health insurance premiums will be affordable. In recent weeks and months
a great deal of attention has been focused on the payment responsibilities that business
and government will face under a reformed health care system. Yet surprisingly little
attention has been paid to the issue of whether families themselves will be assured of
affordable health insurance costs.
This study was prepared for the Henry J. Kaiser Commission on the Future of
Medicaid and The Commonwealth Fund. It analyzes the degree to which major health
reform proposals now before Congress address the issue of premium affordability for
families, particularly working families with low and moderate incomes. We review the
issue of affordable premiums from two perspectives. First, we identify the amount of
assured premium support provided to families under each measure. Second, in light of
the important connection between health reform and welfare reform drawn by both the
President and many Members of Congress, we estimate the extent to which each
measure's premium assistance provisions act to either encourage or discourage work.
The question of premium affordability is particularly important, because of the high
cost of health care. Health insurance is extremely expensive. Even a group health plan
with only modest levels of coverage costs thousands of dollars annually. Moreover, even
comprehensive health insurance normally covers only a portion of family health costs.
In the United States out-of-pocket health expenditures account for more than 22 percent
of all personal health spending. These out-of-pocket expenditures reflect the many
medical and health care needs that insurance simply does not cover. For example, even
the most generous health insurance plans frequently leave essential health and healthrelated services uncovered. Many of the plans now under consideration either contain
or envision sizable deductible and cost-sharing requirements as well as limitations on
covered benefits. All of these coverage restrictions further increase families' out-of-pocket
payment responsibilities.
1
2
Experts have concluded that families should experience total out-of-pocket health
costs (including premiums, deductibles, coinsurance, and uncovered health expenses)
no higher than 10 percent of their annual income (and even this level may be far too high
for families with low to moderate incomes). It is likely that any health insurance proposal
which is ultimately enacted will continue to require additional out-of-pocket spending for
uncovered expenses. Yet the Congressional Budget Office has estimated that in 1994
1
Health Care Financing Review, Winter, 1992
2
For a discussion of income-related cost-sharing, see Thomas Rice and Kenneth E. Thorpe, "IncomeRelated Cost Sharing in Heatlh Insurance," Health Affairs. Spring 1993, pp. 22-39.
Center for Health Policy Research
The George Washington University, Febntary 1994
3
�the average private health insurance group coverage premium for a one-parent family will
cost $4095. Without guaranteed - and substantial ~ financial assistance in the form of
either employer contributions, government contributions or both, even basic coverage will
remain beyond the reach of many moderate and middle income working families. Indeed,
in 1991 the persons most at risk for being uninsured in the U.S. were members of families
with earnings under $40,000.
3
This study consists of two parts. The first part reviews four health reform
proposals and calculates for each plan the amount of assured premium assistance
provided to low and moderate income working families. The second part of the study
measures the effect of increased earnings on assured premium assistance. We estimate
the impact of changes in earnings on both the health plan assistance levels alone and in
combination with the phase-out of the Earned Income Tax Credit (EITC) as wages
increase.
LEGISLATION REVIEWED
The legislation reviewed in this study include four of the six national health reform
proposals introduced as of December 22, 1993. They are:
4
The Health Security Act (H.R. 3600/S. 1757), developed by the President's Health
Reform Task Force and introduced by Representative Richard Gephardt and
Senator George Mitchell.
The American Health Security Act (H.R. 1200/S. 491), introduced by
Representative Jim McDermott and Senator Paul Wellstone.
The Managed Competition Act (H.R. 3222/S. 1579) introduced by Representative
Jim Cooper and Senator John Breaux.
The Health Equity and Access Reform Today Act (H.R. 3704/S. 1770), introduced
by Representative Bill Thomas and Senator John Chafee.
^ Employee Benefit Research Instilule. Sources of Health Insurance and Characteristics of the Uninsured. Analysis of the March,
1991, Currenl Population Survey (Issue Brief No. 123. Tebruary, 1992) p. 13.
4
Two measures were not included in Ihis study. Boih the Affordable Health Care Now Acl (introduced by Representative
Roben Michel and Senator Trent Lott and The Consumer Choice Health Securily Acl (introduced by Senator Nickles and
Representative Steams) were excluded. The Nickles bill was excluded because, unlike the other measures, it does not rely on a mix of
employer, government and individual financing. Instead, employer contributions are prohibited; the bill provides credits for the sum of
health insurance premiums and uncovered medical expenses that exceed 10 percent of an individual adjusted gross income, with credits
increasing in size as ihe percentage of family income spent on health care grows. The Michel/Loll bill was excluded because the
subsidy program is carried out through an optional stale Medicaid expansion and it is not possible to measure which states will
respond to Ihe option or to what degree.
Center for Health Policy Research
Tlie George Washinglon University, Febmaiy 1994
4
�DRI/McGraw-Hill
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Prepared for:
Citizens For A Sound Economy Foundation
1250 H Street, Northwest
Suite 700
Washington, D C. 20005
Prepared by:
DRI/McG raw-Hill
The McGraw-Hill Building
1200 G Street, Northwest
1 0 Floor
Washington, D.C. 20005
th
February 1994
Copyright O 1994 McGraw-Hill. Inc.
Reproduction in whole or in part is prohibited except by permission. Allrightsreserved.
�Contents
Page
1.0
Executive Summary
1
2.0
Introduction
7
2.1
2.2
2.3
2.4
3.0
4.0
Background of the Clinton Plan
8
Case Descriptions
9
Base Case U.S. Economic Outlook
11
Key Assumptions Underlying the Alternative Macro Simulations.... 16
Results
25
3.1
3.2
3.3
3.4
3.5
3.6
25
28
32
34
37
42
Universal Coverage
Employer Mandates
Corporate Assessment
Additional Taxes
Spending Caps
Interindustry Results
Conclusions
45
Appendixes
Appendix A: National Economic Indicators - Levels
Appendix B: National Economic Indicators - Differences Between Simulations
for Key Macroeconomic Variables
Appendix C: National Economic Indicators - Differences Between Baseline and
Simulations for Key Macroeconomic Variables
Appendix D: Health Sector Results
Appendix E: Industry Impacts
Appendix F: Notes on Macroeconomic Simulations
�1.0 Executive Summary
On September 22, 1993 President Clinton unveiled a health care reform plan that consists
of five major initiatives: universal coverage, employer mandates, new taxes, managed
competition/insurance reform, and spending caps.
DRI/McGraw-Hill (DRI) was
commissioned by Citizens for a Sound Economy Foundation to quantify the
macroeconomic effects of each initiative on a national level. In addition, the analysis
disaggregates the impacts by industry and wage earner class. This report summarizes the
major findings of the DRI national analysis.
Approach
DRI determined the economic impact of the Administration's health care plan using an
incremental analysis. A series of simulations was developed with each progressively
adding features of the plan. The first simulation, the baseline, assumed the current health
care system and the last simulation contained the entire health care reform plan. Table
1.1 itemizes the features of the plan contained in each simulation.
Table 1.1
The Simulations
Simulation
Baseline
1
2
3
4
5
Universal
Coverage
Employer
Mandate
Corporate
Assessment
All Taxes
Spending
Caps
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Using the incremental approach, one can readily determine the effects of each feature of
the plan as well as the combined impact of multiple features. Impacts of individual features
of the plan are determined by comparing results to the prior simulation. Comparisons to
the baseline reflect the interactive, sometimes offsetting, effects of the accumulated
features of the program. These interactive, sometimes offsetting effects are illustrated in
Table 1.2, which presents cumulative differences from baseline by simulation for key
macroeconomic variables.
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 1 - Executive Summary
DRI/McGraw-Hill
Page 1
�Table 1.2
Impact of Administration's Health Care Plan
on Key Macroeconomic Variables
(Differences From Baseline in the Year 2000)
Changes In
Inflation Federal Deficit
Increases
Rate
Employment
Real GDP
(billionsS)
(billions$) (thousands)
I%1
Consumer Spending
for Medical Care
Services
(billions$)
Universal Coverage
-7.1
50
0.0
113.0
Employer Mandate
-59.8
-659
0.3
133.4
82.1
98.9
Corporate Assessment
-65.4
0.4
129.8
101.7
All Taxes
-75.0
-743
-908
0.3
114.8
99.5
Spending Caps
-17.7
-311
-0.1
1.7
-49.5
Conclusions
If the entire Administration health care plan is adopted (with spending
caps), then unmet demand for health services may result. If the plan is
adopted without spending caps, then employment losses in excess of
900,000 occur in the year 2000. Table 1.2 illustrates the fundamental tradeoffs inherent in the Administration's health care plan. Implementation of
universal coverage alone will increase consumer spending for medical care
services by $82 billion in the year 2000. Employment in the health care sector
will increase at the expense of other sectors of the economy. Use of employer
mandates to finance universal coverage will cause the loss of 659,000 jobs.
Imposition of additional taxes will exacerbate the job loss to 908,000.
Spending caps will mitigate the employment impacts, but may create unmet
demand for health care services. Despite the expansion of the insured
population under the Administration health care plan, the level of health care
services (as measured by real consumer spending for medical care services) is
virtually unchanged. This implies a drop in consumption of health care services
by those who are already insured.
Universal coverage will cause increases in the utilization of medical care
services and result in higher health care spending (Figure 1.1). By the year
2000. increases in spending for medical care services will have reached $82
billion. The increased spending will contribute to higher health care sector
employment, but at the expense of other sectors. With more people working,
incomes are higher and people spend more. This expansion causes higher
inflation and higher interest rates, which have a contractionary effect on
employment in 1999 and 2000. High interest rates combine with deficit
financing of the universal coverage to force the federal deficit to rise: $66
billion in 1998 and $113 billion in 2000. The net effect of universal coverage
DRI/McGraw-Hill
Page 2
The Administration's Health Care Reform Plan
National Macroeconomic Effects
Chapter 1 - Executive Summary
�on real GDP is faster growth in 1996 through 1998 (+0.4% in 1998), but slower
growth in 1999 and 2000 (-0.4 % in 2000).
Figure 1.1
Increases in Consumer Spending for Medical Care Services
Due to Universal Coverage
90 j
80 70 60 -•
* 50 -•
1 40 -•
30
20
10
0
1996
1997
1998
Year
1999
2000
• When an employer mandate is introduced to partially finance universal
coverage, the employment gains due to universal coverage are offset by
the employment losses associated with the mandate. A mandate increases
employers' costs of doing business. Employers will attempt to pass the cost
increases through to consumers either as lower wages or higher prices (lower
real wages). Consumers respond by cutting back on real spending for medical
and non-medical goods and services, which has a negative effect on
employment and GDP. By the year 2000, approximately 709,000 jobs will be
lost due to the employer mandate alone. GDP declines as well. In 2000, real
GDP is down by $53 billion due to the mandate.
As a result of these
contractionary effects, the federal deficit is larger ($20 billion in the year 2000),
even though employers, not the government, are financing the bulk of health
insurance coverage. When combined with the universal coverage the net job
loss is 669,000.
• The corporate assessment is a tax on labor and has the same qualitative
effects as the employer mandate. The tax will lead to an increase in prices
and, at the same time, a reduction in output. The change in prices is brought
about by an increase in unit labor costs. The increases in prices will lead to
reductions in real consumer spending and, via multiplier effects, to a general
contraction in economic activity. Real personal income also declines, and by a
greater amount than the drop in real GDP. Higher prices also lead to increased
interest rates; the prime rate increases in every year.
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 1 - Executive Summary
DRI/McGraw-Hill
Page3
�• The introduction of additional taxes to pay for universal coverage will
result in further economic losses. To further pay for universal coverage, the
federal government is assumed to levy three additional taxes: a tobacco tax,
adjustments to flexible spending accounts, and changes in medical expense
deductions. These taxes exacerbate the negative employment and income
effects caused by the employer mandate. These taxes alone will reduce
employment by an additional 165,000 jobs in 2000, bringing cumulative job
losses to 908,000. These additional taxes will reduce real GDP by $10 billion,
for a cumulative reduction in real GDP of $75 billion. Taxes will increase
employer costs, which leads to higher inflation, lower consumer spending, and
weaker employment and GDP growth. Despite the weaker economy, the
deficit is smaller as a result of the additional tax revenue ($15 billion in 2000).
• The imposition of spending caps creates a risk of unmet demand for
health care services. Health care spending reductions will be necessary if the
cost containment objectives of the Clinton plan are to be met. Use of a central
regulatory authority instead of market forces to constrain spending and prices
will reduce health care utilization and/or provider incomes relative to what
would have been realized in the absence of such controls. DRI assumes that
utilization and provider incomes both will be reduced. From 1998 to 2000,
health care services will be reduced by approximately 5 percent ( Figure 1.2).
In dollar terms, the utilization reduction exceeds $30 billion in 2000, which is
more than $300 per household (Figure 1.3) Note that this figure is in 1987
dollars, fn 1994 dollars the utilization reduction is $461.
Figure 1.2
Reduction in Health Care Utilization Due to Spending Caps
1996
1
1997
1998
1999
2000
T
-1 --
mmm
£
H -2
CL
-3 -•
-4 J-5
1
Year
DRI/McGraw-Hill
Page 4
The Administration's Health Care Reform Plan
National Macroeconomic Effects
Chapter 1 - Executive Summary
�To the extent that utilization reductions are due to elimination of inefficiencies
in the system (i.e. elimination of unnecessary services), then consumers are
better off. To the extent that the reductions in utilization reflect the inability of
consumers to meet their health care needs, then consumers are worse off.
Under the administration plan, anticipated efficiency gains are achieved largely
through managed care practices implemented by HMOs.
Figure 1.3
Utilization Reduction Per Household
(1987 $)
1998
1997
1996
50 T
1999
2000
Si
11
0
-50 -100 -•
(A
I -150 -
o
Q
-200
-250 -300 -350 Year
Studies by others indicate that such gains are not likely to account for all of the
reduction in utilization required to meet the administration's spending caps.
Based on their analysis of hospital utilization among HMO and fee-for-service
populations, William B. Schwartz and Daniel B. Mendelson conclude that
"additional dollar savings through elimination of unnecessary days will be both
small and difficult to achieve." Focusing on overall utilization of medical care
services, Lewin/VHI estimates that, on average, HMOs reduce utilization by
only 2%. Kilbreth and Cohen raise a "concern, that, while HMOs offer a onetime savings on hospital use, they have no greater long-term control than do
other insurance plans over the rate of increase in price inputs due to
technology advances, change in conditions in the labor market, and other
factors."
1
2
3
1
William B. Schwartz and Daniel N. Mendelson, "Why Managed Care Cannot Contain Hospitals Costs - Without Rationing", Health
Affairs. Summer 1992, 103.
^ John F. Sheils, Lawrence S. Lewin, and Randall A. Haught, "Potential Public Expenditures under Managed Competition", Health
Affairs. Supplement 1993, 234.
Elizabeth Kilbreth and Alan B. Cohen, "Strategic Choices for Cost Containment Under a Reformed U.S. Health Care System",
Inquiry. Vol. 30, No. 4, 377.
J
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National Macroeconomic Effects
Chapter 1 - Executive Summary
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�• The employment impacts of the Administration's Health Care Plan will not
be evenly distributed across sectors of the economy. The analysis
indicates that those industries with above average proportions of uninsured
employees will realize the largest losses in employment. Retail trade will be
most affected with job losses in the year 2000 reaching 562,000 without
spending caps and 157,000 with spending caps. Similarly, in the year 2000,
the construction sector will lose 223,000 jobs without spending caps and
50,000 with spending caps. The health care services sector will be the big
winner, with jobs increasing in the year 2000 by 598,000 without spending caps
and 69,000 with spending caps.
Assumptions
This analysis assumed the same features that are contained in the Administration's health
care reform package as proposed on September 22, 1993, with the following caveats:
• Because all cost estimates were translated into appropriate National Income
and Product Account (NIPA) definitions and concepts, differences may
appear that reflect differences in account conventions (i.e., NIPA versus
National Health Accounts).
• Cost estimates were developed based upon all available information. The
study did not limit itself to those of the administration alone.
DRI/McGraw-Hill
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6
The Administration's Health Care Reform Plan
National Macroeconomic Effects
Chapter 1 - Executive Summary
�2.0 Introduction
According to the Health Care Financing Administration (HCFA), national health
expenditures increased 11.4% in 1991, slightly higher than the growth rate realized in each
of the previous two years. The health care spending share of GDP increased from 12.2%
in 1990 to 13.2% in 1991, the second largest jump since 1960. Given current trends,
HCFA projects that health spending will continue to increase at near-double digit annual
rates through the turn of the century, accounting for more than 18% of GDP by the year
2000.
Changes in total spending for health care are determined by changes in price and changes
in quantity (volume) of medical care services. Changes in price include economy-wide
inflation as well as health sector-specific inflation. Quantity changes reflect changes in
population, technology, and per capita utilization.
A major factor underlying changes in the price and quantity determinants is third party
payment, which reduces the financial burden on patients and provides few incentives to
hold down the use of services and the prices charged by providers. In 1965, 80% of
medical care spending was paid for out-of-pocket. In 1965, Medicare and Medicaid
programs were passed. As a result of tremendous growth in those programs, and the
spread of private insurance, out-of-pocket spending accounted for about 20% of health
spending in 1991 (Figure 2.1).
Figure 2.1
Health Care Spending Distribution by
Out-of-Pocket and Third Party Payments
90
80
70
_ 60
1
I 50
I AO
30
20
10
0
i
1960
1980
1990
2000
Year
•
Out of Pocket
M Third Party
At the same time that health spending is increasing at double digit rates and is absorbing
an increasingly larger share of the nation's total output, the number of Americans without
health insurance is increasing.
The Administration's Health Care Reform Plan:
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Chapter 2 - Introduction
DRI/McGraw-Hill
Page?
�Scope of Study
Citizens for a Sound Economy Foundation (CSE Foundation) commissioned DRI/McGrawHill to estimate the macroeconomic effects of the Clinton health care reform plan. Given
that features likely to be included in the plan will change as it proceeds through the
legislative process, DRI/McGraw-Hill has analyzed the economic impact of the plan on a
component basis. Component analysis will enable readers to selectively address specific
features/initiatives as the plan moves through Congress.
While the plan's features are numerous and complex, they can be grouped into three basic
categories: those pertaining to insurance coverage, those pertaining to financing, and
those pertaining to direct controls of health care spending. For this analysis, DRI analyzes
one or more of the major components for each of those categories: universal coverage for
the coverage category, employer mandate and taxation for the financing category, and
premium caps for the direct spending controls category.
In order to estimate the effects of these initiatives, DRI/McGraw-Hill:
• established a "baseline" macroeconomic forecast that excludes any health
care reform assumptions;
• developed "alternative" macroeconomic projections that incorporate health
care reform assumptions; and
• calculated the difference between alternative values of key indicators to
estimate the macroeconomic effects of the specific initiatives.
2.1 Background ofthe Clinton Plan
On September 22, 1993, the Administration unveiled its health care reform package.
According to the Administration, all Americans will be covered by a standard health
insurance benefits package as a result of the act. As a result, 37 million people who are
currently uninsured will have coverage, and the insurance plans of 22 million people whose
benefits currently fall short of the standard benefit package will be upgraded.
In the Administration's plan, insurance coverage will be financed largely by employers, who
will be required to contribute 80% of the average premium, with employees making up the
difference. If employees choose a plan that has more benefits than the standard plan and
is, therefore, more expensive, the amount contributed by the employee will be greater than
20% of the average premium.
In order to ameliorate the effects of the employer mandate on small businesses and lowwage employees, there will be caps on the contributions by those two groups, with the
federal government making up the difference. The federal government will also be
financing a new long-term care program, a new Medicare prescription drug plan, and
administrative costs for the "regional health alliances" that constitute the managed
competition component of the plan. Combined with the subsidies to small businesses and
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The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 2 - Introduction
�low-wage workers, the funding of these new programs creates $350 billion in new federal
spending through the year 2000.
The Administration's plan assumes that new federal spending will be offset by caps on
spending for Medicare and Medicaid, higher sin taxes and a payroll tax on corporations
that form their own alliances, revenue effects of mandates, and other federal program
savings. The Administration claims that federal savings will exceed new federal spending,
thereby reducing the federal deficit by $58 billion over the 1996-2000 period.
The Administration claims that total health care spending will be higher than baseline in the
first few years as a result of expanded health insurance, then predicts it will be $136 billion
lower than baseline in the year 2000, and increasing at half the baseline rate. "Savings"
are attributed to increased competition, reduced administrative costs, and budget
discipline.
The Administration's plan assumes that regional health purchasing alliances will negotiate
per capita premium rates with every health plan on behalf of all consumers in that region.
According to the Administration, budget discipline will be imposed by a national health
board, which will establish and enforce premium targets for the regional alliances.
Alliances that meet their targets will be allowed to raise their premiums by a factor that
accounts for inflation and population growth. Alliances that do not meet their targets will
have their inflation factors reduced.
2.2. Case Descriptions
The DRJ analysis focuses on the major features of the Clinton Health Care Reform Plan.
For this analysis, DRI developed macroeconomic simulations for the following: universal
coverage for the coverage category, employer mandate and taxation for the financing
category, and premium caps for the direct spending control category.
• Universal/Expanded Coverage. The Administration estimates that the average
cost of its plan in today's dollars will be $1,932 for individual coverage and
$4,360 for family coverage. Based on outside data, the DRI analysis assumes
premiums approximately 20% higher than the Administration's estimate. This
analysis evaluates the economic effects of the plan given the administration's
coverage and benefit structure assumptions. The program extends coverage to
the uninsured and their dependents, increases coverage for those already
insured but not meeting the minimum standards specified in the benefits
package, and creates new benefits in long term care, prescription drugs for
Medicare recipients, and a variety of public health programs. The simulation
was run relative to an economic baseline that assumes no health reform.
Furthermore, universal coverage was examined in the absence of employer
mandates, other tax financing proposals, and without the constraints of
spending caps. The program in this simulation is Federally funded, and
financed via an increased deficit. The timing of program implementation is the
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 2 - Introduction
DRI/McGraw-Hill
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�same as in the Administration's plan, with 15% of costs incurred in 1996, 40% in
1997, and 100% in 1998 and beyond.
• Employer Mandate. The impact of the full Clinton employer mandate program
(including subsidies) is evaluated incrementally, i.e., relative to an economic
baseline containing universal coverage. All of the features of the employer
mandate in the Administration plan are incorporated in this analysis, including
the premium caps that vary by size of firm and average wage (ranging from
3.5% to 7.9% of payroll). Any additional taxes and spending controls are not
included. In this simulation, a portion of Federal expenditures is replaced by
employer funding in financing universal coverage. This simulation also reflects
the timing for phase-in described in the universal coverage simulation.
• Corporate Assessment. Corporations that opt out of the regional health care
alliances are assessed a 1 % payroll levy. The macroeconomic effect of this tax
is evaluated relative to the employer mandate simulation.
• Additional Taxes. The incremental effects of any additional taxes that are part
of the reform package are quantified relative to an economic baseline
containing universal coverage and employer mandates. Higher excise taxes on
tobacco, a payroll levy on large corporations that form corporate alliances, and
a series of miscellaneous changes that increase tax revenues are included in
this simulation. In 1998, the distribution of tax revenues by source is 45% for
tobacco tax, 28% for corporate assessment, and 27% for the rest.
• Spending Caps. The features of the Clinton plan described up to this point universal coverage, employer mandates, and additional taxes - are altogether
designed to promote one of the major objectives of the package, namely,
coverage for the uninsured and the associated necessary financing of these
additional entitlements. The second major objective, cost containment, is
attempted via insurance reform (managed competition) and through the
regulatory apparatus designed to control the level and rate of increase in health
care spending. Spending controls are examined in a macroeconomic simulation
relative to an economic baseline containing universal coverage, employer
mandates and additional taxes. The spending control elements that are
evaluated in this simulation mirror the Administration's proposal, including the
appropriate phase-in.
Each simulation is run incrementally, that is, the universal coverage simulation is run off of
the baseline, and the employer mandate is run off of the universal coverage simulation.
With the final simulation that examines the impact of spending controls, the complete
program is evaluated.
The forecast interval for each of the cases is 1994 through 2000. While a complete set of
macroeconomic variables is obtained, the focus in our discussion of each simulation is the
effect on output, employment, prices, interest rates, and nominal and real health care
spending.
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The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 2 - Introduction
�2.3. Base Case U.S. Economic Outlook
The base case was developed from the December 1993 DRI/McGraw-Hill control forecast
with DRI's assumptions about health care reform excluded. The baseline assumptions are
summarized below.
Near-Term Forecast Assumptions (Through 1996)
Interest-rate-sensitive sectors of the economy will be the main engines of growth during the
next year. Investment in producers' durable equipment and residential fixed investment
both will advance more than 10% over the next 12 months. The past two months have
seen strong sales and starts of new homes, while orders for durable goods rose for the
fourth time in five months. With commercial vacancy rates finally falling and manufacturing
operating rates rising, nonresidential construction will also post double-digit growth rates
during 1994. State and local government spending will be boosted by infrastructure repair.
As the economy picks up, inventory restocking will also add to growth.
Fiscal restraint and weak foreign economies will be sources of drag for the economy. Real
federal government purchases will decline over the next year, while higher tax rates hold
growth in real consumption below growth in real GDP. Weak foreign economies will hold
export growth well below import growth, which will strengthen due to dollar appreciation
and strong demand for capital goods. Real GDP will grow at a 4.4% rate in the fourth
quarter, and 3.0% next year. The fourth-quarter spurt reflects a bounce back from the
flood's impact on last quarter and a rebound in motor vehicle production. This will be
enough to lower the unemployment rate to near 6% by the end of 1994.
The Federal Reserve will remain cautiously permissive, raising interest rates very gradually
over the next two years; the federal funds' rate reaches nearly 4.0% in mid-1995, but
eases as economic growth rates slow to 2%. The permissiveness partially accommodates
deficit reduction, and is also quite consistent with an unemployment rate above 6% and
stable CPI inflation rates of 3%. Bond rates rise even less-the yield on the 10-year
Treasury remains below its second-quarter 1993 level until the economy nears full
employment in early 1995. Indeed, the yield on the 10-year Treasury remains below 6.0%
throughout the forecast period. Nonetheless, the mild uptick is enough to slow growth in
the more interest-rate-sensitive sectors of the economy, and thus generates a "soft
landing." Real GDP growth slows to 2.4% in 1995 and 2.3% in 1996. These annual
average figures are slightly deceptive-the slowest period for the economy will be in mid1995.
A firming of the dollar over the next three quarters contributes to an increase in the
merchandise trade deficit during the forecast period, causing the trade balance to worsen.
CPI inflation remains moderate, inching up from 3.0% this year to 3.4% in 1996. Soft oil
prices contribute to price restraint.
Fiscal Policy
The recovering economy, together with lower interest payments and smaller-thananticipated increases in outlays for Medicare and Medicaid, narrowed the federal deficit to
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 2 - Introduction
DRI/McGraw-Hill
Page 11
�$255 billion in fiscal 1993, from $290 billion in the year-earlier period. The new federal
budget bill trims the unified deficit from $255 billion in fiscal 1993 to $187 billion in 1995,
but the deficit begins to widen in 1996.
Real federal purchases decline throughout the forecast period because of the discretionary
spending caps. Defense spending bears all the burden of the real cuts; nondefense
purchases remain essentially flat in constant dollars. Costs of the Midwest flood will boost
state and local spending through early 1994. Most of the cleanup and repair costs will be
covered by the federal government through grants-in-aid. During the flood, the cost of
providing food and shelter and dealing with threats to public health was borne primarily by
FEMA.
Monetary Policy
DRI expects interest rates to turn up in mid-1994 as the economy strengthens and the Fed
remains aggressive toward signs of inflation. Slow employment growth and low inflation
will keep the increase modest. The Federal Funds Rate peaks at 4.00% and the Prime
Rate at 6.50% in early 1995. A slowdown in economic growth will cause interest rates to
ease back down in 1995.
Energy
World oil prices declined in late 1993, due to the anticipated reentry of Iraq into the world
oil market in 1994 and OPEC's inability to curb other producers' output. Refiners'
acquisition price of foreign crude is expected to slip from $16.08 per barrel in the third
quarter of 1993 to $15.84 in the fourth quarter of 1993 and $15.52 in the first quarter of
1994. Thereafter, stronger demand is accommodated by increases in Iraqi and other
OPEC production, keeping oil prices under $19.50 per barrel through 1996.
The 4.3 cent per gallon increase in the motor fuels tax was introduced in October 1, 1993.
The federal tax on gasoline and diesel fuel thus increased from 15.0 cents per gallon to
19.3 cents. It is maintained at that level through 1996. State and local fuel taxes are
gradually raised from 18.7 cents per gallon in 1993 to 21.2 cents in 1996.
Domestic production of oil and natural gas will remain near 35.9-36.1 quadrillion Btus
(quads) during 1993-96. Output of nuclear, coal, and "other" will increase from 30.8 quads
in 1993 to 33.5 quads by 1996.
Exchange Rate
The trade-weighted dollar is projected to appreciate through mid-1994. The recent dollar
rally against the Deutsche mark is well supported by the recent acceleration in U.S. activity
and falling German interest rates. DRI expects the yen to weaken once capital outflows
from Japan resume. The Canadian dollar is likely near its lows, but recovery will be modest
given a likely combination of tight Canadian fiscal and easy monetary policy, and the
possibility of higher U.S. short-term interest rates. A widening U.S. external deficit may
weaken the dollar once foreign markets revive in late 1994 or early 1995.
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The Administration's Health Care Reform Plan:
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Chapter 2 - Introduction
�Food Prices
Although farm prices fell in October 1993, a sharp reduction in the Agriculture
Department's forecast of the corn harvest caused crop prices to surge in November. As
higher feed prices work their way through the food chain, livestock and poultry prices will
rise in 1994 more than previously anticipated. On a year-over-year basis, after dropping
2.0% in 1992 and rising 3.1% this year, farm prices will jump more than 5% in 1993. As
crop yields return to normal, prices will rise less than 2% in 1995 and 1996. Consumer
food price inflation will be more steady, running somewhat above 3% in 1994 and
somewhat below 3% in 1995-96.
Other
The analysis assumes that legislation to increase the federal minimum wage to $4.60 per
hour in July 1994 and indexing it to consumer price inflation thereafter will be passed early
next year.
Several factors cut growth in unsmoothed potential output (defined as the level of GDP
attained at full employment) from 2.4-2.5% in 1988 and 1989 to 1.7-1.8% in 1990, 1991,
and 1992: weaker labor-force growth, a sharp slowdown in net capital formation, and
slower gains in the stock of R&D capital. Growth in potential output will move back above
2% in 1994-96 as capital formation increases.
Health Sector
Growth in spending for medical care services has been moderating for the past few years,
reflecting deceleration in price and quantity factors. On the price side, part of the
deceleration is simply a result of moderation in economy-wide inflation that began with the
1990-1991 recession, and part of the deceleration seems to be a result of the pressure that
health care providers and pharmaceutical manufacturers have been under to restrain their
price increases. On the quantity side, the recession contributed to moderation in demand
for medical care services as workers who lost their jobs also lost their health insurance, a
trend that continues today. In addition, demand for medical care services has been curbed
by cost containment efforts of employers, including increased cost shifting to employees.
Over the near term forecast interval, medical care prices continue to decelerate, with the
implicit price deflator for medical care services increasing 2.6% in 1994, 2.5% in 1995, and
2.2% in 1996. The quantity of medical care services (real spending), on the other hand,
accelerates, reflecting the impact of acceleration in Medicare and Medicaid volume
increases in 1994 and sustained Medicaid volume increases in 1995. Real spending for
medical care services increases 3.2% in 1993, 3.9% in 1994, and 4.6% in 1996. The net
result of the price and quantity forces is acceleration in nominal spending for medical care
services from 1993 to 1995, and deceleration in 1996.
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 2 - Introduction
DRI/McGraw-Hill
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�Long-Term Forecast Assumptions (1997 and Beyond)
For the long-term projection period, the economy is expected to grow fairly steadily, if
unremarkably, between 1997 and 2000, annual growth in real GDP should average 2.5%,
significantly less than the 2.8% rate recorded since 1970 and even further below the 3.8%
posted in the 1960s. The implicit GDP deflator is projected to show 2.9% average annual
increases through 2000.
Real personal consumption expenditures are expected to average annual increases of
2.0% between 1997 and 2000. Real durable goods average 2.3% increases, while non
durable goods spending is projected to average only 1.3% growth per year. Services
spending grows by an average of 2.3% annually. These growth rates are significantly less
than those recorded historically (2.9% for total consumption since 1970, for example), in
part because, for the last two years, consumption has been at its highest share of gross
domestic product since 1950. Some retreat from this share can be expected eventually,
leading to the relatively low growth rates projected. As the consumption share declines, it
permits the investment share to increase. It is also consistent with an improvement in the
trade balance.
Energy-intensive consumption (gasoline, fuel oil and coal, electricity, and natural gas)
averages 1.4% annual real growth over the long term, slightly above the average annual
pace of 1.1% since 1970. Its share of total consumption averaged 5.7% in 1992,
compared to 6.1% in 1987 and a peak of over 9.0% in 1981. The share gradually
diminishes, averaging 5.5% over the duration of the long-term interval.
Last year housing starts rebounded after suffering their worst year in post-war history in
1991. Fortunately continued bounce back is expected, although the demographics cannot
support the level of housing activity seen in the 1970s. After 1996, starts average 1.46
million units. Tax reform has a significant effect on the composition of housing. The loss
of tax shelters has significantly reduced the demand for multi-family dwellings. As a result,
the share of multi-family units to total starts averages nearly 25% during the long term,
compared with 33% in the 13 years prior to tax reform's introduction.
In the long run, the output of the economy is determined primarily by supply. Accordingly,
the rate of growth of potential output becomes a critical long-run parameter. Annual
potential output growth averages 2.4% from 1997 through 2000, slightly slower than the
pace recorded since 1980. Output per hour falters somewhat in the long term and
averages 1.4% growth annually between 1997 and 2000, slightly less than the 1.5%
growth achieved between 1960 and 1990.
As the economy faltered, real business fixed investment fell 0.4% in 1990, before rising
2.9% in 1992. Business fixed investment continues to spur the economy, showing some
cyclical strength recording gains of 11.0% in 1993, 10.4% in 1994, and 8.7% in 1995. Past
1996, real business fixed investment is expected to average 4.5% annual increases, with
equipment spending (up 5.5%) continuing to outpace structures spending (up 1.4%). The
overall index of industrial production is projected to increase an average 3.4% a year from
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The Administration's Health Care Reform Plan:
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Chapter 2 - Introduction
�1997 through 2000. Capacity utilization in manufacturing averages 83.9%, up nearly five
percentage points from the 1992 annual rate of 78.8%.
Downward pressure on spending reduces the proportion of GDP that passes through the
federal budget from 24.2% in 1992 to 22.6% in 1995, while averaging 22.7% over the
duration of the long-term forecast. Real military spending jumped sharply in early 1991, to
cover the costs of the Gulf War, but is projected to fall at an average annual rate of 5.5%
over the period 1993 to 1996. Significant declines continue into 1997 and 1998,
registering drops of 6.8% and 2.6% respectively, before slowing to post smaller declines of
0.2% in 1999 and 2000. After declining 1.0% in 1996, nonmilitary federal purchases
remain relatively stable, rising at a modest pace of 0.2% in real terms from 1998 to 2000.
The federal deficit (NIPA basis) averages 2.2% of GDP after 1996, compared with 2.2%
between 1966 and 1990. This average is an improvement from the 4.6% rate encountered
in 1992. The NIPA deficit is not directly affected by RTC activity. Despite the Federal
Reserve's continuing resolve to keep inflation under control, real long-term interest rates
are expected to remain relatively modest. The prime rate is expected to average 6.1% in
1997 and 6.6% in 1998, before rising and hovering in an extremely narrow band around
7.0% in 1999 and 2000.
After falling from a peak of 13.8% in 1975 to 11.4% in 1984, the ratio of state and local
government spending to GDP has grown again to nearly 14%. This rise has brought with it
budget difficulties for many states and localities. Despite these problems, however, the
share of spending in GDP is expected to continue rising slowly over the forecast interval,
reaching 14.8% in 2000.
In the long run, the dollar's path will be determined by inflation and interest rate
differentials. Through the second quarter of 1994, the value of the dollar rises 5.1% from
the second quarter of 1993. The dollar is then expected to depreciate 2.5% in 1995 and
2.4% in 1996, before falling 0.8% a year thereafter.
The balance of payments soared to $66.4 billion in 1992 and continues to rise to $192.7
billion in 1996, before easing slightly to $186.2 billion in 2000. Having jumped from 0.9%
of GDP in 1982 to 3.5% in 1987, the merchandise trade deficit improved from 2.0% of GDP
in 1990 to 1.6% last year as the economy slowed. By 1995, the deficit is back to 2.6% of
GDP, but improves steadily thereafter, falling to 2.0% of GDP by 2000.
Energy prices and quantities are based on DRI/McGraw-Hill Energy Service's August 1993
projections, updated to take account of subsequent events. In particular, the projection
takes into account the major provisions of the compromise version of the Clean Air Act
Amendments of 1990. The refiners' acquisition price of imported oil is expected to fall to
$16.59 per barrel in 1993, down from an average of $18.12 in 1992, before resurging to an
average $19.03 per barrel in 1996. Thereafter, oil price rises outpace overall inflation,
reaching $24.89 by 2000. The producer price index for fuels, related products, and power
should average 5.8% annual increases from 1997 through 2000, in excess of two
percentage points above overall inflation. Coal and electricity prices increase less rapidly
than oil prices.
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Chapter 2 - Introduction
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�Labor-supply projections are derived from DRI/McGraw-Hill's model of labor-force
participation by age-sex cohorts. Civilian labor-force growth should slow from an average
of 2.1% since 1970 to 1.4% between 1997 and 2000. This puts the labor force at 142
million in 2000.
Slower labor-force growth eventually dictates a similar slowdown in employment growth.
On the establishment survey basis, employment averages 1.6% increases annually
through 2000, compared with 2.1% between 1980 and 1990. The unemployment rate is
projected to show little fluctuation, averaging 5.7%. This rate is considered close to the
minimum that the economy can sustain without experiencing accelerating inflation. Overall
wage gains remain relatively modest averaging 3.5% from 1997 through 2000, consistent
with the mild inflationary pressures that reveal increases of 3.4% over the same interval,
thus protecting workers real incomes.
From 1997 to 2000, real spending for medical care decelerates steadily as successful cost
containment efforts in the private sector are complemented by successful efforts in the
public sector. Such deceleration more than offsets a pickup in medical care inflation due to
economy wide forces. As a result, growth in nominal spending for medical care services
falls from 8.8% in 1996 to 7.7% in the year 2000.
2.4 Key Assumptions Underlying the Alternative Macro Simulations
The key assumptions underlying each of the simulations described in section 2.2 are
enumerated here. Note that the health cost assumptions may differ from other published
estimates for two reasons. First, the incremental approach used in the examination of
selected features of the Administration's program requires cost estimates that do not reflect
the effects of other features. For example, in the case of universal coverage, no offsets
are incorporated reflecting the effect of assumed cost savings from either managed
competition or spending limits. Second, all cost estimates are expressed in terms of
National Income and Product Account (NIPA) definitions, while other estimates may be
expressed in terms of other accounts (e.g., National Health Accounts). Key assumptions
for each of the four simulations are described below.
Universal Coverage
In the universal coverage simulation, a Federal program is assumed to provide universal
coverage for the under 65 population, subsidies for early retirees (aged 55-64), prescription
drug benefits for the Medicare population, long-term care, and an assortment of other
public programs. The scope of mandated benefits is identical to the Clinton package. The
timing of program implementation is also the same, with a phase-in of 15% in 1996, 40% in
1997, and 100% in 1998 and beyond. Additional health care spending during the 19962000 time frame emanates from increased utilization of health services for the previously
uninsured and those whose coverage has been expanded, long-term care utilization
increases, higher prescription drug spending, miscellaneous spending from other public
health initiatives, and changes in administrative costs.
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Chapter 2 - Introduction
�Part of the additional health spending reflects windfall profits to providers. Prices currently
charged by providers reflect uncompensated care. Explicit payment for such care without
corresponding modifications in pricing yields windfall gains. While a substantial portion of
these gains might be eliminated under standard government reimbursement guidelines,
DRI assumes that roughly one third would not. These gains are not significant until 1998,
when the program is fully implemented.
The increases in health care costs in the universal coverage simulation abstract from both
the restructuring in the private health insurance market caused by managed competition
and the constraints imposed centrally by a National Health Board. As a result, the costs
associated with universal coverage do not take into account the effects of managed care or
spending caps.
The increases in health related costs (including consumer spending for medical care
services and health related government transfers) due to universal coverage over the
1996-2000 period are shown in Table 2.1.
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�Table 2.1
Increase in Nominal Spending for Health Services and Drugs
($ Billions)
Health Services
Drugs
1996
1997
1998
1999
2000
11
30
77
81
87
4
4
4
5
5
Employer Mandate
The employer mandate simulation incorporates employer financing for the minimum
benefits package as well as selected Federal spending for employer subsidies, early retiree
subsidies, and Federal initiatives in long-term care, prescription drugs, and miscellaneous
public health activities. Employer financing in this simulation does not take into account the
effects of managed competition-in terms of both managed care utilization and
administrative savings-or of premium limits. Accordingly, the costs for firms that now
provide insurance as well as those that do not will be higher than estimates that reflect
these elements of the Clinton program. Larger employer subsidies are required in this
context for the same reason.
The additional health services spending levels described in the universal coverage
simulation would now be derived from three sources: employers, the Federal government,
and households. As presented in Table 2.2, employers will pay $50 billion in 1998 to cover
their share of mandated health insurance premiums.
Table 2.2
Employer Mandate Simulation
Additional Health Spending by Source
($ Billions)
1996
1997
1998
1999
2000
Employers
7
20
50
52
56
Federal Government
8
22
56
59
63
Households
(4)
(12)
(29)
(30)
(32)
Total
11
30
77
81
87
Three points should be emphasized. First, the timing of the additional health spending is
identical to the universal simulation, with a phase-in during 1996 and 1997. Second,
employer costs are net of government premium subsidies. Third, payments for the
household sector decline. This is consistent with the Administration's plan in terms of
reductions in the overall employee share of insurance premiums and reductions in
household out-of-pocket costs.
The estimated premium subsidy component of Federal spending is noted in Table 2.3.
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�Table 2.3
Premium Subsidies to Employers
($ Billions)
1996
1997
1998
1999
2000
3.4
12.4
39.1
40.7
42.4
The remainder of Federal spending is related to long-term care and various public health
program initiatives.
Corporate Assessment
The third simulation incorporates a corporate payroll tax for companies in corporate
alliances. DRI assumes that more than half of all firms with 5,000 or more employees will
choose corporate alliances over regional alliances. The estimated corporate assessment
tax revenue associated with those large firms is shown in Table 2.4.
Table 2.4
Corporate Assessment Simulation
($ Billions)
1996
1997
1998
1999
2000
5.9
6.3
6.7
6.9
7.3
Additional Taxes
The fourth simulation incorporates the additional taxes needed to complete the financing of
the universal coverage aspect of the Clinton program. Four types of tax increases are
incorporated in this simulation: those imposed on tobacco, the corporate payroll tax for
companies in corporate alliances, increased tax revenues emanating from cafeteria plan
limits, and increased tax revenues from lower medical expense deductions. These
increases by source are presented in Table 2.5.
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National Macroeconomic Effects
Chapter 2 - Introduction
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�Table 2.5
Additional Tax Simulation
Tax Increases by Source
($ Billions)
1995
1996
1997
1998
1999
2000
11.8
11.5
11.1
10.8
10.4
10.2
Corporate Assessment
0
5.9
6.3
6.7
6.9
7.2
Cafeteria Plan Limits
0
0
3.8
4.1
4.4
4.7
Medical Expense Deductions
0
0.3
0.9
2.3
2.4
2.5
11.8
17.7
22.1
23.9
24.1
24.6
Tobacco
Total
Spending Caps
In order to generate the spending caps simulation, a number of parameters related to cost
savings and provider price behavior under spending controls were developed. The cost
savings depicted here are relative to health expenditures in the additional tax simulation,
not relative to the baseline. Furthermore, all of the savings are achieved through
reductions in health services spending, and none from drug spending. Finally, in order to
provide complete estimates, we have included estimated spending reductions derived from
the shift to managed care.
The reductions in health care spending due to managed care, Medicare spending limits,
and private sector spending caps are listed below (see Table 2.6).
Table 2.6
Spending Cap Simulation
Estimated Reduction in Health Care Spending
($ Billions)
Managed Care
Medicare Spending Caps
Private Sector Spending Caps
Total
Y!ty\K/
rX
1996
1997
1998
1999
2000
0
0
14.9
16.1
17.4
2.0
6.0
13.0
18.0
24.0
0
0
53.1
84.9
107.6
2.0
6.0
81.0
119.0
149.0
Spending reductions are distributed in the DRI macro model among Medicare and nonMedicare Federal government payers, employers, and households in the following manner
(Table 2.7).
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Chapter 2 - Introduction
r
�Table 2.7
Spending Cap Simulation
Reduced Health Care Spending by Source
($ Billions)
1996
1997
1998
1999
2000
0
0
19.4
32.4
36.1
2.0
6.0
13.0
18.0
24.0
Employers
0
0
24.0
32.0
42.0
Households
0
0
24.6
36.6
46.9
2.0
6.0
81.0
119.0
149.0
Federal Govt. (Prem. Subsidies)
Medicare
Total
While the share of health spending reductions approximates the share of total health
spending for the federal government, it is significantly lower for employers, because the
employer mandate imposes a net cost on employers. For example, in the year 2000,
employer costs rise $56 billion as a result of the mandate (Table 2.2); however, employers
realize $42 billion in reduced premiums as a result of spending caps. Thus, the net cost is
$14 billion.
The only additional information needed for this simulation is the estimated increases in
medical care prices that would be anticipated once spending caps are implemented. Given
the specified limits on premium growth, and given the relative contribution of medical care
price escalation to expenditure growth historically, we developed constrained escalation
rates for the implicit price deflator for medical care services over the 1996 to 2000 time
frame. Given these constrained price increases, and the estimate of nominal spending
reduction, changes in real health spending (utilization) were derived. Over the period 1998
to 2000, real health care spending is reduced by $25 billion, $30 billion, and $31 billion as
a result of imposing spending caps on the rest of the Administration's plan. These dollar
amounts translate into percentage reductions of 4.2%, 5.0%, and 5.0%, respectively.
Interindustry
Three simulations of the Interindustry model were performed. The first was a Baseline,
consistent with the "no health insurance plan" macroeconomic scenario; the second
modeled the combined effects of universal coverage, the employer mandate, and all
additional taxes; and the third contained the full program assumptions, including spending
caps. The calculations were first reported in terms of changes in real industry output, and
then were translated into changes in employment.
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�Output
The Interindustry model tracks all the direct and indirect production needed to satisfy the
demands of final users in the economy. Using a blend of input-output (l-O) analysis and
econometrics, the model translates the macroeconomic results into the effects on output of
individual industries. The core element of the model is the input-output table. Produced by
the US government every five years, the table shows the distribution of sales for each of
the 432 industries' products across all its markets, including sales to other industries. The
table contains data on the dollars of inputs necessary to produce each dollar's worth of
product. DRI uses statistical techniques to be sure that this table is dynamic over time,
thus reflecting changes in technologies that tend to shift the relative importance of different
products, services, and production processes in the future.
For the industry simulations, a special adjustment was needed in the case of tobacco
products, because part of the financing for health care is in the form of a cigarette tax. In
the DRI Model of the U.S. Economy, the direct effects of the tax are present, but are
somewhat hidden since personal consumption of tobacco products is part of the larger
category called "Other Nondurables." In the interindustry model, however, the Tobacco
industry is identified explicitly. The tobacco output effect was estimated using an elasticity
approach. The presumed $11 billion tax on cigarettes is equivalent to a 20% price
increase at retail, based on current consumption estimates from the US GDP accounts.
Previous work done by DRI has shown that cigarettes have a price elasticity of -0.33, that
is, a 10% increase in price will yield a 3.3% decrease in consumption. Thus a 20%
increase will yield about 6.6% less consumption. Since higher incomes mitigate the decline
a bit, we assumed a 5% decline in tobacco consumption. (Some studies have shown that
smokers respond more to the initial change in retail price and less to the new price in future
years as the "habit" effect dominates spending patterns. We feel that ours is a reasonable
medium-term estimate of the impact.)
Employment
The Interindustry model estimates employment by industry using a set of productivity
equations (a model of output per employee). After estimating new output levels relative to
the baseline, the model calculates the employment as output times the revised estimate of
productivity by industry. Therefore the job impact of the health care program is fully
consistent with the sector-by-sector impacts on output.
DRI enhanced the basic employment model to reflect the fact that different industry groups
will face widely varying increases in compensation costs due to mandated universal
coverage. The analysis assumed:
•
Increases in compensation costs can be proxied by the extent to which an
industry has to increase its health insurance coverage; thus industry sectors
with higher existing rates of health insurance coverage (such as most
manufacturing) will have smaller incremental compensation expense per
employee, while industries with less coverage (retailing, construction, etc.)
will bear a higher cost.
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The Administration's Health Care Reform Plan:
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Chapter 2 - Introduction
�n
The firm's decision of whether to shed workers in the face of higher
compensation costs is affected by the ability of industries to replace labor
with capital.
•
Consistent with the DRI Macro model results, the ability of firms to maintain
employment levels by reducing nominal wages is very limited.
Data on the extent of insurance coverage by industry was derived from the U.S. Census
Bureau's Current Population Survey (CPS) and from EBRI.
The procedure in calculating the employment effects was to:
1. Estimate employment changes due to final demand in the economy and to
the resulting changes in industry output as derived from the l-O model, as
described above.
2. Estimate the change in employment due to the relative rate of insured
employment by industry, and redistribute the demand-induced job effects
from Step 1 accordingly.
Step 2 utilizes estimates of the change in compensation (wages plus supplements) by
industry, due to increased health insurance coverage. (This step utilized the CPS data at a
2-digit SIC level.) Relative to the U.S. average, some industries incur higher costs (e.g.,
Retail Trade), while others have relatively lower costs (e.g., most manufacturing sectors).
The net change in compensation cost is our estimate of the cost due to increased
coverage, minus implicit federal subsidies.
Firms respond to the change in perceived cost (relative to the cost of capital) by adjusting
their labor force in proportion to their ability to substitute capital for labor. This makes use
of DRI's estimates of the elasticity of employment with respect to changes in labor and
capital costs, by industry. We assume in this process that the cost of capital does not
change significantly from industry to industry, so the major determinant of the firm's
decision making becomes the increase in net compensation costs due to the program. In
the DRI model, firms take about two years to adjust employment levels in response to
higher relative costs of labor.
We further assume that the interindustry shifts in employment are accomplished within the
context of the total impact calculated by the macro and interindustry models. In other
words, employment effects are redistributed such that the total difference in jobs between
scenarios adds up to the original macro-level impact on non-agricultural employment, plus
the industry model's estimate for agricultural jobs.
The Administration's Health Care Reform Plan:
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Chapter 2 - Introduction
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Page 23
�3.0 Results
3.1. Universal Coverage
Universal health insurance coverage is phased in over the period 1996 to 1998. Fifteen
percent (15%) ofthe uninsured/underinsured are incorporated into the system in 1996, an
additional 25% in 1997, and the remaining 60% in 1998. As a result of extending health
insurance to the uninsured population and expanding coverage for the underinsured,
spending for medical care services increases, with the biggest jump occurring in 1998,
when the bulk of the uninsured/underinsured population is brought into the system (in the
Unicoverage Simulation). Spending for medical care services is $5 billion higher than
baseline in 1996, $22 billion in 1997, almost $69 billion higher in 1998, $74 billion in 1999,
and $82 billion in 2000 (Figure 3.1).
Figure 3.1
Nominal Consumer Spending for Medical Care Services
Universal Coverage
•
Baseline
Univarsal Coverage
The bulk of the differences in health spending is due to increases in the quantity of medical
care services utilized. As noted earlier, total spending for health care is determined by the
price and quantity (volume) of medical care services (total spending = price * volume).
Volume of medical care services is measured by real medical care spending. Real medical
care spending is $3 billion higher than baseline in 1996, $13 billion higher in 1997, $37
billion higher in 1998, $38 billion higher in 1999, and $39 billion higher in 2000.
The Administration's Health Care Reform Plan:
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�As a result of growth in real spending for medical care services, the share of real GDP
devoted to medical care services rises from 9.3% in 1995 to 10.4% in 2000 (Figure 3.2).
Figure 3.2
Real Spending for Medical Care Services
as a Percent of Real Gross Domestic Product
Universal Coverage
10.4-1
10.2109.8-
./
9.69.49.2-
A
98.8-
1997
1996
•
Baseline
Universal Coverage
Increases in the demand for health services lead to increases in health sector employment
at the expense of employment in other sectors (in 1999 and 2000).
Real personal income is higher than the baseline in every year of the period 1996 to 2000
(rising from a difference of $9 billion in 1994 to $70 billion in 1999 and falling to $66 billion
in 2000).
As a result of the multiplier effects associated with these income increases, increases in
real consumer spending exceed the increases in real medical care spending by $2 to $5
billion over the period 1995 to 1999. Increases in real consumer spending above and
beyond medical care spending increases contribute to gains in total nonagricultural
employment greater than those of service sector employment in 1996, 1997, and 1998.
The total employment differences are actually lower than service sector employment
differences in 1999 and 2000, as increases in the federal deficit induce higher interest
rates and less investment.
The impact of universal coverage on real gross domestic product mirrors the impact on
total employment. The growth rate is progressively higher than baseline in 1996, 1997,
and 1998 (0.1, 0.2, and 0.4 percentage point, respectively), and is 0.4 percentage point
lower in 1999 and 2000 (Figure 3.3).
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The Administration's Health Care Reform PlanNational Macroeconomic Effects
Chapter 3 - Results
�Figure 3.3
Growth in Real Gross Domestic Product
Universal Coverage
•
Baseline
Universal Coverage
The universal coverage initiative is financed by government expenditures. Since no
additional taxes are assumed, universal coverage leads to significant increases in the
federal deficit. As shown in Figure 3.4, the deficit is $113 billion higher than baseline in the
year 2000.
Figure 3.4
Federal Deficit
Universal Coverage
G Baseline
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 3 - Results
Universal Coverage
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Page 27
�3.2 Employer Mandates
Currently, less than two-thirds of employers offer health insurance coverage to their
employees. Under the Clinton Health Care Reform Plan, all employers are required to
contribute at lease 80% of the average premium of the mandated benefits package for all
employees. This requirement will increase health benefits for some (mostly small)
employers and decrease such costs for other (mostly large) employers, but it will increase
such costs in the aggregate.
The employer mandate simulation mirrors the basic elements of the Clinton plan, i.e., in
terms of its benefits, the share expected to be paid by employers, the employer subsidy
features of the program, and so on. While the Administration claims that the minimum
standard benefits package is equivalent to the average plan offered by the typical Fortune
500 company, many outside benefits consultants maintain that it is much richer. The
estimate of employer costs (described in Section 2.4) are based on non-Administration
sources.
The major way in which the mandate operates is through its effect on employer health
benefit costs, as measured by Other Labor Income in the National Income and Product
Accounts. In the employer mandate simulation, other labor income is higher than in the
universal coverage simulation in every year from 1996 onward. Beginning with 1998, the
first full year of the program, other labor income is almost $88 billion higher, reaching a
differential of almost $100 billion by the end of the forecast interval (Figure 3.5).
Figure 3.5
Other Labor Income
-•llr
—
1996
1997
Baseline
DRI/McGraw-Hill
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1999
•
2000
Universal Coverage H Employer Mandate
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 3 - Results
�The increase in other labor income has the same dual effect in terms of prices and output
as a broad-based excise tax. On the price side, the mandate acts as a tax on labor,
increasing unit labor costs. (The employment cost index for compensation shows a steadily
increasing differential relative to unicoverage from 1996 through 2000.) The higher labor
costs, in turn, lead to higher overall inflation rates. In 1998 the GDP implicit price deflator
escalates at a 0.6 percentage point higher rate; however, the higher inflation rate abates
somewhat in 1999 and 2000 in response to monetary policy changes (Figure 3.6).
Figure 3.6
Consumer Price Index Inflation Rate
ill
J• I iI I
1996
1997
Baseline
1998
1999
2000
sJHH
11111
mu
illlii
iiiii
[_I Universal Coverage H Employer Mandate
The combination of higher inflation rates and Federal Reserve reactions in this
environment, results in increased long-term and short-term interest rates. Long-term rates
are 45 basis points higher and short-term rates 56 basis points higher by the end of the
forecast interval.
The mandate causes a contraction in the economy, just as a general excise tax would in a
similar context. Real GDP steadily declines throughout the forecast interval, and is
approximately $52 billion lower by the year 2000 than in the unicoverage simulation. As a
result, growth in real GDP is lowered (Figure 3.7).
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 3 - Results
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�Figure 3.7
Growth in Real Gross Domestic Product
Baniire
•
UiversEi Overage ^ BrfJcyer Marcfete
Corresponding to the decline in output, non-agricultural employment falls throughout and is
about 700,000 lower in 2000. This leads to a rise in the unemployment rate, which is
almost half a percentage point higher by the end of the forecast interval (Figure 3.8).
Figure 3.8
Total Nonagricultural Employment
Difference From Baseline
•
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Page 30
Urtversd Qvarags H Brplcyer Mandate
The Administration's Health Care Reform Plan.
National Macroeconomic Effects
Chapter 3 - Results
�Notwithstanding the substitution of employer costs for Federal government costs, the
deficit is higher in the employer mandate simulation. The reason is that the contractionary
effects of the mandate reduce tax receipts more than program-based decreases in
spending. (It should also be mentioned that the decline in Federal spending is partially
offset by employer subsidies.) Thus, the deficit is $3 billion higher than in the unicoverage
simulation in 1996, $5 billion higher in 1997, $8 billion in 1998, $15 billion in 1999, and $20
billion in 2000 (See Figure 3.9).
Figure 3.9
Federal Deficit
Baseline
CH Universal Coverage ^
Employer Mandate
Consumer spending on medical care is slightly higher in nominal terms, and is slightly
reduced in real terms. Increases in the implicit price deflator for medical care services,
reflecting the impact of general price increases in the economy, more than offset the higher
nominal medical care expenditures.
The cumulative effect of universal coverage and the employer mandate leads to a $60
billion reduction in real GDP in the year 2000, with 660,000 fewer jobs. Long-term interest
rates increase by 122 basis points and short-term rates increase by 118 basis points. In
the same year, labor income is $100 billion higher, reflecting the impact of the mandate on
employer non-wage costs. By 2000, the Federal deficit climbs by $133 billion. Finally,
inflation accelerates by an annual average rate of a 0.4 percentage point over the 19962000 forecast interval.
In terms of aggregate analysis, this simulation has more to do with the rest of the economy
than it does with health care. That is, most of the changes of interest occur outside the
health care sector, and focus on the combined effects of lower output and accelerated
inflation that are the natural byproduct of an employer mandate provision. Again, the
analysis here focused on the effect of the mandate in the absence of spending controls.
The Administration's Health Care Reform Plan:
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Page 31
�3.3 Corporate Assessment
The corporate assessment simulation measures the macroeconomic impact of the
corporate assessment that is levied on companies in corporate alliances. Only companies
with more than 5000 employees would be affected by the Administration's plan in forming
corporate alliances. These would typically be large Fortune 500 companies that are selfinsured. The impacts discussed here are measured relative to the employer mandate
simulation. The corporate assessment is a payroll tax, and as such, is equivalent to an
increase in the employer's payment for social security taxes-albeit only for a relatively
small percentage of companies. As mentioned in Section 2, the estimated revenues from
the corporate assessment are $5.9 billion in 1996, $6.3 billion in 1997, $6.7 billion in 1998,
$6.9 billion in 1999, and $7.2 billion in 2000.
The corporate assessment is a tax on labor and has the same qualitative effects as the
employer mandate. That is, the tax will lead to an increase in prices. The increase in
prices will lead to reductions in real consumer spending and via multiplier effects to a
general contraction in economic activity. Real GDP is lower relative to the employer
mandate by $3 billion in 1996, $4 billion in 1997, $4 billion in 1998, $5 billion in 1999, and
$6 billion in 2000 (Figure 3.10).
Figure 3.10
Growth in Real Gross Domestic Product
ill
lllll
1999
Baseline
CH Employer Mandate
2000
Corporate Assessment Tax
Non-agricultural employment declines steadily throughout the forecast interval, mirroring
the decline in real output. Job losses are 30,000 in 1996, rising steadily until reaching
84,000 in the year 2000. In that year, the unemployment rate is .04 higher than in the
employer mandate simulation (Figure 3.11).
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The Administration's Health Care Reform Plan:
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�Figure 3.11
Total Nonagricultural Employment
Difference From Baseline
•S -0.3
EH Employer Mandate
W Corporate Assessment
Real personal income also declines, and by a greater amount than the drop in real GDP.
The decrease is $3.3 billion in 1996, and reaches over $7.3 billion in 2000.
Higher prices also lead to increased interest rates. The prime rate increases in every year,
moving from 6.06 percent in 1996 to 8.29 percent in 2000, or over 11 basis points higher
than under the employer mandate.
Unlike the employer mandate simulation, where the "tax" does not result in additional tax
revenues, the corporate assessment does provide additional Federal revenues. This leads
to a decline in the Federal deficit of between $3 and $4 billion in every year from 1996
through 2000 (see Figure 3.12).
The Administration's Health Care Reform Plan:
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�Figure 3.12
Federal Deficit
Corporate Assessment Tax
H Baseline
CH Employer Mandate
Corporate Assessment Tax
While most of the effects on the macroeconomy are modest because the magnitude of the
corporate assessment is very small, the impact is a microcosm of the type of changes that
would occur from a more substantial payroll tax. Whether the corporate assessment
prevents large companies from forming their own alliances or joining regional alliances is
unknown at this juncture.
The combined effect of universal coverage, the employer mandate and the corporate
assessment is steadily declining real output. By the year 2000, real GDP is lower by $65
billion; there are 743,000 fewer jobs; short-term and long-term interest rates are up 130
basis points and 125 basis points, respectively; and the Federal deficit increases by $130
billion. Inflation accelerates by an annual average rate of one-half percentage point over
the 1996-2000 forecast interval.
3.4 Additional Taxes
The fourth simulation measures the macroeconomic impact of all additional taxes imposed
in order to complete the financing of the universal coverage component of the plan. The
economic effects of increased excise taxes on tobacco, the corporate assessment and a
series of other measures that increase Federal tax revenues are analyzed in this
simulation.
The tax increases have a contractionary impact on the economy. On a smaller scale, this
simulation yields the opposite effects of the universal coverage simulation. Real output,
measured in terms of GDP in 1987 dollars, is over $18 billion lower than in the employer
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The Administration's Health Care Reform Plan:
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�mandate simulation in 1996, $12.5 billion lower in 1997, $16 billion lower in 1998, $15
billion lower in 1999, and $15 billion lower in 2000 (Figure 3.13).
Figure 3.13
Growth in Real Gross Domestic Product
Additional Taxes
S
1.5
Baseline
•
Brplcyer Mancfate ^ fidOt'taral Taxes
Corresponding to these decreases in real output are the following reductions in nonagricultural employment: 213,000 in 1996, 247,000 in 1997, 232,000 in 1998, 258,000 in
1999, and 249,000 in 2000. The unemployment rate is about one-tenth to two tenths
percentage point higher during every year from 1996 onward (see Figure 3.14).
The Administration's Health Care Reform Plan:
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�Figure 3.14
Total Nonagricultural Employment
Difference From Baseline
D Employer Mandate M Additional Taxes
Real consumer spending is lower by almost $13 billion in 1996, $15 billion in 1997, $18
billion in 1998, $20 billion in 1999, and $21 billion in 2000. Both real durable and
nondurable consumer spending are down throughout the 1995 to 2000 forecast interval.
Finally, the budget deficit is lowered by increasing amounts throughout the forecast
interval. By 2000 the deficit is reduced by almost $19 billion (Figure 3.15).
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The Administration's Health Care Reform Plan:
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�Figure 3.15
Federal Deficit
Additional Taxes
Baseline
D Employer Mandate H Additional Taxes
While higher taxes represent a contractionary influence in the economy, the effect of
higher effective rates more than offsets any revenue lowering effects of reduced output.
The cumulative effect of universal coverage, the employer mandate and all additional taxes
results in a $75 billion drop in real GDP, accompanied by 908,000 fewer jobs in the year
2000. The Federal deficit is $115 billion larger and inflation accelerates by an average rate
of more than a one-half percentage point over the 1996-2000 forecast time frame.
3.5 Spending Caps
Although the administration characterizes spending caps as a backstop measure that will
come into play only if managed competition and other cost containment initiatives do not
bring about enough savings, spending caps are indeed one of the top four elements in the
plan.
The Administration's Health Care Reform Plan.
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�As noted earlier, the budget caps would work as follows. A national health board will
establish and enforce premium targets for the regional alliances. Alliances that meet their
targets will be allowed to raise their premiums by a factor that accounts for inflation and
population growth. Alliances that do not meet their targets will have their inflation factors
reduced.
The inflation factor for those alliances that do not exceed their budgets will be the sum of:
(1) the change in the CPI; (2) the change in the total US population; and an add on. The
add-on will be 1.5 percentage points in 1996, 1.0 in 1997, 0.5 percentage points in 1998,
and eliminated from then on. The inflation factor used in Medicare calculations will be
slightly higher to reflect the higher level of utilization of the elderly population.
All CPI growth and more than half of the discretionary factors were allocated to provider
price increases. The resulting implicit medical price deflator escalation path over the 19962000 interval is: 4.3%, 3.7%, 3.2%, 3.3%, and 3.6%. The baseline rate in the absence of
reform is: 4.7%, 4.4%, 4.4%, 4.7%, and 4.9%.
Given the constrained price increases, and the estimated nominal health spending
reductions (Section 2.4), changes in real health spending (utilization) were derived. Over
75 percent of the reduction in nominal health spending is attributable to the lower medical
price rate. Even though less than 25 percent of the spending reductions are attributable to
reductions in utilization (or quantity), the utilization cutback is significant. Utilization is
reduced by over 5 percent in 1999-2000, relative to the addtaxes simulation. This type of
cutback increases the risk of unmet demand. Thus, large cuts in spending caused by price
reductions exacerbate the risk of rationing.
Consumer spending for medical care services is $2 billion lower than in the addtaxes
simulation in 1996, $6 billion lower in 1997, $81 billion lower in 1998, $119 billion lower in
1999, and $149 billion lower in 2000. Differences in consumer spending care services
from baseline are shown in Figure 3.16.
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The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 3 - Results
�Figure 3.16
Consumer Spending for Medical Care Services
Difference From Baseline
•
AtiticrelTa
Differences from baseline in utilization per household are shown in Figure 3.17.
Table 3.17
Change in Utilization Per Household
(1987 $)
50-
o-
/
-50-100-
•>
e
o
-150-
m
-2D0-250-300J50-
1996
1997
1998
1999
2000
Year
I AtfticrelTaeB ^
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 3 - Results
^erdr^QfE
DRI/McGraw-Hill
Page 39
�The constraint on spending for medical care services has a significant effect on the
medical care services share of GDP (Figure 3.18).
Figure 3.18
Medical Care Services Share of GDP
AdAicnalTaces ^
Spencing Caps
By reducing health care spending, the caps effectively reduce employer health care benefit
costs, which are included in Other Labor Income in the National Income and Product
Accounts (NIPA). Other Labor Income is $44 billion lower than in the addtaxes simulation
in 1998, $66 billion in 1999, and $78 billion in 2000.
Escalation in the employment cost index for compensation is 0.6 percentage points lower
in 1998, 0.5 percentage point lower in 1999, and 0.4 percentage point lower in 2000.
Lower inflation contributes to greater consumer spending for goods and services other than
medical care (and its attendant multiplier effects), but some of the stimulus is offset by the
reduction in other labor income noted above. Thus, real consumer spending is higher in
1997, 1999, and 2000, but it is slightly lower in 1998.
Compared to previous sims, the employment impact of the spending caps mirrors that of
consumer spending. Empfoyment is 47,000 higher in 1996 and 239,000 higher in 1997,
but is 11,000 lower in 1998, a year in which other labor income is cut by about half. By
2000, the employment differential reaches almost 600,000. Employment differences from
baseline are shown in Figure 3.19.
DRI/McGraw-Hill
Page 40
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 3 - Results
�Figure 3.19
Total Nonagricultural Employment
Difference From Baseline
•
AddticrdTaces H
^erdrgQpB
As a result of all the multiplier effects described above, real GDP levels and growth are
higher than in the addtaxes simulation in every year of the projection interval except 1998,
when all of the stimulative effects of lower employer costs are more than offset by the
negative spending effects of the reduction in income (Figure 3.20).
Figure 3.20
Growth in Real Gross Domestic Product
Basdine
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 3 - Results
•
AcHticral TJMSS
I SferdrgCsps
DRI/McGraw-Hill
Page 41
�As noted earlier, the spending caps apply to government programs such as Medicare.
Accordingly, the limits on health care spending reduce the size of the federal deficit from
1996 to 2000 (Figure 3.21).
Figure 3.21
Federal Deficit
D Baseline
ED Additional Taxes B Spending Caps
The cumulative effect of the entire Administration program (relative to the baseline) is a
drop in real GDP of $18 billion in the year 2000. This reduction in output is accompanied
by 311,000 fewer jobs. Nominal consumer spending for medical care services steadily
declines relative to the baseline. In the last two years of the forecast interval, medical care
spending is reduced by $119 billion and $149 billion. At the same time, there is virtually no
change in real medical care spending (utilization) even though 37 million formerly
uninsured individuals are brought into the system.
Since aggregate utilization is
unchanged, this implies a drop in consumption of health care services by those who are
already insured.
Interest rates are higher throughout the 1996-2000 forecast interval. Short-term rates are
as much as 45 basis points higher (1997) before settling down to a differential of 9 basis
points (2000). Long-term.rates are as much as 45 basis points higher (1998) before
settling at a differential of 20 basis points in the year 2000. The Federal deficit is $26
billion larger in 1998, $16 billion larger in 1999, and only $2 billion larger in the year 2000.
3.6. Interindustry Results
The tables in Appendix E show the simulation results for industry employment through the
year 2000.
In the additional taxes simulation, the wholesale and retail trade sectors combined lose
628,000 jobs by the year 2000. Construction loses 223,000 jobs. The most significant
DRI/McGraw-Hill
Page 42
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 3 - Results
�winner is the health care sector, where 599,000 jobs are created, reflecting the impact of
universal coverage.
In the full program scenario, higher inflation and interest rates in the earlier years contribute
to lower output of consumer goods and services, and lower output of interest rate-sensitive
items such as building materials and capital goods. As the economy shifts slowly back
toward full employment, especially once spending caps are introduced into the system, the
negative impacts of the program become much smaller, and in fact most consumer sectors
actually rise above the baseline. Because capital equipment spending is still lower,
however, the output of capital goods producers remains weak.
By the year 2000 only health care services is above the baseline in terms of activity levels,
up by about 0.5%. As a result, the insurance industry is hit less hard than would be
indicated by the macro slowdown alone. Tobacco products take the biggest long-term hit
because of increased excise taxes, decreasing by -6% relative to the baseline in 2000.
Manufacturing industries are down anywhere from -1.1% to -0.3% as a result of the weaker
overall economy. Industries sensitive to interest rates: durable goods, construction and
building materials, all tend to be harder hit than average. Services are affected much less
than average.
Employment impacts are dominated by these changes in output by industry, but are also
affected by the response of firms to changing compensation costs, as discussed above.
Our analysis shows that the industries with below average proportions of insured
employees see their employment going down somewhat more than would be indicated by
the drop in demand for their products or services. Retail trade employment, for example,
falls by -0.7% instead of the -0.5% from the output decline alone. This is also true for
agriculture and those services which had above-average increases in compensation costs
due to increased coverage.
The total effect on jobs by industry is relatively small on a percentage basis (excepting
tobacco products). Most manufacturing industries decline -0.1% to -0.5%, with interest
rate-sensitive industries and apparel tending to be more hard-hit than others. Construction
is down -1.0% in 2000, apparel and furniture are each down -0.6%, and machinery is down
-0.3%. Transport equipment (including motor vehicles) is down -0.6%. Real estate jobs
are off 0.4%, but financial services and insurance are hardly affected. Retail trade, as
expected, declines more than average at -0.7%.
DRI estimates that the actual number of jobs lost is 311,000 for the nation. But there are
wide disparities among industries due to their sheer size as well as to the percentage
change in employment. In the year 2000, just two industries, construction (-50,000 jobs)
and retail trade (-157,000), account for over 60% of the total, followed by wholesale trade (27,000) and business services (-26,000).
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 3 - Results
DRI/McGraw-Hill
Page 43
�4.0 Conclusions
Using the incremental approach to analyze the impact of universal coverage, employer
mandates, additional taxes, and spending caps, we found that:
• Through increases in the utilization of medical care services, universal
coverage leads to increases in health care spending, which absorbs a greater
share of GDP, and which contribute to higher health sector employment from
1996 to 1998. With more people working, incomes are higher and people
spend more. This expansion causes higher inflation and higher interest rates,
which has a contractionary effect on employment in 1999 and 2000. High
interest rates combine with deficit financing of the universal coverage initiative
to force up the federal deficit. Thus, the net effect of universal coverage on real
GDP is faster growth in 1996 through 1998, but slower growth in 1999 and
2000.
• The positive employment and income effects of universal coverage are more
than offset when the deficit financing assumption is replaced with an employer
mandate financing assumption. The mandate increases employers' cost of
doing business. Employers pass the cost increases on to consumers either
through lower wages or higher prices (lower real wages). Consumers respond
by cutting back on real spending for medical and nonmedical goods and
services, which has a negative effect on employment and GDP. As a result of
these contractionary effects, the federal deficit is larger, even though
employers, not the government, are financing the bulk of health insurance
coverage.
Universal coverage and employer mandate combined lead to $60 billion less in
real GDP, 660,000 fewer jobs, and long-term interest rates 122 basis points
higher than baseline.
The corporate assessment is a tax on labor and has the same qualitative effects
as the employer mandate. The tax will lead to an increase in prices and, at the
same time, a reduction in output. The change in prices is brought about by an
increase in unit labor costs. The increases in prices will lead to reductions in
real consumer spending and via multiplier effects to a general contraction in
economic activity. Real personal income also declines, and by a greater
amount than the drop in real GDP. Higher prices also lead to increased interest
rates; the prime rate increases in every year.
The corporate assessment provides additional Federal revenues, which lead to
a decline in the Federal deficit of between $3 and $4 billion in every year from
1996 through 2000. While most of the macroeconomic effects are modest
because of the magnitude of the corporate assessment, the impact is a
microcosm of the type of changes that would occur from a more substantial
payroll tax. The cumulative effects in the year 2000 of universal coverage, the
employment mandate, and the corporate assessment tax are 34 percentage
point higher inflation, $65 billion in lower output, and 743,000 fewer jobs.
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 4 - Conclusions
DRI/McGraw-Hill
Page 4 5
�In order to defray some of the federal deficit spending associated with universal
coverage, the federal government is assumed to levy four additional taxes in the
Additional Taxes simulation: a tobacco tax, a corporate assessment,
adjustments to flexible spending accounts, and changes in medical expense
deductions. These taxes exacerbate the negative employment and income
effects caused by the employer mandate; they increase employer costs, which
leads to higher inflation, lower consumer spending, and weaker employment
and GDP growth. Despite the weaker economy, the deficit is smaller as a result
of the additional tax revenue.
The cumulative effect of combining universal coverage, the employer mandate,
and all additional taxes is lower real output, higher prices, significantly lower
employment, and a larger deficit.
Spending caps effectively reduce the employer cost effects of the mandate,
which means slower price escalation for consumers. With the introduction of
spending caps, the entire Administration's package has been incorporated into
the simulation. As a result, prices are higher and employment is lower.
Nominal medical care spending is $149 billion lower in the year 2000, but real
medical care spending is virtually unchanged.
Because of higher inflation and interest rates in the earlier years, output of
consumer goods and services are for the most part lower in the full program
scenario, as is output of interest rate-sensitive items such as building materials
and capital goods. After spending caps are introduced into the system, the
negative impacts of the program on interest rates become much smaller, and in
fact spending in most consumer sectors actually rises above the baseline.
Because capital equipment spending is still lower, however, the output of capital
goods producers remains weak.
The employment impacts of the Administration's Health Care Plan will not be
evenly distributed across sectors of the economy. The analysis indicates that
those industries with above average proportions of uninsured employees will
realize the largest losses in employment. Retail trade will be most affected with
job losses in the year 2000 reaching 562,000 without spending caps and
157,000 with spending caps. Similarly, in the year 2000, the construction sector
will lose 223,000 jobs without spending caps and 50,000 with spending caps.
The health care services sector will be the big winner with jobs increasing in the
year 2000 by 598,000 jobs without spending caps and 69,000 with spending
caps.
DRI/McGraw-Hill
Page 4 6
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 4 - Conclusions
�These results demonstrate the inherent tradeoffs between various aspects of the program.
The most notable is the relationship between employer mandates and spending caps. The
effects of employer mandates on the economy in general and on employers in particular
are mitigated by the imposition of spending caps. It is clear in this analysis that without the
use of spending caps that the economic costs throughout the economy would be higher. It
is also true, however, that the imposition of spending caps creates a potential risk of unmet
demands for health care services.
Given the health care spending reductions that will be necessary if the cost containment
objectives of the Clinton plan are to be met, and given reasonable assumptions about
constrained price increases on the part of providers, utilization of health care services will
be significantly reduced as a result of the spending cap program.
To the extent that these reductions are due to elimination of inefficiencies in the system
(i.e. elimination of unnecessary services), then consumers are better off. To the extent that
the reductions in utilization reflect the inability of consumers to meet their health care
needs, then consumers are worse off. Under the administration plan, anticipated efficiency
gains are achieved largely through managed care practices implemented by HMOs.
Studies by others indicate that such gains are not likely to account for all of the reduction in
utilization. Based on their analysis of hospital utilization among HMO and fee-for-service
populations, William B. Schwartz and Daniel B. Mendelson conclude that "additional dollar
savings through elimination of unnecessary days will be both small and difficult to
achieve." Focusing on overall utilization of medical care services, Lewin/VHI estimates
that, on average, HMOs reduce utilization by only 2%.2 Kilbreth and Cohen raise a
"concern, that, while HMOs offer a one-time savings on hospital use, they have no greater
long-term control than do other insurance plans over the rate of increase in price inputs
due to technology advances, change in conditions in the labor market, and other factors."
1
3
1
William B. Schwartz and Daniel N. Mendelson, "Why Managed Care Cannot Contain Hospitals Costs - Without Rationing", Health
Affairs, Summer 1992,103.
J o h n F . :Sheils, Lawrence S. Lewin, and Randall A. Haught, "Potential Public Expenditures under Managed Competition", Health
Affairs. Supplement 1993, 234.
•^Elizabeth Kilbreth and Alan B. Cohen, "Strategic Choices for Cost Containment Under a Reformed U.S. Health Care System",
Inquiry. Vol. 30, No. 4, 377.
2
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Chapter 4 - Conclusions
DRI/McGraw-Hill
Page 47
�Appendixes
�Appendix A:
National Economic Indicators - Levels
�Appendix A
National Economic Indicators - Levels
Baseline Simulation
1992
1993
1994
1995
1996
1997
1998
1999
2000
4986.3
6038.5
6045.8
-327.0
1183.1
1459.3
5126.8
6371.8
6372.8
-240.5
1266.8
1492.5
5280.6
6731.5
6731.6
-186.7
1366.3
1550.8
5408.3
7065.3
7056.4
-188.3
1437.4
1624.9
5541.2
7400.0
7383.1
-179.9
1500.2
1694.0
5697.9
7788.8
7764.5
-179.3
1585.2
1762.5
5851.2
8215.7
8178.5
-182.1
1677.5
1858.1
5992.9
8675.0
8626.9
-197.2
1777.3
1971.5
6122.0
9148.4
9093.7
-207.7
1878.0
2082.7
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
108.5
0.6
18.0
5.7
25.4
6.6
29.1
3.0
15.7
110.2
0.6
17.8
5.7
25.8
6.6
30.2
2.9
15.9
112.4
0.6
17.7
5.7
26.4
6.7
31.4
2.8
16.3
114.7
0.6
17.5
5.7
27.0
6.8
32.6
2.8
16.6
117.2
0.6
17.3
5.8
27.5
6.9
33.9
2.7
17.1
119.5
0.6
17.2
5.8
28.0
7.0
35.2
2.7
17.5
121.6
0.6
17.2
5.9
28.5
7.1
36.3
2.7
17.8
123.5
0.6
17.2
5.9
28.8
7.2
37.4
2.7
18.2
125.1
0.6
17.1
5.9
29.1
7.3
38.4
2.7
18.6
Population & Labor Market Measures (million)
Labor Force
Resident Population
Unemployment Rate (%)
127.0
255.8
7.4
128.0
258.4
6.8
130.0
261.0
6.2
132.1
263.6
6.0
134.0
266.1
6.0
135.9
268.5
5.8
137.8
270.9
5.6
139.8
273.3
5.6
141.5
275.6
5.7
4152.9
2973.1
322.7
370.6
3632.5
4234.3
3082.4
350.6
395.8
3698.5
4356.2
3260.8
376.8
424.5
3796.9
4467.8
3433.5
399.9
448.5
3887.6
4562.5
3605.4
423.0
470.9
3968.6
4670.1
3791.3
447.4
496.6
4059.8
4788.0
3995.6
473.7
522.6
4156.8
4890.9
4210.3
501.0
547.8
4242.4
4976.6
4431.0
528.9
575.1
4313.4
6.3
6.0
6.2
6.3
6.0
6.1
6.6
70
7.0
1.2
1.2
1.3
1.3
1.3
1.4
1.4
1.4
1.5
1.1
1.1
1.2
1.2
1.2
1.2
1.3
1.2
1.3
1.3
1.4
1.3
1.4
1.3
1.5
1.4
1.5
1.4
1.5
144.7
1.6
148.0
1.7
160.1
1.7
173.1
1.8
185.2
1.8
201.2
1.9
217.9
2.0
231.5
2.1
237.8
-66.4
-108.0
-136.9
-181.6
-192.7
-184.6
-188.3
-190.3
-186.3
1.2
1.0
0.2
1.3
1.1
0.2
1.4
1.2
0.2
1.4
1.2
0.2
1.5
1.2
0.3
1.5
1.2
0.3
1.5
1.1
0.4
1.4
1.1
04
1.4
1.0
0.4
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
Financial Markets
Prime Rate
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix A
DRI/McGraw-Hill
Page 1
�Appendix A
National Economic Indicators Levels
Universal Coverage Simulation
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
Population Labor Market Measures (million)
Labor Force
Resident Population
Unemployment Rate (%)
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
Financial Markets
Prime Rate
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
DRI/McGraw-Hill
Page 2
1996
1997
1998
1999
2000
5548.4
7411.1
7393.7
-186.0
1503.6
1703.6
5714.6
7820.0
7793.5
-199.6
1594.7
1792.3
5890.6
8298.5
8253.9
-248.2
1706.5
1953.2
6007.2
8741.5
8681.4
-289.1
1800.6
2086.7
6114.9
9197.7
9130.6
-320.7
1899.6
2217.2
117.2
0.6
17.3
5.8
27.6
6.9
34.0
2.7
17.1
119.7
0.6
17.3
5.8
28.1
7.0
35.3
2.7
17.5
122.1
0.6
17.3
5.9
28.5
7.1
36.7
2.7
17.9
123.9
0.6
17.1
5.9
28.8
7.2
37.9
2.7
18.3
125.1
0.6
16.9
5.9
28.9
7.3
38.9
2.7
18.7
134.0
266.1
5.9
135.9
268.5
5.7
138.0
270.9
5.3
139.9
273.3
5.5
141.6
275.6
5.8
4571.2
3608.5
423.3
471.2
3976.8
4695.0
3801.5
448.4
496.8
4083.3
4853.2
4023.1
476.4
521.9
4218.3
4961.3
4238.6
503.8
541.9
4308.3
5042.2
4448.1
530.6
567.0
4375.6
6.1
6.4
7.4
7.8
7.6
1.3
1.4
1.4
1.5
1.5
1.3
1.3
1.4
1.3
1.4
1.3
1.5
1.4
1.5
1.5
1.8
185.4
1.8
201.5
1.9
218.6
2.0
230.9
2.1
235.7
-194.1
-188.8
-199.3
-204.0
-199.7
1.5
1.2
0.3
1.5
1.2
0.3
1.4
1.1
0.4
1.4
1.0
0.4
1.4
1.0
0.4
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix A
�Appendix A
National Economic Indicators
Employer Mandate Simulation
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
Population Labor Market Measures (million)
Labor Force
Resident Population
Unemployment Rate (%)
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
Financial Markets
Prime Rate
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix A
1996
1997
1998
1999
2000
5542.7
7406.7
7389.3
-189.3
1501.1
1704.4
5702.1
7819.8
7793.0
-204.3
1589.9
1792.2
5855.7
8315.5
8269.2
-256.4
1692.7
1947.6
5961.2
8780.7
8718.4
-303.9
1791.9
2092.8
6062.2
9255.5
9185.5
-341.1
1894.9
2233.1
117.2
0.6
17.3
5.8
27.5
6.9
34.0
2.7
17.1
119.5
0.6
17.2
5.8
28.0
7.0
35.3
2.7
17.5
121.7
0.6
17.2
5.9
28.4
7.1
36.6
2.7
17.9
123.2
0.6
17.0
5.9
28.6
7.2
37.7
2.7
18.3
124.4
0.6
16.7
5.8
28.7
7.2
38.7
2.7
18.7
134.0
266.1
6.0
135.9
268.5
5.8
137.9
270.9
5.6
139.8
273.3
5.8
141.4
275.6
6.1
4570.9
3606.4
430.5
471.0
3977.1
4692.6
3796.7
476.4
496.8
4082.5
4846.1
4014.7
564.2
521.8
4216.2
4940.9
4229.6
595.6
541.0
4295.3
5017.8
4445.3
628.7
564.4
4359.2
6.1
6.4
7.6
8.2
8.2
1.3
1.4
1.4
1.5
1.5
1.3
1.3
1.4
1.3
1.4
1.3
1.5
1.4
1.6
1.5
1.8
185.2
1.8
201.2
1.9
217.9
2.0
230.4
2.1
234.2
-192.7
-184.7
-189.3
-190.4
-187.0
1.5
1.2
0.3
1.5
1.1
0.3
1.4
1.1
0.3
1.4
1.0
0.3
1.3
1.0
0.4
DRI/McGraw-Hill
PageS
�Appendix A
National Economic Indicators - Levels
Corporate Assessment Tax Simulation
1996
1997
1998
1999
2000
5539.4
7408.3
7390.9
-185.7
1505.8
1705.5
5698.6
7826.4
7799.7
-200.4
1596.0
1794.4
5851.9
8326.1
8279.6
-252.4
1700.0
1950.9
5956.2
8793.6
8731.1
-300.2
1799.9
2097.1
6056.6
9271.4
9200.9
-337.5
1903.9
2238.5
117.2
0.6
17.3
5.8
27.5
6.9
34.0
2.7
17.1
119.5
0.6
17.2
5.8
28.0
7.0
35.2
2.7
17.5
121.7
0.6
17.2
5.9
28.4
7.1
36.6
2.7
17.8
123.2
0.6
17.0
5.9
28.5
7.2
37.7
2.7
18.2
124.3
0.6
16.7
5.8
28.6
7.2
38.7
2.7
18.7
Population & Labor Market Measures (million)
Labor Force
134.0
Resident Population
266.1
Unemployment Rate (%)
6.0
135.9
268.5
5.8
137.9
270.9
5.6
139.7
273.3
5.9
141.4
275.6
6.2
4567.6
3605.8
430.4
471.1
3974.3
4687.2
3796.4
476.3
496.9
4078.0
4840.1
4016.3
564.4
521.7
4211.2
4934.0
4232.0
595.9
540.7
4289.5
5010.5
4448.7
629.1
563.9
4353.1
6.1
6.5
7.7
8.3
8.3
1.3
1.4
1.4
1.5
1.5
1.3
1.3
1.4
1.3
1.4
1.3
1.5
1.4
1.6
1.5
1.8
185.1
1.9
201.3
1.9
217.9
2.0
230.5
2.1
234.3
•191.8
-183.2
-188.0
-188.4
-184.6
1.5
1.2
0.3
1.5
1.2
0.3
1.4
1.1
0.3
1.4
1.0
0.3
1.3
1.0
0.4
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
Financial Markets
Prime Rate
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
DRI/McGraw-Hill
Page 4
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix A
�Appendix A
National Economic Indicators - Levels
Additional Taxes Simulation
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Sen/ices
Population Labor Market Measures (million)
Labor Force
Resident Population
Unemployment Rate (%)
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
Financial Markets
Prime Rate
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix A
1996
1997
1998
1999
2000
5524.2
7400.8
7383.7
-182.1
1511.4
1707.4
5689.6
7827.7
7802.0
-189.3
1608.6
1795.9
5839.5
8324.3
8279.3
-240.5
1712.8
1951.9
5946.1
8794.6
8734.1
-286.0
1813.6
2096.7
6047.0
9271.9
9203.4
-322.5
1917.0
2236.4
117.0
0.6
17.2
5.8
27.5
6.9
33.9
2.7
17.1
119.3
0.6
17.2
5.8
27.9
7.0
35.2
2.7
17.5
121.5
0.6
17.2
5.9
28.3
7.1
36.5
2.7
17.8
123.0
0.6
17.0
5.9
28.5
7.2
37.7
2.7
18.2
124.2
0.6
16.7
5.8
28.6
7.2
38.7
2.7
18.6
133.9
266.1
6.1
135.8
268.5
5.9
137.8
270.9
5.7
139.7
273.3
5.9
141.3
275.6
6.3
4552.9
3599.6
429.8
471.0
3961.7
4672.4
3791.7
475.9
497.5
4062.6
4823.8
4011.6
563.9
522.0
4193.3
4916.4
4226.8
595.3
541.2
4270.7
4992.8
4443.5
628.5
564.4
4334.1
6.0
6.5
7.7
8.3
8.3
1.3
1.4
1.4
1.5
1.5
1.3
1.3
1.4
1.3
1.4
1.3
1.5
1.4
1.6
1.5
1.8
184.2
1.9
200.5
1.9
216.8
2.0
229.6
2.1
233.5
-187,3
-179.5
-183.5
-183.5
-179.3
1.5
1.2
0.3
1.5
1.2
0.3
1.4
1.1
0.3
1.4
1.0
0.3
1.3
1.0
0.4
;
DRI/McGraw-Hill
PageS
�Appendix A
National Economic Indicators - Levels
Spending Caps Simulation
1996
1997
1998
1999
2000
5529.8
7403.9
7386.8
-177.8
1512.3
1704.0
5708.1
7840.2
7814.0
-175.7
1611.9
1785.6
5829.0
8243.2
8201.9
-208.2
1692.6
1899.2
5960.4
8679.3
8628.9
-213.1
1787.1
1997.3
6104.3
9153.0
9097.1
-209.4
1890.3
2096.7
117.0
0.6
17.2
5.8
27.5
6.9
33.9
2.7
17.1
119.5
0.6
17.2
5.8
28.0
7.0
35.3
2.7
17.5
121.5
0.6
17.2
5.9
28.3
7.1
36.4
2.7
17.8
123.0
0.6
17.0
5.9
28.6
7.2
37.4
2.7
18.2
124.7
0.6
17.0
5.9
28.9
7.3
38.4
2.7
18.6
Population & Labor Market Measures (million)
Labor Force
133.9
266.1
Resident Population
6.1
UnEmployment Rate %)
135.9
268.5
5.8
137.9
270.9
5.7
139.7
273.3
5.9
141.4
275.6
5.9
4555.6
3601.7
430.0
471.1
3963.6
4683.0
3801.9
476.9
497.5
4070.5
4810.4
4006.5
520.0
519.3
4176.6
4897.6
4212.6
529.5
543.6
4247.1
4987.6
4441.1
550.2
572.3
4319.9
6.0
6.6
7.0
7.1
7.1
1.3
1.4
1.4
1.5
1.5
1.3
1.3
1.4
1.3
1.4
1.3
1.5
1.4
1.5
1.4
1.8
184.6
1.9
201.7
1.9
218.4
2.0
232.3
2.1
238.7
-188.4
-185.0
-186.8
-185.5
-185.9
1.5
1.2
0.3
1.5
1.2
0.3
1.4
1.1
0.4
1.4
1.1
0.4
1.4
1.0
0.4
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
Financial Markets
Prime Rate
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
DRI/McGraw-Hill
PageS
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix A
�Appendix B:
National Economic Indicators
Differences Between Simulations
for Key Macroeconomic Variables
�Appendix B
National Economic Indicators
Differences Between Universal Coverage and Baseline Simulations
for Key Macroeconomic Variables
1996
1997
1998
1999
2000
7.145
11.145
10.673
-6.153
3.440
9.593
16.717
31.239
29.004
-20.305
9.525
29.830
39.370
82.800
75.365
-66.110
29.016
95.125
14.269
66.464
54.473
-91.861
23.355
115.216
-7.140
49.344
36.933
-112.953
21.582
134.535
0.064
0.000
0.016
0.003
0.019
0.003
0.021
0.000
0.001
0.204
0.000
0.035
0.009
0.041
0.009
0.106
0.000
0.006
0.508
0.001
0.060
0.017
0.054
0.021
0.349
0.000
0.031
0.425
-0.002
-0.053
0.006
-0.021
0.011
0.494
0.000
0.082
0.050
-0.005
-0.198
-0.027
-0.174
-0.021
0.493
0.000
0.149
Population & Labor Market Measures (million]
0.011
Labor Force
0.000
Resident Population
-0.045
Unemployment Rate (%)
0.043
0.000
-0.123
0.117
0.000
-0.299
0.144
0.000
-0.179
0.070
0.000
0.031
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
8.691
3.085
0.306
0.337
8.227
24.878
10.180
1.010
0.141
23.445
65.211
27.436
2.722
-0.725
61.478
70.396
28.256
2.803
-5.990
65.975
65.563
17.081
1.694
-8.086
62.196
Financial Markets
Prime Rate
0.089
0.284
0.794
0.800
0.622
0.000
0.001
0.005
0.008
0.010
0.000
0.000
0.001
0.001
0.003
0.003
0.005
0.005
0.006
0.006
0.000
0.173
0.001
0.324
0.004
0.678
0.007
-0.657
0.009
-2.102
Foreign Trade (billion $)
Current Account Balance
-1.361
-4.177
-10.989
-13.657
-13.376
Other Activity Measure
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
0.000
-0.001
0.001
-0.009
-0.008
-0.001
-0.032
-0.026
-0.006
-0.065
-0.046
-0.019
-0.060
-0.042
-0.018
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix B
DRI/McGrnw-Hill
Page 1
�Appendix B
National Economic Indicators
Differences Between Employer Mandate and Universal Coverage Simulations
for Key Macroeconomic Variables
1996
1997
1998
1999
2000
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
-5.681
-4.436
-4.409
-3.259
-2.506
0.753
-12.448
-0.252
-0.438
-4.689
-4.817
-0.128
-34.878
17.023
15.240
-8.177
-13.833
-5.657
-45.996
39.219
37.025
-14.836
-8.737
6.098
-52.681
57.788
54.890
-20.487
-4.622
15.865
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
-0.049
0.000
-0.015
-0.002
-0.019
-0.002
-0.007
0.000
-0.001
-0.150
-0.001
-0.041
-0.008
-0.052
-0.006
-0.024
0.000
-0.004
-0.374
-0.001
-0.102
-0.019
-0.119
-0.013
-0.059
0.000
-0.013
-0.645
-0.001
-0.141
-0.037
-0.207
-0.026
-0.125
0.000
-0.033
-0.709
-0.001
-0.129
-0.040
-0.216
-0.028
-0.148
0.000
-0.061
Population & Labor Market Measures (million)
Labor Force
-0.004
Resident Population
0.000
Unemployment Rate (%)
0.036
-0.018
0.000
0.095
-0.045
0.000
0.243
-0.136
0.000
0.365
-0.189
0.000
0.375
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
-0.263
-2.045
7.197
-0.195
0.265
-2.442
-4.801
27.924
0.020
-0.742
-7.106
-8.402
87.767
-0.132
-2.162
-20.354
-8.946
91.813
-0.883
-13.036
-24.324
-2.825
98.120
-2.581
-16.343
Financial Markets
Prime Rate
-0.026
0.009
0.194
0.410
0.563
0.001
0.003
0.011
0.018
0.023
0.001
0.000
0.004
0.000
0.016
0.001
0.020
0.004
0.023
0.006
0.002
-0.196
0.008
-0.342
0.025
-0.720
0.030
-0.486
0.035
-1.423
1.373
4.121
10.040
13.585
12.698
-0.005
-0.003
-0.002
-0.011
-0.007
-0.004
-0.034
-0.021
-0.012
-0.022
-0.013
-0.009
-0.030
-0.019
-0.010
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measure
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
DRI/McGraw-Hill
Page 2
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix B
�Appendix B
National Economic Indicators
Differences Between Additional Taxes and Employer Mandate Simulations
for Key Macroeconomic Variables
1996
1997
1998
1999
2000
-18.507
-5.940
-5.629
7.192
10.266
3.074
-12.508
7.877
8.970
14.998
18.681
3.683
-16.180
8.737
10.115
15.822
20.145
4.324
-15.142
13.900
15.674
17.911
21.750
3.838
-15.196
16.334
17.878
18.685
22.052
3.367
-0.213
-0.001
-0.063
-0.010
-0.077
-0.008
-0.034
0.000
-0.002
-0.247
0.000
-0.044
-0.015
-0.101
-0.011
-0.051
0.000
-0.016
-0.232
0.000
-0.029
-0.011
-0.097
-0.007
-0.046
0.000
-0.044
-0.258
0.000
-0.027
-0.012
-0.108
-0.008
-0.061
0.000
-0.054
-0.249
0.001
-0.018
-0.010
-0.105
-0.007
-0.065
0.000
-0.060
Population & Labor Market Measures (million)
Labor Force
-0.045
Resident Population
0.000
0.135
Unemployment Rate (%)
-0.076
0.000
0.120
-0.083
0.000
0.112
-0.089
0.000
0.120
-0.089
0.000
0.112
-17.983
-6.863
-0.681
-0.087
-15.355
-20.161
-5.008
-0.497
0.675
-19.940
-22.304
-3.032
-0.301
0.201
-22.830
-24.480
-2.770
-0.275
0.234
-24.563
-25.056
-1.775
-0.176
-0.018
-25.081
-0.059
0.041
0.055
0.070
0.093
0.003
0.004
0.005
0.006
0.007
0.002
0.000
0.003
0.001
0.004
0.002
0.004
0.002
0.005
0.002
0.003
-0.923
0.005
-0.706
0.005
-1.100
0.006
-0.773
0.007
-0.709
5.400
5.204
5.766
6.899
7.675
-0.007
-0.004
-0.003
0.011
0.008
0.003
0.004
0.003
0.000
0.006
0.005
0.002
0.004
0.003
0.001
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
Financial Markets
Prime Rate
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix B
DRI/McGraw-Hill
Page 3
�Appendix B
National Economic Indicators
Differences Between Spending Caps and Additional Taxes Simulations
for Key Macroeconomic Variables
1996
1997
1998
5.608
3.160
3.151
4.324
0.888
-3.436
18.469
12.568
11.944
13.551
3.273
-10.277
-10.535
-81.103
-77.417
32.383
-20.255
-52.639
14.305
-115.343
-105.185
72.864
-26.517
-99.381
57.308
-118.907
-106.274
113.042
-26.650
-139.692
0.047
0.000
0.014
0.002
0.012
0.002
0.012
0.000
0.000
0.239
0.001
0.058
0.010
0.057
0.010
0.081
0.000
0.002
-0.011
0.000
-0.003
0.003
0.050
-0.002
-0.101
0.000
0.008
0.020
0.000
0.065
0.009
0.124
-0.002
-0.274
0.000
0.009
0.597
0.004
0.259
0.050
0.352
0.037
-0.266
0.000
-0.023
Population & Labor Market Measures (million)
Labor Force
0.009
Resident Population
0.000
Unemployment Rate (%)
-0.032
0.055
0.000
-0.145
0.018
0.000
0.046
-0.002
0.000
-0.037
0.105
0.000
-0.372
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
2.668
2.109
0.209
0.098
1.899
10.618
10.286
1.020
-0.023
7.886
-13.345
-5.185
-43.914
-2.726
-16.760
-18.817
-14.215
-65.810
2.415
-23.681
-5.189
-2.467
-78.345
7.935
-14.281
Financial Markets
Prime Rate
0.023
0.121
-0.621
-1.140
-1.184
-0.001
-0.002
-0.011
-0.023
-0.034
0.000
0.000
0.001
0.001
-0.007
-0.001
-0.015
-0.005
-0.021
-0.009
0.000
0.399
0.001
1.272
-0.012
1.624
-0.022
2.626
-0.033
5.131
-1.123
-5.484
-3.302
-2.040
-6.627
0.007
0.005
0.002
0.010
0.007
0.003
0.027
0.022
0.005
0.067
0.047
0.020
0.091
0.062
0.029
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
1999
2000
1
DRI/McGraw-Hill
Page 4
•—
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix B
�Appendix B
National Economic Indicators
Differences Between Corporate Assessment Tax and Employer Mandate Simulations
for Key Macroeconomic Variables
1996
1997
1998
1999
2000
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
-3.290
1.648
1.615
3.550
4.698
1.148
-3.553
6.568
6.623
3.870
6.077
2.207
-3.836
10.540
10.492
3.977
7.315
3.339
-5.001
12.877
12.751
3.746
8.056
4.310
-5.610
15.826
15.450
3.602
8.990
5.388
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
-0.030
0.000
-0.010
-0.001
-0.010
-0.001
-0.004
0.000
-0.001
-0.062
0.000
-0.014
-0.004
-0.022
-0.003
-0.013
0.000
-0.004
-0.057
0.000
-0.007
-0.004
-0.020
-0.002
-0.012
0.000
-0.011
-0.074
0.000
-0.009
-0.004
-0.024
-0.002
-0.016
0.000
-0.017
-0.084
0.000
-0.009
-0.004
-0.027
-0.003
-0.019
0.000
-0.019
Population & Labor Market Measures (million
Labor Force
-0.006
0.000
Resident Population
0.020
Unemployment Rate (%)
-0.017
0.000
0.033
-0.020
0.000
0.027
-0.024
0.000
0.036
-0.028
0.000
0.040
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
-3.323
-0.693
-0.069
0.027
-2.838
-5.387
-0.228
-0.023
0.143
-4.552
-5.916
1.632
0.162
-0.061
-5.014
-6.857
2.404
0.238
-0.288
-5.757
-7.309
3.418
0.339
-0.460
-6.133
0.007
0.050
0.084
0.093
0.113
0.001
0.002
0.003
0.003
0.004
0.002
0.000
0.002
0.001
0.003
0.001
0.004
0.001
0.004
0.002
0.003
-0.057
0.004
0.121
0.005
0.074
0.005
0.097
0.006
0.109
0.901
1.480
1.290
1.967
2.383
-0.002
-0.001
-0.001
-0.003
-0.001
-0.001
-0.003
-0.002
-0.001
Financial Markets
Prime Rate
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix B
-0.003
-0.002
-0.001
0.001 •
0.001
0.000
DRI/McGraw-Hill
Page 5
�Appendix C:
National Economic Indicators
Differences Between Baseline and
Simulations for Key Macroeconomic
Variables
�Appendix C
National Economic Indicators
Differences Between Baseline and Universal Coverage Simulations
for Key Macroeconomic Variables
1997
1998
7.145
11.145
10.673
-6.153
3.440
9.593
16.717
31.239
29.004
-20.305
9.525
29.830
39.370
82.800
75.365
-66.110
29.016
95.125
14.269
66.464
54.473
-91.861
23.355
115.216
-7.140
49.344
36.933
-112.953
21.582
134.535
0.064
0.000
0.016
0.003
0.019
0.003
0.021
0.000
0.001
0.204
0.000
0.035
0.009
0.041
0.009
0.106
0.000
0.006
0.508
0.001
0.060
0.017
0.054
0.021
0.349
0.000
0.031
0.425
-0.002
-0.053
0.006
-0.021
0.011
0.494
0.000
0.082
0.050
-0.005
-0.198
-0.027
-0.174
-0.021
0.493
0.000
0.149
Population & Labor Market Measures (million)
Labor Force
0.011
Resident Population
0.000
Unemployment Rate (%)
-0.045
0.043
0.000
-0.123
0.117
0.000
-0.299
0.144
0.000
-0.179
0.070
0.000
0.031
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
8.691
3.085
0.306
0.337
8.227
24.878
10.180
1.010
0.141
23.445
65.211
27.436
2.722
-0.725
61.478
70.396
28.256
2.803
-5.990
65.975
65.563
17.081
1.694
-8.086
62.196
Financial Markets
Prime Rate
0.089
0.284
0.794
0.800
0.622
0.000
0.001
0.005
0.008
0.010
0.000
0.000
0.001
0.001
0.003
0.003
0.005
0.005
0.006
0.006
0.000
0.173
0.001
0.324
0.004
0.678
0.007
-0.657
0.009
-2.102
Foreign Trade (billion $)
Current Account Balance
-1.361
-4.177
-10.989
-13.657
-13.376
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
0.000
-0.001
0.001
-0.009
-0.008
-0.001
-0.032
-0.026
-0.006
-0.065
-0.046
-0.019
-0.060
-0.042
-0.018
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment (million)
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix C
1999
2000
1996
DRI/McGraw-Hill
Pagel
�Appendix C
National Economic Indicators
Differences Between Baseline and Employer Mandate Simulations
for Key Macroeconomic Variables
1997
1998
1.464
6.709
6.264
-9.412
0.934
10.346
4.269
30.987
28.566
-24.994
4.708
29.702
4.491
99.823
90.605
-74.286
15.182
89.468
-31.727
105.683
91.498
-106.697
14.617
121.314
-59.820
107.131
91.823
-133.440
16.960
150.400
0.015
0.000
0.001
0.001
0.000
0.001
0.015
0.000
0.000
0.053
0.000
-0.006
0.001
-0.011
0.004
0.081
0.000
0.003
0.134
-0.001
-0.042
-0.002
-0.065
0.008
0.291
0.000
0.018
-0.220
-0.003
-0.194
-0.031
-0.228
-0.015
0.369
0.000
0.048
-0.659
-0.005
-0.327
-0.067
-0.389
-0.049
0.345
0.000
0.088
Population & Labor Market Measures (million)
Labor Force
0.007
Resident Population
0.000
Unemployment Rate (%)
-0.009
0.025
0.000
-0.028
0.072
0.000
-0.056
0.007
0.000
0.186
-0.119
0.000
0.406
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
8.428
1.040
7.503
0.142
8.492
22.436
5.379
28.934
0.161
22.703
58.106
19.033
90.488
-0.857
59.316
50.042
19.311
94.616
-6.873
52.940
41.238
14.256
99.814
-10.668
45:853
Financial Markets
Prime Rate
0.063
0.294
0.988
1.211
1.185
0.001
0.004
0.016
0.025
0.032
0.001
0.000
0.005
0.001
0.019
0.004
0.025
0.009
0.030
0.012
0.002
-0.022
0.009
-0.017
0.029
-0.042
0.037
-1.143
0.044
-3.525
0.011
-0.055
-0.949
-0.072
-0.677
-0.005
-0.004
-0.001
-0.020
-0.015
-0.005
-0.066
-0.047
-0.018
-0.087
-0.059
-0.028
-0.089
-0.061
-0.028
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
DRI/McGraw-Hill
Page 2
1999
2000
1996
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix C
�Appendix C
National Economic Indicators
Differences Between Baseline and Additional Taxes Simulations
for Key Macroeconomic Variables
1996
1997
1998
•17.043
0.769
0.636
-2.220
11.200
13.420
-8.240
38.864
37.536
-9.997
23.389
33.385
-11.689
108.560
100.720
-58.464
35.328
93.792
-46.869
119.584
107.173
-88.785
36.367
125.152
-75.016
123.466
109.701
-114.756
39.012
153.767
-0.198
-0.001
-0.062
-0.009
-0.077
-0.007
-0.019
0.000
-0.002
-0.193
0.000
-0.050
-0.014
-0.112
-0.007
0.030
0.000
-0.013
-0.098
0.000
-0.071
-0.014
-0.162
0.000
0.245
0.000
-0.026
-0.478
-0.003
-0.221
-0.043
-0.336
-0.023
0.308
0.000
-0.005
-0.908
-0.005
-0.345
-0.077
-0.495
-0.056
0.280
0.000
0.028
Population & Labor Market Measures (million)
Labor Force
-0.038
Resident Population
0.000
Unemployment Rate (%)
0.126
-0.051
0.000
0.092
-0.011
0.000
0.057
-0.081
0.000
0.306
-0.208
0.000
0.518
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
-9.555
-5.823
6.822
0.055
-6.863
2.275
0.371
28.437
0.837
2.763
35.801
16.002
90.187
-0.655
36.486
25.561
16.541
94.341
-6.639
28.376
16.182
12.481
99.638
-10.685
20.772
0.003
0.335
1.043
1.280
1.278
0.004
0.009
0.021
0.032
0.039
0.003
0.000
0.008
0.002
0.022
0.006
0.029
0.011
0.034
0.014
0.006
-0.945
0.014
-0.724
0.035
-1.142
0.043
-1.916
0.051
-4.234
5.412
5.148
4.817
6.828
6.998
-0.012
-0.008
-0.004
-0.009
-0.007
-0.002
-0.062
-0.044
-0.018
-0.081
-0.054
-0.026
-0.086
-0.058
-0.028
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
Employment
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
Financial Markets
Prime Rate
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix C
1999
2000
DRI/McGraw-Hill
Page 3
�Appendix C
National Economic Indicators
Differences Between Baseline and Spending Caps Simulations
for Key Macroeconomic Variables
1996
1997
1998
1999
2000
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
11.434
3.929
3.787
2.104
12.088
9.984
10.229
51.433
49.480
3.554
26.662
23.108
-22.223
27.457
23.303
-26.081
15.072
41.153
-32.564
4.240
1.988
-15.921
9.850
25.772
-17.709
4.559
3.427
-1.714
12.361
14.075
Employment
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
-0.151
-0.001
-0.049
-0.008
-0.065
-0.005
-0.007
0.000
-0.002
0.046
0.000
0.008
-0.003
-0.054
0.002
0.111
0.000
-0.011
-0.108
-0.001
-0.074
-0.010
-0.112
-0.002
0.144
0.000
-0.018
-0.457
-0.002
-0.157
-0.034
-0.212
-0.025
0.034
0.000
0.003
-0.311
-0.001
-0.087
-0.027
-0.143
-0.019
0.014
0.000
0.005
Population & Labor Market Measures (million)
Labor Force
-0.029
Resident Population
0.000
Unemployment Rate (%)
0.094
0.003
0.000
-0.053
0.007
0.000
0.103
-0.083
0.000
0.269
-0.103
0.000
0.146
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
-6.887
-3.714
7.032
0.153
-4.964
12.893
10.658
29.457
0.813
10.649
22.456
10.816
46.273
-3.381
19.726
6.744
2.327
28.531
-4.223
4.695
10.994
10.014
21.293
-2.750
6.491
0.026
0.456
0.423
0.140
0.094
0.003
0.007
0.010
0.009
0.005
0.003
0.000
0.009
0.003
0.015
0.005
0.014
0.006
0.013
0.006
0.006
-0.547
0.014
0.548
0.022
0.483
0.021
0.710
0.018
0.897
4.289
-0.336
1.515
4.788
0.371
-0.005
-0.003
-0.002
0.000
-0.001
0.001
-0.034
-0.022
-0.013
-0.014
-0.007
-0.006
0.005
0 003
0.002
Financial Markets
Prime Rate
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
-- -• •
DRI/McGraw-Hill
Page 4
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix C
�Appendix C
National Economic Indicators
Differences Between Baseline and Corporate Assessment Tax Simulations
for Key Macroeconomic Variables
1998
1999
2000
1996
1997
Real GDP (billion $)
Gross Domestic Product
Gross National Product
Federal Deficit
Federal Receipts
Federal Expenditures
-1.826
8.357
7.880
-5.862
5.632
11.494
0.716
37.555
35.189
-21.125
10.785
31.910
0.655
110.363
101.097
-70.309
22.498
92.807
-36.728
118.561
104.250
-102.951
22.674
125.624
-65.430
122.957
107.273
-129.838
25.950
155.788
Employment
Total Non-Agricultural
Mining
Construction
Total Manufacturing
Transportation and Utilities
Trade
Finance Insurance and Real Estate
Services
-0.016
0.000
-0.009
-0.001
-0.009
0.000
0.010
0.000
-0.001
-0.009
0.000
-0.020
-0.003
-0.033
0.001
0.068
0.000
-0.001
0.076
-0.001
-0.049
-0.006
-0.085
0.006
0.279
0.000
0.007
-0.294
-0.003
-0.204
-0.035
-0.252
-0.017
0.353
0.000
0.032
-0.743
-0.005
-0.336
-0.071
-0.416
-0.052
0.326
0.000
0.069
Population & Labor Market Measures (million)
Labor Force
0.000
Resident Population
0.000
Unemployment Rate (%)
0.011
0.008
0.000
0.005
0.051
0.000
-0.028
-0.017
0.000
0.222
-0.147
0.000
0.446
Income (billions of dollars-annual rates)
Real Personal Income
Wage and Salary Disbursements
Nontaxable - Non wage Personal Income
Taxable - Non wage Personal Income
Real Discretionary Income
5.105
0.346
7.434
0.169
5.654
17.049
5.151
28.911
0.304
18.151
52.190
20.665
90.650
-0.918
54.302
43.185
21.714
94.854
-7.162
47.183
33.930
17.674
100.153
-11.127
39.720
Financial Markets
Prime Rate
0.070
0.343
1.072
1.303
1.298
0.002
0.006
0.019
0.029
0.036
0.003
0.000
0.008
0.001
0.022
0.005
0.029
0.010
0.034
0.014
0.005
-0.080
0.013
0.103
0.034
0.032
0.043
-1.046
0.050
-3.416
0.913
1.425
0.341
1.895
1.706
-0.008
-0.006
-0.003
-0.020
-0.014
-0.005
-0.067
-0.048
-0.019
-0.089
-0.060
-0.029
-0.093
-0.063
-0.030
Prices and Wages
Producer Price Index - Finished Goods
Employment Cost Index
Compensation
Wages and Salaries
Average Hourly Earnings
Compensation per Hour
Average Price of New Single-Family Home
Foreign Trade (billion $)
Current Account Balance
Other Activity Measures
Private
Housing Starts (million)
Single-Family Housing Starts
Multifamily Housing Starts
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix C
DRI/McGr:nv-Hill
PageS
�Appendix D:
Health Sector Results
�Appendix D
Health Sector Results
Consumer Spending - Medical Care Services - Current Dollars
1996
1997
1998
1999
2000
1189.5
1202.0
1203.0
1084.0
1204.3
1282.5
1299.3
1299.8
1150.9
1302.1
7.9
8.3
8.3
5.3
8.3
7.8
8.1
8.1
6.2
8.1
Bill ion Dollars
Universal Coverage
Employer Mandate
Additional Taxes
Spending Caps
Corporate Assessment Tax
888.5
888.8
888.9
887.0
889.2
981.7
983.2
983.9
978.0
984.4
1102.8
1109.7
1110.8
1029.9
1111.6
Escalation Rates
Universal Coverage
Employer Mandate
Additional Taxes
Spending Caps
Corporate Assessment Tax
9.5
9.5
9.5
9.3
9.5
10.5
10.6
10.7
10.3
10.7
12.3
12.9
12.9
5.3
12.9
Health Sector Results
Real Consumer Spending for Medical Care Services
1996
1997
1998
1999
2000
616.6
615.1
613.6
583.2
614.7
633.3
631.0
629.1
597.7
630.5
2.9
2.8
2.7
1.9
2.8
2.7
2.6
2.5
2.5
2.6
Billion Dollars
Universal Coverage
Employer Mandate
Additional Taxes
Spending Caps
Corporate Assessment Tax
526.2
526.2
525.9
527.6
526.1
556.8
556.6
555.9
560.9
556.4
599.0
598.3
597.2
572.4
598.0
Escalation Rates
Universal Coverage
Employer Mandate
Additional Taxes
Spending Caps
Corporate Assessment Tax
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix D
4.5
4.5
4.4
4.8
4.5
5.8
5.8
5.7
6.3
5.8
7.6
7.5
7.4
2.0
7.5
DRI/McGraw-Hill
Pagel
�Appendix D
Health Sector Results
Implicit Price Deflator - Consumer Spending - Medical Care Services
1996
1997
1998
1999
2000
1.9
2.0
2.0
1.9
2.0
2.0
2.1
2.1
1.9
2.1
4.4
5.0
5.1
3.2
5.1
4.8
5.4
5.4
3.3
5.4
5.0
5.4
5.4
3.6
5.4
1998
1999
2000
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.9
1.0
0.9
-0.5
1.0
0.9
0.9
0.8
0.1
0.9
Index Levels
1.7
1.7
1.7
1.7
1.7
Universal Coverage
Employer Mandate
Additional Taxes
Spending Caps
Corporate Assessment Tax
1.8
1.8
1.8
1.7
1.8
1.8
1.9
1.9
1.8
1.9
Escalation Rates
%
Universal Coverage
Employer Mandate
Additional Taxes
Spending Caps
Corporate Assessment Tax
4.7
4.8
4.8
4.3
4.8
4.4
4.6
4.7
3.7
4.7
Health Sector Results
Medical Share of G D P
1996
1997
Levels
Universal Coverage
Employer Mandate
Additional Taxes
Spending Caps
Corporate Assessment Tax
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
:
0.1
0.1
0.1
0.1
0.1
Escalation Rates
Universal Coverage
Employer Mandate
Additional Taxes
Spending Caps
Corporate Assessment Tax
1.9
2.0
2.2
2.4
2.0
2.7
2.8
2.6
3.0
2.8
4.4
4.7
4.7
-0.2
4.7
-
DRI/McGraw-Hill
Page 2
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix D
�I
dix
Appen Eindustry impacts
�Appendix E
Change in Compensation Due to Higher Net Insurance Costs
(Percent)
SIC and Industry Name
01-09 Agriculture, Forestry, Fisheries
10, 12 & 14 Mining (exc. Oil & Gas Extrac.)
13 Oil & Gas Extraction
15-17 Construction
20 Food & Kindred Products
21 Tobacco Manufacturers
22 Textile Mill Products
23 Apparel
24 Lumber & Wood Products
25 Fum. & Fixtures
26 Paper & Allied Products
27 Printing & Publishing
28 Chemicals
29 Petroleum Refining
30 Rubber & Misc. Plastics
31 Leather
32 Stone
33 Primary Metals
34 Fabricated Metal Products
35 Nonelectrical Machinery
36 Electrical Machinery
37 Transporation Equipment
38 Instruments
39 Miscellaneous Manufacturing
40 -42, 44-47 Transportation Services
48 Communications
49 Utilities
50 & 51 Wholesale Trade
52-59 Retail Trade
60 Banking
61-62,67 Misc. Financial
63-64 Insurance Carriers & Agents
65-66 Real Estate
70, 72, 76, 78, 79 Personal Services
73, 81,87, 89 Business Services
75 Auto Repair & Rental
80 Health Services
82-84 Educational & Non-profit Services
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix E
1995
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1996
0.34
0.04
0.03
0.12
0.06
0.03
0.05
0.14
0.09
0.09
0.02
0.06
0.02
0.01
0.05
0.11
0.05
0.02
0.05
0.03
0.02
0.01
0.03
0.10
0.05
0.04
0.04
0.07
0.28
0.07
0.04
0.05
0.09
0.27
0.11
0.15
0.11
0.18
1997
1.29
0.16
0.13
0.45
0.21
0.11
0.20
0.55
0.35
0.34
0.07
0.23
0.07
0.05
0.20
0.43
0.17
0.08
0.18
0.10
0.09
0.06
0.11
0.38
0.20
0.14
0.14
0.25
1.08
0.25
0.15
0.21
0.33
1.03
0.41
0.56
0.42
0.67
1998
1.96
0.24
0.20
0.67
0.32
0.17
0.30
0.82
0.52
0.52
0.11
0.35
0.10
0.07
0.30
0.65
0.26
0.12
0.28
0.15
0.14
0.08
0.17
0.57
0.31
0.22
0.22
0.38
1.63
0.38
0.22
0.31
0.49
1.56
0.61
0.84
0.63
1.01
1999
1.46
0.18
0.15
0.50
0.24
0.13
0.23
0.61
0.39
0.39
0.08
0.26
0.08
0.05
0.22
0.48
0.19
0.09
0.21
0.11
0.10
0.06
0.12
0.42
0.23
0.16
0.16
0.28
1.22
0.28
0.16
0.23
0.37
1.16
0.46
0.63
0.47
0.75
2000
0.97
0.12
0.10
0.33
0.16
0.09
0.15
0.41
0.26
0.26
0.06
0.17
0.05
0.04
0.15
0.32
0.13
0.06
0.14
0.07
0.07
0.04
0.08
0.28
0.15
0.11
0.11
0.19
0.81
0.19
0.11
0.16
0.24
0.77
0.30
0.42
0.31
0.50
DRI/McGraw-Hill
Page 1
�Employment by Industry: Base Case
(Thousands)
SIC and Industry Name
01-09 Agriculture, Forestry, Fisheries
10, 12, 14 Mining (exc. Oil & Gas Extrac.)
13 Oil & Gas Extraction
15-17 Construction
20 Food & Kindred Products
21 Tobacco Manufacturers
22 Textile Mill Products
23 Apparel
24 Lumber & Wood Products
25 Furn. & Fixtures
26 Paper & Allied Products
27 Printing & Publishing
28 Chemicals
29 Petroleum Refining
30 Rubber & Misc. Plastics
31 Leather
32 Stone
33 Primary Metals
34 Fabricated Metal Products
35 Nonelectrical Machinery
36 Electrical Machinery
37 Transporation Equipment
38 Instruments
39 Miscellaneous Manufacturing
40 -42, 44-47 Transportation Services
48 Communications
49 Utilities
50 & 51 Wholesale Trade
52-59 Retail Trade
60 Banking
61-62,67 Misc. Financial
63-64 Insurance Carriers & Agents
65-66 Real Estate
70, 72, 76-79 Personal Services
73, 81, 87, 89 Business Services
75 Auto Repair & Rental
80 Health Services
82-84 Educational & Non-profit Services
Government
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix E
1995
1996
1997
1998
1999
2000
1,784
396
397
4,878
1,635
47
644
899
715
487
674
1,532
1,074
149
917
102
528
646
1,355
1,855
1,463
1,592
837
353
3,515
1,223
1,007
6,374
20,595
2,121
1,210
2,168
1,311
5,485
10,366
893
9,324
6,531
19,397
1,782
407
407
5,069
1,635
47
635
875
726
486
675
1,566
1,086
146
927
97
531
629
1,337
1,789
1,414
1,519
827
349
3,545
1,242
1,013
6,488
21,054
2,150
1,271
2,170
1,327
5,696
10,795
897
9,766
6,790
19,801
1,786
419
419
5,168
1,631
47
629
858
735
486
676
1,590
1,095
145
953
96
531
625
1,332
1,746
1,381
1,489
834
349
3,566
1,255
1,020
6,587
21,443
2,193
1,297
2,194
1,335
5,822
11,182
911
10,228
7,030
20,167
1,791
416
435
5,223
1,624
47
617
840
732
483
675
1,607
1,100
144
977
94
528
627
1,341
1,757
1,376
1,479
842
348
3,575
1,273
1,026
6,676
21,777
2,244
1,283
2,238
1,350
5,949
11,597
917
10,595
7,246
20,529
1,791
420
457
5,222
1,616
48
600
819
722
477
668
1,619
1,097
143
989
91
520
621
1,342
1,780
1,367
1,465
847
345
3,575
1,291
1,028
6,716
22,080
2,276
1,303
2,267
1,359
6,052
12,002
929
10,975
7,417
20,911
1,784
425
464
5,220
1,604
48
582
797
711
469
659
1,627
1,089
142
995
88
512
615
1,336
1,796
1,350
1,448
845
339
3,565
1,304
1,029
6,720
22,341
2,287
1,344
2,287
1,363
6,135
12,418
939
11,316
7,568
21,284
DRI/McGraw-Hill
Page 2
�Appendix E
Employment Impacts by Industry: Years 1995 through 1997
Entire Health Care Reform Plan Relative to Base Case
(Thousands)
01-09 Agriculture, Forestry, Fisheries
10, 12 & 14 Mining (exc. Oil&Gas Extrac.)
13 Oil & Gas Extraction
15-17 Construction
20 Food & Kindred Products
21 Tobacco Manufacturers
22 Textile Mill Products
23 Apparel
24 Lumber & W o o d Products
25 Furn. & Fixtures
26 Paper 4 Allied Products
27 Printing 4 Publishing
28 Chemicals
29 Petroleum Refining
30 Rubber 4 Misc. Plastics
31 Leather
32 Stone
33 Primary Metals
34 Fabricated Metal Products
35 Nonelectrical Machinery
36 Electrical Machinery
37 Transporation Equipment
38 Inslruments
39 Miscellaneous Manufacturing
4 0 - 4 2 , 4 4 - 4 7 T r a n s p o r t a t i o n Services
4 8 Communications
4 9 Utilities
5 0 & 51 Wholesale Trade
5 2 - 5 9 Retail Trade
6 0 Banking
6 1 - 6 2 , 6 7 M i s c . Financial
6 3 - 6 4 Insurance Carriers & A g e n t s
6 5 - 6 6 Real Estate
7 0 , 72. 7 6 , 7 8 . 7 9 Personal Services
7 3 . 8 1 , 8 7 , 8 9 Business Services
75 A u t o Repair & Rental
8 0 Health Services
8 2 - 8 4 E d u c a t i o n a l & N o n - p r o f i t Services
Government
From O u t p u t
Effects
-0859
-0.032
0046
-1.862
-0.119
-0.851
-0.183
-0.412
-0.524
-0.107
-0.150
-0.116
-0.127
-0.005
-0.403
-0.002
-0.088
-0.190
-0.265
-0.094
-0.176
-0.387
-0.039
-0.055
-0.430
0.012
-0.008
-0.148
-4.573
-0.289
-0.047
0.094
-0.091
-0.331
-1.805
-0.153
1.353
-0.234
0
1995
F r o m Coverage
of U n i n s u r e d
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Total
-0.859
-0.032
0.046
-1.862
-0.119
-0.851
-0.183
-0.412
-0.524
-0.107
-0.150
-0.116
-0.127
-0.005
-0.403
-0.002
-0.088
-0.190
-0.265
-0.094
-0.176
-0.387
-0.039
-0.055
-0.430
0.012
-0.008
-0.148
-4.573
-0.289
-0.047
0.094
-0.091
-0.331
-1.805
-0.153
1.353
-0.234
0
1996
From Coverage
of U n i n s u r e d
-1.792
0.068
0.055
0.388
0.224
0.006
0.125
0.100
0.061
0.086
0.151
0.270
0.237
0.032
0.195
0.008
0.111
0.149
0.261
0.414
0.330
0.381
0.187
0.018
0.623
0.184
0.127
0.877
-6.492
0.175
0.273
0.429
-0.189
-1.748
0.830
-0.123
1.414
1.558
0
From O u t p u t
Effects
-4.392
-0.482
-0.470
-15.076
-1.996
-3.048
-1.903
-3.528
-4.373
-1.113
-2.243
-2.053
-1.949
-0.088
^.608
0.212
-1.342
-3.139
-4.859
-3.934
-2.740
-6.495
-0.854
-0.941
-5.076
-1.568
-0.745
-9.701
-54.133
-3.970
-1.749
1.639
-0.737
-15.366
-29.068
-2.712
59.296
-18.093
-1.911
Total
-6.185
-0.414
-0.415
-14.687
-1.773
-3.042
-1.778
-3.428
-4.312
-1.028
-2.092
-1.783
-1.712
-0.057
-4.413
0.220
-1.231
-2.990
-4.598
-3.521
-2.411
-6.114
-0.667
-0.923
-4.454
-1.385
-0.618
-8.824
-60.625
-3.795
-1.476
2.068
-0.927
-17.114
-28.238
-2.834
60.710
-16.535
-1.911
From O u t p u t
Effects
-3.194
0.225
-0.364
-6.738
-1.206
-3.002
-0.163
-1.700
0.389
0.079
-0.451
-0.704
1.631
0.022
3.184
-0.073
0.367
2.152
1.725
1.600
2.114
1.146
-0.242
-0.990
-2.195
-0.605
-0.423
-2.265
-51.280
-4.496
-2.573
8.590
0.897
-30.621
-39.487
-4.327
226.505
-39.667
-10.966
1997
From Coverage
of Uninsured
-8.613
0.333
0.267
1.889
1.070
0.031
0.595
0.472
0.294
0.411
0.724
1.309
1.144
0.151
0.956
0.038
0.533
0.712
1.246
1.946
1.552
1.796
0.900
0.086
2.999
0.887
0.613
4.254
-31.603
0.850
1.331
2.074
-0.914
-8.532
4.089
-0.595
7.029
7.677
0
Total
-11.807
0.558
-0.096
^.849
-0.136
-2.971
0.432
-1.229
0.683
0.489
0.273
0.605
2.774
0.173
4.140
-0.036
0.900
2.864
2.971
3.546
3.666
2.942
0.658
-0.904
0.804
0.282
0.190
1.990
-82.883
-3.646
-1.243
10.664
-0.017
-39.153
-35.398
-4.922
233.534
-31.991
-10.966
—
-
The A d m i n i s t r a t i o n ' s Health Care Reform Plan:
National Macroeconomic Effects
Appendix E
DRI/McGraw-Hill
Page 3
�Appendix E
Employment Impacts by Industry: Years 1998 through 2000
Entire Health Care Reform Plan Relative to Base Case
(Thousands)
01-09 Agriculture, Forestry, Fisheries
10, 12 & 14 Mining (exc. O i l i G a s Extrac.)
13 Oil & Gas Extraction
15-17 Conslruction
20 Food & Kindred Products
21 Tobacco Manufacturers
22 Textile Mill Products
23 Apparel
24 Lumber & W o o d Products
25 Furn. & Fixtures
26 Paper & Allied Products
27 Printing & Publishing
28 Chemicals
29 Petroleum Refining
30 Rubber 4 Misc. Plastics
31 Leather
32 Stone
33 Primary Metals
34 Fabricated Metal Products
35 Nonelectrical Machinery
36 Electrical Machinery
37 Transporation Equipmenl
38 Instruments
39 Miscellaneous Manufacturing
40 - 42, 44-47 Transportation Services
48 Communications
49 Utilities
50 & 51 Wholesale Trade
52-59 Retail Trade
60 Banking
6 1 - 6 2 . 6 7 Misc. Financial
6 3 - 6 4 Insurance Carriers & A g e n t s
6 5 6 6 Real Estate
7 0 , 7 2 . 7 6 , 7 8 , 7 9 Personal Services
7 3 , 8 1 , 8 7 , 8 9 Business Services
75 A u t o Repair & Rental
8 0 Health Services
8 2 - 8 4 Educational & N o n p r o f i t Services
Government
DRI/McGraw-Hill
Page 4
From O u t p u t
Effects
-6.248
-0.562
-0.814
-34.588
-3.800
-2.766
-4.043
-7.239
-8.165
-2.204
-3.349
-2.427
-0.248
-0.089
-9.405
-0.786
-2.521
•4.301
-6.540
-2.032
-3.352
-8.828
-1.259
-2.780
-7.459
-1.387
-1.356
-8.847
-102.583
0.601
-3 020
3.124
-2.434
-7.848
-14.056
-1.313
177.302
-8.819
-18.193
1998
From Coverage
of Uninsured
-17.161
0.663
0.547
3.786
2.117
0.062
1.166
0.921
0.584
0.812
1.437
2.624
2.281
0.298
1.940
0.074
1.055
1.415
2.483
3.861
3.062
3.541
1.801
0.171
5.973
1.781
1.223
8.542
-63.685
1.718
2.637
4.179
-1.833
-17.270
8.353
-1.193
14.394
15.644
0
Total
-23.408
0.101
-0.268
-30.803
-1.683
-2.704
-2.877
-6.318
-7.581
-1.392
-1.913
0.197
2.034
0.209
-7.465
-0.712
-1.466
-2.886
-1.057
1.829
-0.291
-5.287
0.543
-2.609
-1.486
0.394
-0.133
-0.305
-166.269
2.318
-0.383
7.303
-4.267
-25.118
-5.703
-2.506
191.697
6.825
-18.193
From O u t p u t
Effects
-6.974
-1.949
-1.611
-63.428
-7.820
-2.929
-6.061
-10.267
-9.121
-4.585
-5.692
-9.774
-5.945
-0.451
-10.619
-0.771
-4.832
-7.492
-14.933
-13.220
-10.144
-20.821
-8.292
-5.181
-21.624
-7.218
-5.261
-43.911
-166.890
-10.900
-4.804
-3.813
-5.555
-8.589
-32.872
-1.826
84.204
-5.545
3.19
1999
From Coverage
of Uninsured
-18.042
0.697
0.595
3.984
2.213
0.065
1.201
0.948
0.607
0.846
1.499
2.774
2.395
0.311
2.067
0.076
1.098
1.480
2.613
4.084
3.199
3.691
1.902
0.178
6.273
1.890
1.286
9.031
-67.707
1.828
2.773
4.443
-1.940
-18.432
9.013
-1.264
15.545
16.780
0
Total
-25.016
-1.253
-1.016
-59.444
-5.608
-2.864
^.860
-9.319
-8.514
-3.739
-1.193
-7.000
-3.550
-0.140
-8.552
-0.695
-3.734
-6.011
-12.321
-9.136
-6.945
-17.130
-6.391
-5.003
-15.351
-5.328
-3.975
-34.880
-234.597
-9.072
-2.031
0.630
-7.495
-27.021
-23.859
-3.090
99.749
11.235
3.19
From O u t p u t
Effects
-1.948
-0.888
-0.887
-52.898
-4.567
-2.879
-2.421
-5.474
-2.023
-3.315
-2.403
-8.087
-3.150
-0.261
-3.074
-0.718
-2.895
-2.220
-8.308
-7.313
-5.644
-10.608
-8.770
-1.827
-16.373
-5.701
-1.444
-33.417
-108.657
-7.059
-3.254
-3.763
-5.055
-7.276
-32.944
-1.269
57.551
-1 068
4.912
2000
F r o m Coverage
of Uninsured
-12.809
0.500
0.437
2.828
1.563
0.046
0.830
0.656
0.425
0.593
1.054
1.984
1.695
0.220
1.483
0.052
0.769
1.042
1.854
2.935
2.254
2.596
1.354
0.125
4.452
1.359
0.915
6.439
-18.761
1.311
2.013
3.192
-1.387
-13.310
6.616
-0.910
11.407
12.182
0
Total
-17.757
0.388
-0.450
-50.071
-3.005
-2.833
-1.592
-4.818
-1.598
-2.723
-1.349
-6.103
-1.456
-0.041
-1.591
-0.665
-2.127
-1.178
-6.454
-4.379
-3.391
-8.011
-7.415
-4.703
-11.921
-1.342
-3.529
-26.978
-157.417
-5.748
-1.241
-0.572
-6.442
-20.587
-26.328
-2 179
68957
11.114
4.912
The A d m i n i s t r a t i o n ' s Health Care Reform Plan:
National Macroeconomic Effects
Appendix E
�Appendix E
Change in Compensation Due to Higher Net Insurance Costs
Additional Taxes Simulation
(Percent)
SIC and Industrv Name
01-09 Agriculture, Forestry, Fisheries
10, 12 & 14 Mining (exc. Oil & Gas Extrac.)
13 Oil & Gas Extraction
15-17 Construction
20 Food & Kindred Products
21 Tobacco Manufacturers
22 Textile Mill Products
23 Apparel
24 Lumber & Wood Products
25 Furn. & Fixtures
26 Paper & Allied Products
27 Printing & Publishing
28 Chemicals
29 Petroleum Refining
30 Rubber & Misc. Plastics
31 Leather
32 Stone
33 Primary Metals
34 Fabricated Metal Products
35 Nonelectrical Machinery
36 Electrical Machinery
37 Transporation Equipment
38 Instruments
39 Miscellaneous Manufacturing
40 -42, 44-47 Transportation Services
48 Communications
49 Utilities
50 & 51 Wholesale Trade
52-59 Retail Trade
60 Banking
61-62,67 Misc. Financial
63-64 Insurance Carriers & Agents
65-66 Real Estate
70, 72, 76, 78, 79 Personal Services
73, 81,87, 89 Business Services
75 Auto Repair & Rental
80 Health Services
82-84 Educational & Non-profit Services
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix E
1995
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1996
0.34
0.04
0.03
0.12
0.06
0.03
0.05
0.14
0.09
0.09
0.02
0.06
0.02
0.01
0.05
0.11
0.05
0.02
0.05
0.03
0.02
0.01
0.03
0.10
0.05
0.04
0.04
0.07
0.28
0.07
0.04
0.05
0.09
0.27
0.11
0.15
0.11
0.18
1997
1.29
0.16
0.13
0.45
0.21
0.11
0.20
0.55
0.35
0.34
0.07
0.23
0.07
0.05
0.20
0.43
0.17
0.08
0.18
0.10
0.09
0.06
0.11
0.38
0.20
0.14
0.14
0.25
1.08
0.25
0.15
0.21
0.33
1.03
0.41
0.56
0.42
0.67
1998
3.80
0.47
0.38
1.31
0.62
0.33
0.59
1.60
1.02
1.01
0.22
0.68
0.20
0.14
0.58
1.26
0.50
0.23
0.54
0.28
0.27
0.16
0.33
1.10
0.60
0.42
0.43
0.74
3.17
0.74
0.43
0.61
0.96
3.02
1.19
1.64
1.23
1.97
1999
2000
3.79
0.47
0.38
1.30
0.61
0.33
0.59
1.60
1.02
1.00
0.22
0.68
0.20
0.14
0.58
1.26
0.50
0.23
0.53
0.28
0.27
0.16
0.32
1.10
0.59
0.42
0.42
0.74
3.16
0.74
0.43
0.61
0.96
3.02
1.19
1.64
1.23
1.96
3.88
0.48
0.39
1.34
0.63
0.34
0.60
1.63
1.04
1.03
0.22
0.69
0.21
0.14
0.60
1.29
0.51
0.23
0.55
0.29
0.28
0.16
0.33
1.13
0.61
0.43
0.43
0.76
3.24
0.76
0.44
0.62
0.98
3.09
1.22
1.68
1.26
2.01
DRI/McGraw-Hill
PageS
�Appendix E
Employment Impacts by Industry: Years 1995 through 1997
Additional Taxes
(Thousands)
01-09 Agriculture, Forestry, Fisheries
10, 12 & 14 Mining (exc. Oil&Gas Extrac.)
13 Oil 4 Gas Extraction
15-17 Construction
20 Food & Kindred Products
21 Tobacco Manufacturers
22 Textile Mill Products
23 Apparel
24 Lumber & W o o d Products
25 Furn. 4 Fixtures
26 Paper 4 Allied Products
27 Printing 4 Publishing
28 Chemicals
29 Petroleum Refining
30 Rubber 4 Misc. Plaslics
31 Leather
32 Stone
33 Primary Metals
34 Fabricated Metal Products
35 Nonelectrical Machinery
36 Electrical Machinery
37 Transporation Equipment
38 Instruments
39 Miscellaneous Manufacturing
40 - 42. 44-47 Transportation Services
48 Communications
49 Utilities
5 0 & 5 1 Wholesale Trade
52-59 Retail Trade
6 0 Banking
6 1 - 6 2 , 6 7 Misc. Financial
6 3 6 4 Insurance Carriers & A g e n t s
6 5 - 6 6 Real Estate
7 0 , 7 2 , 7 6 , 7 8 , 7 9 Personal Services
7 3 . 8 1 . 8 7 , 8 9 Business Services
75 A u t o Repair & Rental
8 0 Health Services
8 2 - 8 4 Educational & N o n - p r o f i t Services
Government
DRI/McGraw-Hill
Page 6
From Output
Effects
-2.866
-0.032
0.046
-1.863
-0.119
-0.851
-0.183
-0.412
-0.524
-0.107
-0.15
-0 116
-0.127
-0.005
-0.403
-0.002
-0.088
-0.19
-0.265
-0.094
-0.176
-0.387
-0.039
-0.055
-0.43
0.012
-0.008
-0.156
-4 565
-0.289
-0.047
0.094
-0.091
-0.33
-1.815
-0.154
1.359
-0 231
0
1995
From Coverage
of U n i n s u r e d
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Total
-2.866
-0.032
0.046
-1.863
-0.119
-0.851
-0.183
-0.412
-0.524
-0.107
-0.15
-0.116
-0.127
-0.005
-0.403
-0.002
-0.088
-0.19
-0.265
-0.094
-0.176
-0.387
-0.039
-0.055
-0.43
0.012
-0.008
-0.156
-4.565
-0.289
-0.047
0.094
-0.091
-0.33
-1.815
-0.154
1.359
-0.231
0
From O u t p u t
Effects
-6.903
-0.635
-0.506
-20.444
-2.488
-3.037
-2.437
-4.335
-5.904
-1.521
-2.646
-2.576
-2.554
-0.111
-6.088
0.216
-1.767
-4.011
-6.212
-4.826
-3.689
-8.316
-1.078
-1.148
-6.641
-1.658
-0.974
-10.854
-65.035
-4.486
-1.847
0.758
-0.938
-13.077
-27.737
-2.526
40.742
-15.311
-2.168
1996
F r o m Coverage
of U n i n s u r e d
-1.792
0.068
0.055
0.388
0.224
0.006
0.125
0.1
0.061
0.086
0.151
0.27
0.237
0.032
0.195
0.008
0.111
0.149
0.261
0.414
0.33
0.381
0.187
0.018
0.623
0.184
0.127
0.877
-6.492
0.175
0.273
0.429
-0.189
-1.748
0.83
-0.123
1.414
1.558
0
Total
-8.695
-0.567
-0.451
-20.056
-2.265
-3.031
-2.312
-4.235
-5.843
-1.435
-2.495
-2.306
-2.317
-0.079
-5.892
0.224
-1.656
-3.862
-5.951
-4.412
-3.359
-7.935
-0.892
-1.13
-6.019
-1.474
-0.846
-9.976
-71.527
-4.311
-1.574
1.187
-1.127
-14.825
-26.907
-2.648
42.155
-13.753
-2.168
From Output
Effects
-8.791
-0.37
-0.769
-26.296
-3.495
-3.026
-2.237
-4.841
-4.534
-1.585
-2.249
-3.713
-1.546
-0.092
-2.294
0.06
-1.399
-1.391
-4.306
-3.274
-1.981
-6.465
-1.843
-1.825
-8.79
-3.05
-1.741
-12.375
-98.396
-7.929
-3.935
5.082
-0.301
-32.603
-51.259
-5.081
161.944
-41.993
-13.46
1997
From Coverage
of U n i n s u r e d
-8.613
0.333
0.267
1.889
1.07
0.031
0.595
0.472
0.294
0.411
0.724
1.309
1.144
0.151
0.956
0.038
0.533
0.712
1.246
1.946
1.552
1.796
0.9
0.086
2.999
0.887
0.613
4.254
-31.603
0.85
1.331
2.074
-0.914
-8.532
4.089
-0.595
7.029
7.677
0
Total
-17.404
-0.037
-0.502
-24.408
-2.426
-2.995
-1.642
-4.369
-4.24
-1.174
-1.525
-2.404
-0.402
0.058
-1.338
0.098
-0.866
-0.679
-3.06
-1.328
-0.429
-4.669
-0.943
-1.739
-5.791
-2.163
-1.128
-8.12
-129.999
-7.079
-2.604
7.156
-1.215
-41.135
-47.17
-5.676
168.973
-34.317
-13.46
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix E
�Appendix E
Employment Impacts by Industry: Years 1998 through 2 0 0 0
Additional Taxes
(Thousands)
01-09 Agriculture. Forestry, Fisheries
10, 12 & 14 Mining (exc. Oil&Gas Extrac.)
13 Oil & Gas Extraction
15-17 Construction
20 Food & Kindred Products
21 Tobacco Manufacturers
22 Textile Mill Products
23 Apparel
24 Lumber & Wood Products
25 Furn. & Fixtures
26 Paper & Allied Products
27 Printing A Publishing
28 Chemicals
29 Petroleum Refining
30 Rubber & Misc. Plastics
31 Leather
32 Stone
33 Primary Metals
34 Fabricated Metal Products
35 Nonelectrical Machinery
36 Electrical Machinery
37 Transporation Equipment
38 Instruments
39 Miscellaneous Manufacturing
40 - 42. 44-47 Transportation Services
48 Communications
49 Utilities
50 4 51 Wholesale Trade
52-59 Retail Trade
60 Banking
61-62,67 Misc. Financial
63-64 Insurance Carriers & Agents
65 66 Real Estate
70, 72, 76, 78, 79 Personal Services
73, 8 1 , 8 7 , 89 Business Services
75 Auto Repair & Rental
80 Health Services
82-84 Educational & Non-profit Services
Government
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix E
From Output
Effects
-11.012
-0.732
-1.178
-68.954
-5.12S
-2.938
-4.016
-7.181
-14.292
-2.914
-2.44
-3.016
3.358
0.02
-6.191
-0.413
-3.46
-3.242
-6.727
-0.219
-1.397
-9.606
-0.514
-2.65
-10.267
-2.231
-1.079
-1.225
-160.179
-12.317
-5.84
18.618
0.202
-64.536
-95.276
-9.818
499.296
-83.328
-26.049
1998
From Coverage
of Uninsured
-26.892
1.037
0.861
5.937
3.314
0.097
1.822
1.436
0.913
1.271
2.249
4.116
3.575
0.466
3.049
0.116
1.651
2.216
3.892
6.053
4.793
5.54
2.825
0.267
9.358
2.795
1.916
13.404
-99.99
2.698
4.124
6.563
-2.876
-27.139
13.147
-1.871
22.657
24.608
0
Total
-37.904
0.305
-0.318
-63.017
-1.811
-2.841
-2.194
-5.743
-13.378
-1.642
-0.191
1.101
6.933
0.487
-3.142
-0.298
-1.809
-1.026
-2.835
5.834
3.395
-4.065
2.311
-2.383
-0.909
0.563
0.837
12.178
-260.169
-9.618
-1.716
25.181
-2.675
-91.674
-82.13
-11.689
521.952
-58.72
-26.049
From Output
Effects
-16.62
-2.864
-3.747
-150.84
-12.385
-3.208
-9.622
-15.099
-27.314
-7.711
-6.995
-11.189
0.057
-0.385
-18.35
-0.581
-9.265
-10.904
-21.976
-12.68
-12.128
-30.6
-7.535
-5.851
-29.544
-7.948
-5.291
-43.277
-291.42
-20.911
-9.281
13.082
-5.504
-55.67
-101.018
-8.894
541.916
-67.318
-5.311
1999
From Coverage
of Uninsured
-40.097
1.549
1.326
8.853
4.915
0.145
2.663
2.102
1.348
1.878
3.33
6.169
5.321
0.691
4.598
0.169
2.437
3.287
5.806
9.085
7.107
8.197
4.228
0.395
13.939
4.204
2.859
20.078
-150.624
4.066
6.17
9.883
-4.313
-41.016
20.079
-2.812
34.632
37.353
0
Total
-56.717
-1.315
-2.421
-141.987
-7.47
-3.063
-6.959
-12.998
-25.966
-5832
-3.666
-5.02
5.378
0.307
-13.752
-0.412
-6.827
-7.617
-16.169
-3.595
-5.022
-22.403
-3.308
-5.456
-15.605
-3.743
-2.432
-23.2
-442.044
-16.845
-3.111
22.965
-9.817
-96.686
-80.939
-11.706
576.548
-29.965
-5.311
From Output
Effects
-21.323
-5.281
-5.989
-232.043
-19.295
-3.64
-12.658
-19.739
-35.07
-12.013
-9.598
-21.063
-3.906
-0.794
-23.467
-1.137
-14.002
-15.813
-34.538
-23.607
-21.532
-46.825
-18.815
-10.404
-51.419
-14.893
-10.109
-86.276
-407.562
-32.408
-14.858
4.134
-13.007
-62.731
-137.801
-10.422
562.597
-70.148
28.149
2000
From Coverage
of Uninsured
-40.454
1.581
1.383
8.933
4.933
0.147
2.613
2.067
1.341
1.869
3.325
6.27
5.35
0.693
4.688
0.165
2.424
3.288
5.853
9.28
7.111
8.192
4.278
0.393
14.061
4.298
2.892
20.344
-154.258
4.143
6.382
10.093
-4.383
-42.116
20.976
-2.877
36.154
38.57
0
Total
-61.777
-3.699
-4.607
-223.11
-14.362
-3.493
-10.045
-17.672
-33.73
,--10.144
-6.273
-14.792
1.444
-0.101
-18.78
-0.972
-11.578
-12.525
-28.685
-14.327
-14.421
-38.633
-14.537
-10.012
-37.358
-10.595
-7.218
-65.932
-561.819
-28.265
-8.475
14.228
-17.39
-104.846
-116.825
-13.299
598.751
-31.578
28.149
DRI/McGraw-Hill
Page 7
�Appendix F:
Notes on Macroeconomic Simulations
�Appendix F
Notes on Macroeconomic Simulations
Federal Reserve Policy
All five simulations of the DRI/McGraw-Hill Quarterly Model of the U.S. Economy were run
under the assumption that the Federal Reserve maintained an unchanged level of nonborrowed reserves available to the banking system. This corresponds to a partially
accommodative monetary stance, under which increases in the size of the nominal
economy lead to higher interest rates, while decreases in the size of the nominal economy
lead to lower interest rates.
In the universal coverage solution, for example, a deficit-financed expansion of federal
transfer payments to provide for universal health-care coverage raises the level of gross
domestic product (GDP) by $83 billion or (1.0%) relative to the baseline by 1998. The key
short-term interest rate-the Federal funds rate-is pushed up by almost 80 basis points in
the same year, with longer-term yields rising even more as bond-market investors react
negatively to larger federal deficits and a slightly higher rate of inflation. The higher
interest rates subsequently lower (crowd-out) domestic investment, and through raising the
exchange rate retard US exports, so that by the year 2000, GDP is only 0.5% above the
baseline solution.
This scenario would be different if the Federal Reserve had pursued either a more
restrictive or more accommodative stance. A more restrictive policy-one that kept the level
of the money supply unchanged from the baseline-would result in much higher interest
rates, a greater degree of crowing out (both of investment and exports) and an even lower
level of GDP by 2000. The benefit of such a policy would be lower inflation. Conversely, a
more accommodative monetary policy-one that kept short-term interest rates unchanged
from the baseline-would result in a a much smaller degree of crowding out and a higher
level of GDP in the year 2000, but at the cost of higher inflation.
What is the most appropriate assumption to make about monetary policy? While it is
clearly impossible to predict the exact policy response, the behavior of the Federal Reserve
since the introduction of the "New Fed Policy," in October 1979, suggests that the central
bank would not adopt a more accommodative stance because that would significantly
increase the risk of reigniting inflation. The Fed will not want to loose its hard-won
credibility as an inflation fighter at a time when fiscal policy is becoming looser because of
higher federal expenditures on health care.
The Fed might adopt a more restrictive stance than we have suggested, at least in the
universal coverage and employee mandate scenarios, through a desire to prevent any
acceleration of inflation. Although, too restrictive a monetary policy in either the employee
mandate or additional taxes solutions would result in substantial employment losses. In the
spending caps scenario, the current policy assumption seems about right, as the Fed is not
faced with either higher inflation or significantly higher unemployment.
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix F
DRI/McGraw-Hill
Page 1
�The current policy assumption-of unchanged non-borrowed reserves-then seems the best
compromise. It also has the advantage of permitting direct comparisons across the various
scenarios, and hence an evaluation of the impacts of the individual parts of the proposal. It
may, however, be useful to perform the same exercise with scenario-specific monetary
policy assumptions, or with a consistently different monetary policy assumption, although
both these options remain outside the scope of the present study.
Employer Response to Higher Labor Compensation
All of the simulations described in this study have been performed using the model's
default assumption that employers respond to increases in non-pecuniary compensation by
raising prices, rather than lowering pecuniary compensation. Hence, increases in the cost
of labor predicated on mandated employer payments to cover medical insurance premiums
raise total compensation and overall prices; employers are not assumed to lower money
wages to either partially or completely offset the higher level of insurance premium
payments.
The results of the employer mandate and additional taxes scenarios are particularly
sensitive to this assumption. The more the increase in mandated premiums is offset by
lower wages, rather than passed on in the form of higher prices, then the less inflation
accelerates, and the less employment falls relative to the baseline. The results of the
spending caps solution are somewhat less impacted, because the cost savings assumed in
this scenario are passed through in the form of lower prices (rather than higher money
wages), thereby offsetting most of the price increase assumed in the employer mandate
and additional taxes simulations off which this scenario is based.
It may be appropriate to consider running the relevant scenarios under an alternative
assumption, especially as some preliminary econometric analysis, recently performed by
DRI/McGraw-Hill, suggests that employers would pass through about one-half of the
increase in medical premium payments in the form of higher prices, and the other half in
the form of lower money wages. But a robust analysis of an alternative pass-through
assumption requires some restructuring of the DRI/McGraw-Hill model, and remains
outside of the scope of the present study.
Technical Simulation Notes
•
Universal Coverage: The provision of universal health-care coverage was
assumed to cost the federal government $92 billion ($87 billion in medical
services and $5 billion in drugs) in the year 2000. The bulk of these
expenditures ($82 billion) appear as an increase in Federal government
medical transfer payments to persons (VGF@PERMED). The remaining $10
billion appear as an increase in federal government subsidy payments
(SUB@SRPGF).
To ensure that the increase in medical transfer payments leads to a similar
increase in total transfer payments (VGF@PER), an appropriate adjustment
was made to the add-factor &\/GF@PER. And to ensure that increases in
these transfer payments do not lead directly to increases in non-medical
DRI/McGraw-Hill
Page 2
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix F
�consumption expenditures an adjustment was also made to the add-factor on
real "adjusted" disposable income (&YDADJ87).
Because $5 billion of the increase in medical transfer payments were
explicitly for drugs and not for medical services, and because of the one-forone relationship between medical transfer payments and personal
consumption expenditures on medical services (CSMED) in the DRI model, a
$5 billion downward adjustment was made to CSMED via the add-factor on
real medical service expenditures (&CSMED87). A corresponding increase
was made to personal consumption expenditures on drugs (part of the CNOO
category) via the add-factor, &CN0087.
The $10 billion increase in federal subsidy payments is designed to account
for the improved profitability of health-care providers who, under the universal
health-care plan, will get paid for services that they currently provide on a
charitable basis. To ensure that all of the subsidy payments flow into
corporate profits, a downward adjustment must be made to the add-factor on
farm income (&YENTAFADJ).
•
Employer Mandate: In this scenario, more of the cost of providing universal
health-care is borne by employers, although there is still a significant
increase in the level of federal government transfer and subsidy payments.
Indeed, the federal government still pays $68 billion of the $92 billion
required to provide universal health-care in 2000. Employers do not,
however, simply "chip-in" the remainder, but rather contribute $56 billion,
permitting households to reap a $32 billion saving.
Of the $68 billion paid by the Federal government, $26 billion appears as an
increase in federal government medical transfer payments, the remaining $42
billion appears as an increase in federal subsidy payments. The treatment of
the increase in transfer payments is identical to that in the universal coverage
simulation described above. The treatment of the subsidy payments is
different in this scenario, however, because under the employer mandate
provisions, federal subsidies will be paid to small-to-medium sized
businesses to offset part of their cost of providing coverage.
The increase in federal subsidy payments together with the employer's
contribution (a total of $98 billion) are entered into other labor income, via its
add-factor (&YOL). (Again, an appropriate adjustment is made to prevent
any of the subsidy payment from going into farm income). The increase in
other labor income raises total unit labor costs (JULCNF) via its impact on the
index of compensation (JRWSSNF). Since that part of the increase in other
labor income that is paid by the federal government ($42 billion) should not
raise unit labor cost the indexes of compensation, JRWSSNF and ECIWSSP
must be adjusted downward via their add-factors.
Finally, the increases in other labor income raise the level of real adjusted
personal disposable income (YDADJ87). This feeds into a number of
variables in the model, most notably the personal consumption expenditures,
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix F
DRI/McGraw-Hill
Page 3
�which requires that further adjustments be made to prevent any of the
increased federal and employer expenditures from being diverted to nonmedical expenditures.
•
Additional Taxes: This simulation is based on the employer mandate solution
described above. In this scenario, the federal government levies four taxes
to mitigate the impacts of increased expenditures on the budget deficit. By
2000, the static revenue gain (i.e., the revenue gain before accounting for
any economic feedback) is approximately $25 billion.
About $10 billion of those revenues come from the tobacco tax, which is
assumed to be enacted in the fourth quarter of 1995. Implementation of this
tax requires upward adjustments to the price of tobacco (via &PCNOO) and
to the federal governments indirect-tax revenue (TXGF) via DMYTXGF.
The corporate assessment (a payment made by large corporations which
choose to opt out of the program) is worth $7 billion in 2000. It is assumed to
be enacted in the first quarter of 1996. This tax is treated as an increase in
the payroll tax that is borne solely by employers; it is implemented via the
payroll tax rate (RTWGF), and the employer's share of payroll tax payments
(TWER%TW).
Two further taxes-which amount to adjustments to the cafeteria plan limits
and the medical expense deductions-are also worth around $7 billion in
2000. Adjustment to the medical expense deduction occurs in 1996, while
the cafeteria plan limits come into effect in 1997. Both are treated as
adjustments to the effective personal income tax rate, and are implemented
via the add-factor (&RTPGF).
•
Spending Caps: This simulation is based on the additional taxes solution
described above. In this scenario, the imposition of spending caps is
assumed to achieve $149 billion of saving relative to that scenario by 2000.
Most of the saving ($84 billion) is achieved through lower prices, although
$65 billion reflects a lower delivery of actual medical services. Of the $149
billion in saving, $85 billion accrues to employers, $28 billion to the federal
government, and the remaining $36 billion to households.
Preparation of this simulation is identical to that of the employer mandate
solution described above, although, of course, the size of the actual
adjustments differ. The only additional changes reflect implementation of the
cost savings on the level of medical consumption expenditures. This is
achieved through a reduction in real personal consumption expenditures on
medical services (CSMED87) and on the implicit price deflator for that
category (PCSMED).
DRI/McGraw-Hill
Page 4
The Administration's Health Care Reform Plan:
National Macroeconomic Effects
Appendix F
�1
lUH-^fPW/IHa
�FEB 09 ' 9 4
04:47Pri 2 0 2 / 4 7 9 - 5 1 2 9
P-3
{CITIZENS FOR A SOUND ECONOMY HC FINANCE STUDY}
Date: Wednesday, February 9, 1994
Location: Dirksen SOB, Gil
Sponsored By: Citizens for a Sound Economy
Your Name/Phone: Matt Smith/(202)479-5128
Summary: CSE released thefindingsof a study done for them by DRI/McGraw-Hill on the
financing of the President's Health Care Reform package. It was presented by DRI/McGrawHill's Research Director, Dr. David Weiss (pronounced Weese). Weiss is frequently called
upon by Congress and the media to give commentary on economic matters. He served as
Senior Economist for the Federal Reserve Board, and a Senior Staff Economist for President
Carter's Council of Economic Advisors. The study essentially found the following:
• If the entire Administration plan is adopted, and spending caps are used, an unmet
demand for health services could result. If no spending caps are used, and the plan is
adopted, then employment losses in excess of 900 thousand will occur in the year
2000. Of these job losses, Weiss said that half will come from the retail trade
industry. The next hardest hit will be taken by the construction industry, a relatively
seasonal industry relying on year round health care.
• Weiss later claimed that while there will be a net job loss, "this is offset by a gain
in medical jobs by universal coverage." Later he explained "This is a designed job
loss...Going to Universal Coverage actually adds jobs cause you're adding jobs in the
medical care sector, but then you take it out because of A, the employer mandate, and
B, the other taxes that you're imposing."
• The Universal coverage will cause increases in the utilization of medical care
services and result in higher health care spending.
• When an employer mandate is introduced to partially finance universal coverage,
the gains in employment due to universal coverage are offset by employment losses
associated with the mandate. In other words, an employer mandate has the effect of a
tax. He said it is a required payment that increases the cost of doing business. As a
result it will impact on an employers decision to hire labor. Weiss noted that the more
it costs to hire labor, the fewer people who will be hired.
• The corporate assessment is a tax on labor and has the same qualitative effects as
the employer mandate.
• The introduction of additional taxes to pay for universal coverage will result in
further economic losses.
• Imposing spending caps creates a risk of unmet demand for health care services.
• The employment impacts of our plan will not be evenly distributed across sectors of
�FEB 05 '94 04:47PM 202/479-5129
P.2
the economy.
• Weiss remarked that the numbers they came up with were "remarkably similar" to
the CBO numbers.
• Weiss insisted "There is no way in the long run to control health care costs without
either controlling the access to health care or controlling the incomes of health care
providers."
• Weiss was asked if our plan could work under the "best case assumption." He said
that this study assumed the best case assumption.
• Pointed out that the use of medical care doubles at age 65, and then continues to
double every following 10 year period.
• Weiss mentioned he's been talking about doing a study of the Cooper Plan. He
later mentioned that he'd like to review the other plans, but that his company is a
consulting firm and they must wait to be commissioned.
Response Needed?
Media Coverage: C-SPAN appeared to be the only media outlet present.
Attachments:
TOM: Poor quality audio tape on file in DNC Info Center.
Transcrlpr/Nnrcx: My notes and a hard copy of thisreportare also on file in the DNC Info
Center. They are in Cabinet #3, 2nd shelf from the top, filed under Healthcare 2/9/94 CSE
Study.
Materlqff; A complete copy of the DRI/McGraw-Hill study is on file in above file.
�
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Health Care Task Force Records
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White House Health Care Task Force
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
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<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
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William J. Clinton Presidential Library & Museum
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[Democratic National Committee Material] [Loose] [3]
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Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
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2006-0885-F Segment 2
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Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
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Clinton Presidential Records: White House Staff and Office Files
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2/6/2015
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12093080
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https://clinton.presidentiallibraries.us/files/original/0131e9fe9f367bdbe8cc30d0ebee1819.pdf
4867d501b774a0e5bd6fcdf8a64f143b
PDF Text
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FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
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Presidential Library Staff.
Collection/Record Group:
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Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4785
FolderlD:
Folder Title:
[Democratic National Committee Material] [loose] [2]
Stack:
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Shelf:
Position:
S
53
3
3
2
�Withdrawal/Redaction Sheet
Clinton Library
DOC UMENT NO.
AND TYPE
SUBJECT/TITLE
DATE
RESTRICTION
1
001.. memo
Paul Jamieson to Gene Sperling; re: To Do List (partial) (1 page)
11/19/1993
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4785
FOLDER TITLE:
[Democratic National Committee Material] [Loose] [2]
2006-0885-F
ip2728
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b))
PI
P2
P3
P4
b(l) National security classified information 1(b)(1) of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency i(b)(2) of the FOIA)
b(3) Release would violate a Federal statute 1(b)(3) of the FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information [(b)(4) of the FOIA|
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIA|
b(9) Release would disclose geological or geophysical information
concerning wells 1(b)(9) of the FOIA]
National Security Classified Information 1(a)(1) of the PRA|
Relating to the appointment to Federal office 1(a)(2) of the PRA|
Release would violate a Federal statute [(a)(3) of the PRA]
Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) of the PRAJ
Pf. Release would disclose confidential advice between the President
and his advisors, or between such advisors [a)(5) of the PRA]
P<i Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA|
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PttM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�January 1994
m
Can Private Health Plans Achieve
the Cost Containmeint Targets of
Market Reform?
A Review of Risk Issues
Based on discussion by a work group including:
George Barry, FSA
John Cookson, FSA
Guy King, FSA, MAAA
Alice Rosenblatt, FSA
Barbara Schiel, FSA
Gordon Trapnell, FSA
and Lynn Etheredge, Consultant
<c3
Prepared by Stanley B. Jones, during development of a new George
Washington University project on health reform, with funding from
the Robert Wood Johnson Foundation.
�INTRODUCTION
A key objective of "market reform" approaches to health care reform is a health
insurance market which encourages aggressive pricing among competing health plans,
to the end of containing future increases in
health insurance premiums.
Another key objective of health care
reform is to extend health insurance coverage to the entire population, including
individuals and employers who will need
subsidies. The costs of such subsidies come
largely from the "savings" achieved by
health plans' containing future premium
increases.
nant is how plans can establish reserves
needed for aggressive pricing, given greater
uncertainty and risk.
To review these risk-related questions, a
work group of actuaries met on January 5
and 6, 1994, to assess how the Clinton
market reform proposal—as a proxy for all
the market reform proposals, because it demands the most of the health plans—affects
uncertainty and risk and how it might be
constructively modified or implemented to
give plans a better chance of meeting its
targets. Specifically, the meeting's goals
were:
The proposals raise the question, "How
much 'savings' or cost containment can
health plans achieve, and how fast?" The
Clinton proposal sets caps on annual premium increases that are intended to achieve
needed savings over five years. Other
proposals set targets without caps (Cooper)
or set targets but phase in universal! coverage only if savings are achieved (Chaffee,
Dole).
• To describe the key provisions of the
Clinton proposal that influence levels of
uncertainty in estimating future costs (see
page 3 and Appendix A).
A question behind the question of "How
much how fast?" is "What is the capacity of
the health insurance/health plan industry to
adapt to the new market and contain insurance premium increases?" A key determinant will be whether health plans can
estimate future costs in the reformed market
with enough certainty to allow aggressive
(low) premium setting. A related determi-
• To descrilse short-term research that
would further clarify these issues (see page
11).
• To sketch lout changes in market reform
proposals that would reduce uncertainty
and risk or strengthen insurers' capacity to
bid aggressively in spite of higher uncertainty and risk (see page 9).
The meeting was funded by the Robert
Wood Johnson Foundation, under the
direction of Stanley B. Jones. The following
observations and suggestions do not reflect
a formal consensus of the participants.
-2-
�KEY PROVISIONS OF THE CLINTON PROPOSAL MOST LIKELY
TO INFLUENCE THE ESTIMATION OF FUTURE CLAIMS COSTS
AND INCREASE PREMIUMS
The primary source of "risk" in insurance
is uncertainty in estimating the claims costs
for enrollees some 6 months before the
contract period begins and some 18 months
before the contract period ends. In market
reform proposals, the health plan in fact
sets its premium before the open season
when its enrollment pool is determined.
Claims costs are by far the largest part of
the health plans' premiums. If health plans'
uncertainty about future claims costs increase, they must either increase their
premium estimates to cover the possibility
of costs higher than they estimate, or they
must set aside a portion of their financial
reserves to cover these costs should they
occur. Financial reserves are a measure of
health plans' capacity to bid aggressively
(i.e., low) for business in the face of uncertainty. As uncertainty increases, the plan
must set higher premiums or have access to
higher reserves.
The first two to three years of the new
market created by the Clinton market reform proposal are the time of greatest
uncertainty for health plans. As the effects
of the changes in the insurance and health
care market jsettle in, estimation of future
claims costs | with higher degrees of certainty
should become easier. It comes down to
how to develop the data and gain the experience needed to estimate future claims
costs based on experience in the new environment.
In addition to these risk reserves, a plan
must maintain reserves to cover its incurred
but not received claims. Because of administrative lags and other factors, claims come
into fee-for-service plans many months after
the end of the year for which premiums are
paid. These liabilities of the plan are the
primary reason state insurance commissioners require plans to maintain reserves
large enough to cover one or more months
of claims for all of their insured business.
Many insurers today, especially those
who sell coverage to large employers, carry
the risk for only a small portion of their
enrollees. liarge employers usually selfinsure. Employers of as few as 100 often
self-insure 'to some degree.
Many provisions were cited as contributing to uncertainty. Those dted as creating
the most uncertainty include (not in priority
order):
NEW INSURED POPULATIONS
• Health plans at risk for costs of everyone
who enrolls with them
The new system puts the insurer at risk
for all enrollees. This increases the total
financial risk the insurer must be prepared
to take for lall of the uncertainties listed
below.
Market reform proposals increase uncertainty. This leads to increases in premiums
or to use of reserves in the near term—and
increases in premium to make them up in
the longer term. While this is of course
contrary to the cost contairunent goals of
market reform, it is a transitional problem.
• One health plan rate for everyone who
enrolls from the alliance area
Health plans at present are basing estimates of future claims costs on data from
only the employer groups and individuals
they currently insure in an area.
-3-
�This rating pool is not necessarily satisfactory as a basis for estimating the claims of
the group of employees/individuals who
will enroll with their plan when it is offered
to everyone in the area during an open
season. Plans will vary greatly as to how
large and how representative their current
"rating pools" are relative to the populations
of the areas they serve.
• Requirement for health plans to include
Medicaid, CHAMPUS, VA, American
Indian, previously uninsured populations,
and some Medicare eligibles
Health plans do not have data in their
rating pools on these 60 million people who
are now uninsured in the private sector. Nor
are other actuarially useful data (e.g., their
prior utilization, age and sex characteristics,
and areas of residence) readily available.
• Elimination of preexisting condition
clauses and other medical underwriting
practices
Health plans' current rating pools will
reflect the effects of these practices in the
present market. How the elimination of
these practices will influence future claims
costs is uncertain.
NEW BENEFITS
from what] will be negotiated by the alliance. Shifting to the alliance's fee schedule
is likely to! produce different claims costs.
• Changes in provider practice patterns in
the new market
Many health plan rating factors are likely
to prove unreliable in the new market. For
example, factors for anticipating provider
service volume increases to offset price cuts
and provider willingness to shift the cost of
discounts I to other plans are likely to
change, given revenue pressure on providers from "direct billing" and no "balance
billing" requirements, reduced opportunities
for cost shifting to private payers, further
cuts in Medicare payments, rising pressure
from HMOs and managed care systems for
competitive prices, and the proposal's requirement that providers absorb the losses
from lower cost sharing for AFDC eligibles.
i
Health) plans will be at risk for the estimates of this type of increase they include
in their rates. As govemment sets fee schedules and orders reduced fees by health
plans that exceed the premium cap, plans
will also I be at risk for the government's
estimate of this volume increase.
• Changes to provider networks, e.g.,
required use of centers of excellence and
essential community providers
The greatest uncertainty regarding benefits in the proposal is with regard to mental
health benefits. The uncertainty is increased
by the eligibility under the proposal of
residents of govemment mental hospitals,
institutions for the retarded, and residential
substance abuse centers.
Health plans whose rating pools do not
include use of these providers in the ways
specified and use of the payment arrangements laid out in the proposal will not be
confident of volumes of service and ultimate claims costs in these institutions.
NEW PROVIDER RELATIONS
GOVERNMENT-SPECIFIED PRICING
LIMITS AND ASSUMPTIONS
• Required payment by all-payer fee
schedule
Many health plans pay by fee schedules
that differ in amounts and types of fees
i
• Overly tight govemment limits on
premiums
�Premium caps or targets are not necessarily inconsistent with aggressive competitive
bidding in this market environment. The
question is whether the caps or targets {a)
are high enough to give plans room to
quote premiums that will cover their uncertainty and (b) permit year-to-year premium
increases high enough to allow plans to bid
aggressively.
The work group could not resolve the
question of whether the caps are high
enough. However, the year-to-year premium increases permitted by the Clinton
plan seem too rigid and rapid.
previously differing fees from these two
sources.
Fee-for-service health plans are dependent
on the alliance to negotiate fee schedules for
providers in the area that accomplish this
sensitive blend. Health plans that pay by
other than (fee schedules must negotiate a
similar blend. Health plans are at risk for
higher costs of claims if either the alliance
or they do'this difficult task poorly.
• Factors under control of the alliance or
the government for which a health plan is
at risk
If insurers are to bid aggressively in the
face of uncertainty, they must be able to
adjust future premiums, within the constraints of the competitive market, to recover reserves lost if their bids prove too
low. Rigid limits increase the risk of aggressive bidding in the early years.
Under the proposal, a health plan is
obliged either to use a number of government-generated data or rating factors or to
live under, caps based on these factors. It is
also dependent on govemment or the alliance for the timeliness of these factors and
data. In most of these cases, the health plan,
not the govemment or the alliance, is at risk
for losses if the data or assumptions are
wrong. This increases uncertainty. These
items indUde:
The relatively rapid movement to impose
tighter annual premium caps and phase in
populations and benefits also increases risk,
because of the "data-lag" problem. Plans
must bid for the second year's business
under market reform proposals with less
than six months experience and less than
three months claims data on their first
year's bids. By the time health plans have
the complete data from their first year
under the new system and can make a final
evaluation of their rating assumptions, they
will already have had to commit to the
third-year premium, which is capped more
tightly than the first year's. This data lag
makes for a slow learning curve that increases risk associated with rapid change.
- Alliance revenue shortfalls.
- Data provided by an alliance on demographics of its area.
- Alliance-negotiated fee schedules that
produce higher daims costs for plans than
a blended Medicaid/plan premium can
cover.
- Alliance factor for converting per-capita
premium bids into single, couple, single
parent [and children, or two parents and
children bids.
- Government wrongly estimates the costs
of new benefits as they are added and
raises alliance premium targets inadequately to cover them.
• "Blended rate" approach to paying for
the Medicaid population
The adequacy of the "blended rate" to
cover the daims costs of combined Medicaid and private enrollees hinges on new
fees to providers negotiated to reflect their
- Government or alliance failure to issue
data and regulations in place before
health|plan bids must be developed.
-5-
�Legal challenges to govemment law/
regulations or alliance actions that force
payment of daims considered non-covered.
Govemment sets unrealistically low caps
on alliance or plans based on poor data or
analytics.
NEW INSURANCE MARKET
VOLATILITY
• High annual open enrollment shifts
during open season resulting from changes
in available plans, early plans' failures,
movement of VA and CHAMPUS eligibles
to private plans, and inclusion of early retirees
Health plans can count on relatively
limited changes in year-to-year enrollment
in the current multiple-choice systems. In
the new system, espedally in the early
years, many individuals will be changing
plans during open season, potentially
changing the plans' risk pools substantially
through risk selection. This high volume
results from the different mix of plans that
are certified to offer choices in the first few
years of implementation; the wider choice
of plans available to individuals; the collapse of mismanaged or unlucky plans in
the early years; the large number of individuals previously uninsured in the private
sector who will be picking a private plan;
and individuals who have choice or private
insurance for the first time switching often
until they learn what suits them.
This "churning" of enrollees in early years
greatly increases the uncertainty attendant
to risk selection, which is only partially
ameliorated by the proposal.
• Irresponsible pricing and gaming by
competitors
Health plans jockeying for competitive
advantage in the first and subsequent years
of the new system may well set prices that
are not reasonable based on risk. For example, they may push their premium above
the premium target for the area in the first
year in the hope that enough individuals
will enroll in cheaper plans to produce an
average weighted premium under the target. Or they may quote premiums that are
unrealistically low or bite off more enrollees
than they can responsibly insure because of
the attraction of market share in these early
years. Some may gamble that the govemment will relent on its caps and in some
way prevent plans, espedally large ones,
from going under.
These practices are likely to produce a
large number of insolvendes in the early
years of thle plan, espedally when combined
with bad luck and bad rating. The finandal
results of these activities seem to come back
on the other plans in the area through
assessments for the guarantee fund or lower
caps in future years. Health plans can not
foresee the amount of these costs. These
provisions put all insurers atrisktogether
for each others' behavior.
• Changes or savings in insurer/plan
administrative costs
i
Insurers should realize administrative
savings in the areas of premium collection,
underwriting, fee schedule negotiation, and
perhaps rharketing. They should see increases in costs in some aspects of managed
care administration and computer systems
updates and changes to meet new requirements. How these will offset each other for
rating purposes is uncertain.
�KEY PROVISIONS OF THE CLINTON PROIjOSAL INTENDED TO
SIMPLIFY THE ESTIMATION OF FUTURE CLAIMS COSTS
• All-payer fee schedules negotiated by
the alliance
• Adjustment for and control of risk selection
After the initial years, knowing the rate of
increase in future-year provider fees set by
the alliance will somewhat decrease the uncertainty of fee-for-service health plans.
These provisions are all to the good, but
should not be thought to eliminate all selection risk. iHealth plans will and must
rate for the population they believe they
will enroll during the open season, taking
into account as best they can the value of
proposed risk adjusters or constraints on
risk selection as these become known and
demonstrated.
• Passing on mandatory premium reductions to providers
By requiring plans who exceed their premium caps to pass premium cuts back to
providers in the form of reductions in fees
or other payments, the Clinton proposal
passes cost cuts in this situation to the
provider. It does not reduce the insurer's
risk, however, since the original insurer
premium bid, which included risk, is reduced proportionate to the reduction in
fees. Essentially, the risk that claims costs
will exceed premium income after the cut
remains the same as before. The insurer in
fact carries the additional risk that the govemment will not cut fees enough to offset
cuts in premiums.
• State reinsurance pools
The possibility of sharing among competing health plans the costs of difficult-to-rate
populations, or populations who could
become a cause of risk selection, could help
reduce risk, especially during the transitional years. See research suggestion below.
HOW COULD INCREASED RISK UNDERMINE THE OBJECTIVES
OF REFORM?
Unless corrected for by measures such as
those described below, the increased risks resulting from the above provisions are likely
to create health plan actions during the transition period that are contrary to the cost
containment objectives of market reform.
million new insureds to the private insurance roles, limits on plans' ability to increase premiums, and a lack of adequate
data for future claims estimation for the
plans' enrollees. Other sources of
uncertainty affect different plans in different
ways. The possible responses include the
following:
Some sources of uncertainty affect all
companies, e.g., the addition of over 60
-7-
�• Plans could set premiums as high as
possible (i.e., up against the cap) in the
early years to preserve their reserves and
cover as much as possible of the greater
uncertainties and risk they face. The present
structure of the caps encourages this tactic,
because from the second through fifth years
the plan is limited to a progressively smaller increase over the amount it bids in the
first year. Consequently, if the plan bids too
low by underestimating the risk (or because
of greed), it will not be able to bid higher
premiums to make up the reserves it loses
for many years.
• Plans with reserves lower than needed to
cany outside estimates of risk will also have
to bid high or set limits on how many
people it will enroll as permitted by the
proposal. Since many plans may come out
of our current era of "self-insurance" with
low reserves, an alliance may find it is
offered fewer enrollment slots than it needs
to offer real choices to its population.
• Plans with high reserves from the "old"
market, not necessarily gained by competing according to the enlightened rules of the
"new" market, may take the opportunity to
buy market share by bidding low. These
may not be the most desirable competitors.
niques for rating in the new system and
until the system stabilizes somewhat. Inexperienced new risk carriers such as physician hospital organizations and other provider-based plans are likely to be especially
at risk because of their lack of risk management experience.
• Some health plans may resort to unconstructive means to survive in a market
where they are handicapped by low reserves or poor rating tools. They may invest
extensively in hedging their bets through
creative risk selection beyond what the law
and alliance can police. They may attempt
to capture control of the alliance (or Congress) politically. Large plans may spend
their reserves to finance low premiums to
expand market share to the point where
they believe the alliance will not be able to
reject them without angering too many
subscribers or destabilizing the system.
They may assume at worst they can survive
for decades | as a fee-for-service payer with
rates decreed by the National Board.
• The worst consequence of the increased
risk levels \yould be a "system collapse" in
an alliance jwhere one or more very large
plans are obliged to leave the market,
requiring their many enrollees to move to
other plans) in a single open season. These
other plans' also may well withdraw or limit
their enrollment tightly, because they can
not increase their premiums adequately to
cover the added risk.
• Plans will make mistakes and become
insolvent in this high-risk situation, because
there will be too little room under the
proposed caps for making mistakes and
recovering as part of the transition process
until actuaries can develop data and tech-
-8-
�CHANGES IN MARKET REFORM PROPOSALS THAT WOULD
REDUCE UNCERTAINTY AND STRENGTHEN INSURERS'
CAPACITY TO BID AGGRESSIVELY
If the nation is serious about building a
reformed health system, built around
competition among private-sector health
plans, it can take steps to reduce the risks
involved in this transition. The following
are several suggestions from members of
the actuarial group.
• Modify premium caps or targets.
Caps need to make dear to all of the
health care and health insurance industry
that major reform is unavoidable. However,
they also need to give the best in the industry incentives and opportunity to perform at
their best toward the goals of the reform.
Several possible changes in the premium
targets would help critically to these ends:
- A three-year check point at which the
alliance has authority to review both the
plan's performance in detail and the
likelihood of its achieving the target, and
to reject its bid on these grounds.
{d) Or, stretch out the time frame within
which alliances and the indusby must meet
the targets to more than five years. This
would be espedally important in areas
where the health plans and health care
system have a past record for achieving cost
containment, i.e., where the easy savings
may be gone.
• Give the alliance more tools: within any
of the aboye premium target arrangements,
allow the alliance to use tools similar to
those used by large employers to achieve
targets, e.g., allow them:
(<i) Set year two and later premium targets
for health plans based on the same weighted average per-capita premium approach
used in the first year, rather than tying
plans to their first-year bids.
- As in tlie current proposal, to eject plans
over 120% of average peropita premium.
- To prohibit new enrollees to plans with
premiums, say, 110%, above the average
per-capita premium.
(b) Or, eliminate the plan-specific premium
targets, but enforce the alliance target.
(c) Or, eliminate the annual premium target
for each plan and alliance in favor of a fiveyear "performance standard," i.e., leave the
plans and alliances room to achieve their
"savings" in whatever years the plans'
maturity, reserves, market position, and
other transitional problems permit. This
five year target might indude:
- To limit numbers of new enrollees in
high-premium plans that are pushing the
weighted per-capita premium over alliance ta'rgets.
- To require plans over 110% of average
per-capita premium to increase dedurtibles in order to bring the premium rate
down to a level that will allow the alliance to meet its average weighted premium.' (Research shows consumers understand best of all the meaning of deductibles.) |The increase would allow the
plans' enrollees to pay more for the
- A "glide path" with a high and a low
boundary within which the plan must
remain over the five years and regular
reports to the plan and alliance on where
it stands.
-9-
�privilege of staying or leave for other
lower premium/lower cost-sharing plans.
• Sunset the premium targets for the plans
that perform and survive the five years, so
plans have something to work for. Otherwise, they will feel whatever gains they
manage to make the govemment will take
away.
• Federal or state govemment, as appropriate, could organize and provide actuarially
useful data on new populations to be
insured by health plans so that estimates
of future claims costs can be made with
greater certainty.
Data on Medicaid, CHAMPUS, VA,
American Indian, early retirees, and the
previously uninsured would indude past
health care utilization and payment levels
for the area; age, sex, family composition;
geographic area of residence; and service
within the alliance.
With regard to the presently uninsured,
govemment could assemble existing relevant data and produce actuarial guidelines
for use by plans. Such data could reduce
uncertainty, premium levels, and reserves
requirements on plans in the early years.
• Rating requirements for health plans
could be amended to:
(a) Clarify Sec. 1341(a)(1) so as to make
dear each health plan will quote one rate
for all who enroll but can base its rate not
on what it would be if it enrolled all eligibles in the alliance, but on what subset of
the alliance population it believes is likely
to enroll.
tion or irresponsible rating. (Remember, this
system puts all insurers at risk together for
the improprieties and greed of some.)
Alternatively, require plans to file actuarial
certification of their premium.
• Phase in or delay implementation of
difficult to rate new benefits. Mental
health Coverages are by far the most difficult and uncertain.
• Establish reasonable risk sharing by
govemment and alliance:
(a) For factors over which govemment or
an alliance has control but for which a
health plan bears the risk, such as those
listed above.
(b) And for situations where an alliance can
achieve aii acceptable level of competition,
coverage of all areas of the alliance, or the
overall premium targets only by sharing in
therisksof undercapitalized plans.
Both of the above should be structured on
a cost-sharing basis, e.g., the plan pays a
flat initial amount of the overage plus a
percentage of the remainder.
Both might be implemented by allowing
the plan to pay back a portion of its share
over several future years if it and the alliance agree.
Both might also be implemented by
allowing a plan to exceed its target or
performance standard in the event (a) or (b)
above is 'involved.
• Allow insurers to establish systems for
sharing or distributing risk and costs of
unratable factors among insurers in the
early years. The "reinsurance pool" of the
Clinton plan might be used for such purposes as suggested in the research proposals
below.
(b) Audit health plans' rates that fall above
or below a credible corridor (e.g., more than
120% and less than 80% of the average
weighted premium) for possible risk selec-
-10-
�SHORT-TERM RESEARCH THAT WOULI} FURTHER CLARIFY
THESE ISSUES
• What is the capital status (reserves) of the
health insurance industry in the United
States, and what is it likely to be at the time
the new system is put in place? Will the
capital be adequate and appropriately
distributed to support the increase in risks
proposed for the industry? For aggressive
bidding? For providing a range of choices to
all enrollees? This is an empirical study and
could be accomplished to determine whether coverages or eligibility for alliances need
to be phased in order for the industry to
build up reserves.
• Assess what actuarially useful data can be
collected and made available on a crash
basis to insurers on new populations for the
first-year bids of the new system.
• What amount of "wiggle room" is needed
in year-to-year rating to reasonably accommodate the uncertainties in the new
system until the system settles into place
and trends become more stable.
• Model different types of caps (year-toyear, five-year cumulative with "glide path,"
no plan cap with stronger alliance) on
health plan competitive strategies to test
which provokes the strongest and most
desirable insurer market behavior while not
destroying the capital and risk-bearing
capacity of the industry.
• Test variojus levels of starting baselines
for caps and caps over a five-year period to
determine effects on above models of types
of caps.
• What kind of interplan pooling mechanisms might be workable and encouraged
or allowed under the law?
• Assessment of what difficult-to-rate
populations, as well as high-cost diagnoses,
etc., might te put in the "reinsurance pool."
For example, might residents of state mental
hospitals be included?
• Study what other large buyers (employers) have done in the past in situations
where health plans were asked to take large
risks and make substantial changes in their
product and rating. What risk-sharing techniques did these insurers enter into with
plans? What steps have employers taken to
conserve costs among competing plans?
Which of these might be allowed to the
alliance or converted into state or federal
risk-sharing schemes?
-11-
�Appendix A:
KEY PROVISIONS OF CLINTON HEALTH REFORM PROPOSAL
THAT ARE PARTICULARLY RELEVANT T ^ ESTIMATING FUTURE
CLAIMS COSTS FOR A HEALTH PLAN COMPETING IN A
CLINTON PLAN HEALTH ALLIANCE
Stanley B. Jones
GOAL OF PROPOSAL
The Buyers
The goal of the Clinton approach to
purchasing health insurance is to achieve
universal and comprehensive coverage
while encouraging health plans to compete
with one another for enrollees by containing
future increases in the costs of health care
(and their plan premiums). The proposal
presumes that, to be successful, health plans
will move as rapidly as possible to more
tightly managed care/vertically integrated
HMOs and that individuals over time will
gravitate to these plans because of their
price and cost-sharing advantages.
• One "alliance" in each geographic area
will contract with at least one "fee-for-service plan" and two or more managed care
plans to pffer the standard benefits to individuals.
In the Clinton system, the health alliance
serves as the sole health insurance purchasing agent for most (about 80%) of the employees and individuals in its geographic
area (as many as one million people). The
alliance collects all premium contributions
from employers and individuals, contracts
with health plans certified by states, and
pays the total premium to the health plans
for individuals and families who enroll with
each plan. Plans compete for enrollees in
annual open seasons.
NEW MARKET ENVIRONMENT
• All individuals in the alliance, except
undocumented aliens, are mandated to
enroll and pay usually 20% of the plan's
premium, as follows:
- Employees of all firms of less than 5,000
employees.
- Employees of larger firms who elect not
to exercise their one-time option to set up
their own corporate plan when the new
law is enacted.
- Employees of larger firms who decide to
close down their corporate plan at some
point in the future and enroll their employees in the alliance.
- Early retirees (age 55-65 and ineligible for
Medicare).
- AFDC and SSI individuals in the area.
- Federal, state, and local employees (feds
start in 1998).
- Any other individuals who are not undocumented aliens. For example, residents of
mentcil hospitals, institutions for the
mentally retarded, prisoners, homeless
Following is a summary description of
this new market environment and what the
health plan must do to enter it.
-12-
�persons, and others will all be eligible for
benefits. If other federal, state, or local
govemment programs are currently covering the costs of covered services to these
populations, they are likely to fold them
into alliance health plans.
- Individuals who do not enroll will be
offered choice when they seek care or will
be randomly assigned to a plan.
• Other individuals are given the choice of
enrolling.
(a) CHAMPUS, VA, and American Indian
eligibles may choose the alliance over their
government-sponsored plans.
(b) Individuals who become eligible for
Medicare after the law is passed may
choose to continue their private coverage by
paying the difference between its premium
(adjusted for age) and 95% of Medicare's
AAPCC for the alliance.
• Individuals must include their dependents (husband and wife and other dependents must be in the same plan) in their
health plan. Dependents are as defined in
state law, including foster and adopted
children, unmarried disabled children who
were disabled before age 21, children attending college, grandchildren when the
parent is also claimed as a dependent of the
grandparent.
• Standard ibenefits to be offered by all
plans will t}e comparable to Fortune 500
packages, butricherin the area of mental
health.
• Certified plans can not add to or subtract
from the standard benefits (beyond those
few specifically designated as "discretionary" mental health services).
i
• A "cost-sharing" supplemental policy to
fill in all but copayments must be offered
by all alliance plans to enrollees during
open season.
• In addition to standard benefits, state
govemment and/or the alliance can direct
or financially encourage one or more health
plans to prjovide access to services of "centers of excellence," services to underserved
areas, and special health related services
needed by I special populations.
• "Professional services" indude the services
of physidans or of other professionals
certified by the state to perform a service
otherwise performed by a physidan.
i
Types of health plan that can be offered
• Fee-for-service plan paying all providers.
This plan pays all providers in the alliance area (no provider panels or gatekeepers) using standard fee schedules negotiated
by the alliance. The plan can use utilization
review, precertification, length-of-stay
monitoring, and negotiated discounts from
the alliance fee schedule. The "high cost
sharing" package is assumed to be assodated with the fee-for-service plans, but not
mandated to be.
• Employers are not "buyers." They do not
select among plans. They are mandated to
pay the alliance on behalf of their employees a portion (usually 80%) of the average
weighted premium for all eligible enrollees
in all plans in the area for each class of
enrollment (single, single-parent family,
couple, two-parent family).
• Managed care plans/HMOs with a point
of service, option:
This plan selects and organizes panels of
providers with discountsfromnegotiated
fee schedules, capitation, global fees, salaries, incentive arrangements, or other payment devices. The "low cost sharing" benefit
package described is assumed to be the
INSURANCE PRODUCTS THAT CAN BE
OFFERED BY HEALTH PLANS
Benefits (See Appendix B: Table of Copayments and Coinsurance from S. 1757))
-IS-
�choice of managed care and HMO plans,
but is not mandated.
These managed care and HMO plans
must also offer subscribers a point-of-service option that permits them to choose any
provider in the area, with a higher premium
and coinsurance (Sec. 1402[d]). This may be
by contract with another vendor.
DESIGN FEATURES OF ALL TYPES OF
PLANS
• Contract with providers such that the
providers "direct bill" the health plans first
and do not "balance bill" patients beyond
cost sharing specified in Ihe standard benefits package. Any and all fee-for-service
payments (including for emergency and
non-network services) must be based on:
- fee schedules negotiated annually by the
alliance for use by all plans, presumably
lower than past fees to take account of
blended Medicaid and private plan premiums;
- voluntary discounts from the alliance fee
schedule given the plan by its providers;
or
- mandatory discounts from the fee schedule ordered by National Board if the
alliance and/or plan is out of compliance
with the premium cap.
(c) An alliance can negotiate with some
plans to offer services in hard-to-serve areas
or offer special services to hard-to-serve
populations.
• Include in contracts with providers agreement to comply with premium cap enforcement requirements, under which health
plans must implement pro rata reductions
in fees/payments to providers when the
National Health Board orders them for a
forthcoming year in order to meet premium
caps for the| alliance or plan (Sec. 6012[a]).
When the average per-capita premium "
cost for an upcoming year, based on projections of likely enrollment for each plan, is
predicted (each plan must submit an estimate
of the number of enrollees it will capture
along with (its premium bid) to exceed the
cap on total premiums for the alliance for
the year, the National Board can first give
plans a chance to negotiate lower rates and
voluntarily reduce premiums. Failing that, it
can order a pro rata reduction in payments
to providers (induding an increase for likely
increased volume, to achieve a lower premium. If tljie cap is exceeded based on
actual enrollment after open season, it is
made up fpr by a downward adjustment in
the succeeding two years' caps.
The premium caps allow the alliance as a
whole annual weighted average increases in
the amount of the CPI increase, plus costs
reflecting alliance demographic and
socioeconomic changes, plus 1.5% in 1996,
1.0% in 1997, .5% in 1998, 0% in 1999, and
as recommended by the National Board and
enacted by Congress thereafter (Sec. 6001[a][3]). An alliance's premium target/cap may
or may not be made known to plans before
bidding.
• Pay for out-of-area services according to
the fee schedule negotiated by the alliance
in that area.
• Indude in their network and pay certain
spedal providers as required.
(a) All must indude "essential community
providers" designated by the Secretary of
HHS (e.g.. Community Health Centers) and
pay either the alliance fee schedule or
Medicare rates—using no gatekeeper review.
In the first year after implementation of
the law, if the alliance exceeds its weighted
average premium target for all plans, individual plans' premiums that exceed the
target are'restricted to the amounts that will
reduce the weighted average premium to
(b) A state can order some plans to include
services at "centers of excellence."
-14-
�the target. For the second through fifth
years, however, the individual plan's premium can not increase over its first-year
premium by more than the dollar amount
of the increase in the alliance weighted
average premium cap (Sec. 601 l[d]).
• Supplemental insurance can be marketed
and priced completely separately, but must
meet tight regulatory standards.
WHAT PLANS WILL BE COMPETING IN
OPEN SEASONS FOR AN ALLIANCE'S
EMPLOYEES?
• At least one fee-for-service plan, but as
many as meet state certification requirements will compete.
• The alliance will seek to offer at least two
managed care plans/HMOs, but will offer
as many as meet state certification requirements.
• Plans may be organized by insurers,
providers, or any other agency that can
meet certification requirements. The alliance
can help providers organize to offer managed care plans.
WHAT ELSE MUST A HEALTH PLAN
DO TO WIN AN ALLIANCE CONTRACT?
• Bid one 12-month per-capita premium for
the standard benefits to be offered to all
enrollees throughout the alliance area, adjusted by a standard factor developed by the
alliance for individual, couple, single-parent
family, and two-parent family enrollment.
The provisions are ambiguous, but the bill
may require! the per-capita bid to represent
what the plan's premium would be if all
eligible individuals in the alliance were to
enroU in the plan (Sec. 1341[a][l]).
• Carry risk for all enrollees; self-insurance
is illegal fori an alliance and its employers.
• Market to! all eligible individuals in the
area and accept all applicants and their
families (all family members will be in the
same health plan) without medical
screening, pjreexisting condition clauses, or
nonstandard limitations, exclusions,
etc.—except: that the plan may limit its
enrollment if it can demonstrate it needs to
do so because of limits in capacity to deliver
services or to maintain financial stability
(Sec. 1402[a][2]). In case of oversubscription,
former enrollees have priority and the rest
are randomly assigned by the alliance.
• Accept per-capita premium payments
only from the alliance (it will collect all
premiums from employers, employees,
individuals) adjusted to take account of:
- The number of employer contributors (i.e.,
the number of full-time workers) per
family unit in the alliance;
- AFDC and SSI per-capita costs and percentage of population for the alliance area
(the same Medicaid/private ratio will be
used to construct a "blended Medicaid/
plan premium for all plans);
- Risk selection between plans, (using a
standard nationally developed algorithm)
(Sec. 1541).
• Pay into | state-established reinsurance
funds that pool the costs of specified classes
of high-cost enrollees or specified high-cost
treatments) or diagnoses (Sec. 1541 [c]).
• Submit a premium bid in the summer of
the year preceding the national annual
November open season; the bid must be
based on data and factors made available
by the alliance in April. If the bid is more
than 20% above the weighted average
premium bid in the area, the alliance
manager can reject it. Otherwise he/she
must accept it.
• Cooperate with laws regulating marketing and provider panel recruitment aimed
at limiting discrimination among subscribers
and providers based on anticipated need for
health care.
-15-
�• Provide information on costs, utilization
review and quality assurance protocols, and
providers.
• Pay providers according to its established
payment procedures for health services
financed by workers compensation or automobile insurance for its subscribers.
• Meet capital/reserve requirements,
„
.,„
States will continue to set standards.
Minimum j standards will be established
y ^ Nabqnal Health Board based on plan
characteristics (Sec. 1551).
b
-16-
�Appendix B:
Title I, Subtitle B
86
1
(3) shall require payment of a copayment in ac-
2
cordance with the lower cost sharing schedule de-
3
scribed in section 1132.
4
(c) OUT-OF-NETWORK ITEMS AND SERVICES.—With
5 respect to an out-of-network item prj service (as defined
6 in section 1402(f)(2)), the combination cost sharing sched7 ule that is offered by a health plan—
8
(1) shall require an individual and a family to
9
incur expenses before the plan provides benefits for
10
the item or sendee in accordance with the
11
deductibles under the higher cost sharing schedule
12
described in section 1133;
13
(2) shall prohibit payment of any copayment;
14
and
15
(3) shall require payment of coinsurance in ac-
16
cordance with such schedule.
17 SEC. 1135. TABLE OF COPAYMENTS AND COINSURANCE.
18
(a)
IN GENERAL.—The
following table specifies, for
19 different items and services, the copayments and coinsur20 ance referred to in sections 1132 and 1133:
21
Copayment* and Coinaurmncc for Items and Service*
Benefit
Btetion
nil
Inpatient hospital •ervice»
Outpatient hcwpiul tenSet*...
•
•HR 3600 I H / .8 1757 IS
Lover Cart Bhuiag
Beherfuk |
No copayment
n i l $10 per-mil
Hi|**r Co«t Bharinf Schedule
20 percent of applicable
payment rate
20 percent of applicable
payment rate
�Tito I, Subtitle B
87
Copaymenta and Coinsurance for Items and Services—Continued
Beoefit
HotpiUl
emergency . room
1111 $25 perrait(an20 percent of applicable
payment rate
lea patient hat
an emergency
medical condition
aa defined in section 1867(e)(1)
of the Social Security Act)
Servieef of health professional*
Emergency services other
than hospital emergency
room services
Ambulatoty irHHii^al. and sur-
1112 $10 per visit
20 percent of applicable
payment rate
1113 $25 per visit (un20 percent of applicable
lesi patient has
I payment rate
an emergency
medical condition
as defined in aectioo 1867(e)(1)
of the Social Security Act)
i m (lOperTiaii
20 percent of applicable
payment rate
1114 No copayment
No coinsurance
1115 No copayment
20 percent of applicable
payment rate
Intensive nonresidential mental illness and substance
abase treatment (except
treatment provided pursuant
to
section
1115(d)(2)(C)(ii))
1115 No copayment
20 percent of applicable
| payment rate
Intensrve nonreaidential mental Qlneas and substance
abuse treatment provided
punuant
to
section
1115(d)(2)(C)(ii)
1115 $25 per visit
50 percent of applicable
payment rate
1115 $10 per visit
20 percent of applicable
{payment rate
1115 $25 per visit until
January 1, 2001,
and $10 per visit
thereafter
50 percent of applicable
pavmentrateuntil January 1, 2001, and 20
percent thereafter
Inpstient and residential menabuse treatment
Outpatient mtHtl illness and
substance sbuse treatment
(except psychotherapy, collateral serrieea, and
Outpatient pqyehotherapy and
eollateral i
•HB $$00 IB / •a 1757 IS
�Title I, Subtitle B
88
Copayments and Coinsurance for Items and Services Continned
Benefit
Saetioo
Lower Cost Sharif
Bdwdnle
Bicbar Oast Shara* Sefcadnl*
1
Cue minafement
1115
No eopayment
No eoinsarmnoe
Family planning and aerrieea
for pregnant women (exeept
f)friL»i«T» yigita and aaaociated aerrKea related to prenatal eare and 1 poatpartum visit)
1116
$10 per visit
20 percent of applicable
payment rate
Clinician visita and associated
serriees related to prenatal
eare and 1 post-partum
visit
„.
1116
No eopayment
No coinsurance
Hospice care
1117
No eopayment
20 percent of applicable
payment rate
1
1118
No copayment
20 percent of applicable
payment rate
1119
No eopayment
20 percent of applicable
payment rate
Ambulance services
1120
No eopayment
20 percent of applicable
payment rate
Outpatient laboratory, radiology, and diagnostic services
1121
No eopayment
20 percent of applicable
payment rate
Outpatient prescnpUon drags
aitd biologieals
1122
$5 per prescription
20 percent of applicable
payment rate
1123
$10 per visit
20 percent of applicable
payment rate
Durable medical equipment
and prosthetic and orthotic
devices _
— _ —
1124
No eopayment
20 percent of applicable
payment rate
Vision eare
1125
$10 per visit (No
20 percent of applicable
payment rate
additional charge
for 1 set of neeeaaarr eyegiaaaes
for an indhSdual
lesi than 18
years of age)
Dental care (except space
mftintyT*fi T
procedures
and intereeptrve orthodootie
treatment) •
1126
$10 per visit
20 percent of applicable
payment rate
Space maintenance
dnrea and intereeptrve orthodontic treatment
1126
$20 per visit
40 percent of applicable
payment rate
Home health care . . .
Extended eare services
—
Outpatient rehabilitation serv-
rw
1
•HR MOO IH / •S 1787 18
�89
Copaymenta and Co Insurance for Items and Services Continued
Benefit
Bcetioa
Lower Cost Sharinf
Sdwdule
H * cr COM Sharinf SeWnie
Heilth education rliten ........
1127
All <set sharing rules deAll cost sharinf
rales determined
termined by plans
by plans
Investigational treatment for
life*threatening condition
1128
All cost iharing
rules determined
by plans
1
(b) APPLICABLE
All cost sharing rules it-
PAYMENT RATE.—For
purposes of
2 this section, the term "applicable payment rate", when
3 used with respect to an item or service, means the applica4 ble payment rate for the item or service established under
5 section 1322(c).
6 S E C . 1136. INDEXING DOLLAR AMOUNTS RELATING TO
7
8
COST SHARING.
(a)
IN GENERAL.—Any
deductible, copayment, out-
9 of-pocket limit on cost sharing, or other amount expressed
10 in dollars in this subtitle for items or services provided
11 in a year after 1994 shall be such amount increased by
12 the percentage specified in subsection (b) fbr the year.
13
(b) PERCENTAGE.—The percentage specified in this
14 subsection for a year is equal to the product of the factors
15 described in subsection (d) for the year and for each prei
16 vious year after 1994, minus 1.
17
(c) ROUNDING.—Any increase (or decrease) under
18 subsection (a) shall be rounded, in the case of an amount
19 specified in this subtitle of—
•HR MOO IH / •S 1717 18
�Henry J. Aaron
Health Attain
1 November 1993
Page n
Achievable Triumph on Health Care Reform
Reform of health care financing will not be achieved by one grand new law
enacted in 1994. It will emerge from a succession of laws enacted over many years. The
current debate is vitally important, however, because it will determine whether the
process of reform begins in 1994 or is delayed indefinitely.
I have argued that no proposal now on the table is likely to win majority support
in both houses of Congress. A compromise can be fashioned from these proposals that
will initiate a process leading eventually to universal coverage and the creation of
institutions capable of controlling growth of health care spending. Because the proposals
of neither the left nor the right have much potential for adding to their bases of support,
a successful compromise must be fashioned principally of elements drawn from the
centrist proposals of President Clinton and Senator Chafee. Particular elements of other
proposals may be included if support from the left lor right hinges on these provisions.
The Clinton and Chafee proposals have important elements in common. Both call
for malpractice reform and for limitations on underwriting practices of insurance
companies. Both indude an individual mandate to buy insurance although the mandate
is quite limited in the President's plan. Both call for the creation of regional health
alliances although the powers accorded the alliances differ radically between the two
plans. Both call for subsidies to help low-inconjie households buy insurance. Both
embrace the principle of managed competition. Both advocate large cuts in payments
to medicare and medicaid providers
commitments to universal coverage.
Most importantly, both contain unequivocal
�-nry J. Aaron
Health Affairs
1 November 1993
P>g« 22
Building a compromise on these common elements acceptable to a majority of
both houses of Congress will be technically and politically difficult and may prove
impossible. The principle value of such a compromise will lie in its capacity to serve as
the seed from which real reform can grow.
The vital core of this compromise is the creation of regional health alliances. The
immense diversity of delivery systems and insurance arrangements in the United States
will require some variation in admirustration. The painful choices that effective cost
control inevitably will force on system administrators means that these difficult choices
must be made by political entities close to each community. While regional health
alliances fully empowered to administer universal coverage and cost controls are
unlikely to emerge from Congress in 1994, creation of regional alliances that could
evolve through later legislation to assume such responsibilities would represent a
histonc achievement.
�Issues Every Plan to Reform Health Care Financing Must Confront
by
Henry J. Aaron
1
On any reasonable scale of complexity, major reform of health care financing is the
most intricate legislation with which Congress has had to grapple since World War II.
Countless issues of economic analysis, administration, and political balancing are responsible
for the more than 1300 pages of draft legislation President Clinton has submitted to
Congress. If the Clinton proposal or any other of comparable reach is enacted, lengthy
implementing legislation from fifty states and shelf-fulls of regulations will multiply the
legislation page-count.
The goals of reform are widely acknowledged; assuring essentially all U.S. citizens
and legal residents financial access to health care; to slow the growth of health care
spending, which means reducing the tendency for insured patients and their care provideragents to consume health care the marginal benefit of which falls well short of equals
marginal social cost; and to sustain or improve the quality of care. While not all agree, I
shall assume that removal of imperfections in the Ihealth insurance market and feasible
subsidies will not suffice to achieve the first goal through voluntary actions of businesses
and individuals. For that reason I believe and shall assume that some form of mandate, on
individuals or businesses, or some form of direct government provision will prove necessary
to make certain that virtually everyone is insured. If a mandate is necessary, the object that
people are to be required to buy must be defined and the entity required to do the buying
must be named and its responsibilities specified. I shall focus on certain issues related to
such a mandate. In so doing, I shall neglect issues of considerable importance including the
'Director of Economic Studies, The Brookings Institutions.
�Allied Social Sciences Association
Henry J. Aaron
TaxonomY
Initially, most health insurance was "community rated," meaning that in a given
community or metropolitan area all members of each of a small number of family types paid
the same premium. This arrangement proved unstable Ifor obvious reasons. New insurers
raided old companies by offering premiums below the community rate to groups with low
expected costs. Insurers using community rating found average costs of their remaining
clients had risen, raised premiums, and thereby created new opportunities for raiding.
Currently, only a few communities and companies continue to engage in community rating,
typically in noncompetitive insurance situations.
Few adherents of experience rating can be found outside the ranks of professional
economists.
Few advocates of community rating can be found inside the ranks of
professional economists except among some specialists in health care. Noneconomists see
price variations as unfair ~ punishing the sick - and tend to down play the incentive effects
of price variations. Despite - or, perhaps, because of - this perspective, noneconomists in
my view come closer to a valid judgment on experience rating than do economists. The
practical question, I shall argue, is: how much variation from community rating, // any, is
desirable or necessary.
Incentive Domains
Incentives arising from price variations can affect choice of insurance, personal
behavior, or business behavior.
-.3..
�Allied Social Sciences Association
Henry ]. Aaron
of rational behavior, continue to demand high-option coverage. Thus, while some people,
induding perhaps most economists, might prefer less costly, high-deductible plans,
proposals now under discussion preclude this option.
Price differences can also affect the choice of provider or provider group. The
essence of managed competition is that differences in prices charged by providers for given
benefits should be clearly and fully visible to households and that households should bear
the full differences in costs. The goal is to encourage efficient provision of health care and
innovation in the way health care services are organized and delivered. All of the major
proposals for reform of health care financing, other than the so-called "single payer" options,
embrace this principle; and there is no good reason why a single-payer plan should exclude
provider competition. For that reason, I shall not discuss it further.
Personal Behavior. The potential for price differences to influence personal behavior
varies between large and small groups, whether experience rating is achieved through
underwriting or self-insurance. The scope for personal incentives is small in large groups.
Because wage rates and fringe benefits normally do not vary from worker to worker, but
are set for the whole group or for large sub-groups, such as families with children, a classic
free-rider problem exists. Incentives for any individual behavioral changes that premium
variations might promote, other than the selection of insurance plans or provider groups,
are divided by n, where n is the size of the group. Iri short, the general practice of setting
wage rates and fringes for large groups based on average characteristics of the group means
that incentive effects of variations in premiums for groups of more than a very few members
are negligible.
-5--
�Allied Social Sciences Association
Henry J. Aaron
Additional correlates of use of health care include personal behaviors - smoking, participation in risky sports, eating habits. Some of these indisputably controllable behaviors - heavy drinking or down-hill skiing - are beyond the observation of medical underwriting.
In total, no more than 20 to 30 percent of the variance in the use of health services is
5
predictable.
Even in the case of individuals subject to medical underwriting, the incentives
provided by price signals may be incorrect. Take discounts for nonsmokers, for example.
This price signal is misleading in two ways. First, and most important, the price is not the
coefficient on smoking from an accurate structural model of the effect of smoking on health
expenditures during the contract period. Rather, it is the coefficient on smoking from a
reduced form equation in which many relevant variables are excluded. To the extent that
the omitted variables are correlated with smoking behavior, the coefficient on smoking is
an incorrect behavioral signal to people regarding the'economic consequences of smoking.
Second, the time period of insurance contracts is very brief, usually six months or one
year. What one should be interested in is the effect of current behavior not just on health
expenditures over the next six months or one year, but on the discounted present value of
expected lifetime health expenditures. The effects of current behavior on lifetime outlays
almost certainly differ in magnitude and may even differ in sign from the effect over the next
relatively brief period. Thus, Schelling has estimated that smoking has little effect on
lifetime health care spending, because smokers die tend to young, thus truncating their
5
Newhouse
..7..
�Allied Social Sciences Association
Henry J. Aaron
associated with a high probability of a death from cancer are less than the cost of treatment
for alternative deaths from other possibly more costly illnesses ~ Alzheimer's disease, for
example. In fact, most noneconomists and perhaps many economists, I think, would find
these speculations more than a little bizarre.
Business Behavior. Many illnesses and injuries are related to the work place or, more
commonly, to occupation. Some production processes, such as mining, are inherently
dangerous or unhealthful. Prices of commodities that iare dangerous to produce should
reflect the costs generated by these dangers. Self-insurance and medical underwriting
achieve this goal. Community rating would defeat it. Furthermore, companies can engage
in various practices, including plant design, selection of types of equipment, investments in
worker training, and wellness programs that affect health expenditures. Community rating
reduces the return to companies from such practices. While the sacrifice of experience rating
would weaken these incentives, it is possible to promote work place safety in other ways,
as current regulations attest. These alternative techniques may be less accurate or more
costly than reliance on accurate price signals would be. But the existence of alternatives
indicates that not all incentives guiding employer behavior that emanate from experience
rating need be sacrificed.
Experience rating also creates perverse incentives.
discriminate in hiring.
It encourages employers to
Employers have an incentive not to hire candidates with high
predictable health care costs, whether or not these costs are related to capacity to meet job
requirements. The alleged reticence of employers to hire older workers may be attributable
in part to the tendency of health costs to rise with age. The same considerations arise with
..9-.
�Allied Social Sciences Association
Henry J. Aaron
work place factors over which employers have control.
But most of the variation in
predictable medical outlays is traceable to factors that no one can much control. Hence, the
common view that the choice between experience rating and community rating is mostly a
matter of fairness or distributional equity and that experience rating does indeed penalize
the sick is mostly, but not completely, right.
I conclude that experience rating is undesirable. In the name of small potential
efficiency gains, it would require extensive direct administrative costs, it would create
perverse incentives (don't hire the sick, the old, the handicapped), and it would therefore
necessitate extensive regulatory oversight to prevent abuse. Some elements of experience
rating that most economists would defend can be easily retained. Thus, the Clinton health
plan, at least at the outset, would retain geographic variations in health spending by basing
initial premiums within each regional health alliance ort historical spending. Whether efforts
should be made over time to reduce such inter-alliance variations raises additional questions
that I shall not explore here.
Apart from such geographic variations, it is not clear that, on balance, experience
rating promotes economic efficiency and it raises a host of disturbing equity concerns.
Economists should stop displaying a regrettable instinct for the capillary by dwelling on
imagined efficiencies from experience rating. I would urge them to turn to tasks that are
genuinely important for efficiency in the delivery of health care
for example, to designing
partly prospective payment systems that promote competition but discourage cream
skimming by providers.
A move to community rating should be accompanied by
-11--
�Allied Social Sciences Association
Henry J. Aaron
President Clinton's plan stops well short of establishing a single national price for
health insurance. It would charge employers one of three premiums set in each health
alliance based on whether the worker is single, a single head of household, or married.
Each state would form one or more nonoverlapping regional health alliances among which
the three premiums would differ based on historic spending patterns.
How these boundaries are drawn will affect premiums at any given location. The
premium charged a business in a town adjacent to a metropolitan area will depend
sensitively on whether the town is included in the presumably high cost metropolitan area
or in some presumably low cost suburban or rural a'lliance. For similar reasons, how
alliance boundaries are drawn will influence whether companies with 5,000 or more workers
1
will exercise the option under the Clinton plan to form their own health alliances
independent of the regional alliances. The flow of subsidies paid to low income households,
who are eligible for aid if family income is below 150 percent of official poverty thresholds,
and to businesses, who are eligible for subsidies if they employ fewer than 75 workers and
pay average earnings below $24,000, will also depend on how alliance boundaries are
drawn. For all of these reasons, the drawing of bound'aries among health alliances is likely
to initiate political battles even more intense than those associated with Congressional
redistricting.
The magnitude of the shifts in costs among companies as a result of shifting from
experience rating to the proposed community rating is impossible to measure accurately
with currently available data. Table 1 gives a crude indication of the size of shifts among
two-digit SIC industry groups. The data in table 1 exaggerate the shift in costs among
-13--
�Cunml
aiplcyer comiburioni
for heahh insurance
(% ofwatei)
aoerFTE)
Sovica
Hoteb u d other lodging pUctt
PcnonaJ tovicct
Bui ia eta Hrvicei
Autorepair,iccvicet, tod parldng
MuceUineoiarep»iricrvices
Motion pictura
Amutanent andrecreationKrvica
HnhhMrvict*
Legal icrvicea
Educational iervicca
Social icrvicea
1,480
1.784
583
1.406
754
1.821
2,469
1.264
2,449
2,177
296
139
68
1,791
2.177
2.205
2,095
2.170
2.i ib
2^09
2J68
2.157
2J66
2.241
2.068
2.054
2.047
2^06
Dtference between
current aid ad/usted
contributions
aoerFTE)
r% of vara)
-2.6
-2.2
-8.8
-3.2
-6.5
-1J
0.6
-4.0
0.6
-0.1
-7.7
-11.5
-10.6
-1.0
Other lervica
-16.5
0.0
2.041
(1041)
0
PrimhoMdmldi
Sourcea: Current and adjusted employer contributicrai computed by the autfaortfromunpublished data of the Bureau of Economic Analyiii and Lewin-VHL The industrial
distribution of total employer payments is estimated for census yean by the Bureau of Economic Analysis. These rati at have been held constant since the last census
year, 1987, and applied to total employer contributions of each year. Imports, exports, and thjpmetas are from the 1987 Input-Output table (BEA), the December 1992
Merchandise Trade lupplement, and tabulated from "U.S. Commodity Exports and Imports u Related to Output.' 1982 and 1981' (Census Bureau, 1986).
* Adjusted premium inchidet a 13 percem increase in avenge costs to cover uninsured workers and assumes uniform costs for non-retirees (community rating).
k Data for imports, exports, and shipments for all industries except manufacturing tre from the 1987 Import-Output table, BEA.
Thisfigureincludes both wholesale and retail trade.
4 Other services include museums, botanical, zoological gardens; engineering and management services; and services not classified elsewhere.
d
c
5J
9.3
3.4
6.0
3.6
6.9
7.5
5.6
7.8
4.4
1J
0.8
0.4
4J
Adjusted employer
coraribunpns
far heahh insurance
<S per f i t )
(697)
(421)
(UU)
(764)
(1.357)
(387)
201
(894)
183
(64)
(1.772)
(1.915)
(1.979)
(415)
�Allied Social Sciences Association
Henry ). Aaron
economy exclude the costs of retiree benefits, which are then added back, on a very
approximate basis, by two-digit industry. Columns 5 and 6 show the change in employer
health care spending in dollars and as a percent of wages from current levels (column 2) to
that shown in column 4.
The changes in spending shown in column 5 differ from those under the Clinton plan
for at least five reasons. First, some companies will receive subsidies under the Clinton
plan. Second, the Clinton plan, at least initially, would not eliminate regional variations in
health costs. Third, some companies now offer benefits beyond those in the Clinton benefit
package and payments beyond 80 percent of total insurance cost. While not required to
continue offering such benefits, many companies almost certainly would do so. Fourth, the
costs of retiree benefits would initially remain with companies (apart from the shifting
inherent in a move away from experience rating) if, as seems likely, the Clinton proposal
9
to relieve companies of the full cost of retiree benefits does not survive. Fifth, the estimates
make no allowance for the effect on premiums of regional health alliances of averaging in
the "medically needy," a group now receiving medicaid that has relatively high costs and
that would be part of the community-rated pool within each regional alliance.
10
Thus,
while the shifts in costs shown in table 1 do not accurately characterize the distribution of
health care costs under President Clinton's plan or any other proposed reform, they do
indicate the magnitude of shifts arising from a move to community rating. For example,
9
Even if companies must pay premiums for retirees under'the age of 65 and for benefits not covered
by medicare for retirees over age 65, the Clinton plan relieves! companies of much of the cost of retiree
benefits, who are relatively old and therefore relatively costly, because of community rating.
10
Lewin-ICF
-15--
�Allied Social Sciences Association
Henry J. Aaron
fringes. Companies whose health insurance costs fall relative to the average will have
incentives to widen profit margins. In reality, the adjustment process will vary widely in
speed and character, because factor and product markets are imperfectly competitive and
the extent of forward or backward shifting will depend On the leverage companies enjoy in
product and labor markets.
Most of the debate among economists regarding the effects of health care reform has
proceeded at a highly aggregated level -
concerning effects on overall employment, for
example. Within the representative-company, representative-household framework, the
effects of health insurance reform are small. Nevertheless, the results shown in table 1
suggest that the transition from experience rating to community rating will entail significant
adjustments. While the algebraic sum of these effects is almost certainly minor, the absolute
size of adjustments from largely offsetting gains and losses deserves more analytical
attention than it has received. Unfortunately, the data demands from disaggregated analysis
are formidable, and existing data do not satisfy those d'emands.
Question 3:
Should companies or individuals be subject to an insurance
mandate?
To achieve universal coverage with certainty, any reform of health care financing
must rely on a mandate. President Clinton's plan requires employers to sponsor insurance
plans for all employees and pay 80 percent of the average cost of insurance in the health
alliance or alliances to which the employer belongs. His plan also mandates that nonaged
individuals who are self-employed or are out of the labor force to demonstrate that they
have insurance. Senator Chafee's plan, in contrast, would require employers to sponsor
-17-
�Allied Social Sciences Association
Henry J. Aaron
source of coverage must be determined, and transfers of funds among finandal agents must
be managed.
The chief administrative advantage of the employer mandate is that the govemment
must deal only with companies rather than the far larger number of individuals. This
advantage is eroded to the extent that employees are required to pay part of the cost of
coverage and are dirertly eligible for subsidies based on income that require periodic filings
to determine eligibility and subsidy amount. If the employee payment were identical for
all workers, the requirement of individual payment would not add any serious administrative complexity for employees. Because of withholding, the individual mandate
would not necessarily entail greater administrative complexity for employees than does an
employer mandate for any given premium rule.
Self-employed and Not-employed. The difference between enfordng coverage under
an employer mandate and doing so under an individual mandate loses much meaning for
the self-employed. For any given pattern of charges, the govemment would have to rely
on declarations accompanying tax returns, direct registration, or some other enforcement
mechanism. As with all tax enforcement, the self-employed will pose more vexatious and
administratively costly problems than do the employed.
By definition, an employer mandate cannot reach those who are outside the labor
force and who are not members of a family in which at least one person works. The Clinton
plan relies on an individual mandate for people in such households.
-19--
�Allied Social Sciences Association
Henry J. Aaron
costs above 7.9 percent of payroll are automatically eligible for subsidy. Second, companies
with fewer than 75 workers are eligible for caps equal to a reduced percent of payroll. The
lowest rate, 3.5 percent, applies to employers with fewer than 50 employees and earnings
per worker under $12,000 annually.
This arrangement creates at least three odd interrelated incentives. First, companies
with 75 or more workers have a strong incentive to contract out for services that can be
produced by 75 or fewer low wage workers. Custodial services, mail rooms, and other low
skill services are best purchased by separate small companies that are eligible for caps under
7.9 percent.
Second, the cap is ineffective in ameliorating the disincentive for companies not
subject to the 7.9 percent cap to hire low wage workers. Family benefits typically will cost
approxim^tely^$250j^er hour. A company with average health care premium costs under
7.9 percent of payroll must bear that full cost when it hires a minimum wage worker. While
recent research has caused many labor economists to reduce their estimates of the
disemployment effects of increases in the minimum wage, a jump of about $2.50 per hour - or roughly a 50 percent increase in the minimum wage ~ and one that is indexed vastly
exceeds any historical change. This effect is responsible for the incentive to "buy rather than
make" services produced by low wage workers.
Third, the caps on maximum payments create disincentives to hire high wage
workers. Two examples illustrate this incentive. Consider company X with 75 or more
employees that is subject to the 7.9 percent cap. If health insurance costs would average
--21--
�Allied Social Sciences Association
Henry J. Aaron
Transition
The chief advantages of the employer mandate over the individual mandate appear
to be transitional. The employer mandate keeps current employer outlays flowing, thereby
minimizing the need to replace those funds with new taxes or direct personal payments.
To that extent, the employer mandate minimizes the adjustment costs of shifting to a new
payment base. This advantage is both economic and political. The economic advantage is
encapsulated in the old saw from public finance: an old tax is a good tax. The deeper truth
in this saying is that current taxes are capitalized into values of assets that people have
purchased on the expectation that taxes would persist. Undoing such taxes - or contractual
distributions of health insurance costs -- will produce windfall gains and losses. As table
1 indicates, these gains and losses may be considerable.
This transitional argument is somewhat weakened to the extent that current employer
•payments can be maintained under an individual mandate through maintenance-of-effort
rules or by requiring employers to pass savings from reduced payments for health insurance
to workers in the form of higher wages. Such rules are difficult to design and enforce
effectively. The transitional argument is weakened also by the findings presented earlier in
this paper regarding the shifts among employers in costs arising from a shift to community
rating.
-23-
�TO BUSINESS AND POLITICAL EDITORS:
PRESIDENT CLINTON GETS 'D+' ON FIRST
YEAR REPORT CARD FROM NOTED ECONOMIST
U n i v e r s i t y o f C a l i f o r n i a I r v i n e Professor F a i l s C l i n t o n
i n Labor and Tax P o l i c i e s ; High Marks For I n t e r n a t i o n a l
Trade
IRVINE, C a l i f . , Jan. 19 /PRNewswire/ -- P r e s i d e n t
C l i n t o n e s s e n t i a l l y " f a i l e d " h i s f i r s t year i n o f f i c e and
t h e next t h r e e w i l l be h i s l a s t years i n t h e White House,
a c c o r d i n g t o a l e a d i n g economist a t t h e U n i v e r s i t y o f
C a l i f o r n i a , I r v i n e , (UCI) Graduate School o f Management.
" I submit t h a t B i l l C l i n t o n w i l l n o t o n l y f a i l t o be
r e e l e c t e d -- he w i l l n o t be t h e Democratic nominee i n
1996," P r o f e s s o r R i c h a r d B. McKenzie t o l d Orange County,
C a l i f o r n i a , b u s i n e s s l e a d e r s a t a b r e a k f a s t meeting
Thursday, Jan. 20, t h e f i r s t a n n i v e r s a r y o f C l i n t o n ' s
inauguration.
McKenzie graded C l i n t o n i n s i x key areas and gave t h e
p r e s i d e n t an o v e r a l l performance mark o f "D+." The
h i g h e s t grade t h e p r e s i d e n t r e c e i v e d was a "B" f o r h i s
Press RETURN t o c o n t i n u e , GOLD MENU f o r o p t i o n s o r EXIT t o c a n c e l
�h i g h e s t grade t h e p r e s i d e n t r e c e i v e d was a "B" f o r h i s
i n t e r n a t i o n a l t r a d e p o l i c i e s . C l i n t o n r e c e i v e d a "C" i n
l e a d e r s h i p and "Ds" i n h e a l t h care and economic growth.
His t a x and l a b o r p o l i c i e s earned "Fs."
McKenzie v o t e d f o r C l i n t o n and has no partyaffiliation.
He i s t h e W a l t e r B. Gerken P r o f e s s o r o f
NEW PAGE
E n t e r p r i s e and S o c i e t y a t UCI's Graduate School o f
Management and a u t h o r o f t h e r e c e n t l y r e l e a s e d Ipook, "What
Went R i g h t i n t h e 1980s" ( P a c i f i c Research I n s t i t u t e ,
1994) .
McKenzie i s a v a i l a b l e f o r comment by telephone o r i n
person. A copy o f h i s speech -- i n c l u d i n g 10 reasons why
B i l l C l i n t o n w i l l n o t be r e e l e c t e d i n 1996 -- a l s o i s
a v a i l a b l e . A copy o f t h e r e p o r t c a r d i s a v a i l a b l e by
c a l l i n g 310-458-1224.
-01/19/94
/CONTACT: R i c h a r d McKenzie o f t h e U n i v e r s i t y o f
C a l i f o r n i a , I r v i n e , Graduate School o f Management,
714-725-2604/
CO: U n i v e r s i t y o f C a l i f o r n i a , I r v i n e ,
Graduate School o f Management ST: C a l i f o r n i a I N : SU:
NY-JB -- LA018 -- 1268 01-19-94 15:44 EST
Press RETURN t o c o n t i n u e ,
GOLD MENU f o r o p t i o n s
o r EXIT t o c a n c e l
�1
Health plan
faces 2 more
challenges
Ueng
By Judi Hasson
USA TODAY
The Ginton health proposal
came under fire Thursday
from two fronts — economists,
who predicted it would wreak
havoc on medical care, and the
American Medical Association,
which wants major changes.
A letter signed by more than
560 largely conservative economists, including Nobel laureate Milton Friedman, warned
a^inst price controls.
They said President Clinton's plan to cap insurance premiums if increases don't slow,
along with other cost-control
rules, would "produce shortages, black markets and reduced quality."
White House economic adviser Gene Sperling called the
letter "misleading." He said almost no "mainstream" economists had signed it
"Our plan relies on competition backed up by an overall
limit on how much a family's
premium can go up," Sperling
said. "That is far different than
the type of detailed price controls that we rejected."
Edith Rasell, health economist and physician at the Economic Policy Institute, said.
"There's noreasonto be concerned that quality will deteriorate just because we're going
to use some cost containment"
The AMA is increasing its efforts to change major parts of
the White House proposal.
In a memo to three dozen
AMA-afflliated specialist societies, the AMA called for a unified voice in lobbying Congress
and invited the specialists to a
Tuesday strategy meeting.
"We know everyone won't
agree on everything^ but we do
want to know the areas of
agreement so we can capitalize
on it," said AMA spokesman
James Todd.
Among changes the AMA
wants: antitrust exemptions, so
doctors can set fees collective-
decide which services to
to compete with orgaly and health plans; and limits
nized
on malpractice awards.
Todd complained the Ginton plan limits choice of doctors by requiring everyone to
join one plan and pay extra for
care outside it.
The AMA is so sensitive
about its behind-the-scenes efforts that it sent a memo
Wednesday asking the specialists not to discuss the latest lobbying efforts.
i t is the AMA's opinion that
no purpose is served in discussing legislative strategy in the
media," the AMA's Richard
Deem wrote. "Please let us
know if you receive any media
contacts on the meeting."
Saturday, the White House
takes another step in recruiting
sympathetic doctors. Dozens
will be at a workshop on how to
talk up the plan back home.
Meanwhile. Sen. Edward
Kennedy, D-Mass., predicts
that regardles of the disputes,
some form of mandatory employer-paid insurance will remain in Gin ton's proposal.
Kennedy and New York
Democrat Daniel Patrick Moynihaa a critic of Ginton recently, chair the two key committees that will shepherd the
health bill through the Senate.
Business groups complain
many employers can't afford
the added cost of the employer
mandate, even though small
firms with low-wage workforces would be eligible for
subsidies. Senate Minority
Leader Robert Dole. R-Kaiu is
on record against the employer
mandate, and last month the
AMA withdrew its support.
Says Kennedy: "People expea that we're going to have a
public school system ... clean
drinking water, a Social Security system. People will hopefully feel they'll have a healthcare system that will give them
the assurance they'll be covered for their life."
i
c
CO
CO
C
CO
>
�Dear Mr. President...
Stuart I. Greenbaum Northwestern University
1939, 1,018 economists fare-Herschel Grossman Brown University
(saw the Depression in a letter then Gottfried Haberler American Enterprise Institute
sent President Herbert Hoover David D. Haddock Northwestern University
wanting against tit Smoot-Hawley Steve H. Hanke Johns Hopkins University
Tariff Act Today tee print a simi- John R. Hanson Texas AAM University
lar letter-along with the names of James C Hartigan University ot Oklahoma
some cf its 562 signatories-warn- Thomas W. Hazlett University of California
ing against the economic conse- at Davis
quences af the Clinton health care David Henderson Hoover Institution,
Stanford University
plan.
Scott E. Masten University of Michigan
Fred S. McChesnay Emory University
Robert L McDonald Northwestern University
David I. Metselman Virginia Polytechnic
Institute and State University
Allan H. Meltzar Carnegie Mellon University
Merton Miller University of Chicago
Thomas G. Moora Hoover Institution,
Stanford University
Gerald L Musgrave Economics America. Inc.
Richard F. Muth Emory University
Jack Hirshleifar UCLA
William Niskanen Cato Institute
Charles A. Holt University of Virginia
Walter Y. 01 University of Rochester
Arman A. Alchian UCLA
Steven Horwitz St. Lawrence University
/meant Ostrom Indiana University
Wayne Allen Delta State University
Brooks B. Hull University of Michigan
Judd W. Patton Bellevue College
William R. Allen UCLA
at Dearborn
Sam Paltzman University of Chicago
Gary M. Anderjon California State
Laurence R. lannaccone Santa Clara University
Charles R. Ptatt California Institute
University at Northridge
Gregg A. Jarrell University of Rochester
of Technology
Martin Anderson Hoover Institution.
Ronald N. Johnson Montana State University
WHKam Poole Brown University
Stanford University
Joseph P. Kalt Harvard University
John Baden University of Washington
Jeremy Rabkm Cornell University
Samuel H. Baker
John Raisian Hoover InstituCollege of William & Mary
tion, Stanford University
R. Robert Batemarco
W. Robert Read University
Manhattan College
of Oklahoma
January 13,1994
Arletgh T. Bell Jr. Loyola
Edward M. Rica University
Dear President Clinton:
College in Maryland
of
Washington
Price controls produce shortages, black markets and
Ernst R. Bemdt Massachusetts
Murray N. Rothbard Unrverreduced quality. This has been the universal experience
Institute of Technology
srty of Nevada at Las Vegas
in the 4.000 years that governments have tried to artifiWalter Block
Simon Rotten berg University
cially hold prices down using regulations,
College of the Holy Cross
of Massachusetts at Amherst
You insist that your health care plan avoids price
George H. Borts Brown
Paul H. Rubin
controls. We respectfully disagree. Your! plan sets the
University
Emory University
fees charged by doctors and hospitals,' caps annual
Michael Boskin Hoover InstituHenry Saffar Kaan College
spending on health care, limits insurance premiums,
tion, Stanford University
of New Jersey
and imposes price limitations on new and existing
Martin Bronfenbrenner
Thomas R. Saving
Duke University
drugs.
Texas A&M University
Edgar K. Browning Texas
Anna J. Schwartz
In countries that have imposed these types of reguA&M University
New York University
lations, patients face delays of months and years for
Yale Brozen
Barry J.SaMon University of
surgery, govemment bureaucrats decidejtreatment opUniversity of Chicago
Texas at Dallas
tions instead of doctors or patients, and innovations in
Phillip Cagan
WMwi F. Shugart I
medical techniques and pharmaceuticals are dramatiColumbia University
Universrty of Mississippi
cally
reduced.
Here
in
America,
the
threat
of
price
conJohn E. Calfee
JulanL Simon
trols on medicines has already decreased]researchand
Brookings Institution
University of Maryland
development
at drug companies, which will lead to reThomas Cargill University of
Bvton A. Smith
duced discoveries and the loss of life in the future.
Nevada at Las Vegas
University of Houston
In the 1970s, govemment tried to regulate the price
Robert Cherry Brooklyn College
Vvnon L Smith University
of a simple homogenous product, gasoline.
The result
Harold Christensen Centenary
of Arizona
was a social and economic disaster.1 People were
College of Louisiana
Robvt F. Stsmbeu^i
Richard Coffman
forced to waste hours waiting in lines] to purchase
University of Pennsylvania
University of Idaho
Heftoert Stain American
gasoline. Long waits for surgery and other medical
Paul A. Coomes University
Enterprise Institute
care will have far more serious consequences.
of Louisville
Hans R. S t *
Caps, fee schedules and other government regulaRobert W. Crandall
Vanderbilt University
tions may appear to reduce medical spending, but such
The Brookings Institution
John Taylor
gains are illusory. We will instead end lip with lowerPatricia M. Danzon
Stanford University
quality medical care, reduced medical innovation, and
University of Pennsylvania
Henry Thompaon Auburn
expensive
new
bureaucracies
to
monitor
compliance.
Harold Demsetz UCLA
University
These controls will hurt people, and thej| will damage
Arthur M. Diamond Jr.
Marti Toma University of
the economy. We urge you to remove price controls, in
University of Nebraska
Kentucky
any form, from your health care plan.
Thomas DiLoranzo Loyola
Geoffi Troughton California
College in Maryland
State University at Chico
Dean S. Dutton Brigham Young University
Gordon Tullock University of Arizona
George Kaufman Loyola University
John Ellis University of California at Santa Cruz
Norman B. Tura Institute for Research
Benjamin KMn UCLA
Alain Enthoven Stanford University
on the Economics of Taxation
Metvyn Krauss New York University
Paul Evans Ohio State University
Jamas Van B a * Blinn College
David Krautzar James Madison University
David I. Fand George Mason University
Richard Vaddar Ohio University
David N. Laband Salisbury State University
Marianne V. Fetton Indiana University
Warren Wada North Park College
Gene Labar University of Vermont
Marvin Frankel University of Illinois
John T. Wamar Clemson University
Nichotos Lash Loyola Universrty
Milton Friedman Hoover Institution,
Murray L Waidanbaum
Peter Lawtn University of Dallas
Stanford University
Washington University
Luis Locsy University cf Miami
Finis Watch Texas A&M University
B. Defworth Gardner Brigham Young University
John R. Lott Jr. Universrty of Pennsylvania
Walter E. WHams
Martin S. Gaisal VanderWt University
Robert Main Butler University
George Mason University
John Geppart University of Nebraska at Lincoln
Robert Manasa Louisiana State University
Kar-Yki Wong University of Washington
Fred R. Gtohe University of Colorado
N. Gregory ManUw Harvard University
Edward L Zajac University of Arizona
Scott Goldsmith University of Alaska
Robert T. Masson Cornell University
J H i ^ L L S T R E E T JOURNAL FRIDAY. JANT ARV n
T
i
inn <
�1
1X1,) M l l ' I M H > t ^ ( I I J .
1661 'M A«Uy»r 'Avaiij
Economists Attack Qintonj Health Plan
Group Says Cost Controls Wbuld Ero^Care,frbduceShortages
n 7\ o» •«
ByDaveStadmore
Amnrmtrtrtrm
f
Fedtntion ci Independent Business, a maior foe otf the Cbnton h e ^ pbnTab^ed.
At a news conference. Lott, Niafcanen and John Calfee of
Long waits for surgery and an eroding quality of care are the Brookings Institution adonwledged that the signers ofthe price Americana would pay far the coat restraints in fered no solutions ot their own toward reducsig health cafe
President Clinton's health plan, more than 560 economats costs, expected to top $1 trillion in 1994. but that aD agreed
the price cap features at the Omton plan would wonen the
predicted yesterday.
"Price controls don't control the true casta of good! Pto- pmMflii.
Administration officials sought to counter the attack.
pie pay in other ways," said University of Pennsytvtna
"Our
firstbne of defense in coat containnwit is market ineconomist John R. Lott Jr., who gathered signatures from
colleagues across the country on an open letter sent to the centives tni competition." said Alan Blindei of the presi
dent's Counci of Economic Adviaen.
White House.
"Price controls produce shortages, black markets and re- The plan's cape on private nsurance prenrnam are backups that come into I play only if the market mechanisms fail
duced quality," the letter warned, involdng the memory of to work. Bbnder said. And since the administntion rejected
long lines caused by gasoline rationing during the 1970s. cost controls on specific services such as setting a broken
Clinton administration officials said the letter nusrepre- arm or giving a Ou shot, the private sector stiD would have
sented their health plan, saymg that price controls would be discretion to set those prices.
used only as a last resort.
Barry P. Boswoijth, a Brookings Institution senior fellow,
The signers included conservatives bke Nobel laureate said he refused to sign the "misleading" letter.
Milton Friedman: William A. Niskanen. formerly on Presi- 1 don't see how economists (can) oppose the basic idea of
dent Ronald Reagan's Council of Economic Advisers: and a budgetfamton something," said Bosworth. who was direcMichael A. Boskin. the chairman of the council under Presi- tor of the Council on Wage and Price Stability in the Carter
dent George Bush. William C. Duifelberg of the National admintstration. That'i what we teach people."
�1
Stye Mtatyngfamfbiro
FRIDAY, JANUARY 14. IVM .
Economists urge Clinton
nottolimit medical fees COSTS
From page AI
Bv D c m a Smitn
^E J - E O S S E W S
4GESCV
More than 500 economists yesterday urged President Clinton to drop
pnee limits from his health care reform plan as the govemment reported a slowdown in medical care
inflation last year.
Caps, fee schedules and other
govemment regulations may appear
to reduce medical spending, but
such gains are illusory." the economists wrote in a letter to the president
"We will instead end up with lower
quality medical care, reduced medical innovation and expensive new
bureaucracies to monitor compliance." they added.
The letter was signed by 565 econ-
omists from around rhe country represennng a broad political ipectrum. John Lott. a professor at ;he
Wharton School of the University of
Pennsylvania, told reponers.
The administration says its plan
does not contain pnee controls But
the economists argued that an administration proposaj to limit increases in insurance premiums and
to allow state-run health alliances to
negotiate prices paid to care providers amounts to the same thing.
The economists argued that the
administration's proposal would
have the same effect as govemment
price controls — long lines at hospitals and delays in surgery
• Here in Amenca. the threat of
see COSTS, page A16
price controls on medicines has already decreased research and de'.elopmeni at drug companies.
•Ahich w.iil lead to reduced discoveries and the loss of life in the future,"
rhe economists wrote.
Administration officials have argued that the president s proposal
would b'nng more market forces to
hear on the health care industry and
ihat the premium cap? are only a
backup mechanism" to guarantee
prices will not spiral out of control.
The | Health Secunty Act is directed at trying to create the conditions tor a market that will work,"
White House health policy adviser
Richard Kronick said.
While cost control aspects of the
president s plan are coming under
heavy fire, the latest govemment
economic report suggests market
forces may already be having a dramatic effect on health care prices.
The trend will make it harder for
Mr. Clinton to argue there is a healtn
care ensis and to sell his plan :o re
vamp one-seventh of rhe ration ;
economy, analysts said
The Labor Department repori-.:
yesterday that medical care
,
rose by 5.4 percent last -.ear "'•>•
nse was higher than the J " per.-e-•
overall nse in the Consumer ••>-..•
Index last year, but it represer.:, ,
significant slowdown m medic.i.
care inflation from previous ear-;
In 1992. when Mr. Clinton rr—.
ised to tackle health care retorduring rhe presidential elecc-n
campaign, medical care cons - ^
by 6.6 percent after a " 9 perce-:
rise in 1991 and a whopping ^ i ?<rr
cent increase in 1990.
"The simple reality isthat rhe c-^of doctors, hospitals and drugs -a-.e
all been moderating significar.r:.
said David Jones, chief econorr.:v ••
Aubrey G. Lanston.
"That was a very imponar.r c e
mem in how President Clinton .:c
fined the crisis to start with - - J these costs were escalating
control and the govemment r a j ••
step in," Mr. Jones added
�FOR HEALTH INSURANCE
WIT
With
Ameria'j attention focused on deficit
reduction last February, the Pmident warned that
concrolling health care costs was an essential precondition for balancing the budget and renewing our
economic future. But somewhere between February's
diagnosis and September's proposed cure, the bottom
line on health care costs vanished.
Bill Clinton certainly deserves praise for moving
health care reform to the top of the agenda. He is right
to insist that no American should be unable to afford
basic health insurance or fear losing coverage by
38
falling ill or changing jobs. But alas, his plan doesn't disabled people of every age and income level and
give us credible cost control To the contrary, in vast heavily subsidized health coverage for early retirees. It
expansion of entitlements — regardless of need — would provide a wide range of mental health and
opens the floodgate to a new spending surge.
substance abuse services immediately, and extensive
The President's mandated-benefits package is mod- dental benefits and orthodontia by the year 2001.
The issue isn't whether these new benefits would be
eled on a small number of elite Fortune 500 health
plans. Beyond the lavish guarantee 'of univenal coverage, the plan would create a costly array of other new PettrG. Petmtm i$ dmmtum oftbt BUdaaru Group,
entitlements. It would give a generous prescription- a prwta arotammt bmk m Nns York, aid the auAor
drug benefit to all elderly Americans. It calls for at- of "Fating Up: How to Rone the Economy From
home and "community-based" personal services for Crmbmg Dtbt mi Raton tbt Amtriam Dnm''
PHOTO U L U S T I A T I O * I T W I L L I A M D U K S roa
T H S Naw
Yoax T i n t s
�)
and
s. It
and
:sive
dbe
shot
nice to have. They would. The issue is whether we can caps if costs ever came close to breaching them. Yet condition of employment (and leaving it up to emafford them. We can't. These enmiements would be far from alerting the public to the politically toxic fact ployers and employees how to split the cost of the
piled on top of myriad Federal benefits already sched- that meeting its cost-saving goals will mean making "mandate"). I would make all coverage more afforduled to grow much faster than the economy. Even choices, the White House has proclaimed its plan will able through insurance reforms like community rating
without the health plan, the cost of Social Security and deliver more for less.
(requiring each insurance company to charge each
Medicare is in danger of becoming unsustainable in
The President's silence about choices reflects the customer the same premium) and guaranteed issue
the next century. Unless entidements can be con- seductive assumption that all we have to do is squeeze (forbidding insurers to deny coverage to high-risk
trolled, there can be no fiscal sanity.
the pure waste out of our health system. If only individuals). I would extend Medicaid to all houseAsked about the danger that the proposed health Washington gets tough on fraud and abuse, cuts excessholds under the poverty line — and allow households
benefits would give an extra push to the entidements paper work and punishes the profiteers, we can suppos-with incomes up to twice the poverty line to "buy
into" Medicaid on a sliding scale.
juggernaut. Administration spokespeople insist the edly realize huge savings without
According to the Congressional
numbers all add up. The plan, they assert, will generate trade-offs. But in real life, pure
Budget Office, these proposals
more than enough health care savings to pay for new waste is difficult to identify. Most
would cost a fraction of what the
benefits and still reduce the deficit. But economists as of what physicians do involves
President has proposed. Yet toideologically diverse as Martin Feldstein, Michael judgments about probabilities (the
gether they would guarantee basic
Boskin and Henry Aaron all question the Administra- benefits of routine fetal monitoring
isn't wlietlitMinsurance coverage to 99 percent of
or of a bone marrow transplant),
tion's assumptions and numbers.
all Americans.
not certainties. One physician's
New benefits always create new demand. Back in
tlic Ijcnehts
notion of waste is another's idea' of
1965 President Lyndon Johnson defended Medicare
Workable reforms would also inby saying that an extra $500 million would be "nogood medicine. Moreover, real
in die
troduce the incentives needed to
problem." Today the program costs $150 billion. medical costs are not going up
make our health benefits less exClinton plan
The record in forecasting cost savings is no better. because of a proliferation of usepensive and. our entire health
less
services
but
because
of
costly
In 1990, for example. Congress projected that tightensystem more cost-consdous. That
new
technologies
that
have
at
least
wouldn
1
be
ing the screws on Medicare-would yield $43 billion in
means enacting immediate, deep
some
benefit.
savings — none of which materialized. When the
cuts in the tax subsidy for employnice
to
have.
Clinton plan was unveiled, Ira Magaziner, the Admin- Americans like to think, a Euroer-provided health care and signifiistration's health strategist, insisted that its projec- pean wit once quipped, that everycant new cost-sharing requirements
Thev
would.
tions were based on sophisticated models and that thing is an option, even death.
in public programs. It also means
there was no reason to worry. We'd better hope so. Whether we look to theratesat
overhauling the tnedical-malpracdce system. To control the skyFor years economists have been saying that to make which we commit dying patients |to
rocketing cost of heroic intervenour system more efficient and less costly we must giveintensive-care units, switch on
is whether we
tion in the last days of life, we must
patients, doctors and hospitals incentives to weigh multimillion-dollar M.RJ. scanners
go beyond Bill and Hillary Clincosts and benefits. Yet consider how the proposed for routine complaints or perform
can al'toid them.
ton's admirable advice to prepare
plan would affect co-payments and deductibles, the heart bypasses on septuagenarians,
living wills. We need stantfardized
small portion of medical bills that insured patients rates are far higher here- than anyWe can't.
forms sod eveo fuuiic&l meomves
must pay out of their own pockets. These would go where else. Cost control means
to encourage the public to do so.
down for the vast majority of Americans, not op — making trade-offs between providing spectacular care for the few and
cushioning us even more from the true costs.
Although such reforms are sure
Or consider the present $75 billion tax subsidy for doing the greatest good for the
to bring down costs, no one knows
employer-paid health care. It's hard to imagine a more gieamt number. It means asking •—
how much or how quickly. That ia
pei vase entitlement: its biggest windfalls go to upper- as other countries do — whether
why it is crucial to await proven
income Americans while nothing is offered to the we should spend $100,000 extencisavings before adding large entitlepoor or unemployed. Yet the Administration would ing the life of a single premature
ments — and allow states, employgrandfather current employer-paid health plans for 10 infant when, for the same cost, we
ers and health care providers room
yean before imposing any ceiling on their tax subsidy. could provide prenatal care to 100 women.
nt. The essential precondition for genuine
toexp<
Some put great hope in the incentive effects of the
The Clinton plan pretends we can avoid such painful reform is consensus. Senator Daniel Patrick Moyniplan's proposed managed competmon. But Alain Enth- choices. It assumes we can generate huge fiscal savings han, the Democratic chairman of the Senate Finance
oven, the health-policy expert from Stanford Universi- in health care while boosting the demand for health careCommittee, has described the economics of the Presity and the chief architect of managed competition, says — with no new broad-based tax except on cigarettes. Is dent's plan as "a fantasy." Yet without a consensus
the Administration's proposal won't work without a there any way this newriver-boargamble could work? about limits, is it not a political fantasy to think we can
cap on this tax subsidy — the key to inducing Only, as Warren Rudman, former Republican Senator use regulation to silently cap costs? A consensus
consumers to choose cost-effective health plans.
from New Hampshire, wryly suggests, if Americans are about limits might take the form of Oregon's reform
Perhaps fearing that Enthoven may beright,the nqmind to smoke. That way we could maximize the plan: explicit rules about which proceduies the GovAdministration has added an extra circuit breaker new tax revenues on tobacco and insure that most emment will pay for and those it won't. Or, limits
regulation. A National Health Board would decide Americans would not be around long enough to cash incould be entirely implicit, worked out ad hoc by
doctors and patients as we learn to live within budgets.
what procedures are "necessary or appropriate." The on the new early-retirement subsidy.
plan would cap total health care dollars by limiting
It's time America faced the facts. We need radical Whatever route we take, there will be no way around
increases in insurance premiums. Caps were also health reform. We don't need more costly univenal some version of rationing.
slapped on the plan's new benefits and subsidies.
entitlements that will prove very difficult to pay for and Letting entitlements spiral out oi control is a way of
There is certainly precedent for the Administra- impoasible to take away. A workable plan would be saying, as a society, that whatever we promise to
tion's caps. We've had caps on the Federal deficit for aincremental and experimental. It would start by extend- ourselves today takes prrrrdrmr overfindingthe
decade and caps on the national debt for half a century.ing basic health insurance coverage to Americans who resources to invest in a better future foe our children.
If there is one thing sure about caps, it is that they can't afford it, but await the success of cost-saving When the Clinton subsidy caps were introduced as a
have only worked when Congress was planning to measures before adding more benefits. "Basic" means hedge against cost overruns, Henry Waxman, Demospend less anyway. Incredibly, the Administration nedical policies to cover doctor and hospital bills, with cratic Representative from Califonua, complained that
itself acknowledges this. As Judith Feder, Deputy tignificant co-payments and deductibles. It does not "the whole idea of an entitlement is to guarantee that
Assistant Secretary of Health and Human Services, ncan subsidizing coverage for prescription drugs, or even if their estimates are incofieo, the money will be
there and people can count on it" Real reform means
noted in recent testimony, it is "inconceivable" that broadly defined mental or dental care.
Congress would not waive the health plan's subsidy ^ I suggest making this no-frills health insurance a rethinking this "whole idea." • •
THI Nsw Yoax Tints MACAZIKI / JAitUAtv 1«, 1(94 37
�PAGE
LEVEL 1 - 1 OF 1 STORY
Copyright
January
1994 The Times M i r r o r Company
Los Angeles Times
17, 1994,
Monday, Home E d i t i o n
SECTION: Metro; P a r t B; Page 7; Column 1; Op-Ed Desk
LENGTH: 1138
words
HEADLINE: PERSPECTIVE ON HEALTH CARE;
RAISE QUALITY BY LOWERING COSTS;
INCENTIVE FOR PROVIDERS NOW IS TO USE THE MOST COSTLY TREATMENT. THERE'S NO
REWARD JUST KEEPING PEOPLE HEALTHY.
BYLINE: By ALAIN C. ENTHOVEN and SARA J. SINGER, A l a i n C. Enthoven i s a
p r o f e s s o r o f management a t S t a n f o r d U n i v e r s i t y ' s Graduate School o f Business and
a member o f the Jackson Hole Group, an o r g a n i z a t i o n o f h e a l t h - c a r e e x e c u t i v e s
and p o l i c y a n a l y s t s . Sara J. Singer i s h i s s p e c i a l a s s i s t a n t .
BODY :
To improve q u a l i t y i n h e a l t h care, c u t c o s t s . Sounds c o u n t e r i n t u i t i v e , but i n
h e a l t h care, as i n most businesses, q u a l i t y and economy go hand i n hand. One of
the b i g g e s t m i s c o n c e p t i o n s i n the h e a l t h - r e f o r m debate i s t h a t i f you c u t the
cost, q u a l i t y w i l l s u f f e r .
Right now, p r o v i d e r s -- h o s p i t a l s , d o c t o r s and o t h e r p r a c t i t i o n e r s -- work i n
a system i n which everyone i s rewarded f o r p r o v i d i n g more, not n e c e s s a r i l y
b e t t e r , care. T h i s t r a d i t i o n a l f e e - f o r - s e r v i c e , remote t h i r d - p a r t y - p a y e r model
pays per procedure, r e g a r d l e s s o f the outcome. I n a w o r l d such as t h i s ,
p r o v i d e r s , no m a t t e r how e t h i c a l , have an u n a v o i d a b l e i n c e n t i v e t o p r o v i d e the
most c o s t l y t r e a t m e n t .
Wide v a r i a t i o n s i n p r a c t i c e p a t t e r n s among p h y s i c i a n s suggest t h a t more
procedures are not n e c e s s a r i l y r e l a t e d t o b e t t e r outcomes. A m e d i c a l d i r e c t o r of
an East Coast health-maintenance o r g a n i z a t i o n s t u d i e d p r a c t i c e p a t t e r n s and
observed a f i v e f o l d t o t e n f o l d d i f f e r e n c e i n the c o s t l i n e s s o f p r a c t i c e p a t t e r n s
of d i f f e r e n t d o c t o r s , u s u a l l y w i t h no evidence o f d i f f e r e n c e i n outcomes.
Also, the t r a d i t i o n a l system does not a l l o c a t e resources r a t i o n a l l y . I n s t e a d ,
h o s p i t a l s purchase expensive equipment even i f they cannot f u l l y u t i l i z e i t , and
beds go u n f i l l e d w h i l e h o s p i t a l s c o n t i n u e t o b i i i l d c a p a c i t y . There i s no
i n c e n t i v e t o keep i n d i v i d u a l s h e a l t h y because t h e r e i s no reimbursement f o r i t .
P r o v i d e r s are p a i d l e s s f o r p u r s u i n g a l e s s i n v a s i v e , but e q u a l l y e f f e c t i v e ,
non-surgical treatment.
In the c u r r e n t system, t h e r e i s no match between resources and needs. This
country has t r a i n e d too many s p e c i a l i s t s and too few p r i m a r y - c a r e p h y s i c i a n s . A
s u r f e i t of s p e c i a l i s t s i s bad f o r your h e a l t h and bad f o r your pocketbook. I f
there were fewer, we could pay them w e l l and g i v e them f u l l schedules. They
could care f o r the same p o p u l a t i o n a t l e s s c o s t . Because they would be
p r o f i c i e n t , t h e i r work would be o f h i g h q u a l i t y . Because they would be busy,
t h e r e would be l e s s unnecessary surgery.
To make matters worse, there i s no a c c o u n t a b i l i t y for cost or q u a l i t y because
providers are not paid on the b a s i s of e i t h e r . Problems i n h e a l t h - c a r e
�PAGE
2
d e l i v e r y , such as l a c k of immunizations and o t h e r p r e v e n t i v e measures, are
viewed as i s o l a t e d issues. They are not. They r e f l e c t a systemic problem: No
i s accountable f o r g e t t i n g t h e j o b done.
one
Los Angeles Times, January 17,
1994
Even p h y s i c i a n s have come to d i s l i k e the t r a d i t i o n a l f e e - f o r - s e r v i c e model
because i t s e t s them up in an a d v e r s a r i a l r e l a t i o n s h i p with payers. Physicians
r o u t i n e l y must respond to c a l l s from l e s s e r - q u a l i f i e d insurance company
r e p r e s e n t a t i v e s who question t h e i r choice of treatments.
B e t t e r care a t l e s s c o s t i s p o s s i b l e through i n t e g r a t e d f i n a n c i n g ( t h a t i s ,
insurance) and d e l i v e r y systems ( h o s p i t a l s and p h y s i c i a n s ) . Under t h e new r u l e s
of the game, a l l would b e n e f i t by keeping i n d i v i d u a l s under t h e i r care h e a l t h y ,
or, once s i c k , by making them w e l l i n the most e f f i c i e n t way p o s s i b l e . Such a
system would g i v e p r o v i d e r s r e s p o n s i b i l i t y f o r i n d i v i d u a l s ' comprehensive care
f o r a f i x e d p e r i o d i c payment s e t i n advance, put p r o v i d e r s a t f i n a n c i a l r i s k f o r
the c o s t of care and, t h e r e f o r e , f o r the "cost of poor q u a l i t y , " and h o l d
p r o v i d e r s accountable f o r q u a l i t y outcomes.
With t h i s new s e t of i n c e n t i v e s , accountable h e a l t h plans would seek t o
a t t r a c t committed and r e s p o n s i b l e p h y s i c i a n s . F i n d i n g , t r a i n i n g and r e t a i n i n g
the most q u a l i f i e d group p o s s i b l e i n t h e r i g h t q u a n t i t i e s and s p e c i a l t y mix f o r
the p o p u l a t i o n served would be key t o f i n a n c i a l success. Accountable h e a l t h
plans would g i v e d o c t o r s i n c e n t i v e s t o p r o v i d e h i g h - q u a l i t y , low-cost care and
the t o o l s they need t o do so.
I n f o r m a t i o n systems c o u l d be used t o i d e n t i f y and adopt c o s t - e f f e c t i v e care.
Q u a l i t y management and improvement techniques would be employed r o u t i n e l y .
P r o v i d e r s would study v a r i a t i o n s i n p r a c t i c e p a t t e r n s t o determine and adopt
what makes sense. They would be h e l d accountablie f o r q u a l i t y outcomes because
the remuneration of the e n t i r e group would be a t s t a k e . T e c h n o l o g i c a l redundancy
would be e l i m i n a t e d .
C o s t l y s p e c i a l i z e d procedures would be c o n c e n t r a t e d i n e f f i c i e n t r e g i o n a l
c e n t e r s where p h y s i c i a n s are busy enough t o m a i n t a i n p r o f i c i e n c y and achieve
a d m i n i s t r a t i v e economies of s c a l e . There i s a well-documented c o r r e l a t i o n among
high volumes, low m o r t a l i t y and low c o s t . The Pennsylvania open-heart surgery
study, f o r example, s t u d i e d 35 h o s p i t a l s doing coronary a r t e r y bypass g r a f t
o p e r a t i o n s . The procedure a t the h o s p i t a l w i t h the best r i s k - a d j u s t e d m o r t a l i t y
r a t e c o s t $21,000; a t the worst i t was $84,000, and on average was $44,000. I f
every h o s p i t a l performed a t t h e l e v e l of the most p r o f i c i e n t h o s p i t a l ,
Pennsylvania alone c o u l d save $350 m i l l i o n i n one year f o r t h i s one procedure. A
s i m i l a r r e s u l t c o u l d be t r u e f o r o t h e r s t a t e s .
1
We do not mean to suggest that any means of c u t t i n g c o s t s i s acceptable.
A r b i t r a r y cuts put q u a l i t y at r i s k . The Clinton Administration's proposal for
health-care reform s e t s u n r e a l i s t i c l i m i t s on health-plan premium i n c r e a s e s ,
given the i n c e n t i v e scheme and time frame for other reforms they propose.
P r i c e c o n t r o l s would l i m i t premium increases t o the consumer p r i c e index plus
L.5% i n 1996, phased down t o the index p l u s zero i n 1999. Such t a r g e t s and
b e t t e r c o u l d be met a few years l a t e r by a t h o r o u g h l y reformed c o m p e t i t i v e
system w i t h the s t r o n g e s t poss.ib.le market i n c e n t i v e s , w i t h o u t p r i c e c o n t r o l s .
There i s a g r e a t deal of waste i n the h e a l t h - c a r e system and b i g
o p p o r t u n i t i e s f o r c u t t i n g c o s t w i t h o u t c u t t i n g t h e q u a l i t y of care. To
realize
�v
'•|?ig~
Los Angeles Timertjp£v January ' 17, 1994
-
PAGE
3
p o t e n t i a l s a v i n g s , t h e i n d u s t r y needs tdine t o r e o r g a n i z e , r e s t r u c t u r e , r e t r a i n
and i n s t a l l programs o f continuous q u a l i t y and p r o d u c t i v i t y improvement. This
cannot happen o v e r n i g h t .
I f t h e C l i n t o n p l a n succeeded i n meeting i t s c o s t - c o n t a i n m e n t g o a l s , l i k e l y
consequences would be a r b i t r a r y cutbacks- i n s e r v i c e and c a r e , then queues and
r a t i o n i n g i n t h e form o f spending r e d u c t i o n s n o t t h o u g h t t h r o u g h f o r l a c k o f
time and i n c e n t i v e s , e s p e c i a l l y i n t h e s h o r t r u n . Q u a l i t y o f care would s u f f e r .
In a d d i t i o n , e x p e n d i t u r e l i m i t a t i o n s should n o t be confused w i t h c o s t
r e d u c t i o n . While a c o u n t r y can l i m i t the" c o s t o f t r e a t m e n t , as B r i t a i n and
Canada have done, by s h i f t i n g t h e c o s t o f i l l n e s s back onto p a t i e n t s i n t h e form
of t r e a t m e n t s delayed o r denied, t h e o n l y way to; reduce t h e t o t a l s o c i a l cost of
i l l n e s s and i t s t r e a t m e n t i s t o improve t h e e f f i c i e n c y and e f f e c t i v e n e s s o f care
d e l i v e r y . What i s best f o r s o c i e t y i s • t o - m i n i m i z e t h e c o s t o f i l l n e s s and
treatment.
I n g e n e r a l , t h e r a t i o n a l e t h a t h i g h - q u a l i t y H e a l t h care must be expensive i s
flawed. I n f a c t , o f t e n t h e o p p o s i t e i s t r u e . Mistakes c o s t l i v e s and d o l l a r s .
P r o v i d e r s must be g i v e n t o o l s and h e l d accountable f o r d o i n g i t r i g h t t h e f i r s t
time. We b e l i e v e t h a t t h i s can o n l y be achieved 'through market f o r c e s and
accountable h e a l t h p l a n s .
GRAPHIC: Photo, A l a i n C. Enthoven ; Photo, Sara J. Singer ; Drawing, F i l m i n g
those a n t i - h e a l t h - c a r e commercials / JEFF DANZIGER, C h r i s t i a n Science Monitor
LANGUAGE: ENGLISH
LOAD-DATE-MDC: January 19, 1994
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001. memo
SUBJECT/TITLE
DATE
Paul Jamieson to Gene Sperling; re: To Do List (partial) (1 page)
11/19/1993
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4785
FOLDER TITLE:
[Democratic National Committee Material] [Loose] [2]
2006-0885-F
jp2728
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)|
Freedom of information Act -15 U.S.C. 5S2(b)|
PI National Security Classified Information [(a)(1) of the PRA|
P2 Relating to the appointment to Federal office 1(a)(2) of the PRA]
P3 Release would violate a Federal statute [(aX3) of the PRA]
P4 Release would disclose trade secrets or confidential commercial or
financial information [(a)(4) of the PRA|
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(a)(6) of the PRA|
b(l) National security classified information [(bXI)of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) of the FOIA]
b(3) Release would violate a Federal statute |(bX3) of the FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) of the FOIA|
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement.
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells |(bX9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�November 19,1993
TO:
FR:
RE:
Gene Sperling
Paul Jamieson
To do list
PHONE CALLS
Here are the phone calls you should try to make BEFORE COB TODAY :
Roger Altman 622-1070 Does Treasury have the numbers for the Cooper proposal yet? (Would Andy
know anything about this?)
Lester Thurow (MIT School of Management) You have his quote from Time magazine. See if he could
write an article about how present health care system threatens US firms' competitiveness.
o
^
h
^:F?6/(b)(6)^
h
David Birch President, Cognestics, Inc. He was also quoted in the Time article. Say that you saw his
statement in Nation's Business that Congress ought to find out how many of the top job creating small
businesses provide health insurance. What does he think the answer is? Could his company produce a
study on this issue (if it will be positive)? If he can't do it, who else could do such a study?
o 617/661-0300
David Theroux (Urban Institute) Call him to ask why he is organizing opposition by economists to the
Clinton plan because of price controls when we specifically rejected that method of cost controls when we
put the health care plan together. We put a speed limit on the growth of prices; limits will only apply to
those prices that go up faster than the targeted rate, (see attachments: Theroux letter to Cutler, Q&A on
price controls, and Alicia Munnell's one pager on price controls).
Rick Kronick (x2709)
Dana Priest was promised a memo on savings. Is it done yet?
Also ask him to produce a one pager on Growth Rates "ho country has ever grown at CPI+x. So
how can we?"
MEETINGS (give to Pat)
First Lady Pick her brain on which economists has she contacted. What are her general thoughts on how
we should outreach to economists? Mention to her the Urban Institute effort, say that we need to
be hitting back on attempts such as that to distort the plan. We need to discuss this once you've
talked to her. (Maggie, Pam follow-up)
Ira, Kronick
To discuss process for squaring numbers from HHS, Treasury, OMB, etc.
MISCELLANEOUS/LONGER TERM (what can I be doing to help this process along?)
From Ken Thorpe: Do you have the New Jersey jobs study from Labor?
Pear request (?)
JEC Project (?)
Health Care Team Econ Dinner? When, where?
�David J. Theroux
The B INDEPENDENT
INSTITUTE
President
1
November 1, 1993
Professor David C u t l e r
Harvard U n i v e r s i t y
Cambridge, MA 02138
Dear Professor C u t l e r :
I am w r i t i n g t o urge you t o j o i n w i t h numerous prominent
economists and o t h e r s c h o l a r s as a s i g n e r of a p u b l i c l e t t e r t o
President C l i n t o n , c r i t i q u i n g h i s proposed h e a l t h reform plan's
mandated use of p r i c e c o n t r o l s .
The l e t t e r w i l l appear as a f u l l - p a g e ad i n The Wall S t r e e t
Journal.
The ad i s being independently organized and sponsored by
a group of s c h o l a r s s e r i o u s l y concerned w i t h the C l i n t o n p r o p o s a l ,
and I was asked t o be of a s s i s t a n c e .
As you may know, the proposed C l i n t o n p l a n would c o n t r o l
p r i c e s charged by d o c t o r s and h o s p i t a l s , cap annual spending on
h e a l t h care, l i m i t insurance premiums, impose l i m i t a t i o n s on new
and e x i s t i n g drugs, and much more.
The impact of such p r i c e c o n t r o l s would be extremely harmful
t o any h e a l t h care system, e s p e c i a l l y f o r the disadvantaged, as
h e a l t h care q u a l i t y would s e r i o u s l y d e c l i n e and h e a l t h care
s e r v i c e s would become s e v e r e l y r a t i o n e d .
As you may a l s o know, the Independent I n s t i t u t e i s a
s c h o l a r l y , p u b l i c p o l i c y research o r g a n i z a t i o n , and we are t a k i n g
a major i n t e r e s t i n t h i s issue through our h e a l t h care p o l i c y
research program, the Center f o r Health P o l i c y I n n o v a t i o n , under
the d i r e c t i o n of Simon Rottenberg (Professor of Economics,
U n i v e r s i t y of Massachusetts).
Time i s of the essence since the ad i s scheduled to run soon!
Please mail or FAX your response using the enclosed form to arrive
here no later than November 15.
I look f o r w a r d t o h e a r i n g from you.
Thank you.
S i n c e r e l y yours.
David J. Theroux
DJT:js
Enclosure
134 Ninety-Eighth Avenue, Oakland, CA 94603 (510) 632-1366 FAX: (510) 568-6040
�An Open Letter to President Clinton on Health Care Reform
Dear President Clinton:
Price controls produce shortages, black markets, and reduced quality. This has been the universal
experience in the four thousand years that governments have tried to artificially hold prices down using
regulations.
You insist that your health-care plan avoids price controls. We respectfully disagree. Your plan sets the
fees charged by doctors and hospitals, caps annual spending on health-care, limits insurance premiums, and
imposes price limitations on new and existing drugs.
In countries that have imposed these types of regulations, patients face delays of months and years for
surgery, govemment bureaucrats decide treatment options instead of doctors or patients, and innovations in
medical techniques and pharmaceuticals are dramatically reduced. Here in America, the threat of price
controls on medicines has already decreased research and development at drug companies, which will lead
to reduced discoveries and the loss of life in the future.
In the 1970s, govemment tried to regulate the price of a simple homogenous product, gasoline. The result
was a social and economic disaster. People were forced to waste hours waiting in lines to purchase
gasoline. Long waits for surgery and other medical care will have far more serious consequences.
Caps, fee schedules, and other govemment regulations may appear to reduce medical spending, but such
gains are illusory. We will instead end up with lower quality medical care, reduced medical innovation, and
expensive new bureaucracies to monitor compliance. These controls will hurt people, and they will damage
the economy. We urge you to remove price controls, in any form, (from your health-care plan.
Please sign your name
Please print your name
.
Date
Telephone
Affiliation
Please sign your name
Please print your name
Date
Telephone
Affiliation
Please sign your name
Please print your name
Affiliation
Date
Telephone
�Q:
Haven't we learned from our past experiences in the Nixon era that price
controls don't work. Aren't we really going back to these price controls
under the guise of premium caps?
A:
We have considered - but specifically rejected ~ a policy imposing
price controls on health care. Our primary strategy for cost
containment is private sector competition - - creating the right
economic incentives to bring costs in line and encourage health plans
to compete on price and quality.
;
But we strongly believe that regardless of how quickly or how firmly
competitive reforms take hold, we need to build some discipline and
certainty into our system, so that businesses and consumers know that
their health insurance premiums will not suddenly spiral out of control
one year, and that the federal government!is planning on living within
its means. That is why we reinforce the competitive system with a
fail-safe limit on health care premium increases. .
Price controls call for government micro-management of every health
care service, drug, technology and product. Price controls would have
the government substitute its views for the markets in hundreds ~
maybe thousands ~ of decisions. We reject [that type of micromanagement i n favor of letting a market that truly competes work. We
will simply put a speed limit on how fast premiums can go up. These
limits will only apply to plans whose prices go up faster than the
targeted rate; it will not apply to any other plans in the area.
Today's system is like the Autobahn - where there are no limits
whatsoever and those who race ahead at reckless speeds endanger
everybody else on the road. Price controls would be like someone
stopping you every 5 miles to ask, "So, how fast are you going now?"
Our system would be neither of these. We would post a speed limit on
the road and monitor the system, assuming that people are staying
within the limits. Premium caps would apply only to those that go
above the limit.
�v i n E,^U1\ t-ULlUl
WHY ARE HEALTH INSURANCE PREMIUM CAPS HGT THE SAME AS
PRICE CONTROLS ?
Price controls are generally applied to curb the exercise of
industry- or market-specific monopoly power, or to control
economy-wide inflationary tendencies. Premium caps w i l l be
imposed to spur the pursuit of e f f i c i e n c i e s i n the provision
of health care by firms with the expertise and market power
to be effective i n that pursuit.
Price controls seek to l i m i t Price only; the premium caps
w i l l be part of a larger effort to,exert a budget r e s t r a i n t
AND regulate Quantity through the setting of standard
benefit packages and monitoring of performance.
Premium caps w i l l only apply to "generic" benefit packages,
obviating the need for the detailed quality adjustments for
differentiated but e s s e n t i a l l y simi'lar products which occurs
under price controls, multiplying their complexity and
leading to t h e i r ultimate disintegration.
Premium caps w i l l apply to annual purchases of insurance,
vastly reducing the number of purchases which must be
monitored compared to ordinary priqe controls.
Purchases of insurance w i l l take place through large health
a l l i a n c e s with substantial market power to police and
enforce the observance of the caps, minimizing the effective
number of points of sale and the opportunities for cheating.
For a l l of the reasons given above, premium caps w i l l be
more enforceable, more adaptable, and l e s s l i k e l y to cause
unwanted distortions i n the long run than a t r a d i t i o n a l
price control regime.
21002
�< j-Clinton-health-plan
— NEWS ADVISORY — TO NATIONAL AND HEALTH/MEDIGAL EDITORS:
A CRITIQUE OF THE ADMINISTRATION'S HEALTH CARE PLAN;
PRESS CONFERENCE JAN. 13;
MORE THAN 550 ECONOMISTS TO SEND OPEN LETTER TO PRESIDENT CLINTON
More than 550 economists from a l l 50 states and the D i s t r i c t of Columbia
w i l l send a l e t t e r to President Clinton next week about the administration's
health care plan. The group, organized by Professor John Lott of the Wharton
School at the University of Pennsylvania, w i l l release the l e t t e r and a l i s t
of signatories at a press conference on Jan. 13 at the National Press Club.
WHAT:
Press conference to release an open l e t t e r to President
Clinton signed by more than 550 economists
TOPIC:
Clinton health care plan
WHEN:
Thursday, Jan. 13, 10 a.m.(A)
WHERE:
National Press Club
Lisagor Room, 13th Floor
529 14th St. N.W.
Washington
SPEAKERS: — John R. L o t t J r . , Wharton School
— William A. Niskanen, Cato Institute,
former member, Council of Economic Advisers
— Other speakers TBA
(A) The Lisagor Room w i l l be open at 9 a.m. f o r set up. Coffee w i l l be
a v a i l a b l e at t h a t time.
CONTACT: Cathi Smith, 202-543-1743, f o r L o t t , or John L o t t , 215-898-8920.
-01/10/94
/PRNewswire — Jan. 10/ CO: ST: D i s t r i c t of Columbia IN: HEA SU: EXE
DC-DT — DC004 — 7781 01-10-94 10:41 EST
****
f i l e d by:PR-F(—)
on 01/10/94 at 10:46EST ****
**** printed by:WHPR(MMIL) on 01/10/94 at 14:02EST ****
�Date: 01/10/94
US
Time:
13:35
HEALTH: Economists t o warn C l i n t o n t h a t p l a n w i l l harm economy
Knight-Ridder
Washington--Jan 10--A group of 550 economists Thursday w i l l send
a l e t t e r t o P r e s i d e n t B i l l C l i n t o n warning t h a t p r i c e c o n t r o l s i n h i s
h e a l t h - c a r e p l a n w i l l wreak economic havoc.
John L o t t , of the Wharton School, s a i d the p l a n ' s impact on the
economy and on the a v a i l a b i l i t y of h e a l t h care w.buld be r o u g h l y
analogous t o the h i g h p r i c e s and t i g h t s u p p l i e s t h a t r e s u l t e d from
the o i l p r i c e c o n t r o l s i n the 1970s.
L o t t s a i d he and the o t h e r s who signed the l e t t e r b e l i e v e the
u n d e r l y i n g premise of C l i n t o n ' s p l a n i s based l a r g e l y on a government
attempt t o l i m i t p r i c e i n c r e a s e s .
L o t t c i t e d such p r o v i s i o n s as a u t h o r i t y f o r the s t a t e - c h a r t e r e d
h e a l t h c o o p e r a t i v e s t o l i m i t fees t h a t d o c t o r s and h o s p i t a l s can
charge f o r s e r v i c e s , and the l e g a l l y mandated l i m i t s on h e a l t h insurance premiums.
L o t t s a i d he and some of the o t h e r s who sighed the l e t t e r w i l l
e x p l a i n t h e i r concerns more f u l l y i n a press conference Thursday. The
economists t r a v e r s e the p o l i t i c a l spectrum, L o t t s a i d .
End
(By Steve Marcy, K n i g h t - R i d d e r F i n a n c i a l News)
�David J. Theroux
PENDENT
INSTITUTE
November 1,
1993
Professor David C u t l e r
Harvard U n i v e r s i t y
Cambridge, MA 02138
Dear Professor C u t l e r :
I am w r i t i n g t o urge you t o j o i n w i t h numerous prominent
economists and o t h e r scholars as a signer o f a p u b l i c l e t t e r t o
President C l i n t o n , c r i t i q u i n g h i s proposed h e a l t h reform plan's
mandated use o f p r i c e c o n t r o l s .
The l e t t e r w i l l appear as a f u l l - p a g e ad i n The Wall S t r e e t
Journal.
The ad i s being independently organized and sponsored by
a group o f scholars s e r i o u s l y concerned w i t h the C l i n t o n proposal,
and I was asked t o be of a s s i s t a n c e .
As you may know, the proposed C l i n t o n plan would c o n t r o l
p r i c e s charged by doctors and h o s p i t a l s , cap annual spending on
h e a l t h care, l i m i t insurance premiums, impose l i m i t a t i o n s on new
and e x i s t i n g drugs, and much more.
The impact o f such p r i c e c o n t r o l s would be extremely harmful
t o any h e a l t h care system, e s p e c i a l l y f o r the disadvantaged, as
h e a l t h care q u a l i t y would s e r i o u s l y d e c l i n e and h e a l t h care
s e r v i c e s would become severely r a t i o n e d .
As you may a l s o know, the Independent I n s t i t u t e i s a
s c h o l a r l y , p u b l i c p o l i c y research o r g a n i z a t i o n , and we are t a k i n g
a major i n t e r e s t i n t h i s issue through our h e a l t h care p o l i c y
research program, t h e Center f o r Health P o l i c y I n n o v a t i o n , under
the d i r e c t i o n of Simon Rottenberg (Professor o f Economics,
U n i v e r s i t y o f Massachusetts).
Time i s o f the essence since the ad i s scheduled t o run soon!
Please m a i l or FAX your response using t h e enclosed form t o a r r i v e
here no later than NQvember 15I look forward t o hearing from you.
Thank you.
S i n c e r e l y yours.
David J. Theroux
DJT:js
Enclosure
134 Ninety-Eighth Avenue. Oakland, CA 94603 ( 510)632-1366 FAX: (510) 568-6040
�An Open Letter to President Clinton on Health Care Reform
Dear President Clinton:
Price controls produce shortages, black markets, and reduced quality. This has been the universal
experience in the four thousand years that governments have tried to artificially hold prices down using
regulations.
You insist that your health-care plan avoids price controls. Werespectfullydisagree. Your plan sets the
fees charged by doctors and hospitals, caps annual spending on health-care, limits insurance premiums, and
imposes price limitations on new and existing drugs.
In countries that have imposed these types of regulations, patients face delays of months and years for
surgery, govemment bureaucrats decide treatment options instead of doctors or patients, and innovations in
medical techniques and pharmaceuticals are dramaticallyreduced.Here in America, the threat of price
controls on medicines has already decreased research and development at drug companies, which will lead
to reduced discoveries and the loss of life in the future.
In the 1970s, govemment tried to regulate the price of a simple homogenous product, gasoline. The result
was a social and economic disaster. People were forced to waste hours waiting in lines to purchase
gasoline. Long waits for surgery and other medical care will have far more serious consequences.
Caps, fee schedules, and other govemment regulations may appear to reduce medical spending, but such
gains are illusory. We will instead end up with lower quality medical care, reduced medical innovation, and
expensive new bureaucracies to monitor compliance. These controljs will hurt people, and they will damage
the economy. We urge you to remove price controls, in any form,fromyour health-care plan.
Please sign your name
,
Please print your name
Date
Telephone
Affiliation
,
Please sign your name
Date
Please print your name
Telephone
Affiliation
Please sign your name
Date
Please print your name
Affiliation
.
:
Telephone
�6.
After learning from our Nixon era experience that price controls
don't
work, why are we really going back to price controls under the guise
of premium
caps?
A:
We have considered -- but specifically rejected -- a policy imposing price
controls on health care. Our primary strategy for cost containment is
private sector competition -- creating the right economic incentives to bring
•cotts in line and encourage health plans to compete on price and quality.
But we strongly believe that, regardless of how quickly or how firmly
competitive reforms take hold, we need to build some discipline and certainty
-into our system so that businesses and consumers know that their health
_ ^TrflW™*™? jprftmiiifris will not be allowed to suddenly spiral out of control one
rr
.year, and thatjthe federal government will not spend without accountability.
"That is why we reinforce the competitive system with a limit on health care
''pre?niun^wa^eas.es.-----™- ----~~
1
;
This is the most sensible approach to ensuring cost control. As Stephen
Zuekerman and Jack Hadley, two leading health policy analysts wrote, "it
seems far preferable that insurance companies that are responsible to their
: subscribers make these decisions than having the federal government
mvolvedjn^e^led price negotiations and review procedures with individual
hospitals i ^ j p ^ ^ i a a h a - ^ r
Iril;bntrast to our plan, price controls call for government micro-management
of every health care service, drug, technology and product. Price controls
would have the government substitute its vie^vs for the markets in hundreds
- maybe thousands ~ of decisions. We reject that type of micro-management
in favor of letting a market that truly competes work.
Follow-Up
Q:
The premium cap may be too strict for some health plans.
happens if a health plan runs out of money?
A:
What
If a health plan were to literally run out of money, which is highly unlikely,
CppHnmers would simply join another plan. Unlike today, though, benefits
would be guaranteed. Such a scenario is highly unlikely, certainly less likely
than it is today, because health plans will be I required to have met strict
financial solvency requirements before they can do business.
The limit of a premium cap and the security it provides are essential
components of comprehensive health reform.i If businesses and individuals
are going to all be asked to contribute to the cost of health care, and
�government is going to provide discounts to those who cannot afford their full
share, then everyone must be guaranteed that increases in their payments
will stay within reasonable bounds. Without such a guarantee, reform would
have no chance.
When you hear concerns about running out of money, remember the source.
It's the insurance industry that is running an advertising campaign against
this limit on premium growth. And it's because they're out to preserve their
profits -- plain and simple.
Q:
Won't these premium caps cause plans to limit services
and ration care to stay within the range?
and
benefits
A:
Absolutely not. I n fact, health plans have every incentive not to do this. The
President's proposal is built upon competition among health plans. I f a health
plan starts to cut corners on patients, it knows, that the patients are free to
switch plans. And they know that their low levels of consumer satisfaction
will be reported on consumer report cards that will be published publicly
about each health plan which will make it very unlikely that new customers
would sign up. For the health plan, cutting corners will mean less customers
and therefore lower profits.
As a common American example, we regulate the rates of utilities like
electric and gas — and it works just fine. You don't see electric and gas
companies running out of money or cutting off service to customers.
�David J. T h c m i :
EPENDENT
INSTITU TE
FleMduM'
November 1,
1993
P r o f e s s o r David C u t l e r
Harvard U n i v e r s i t y
Cambridge, MA 02138
Dear P r o f e s s o r
Cutler:
I am w r i t i n g t o urge you t o j o i n w i t h numerous p r o m i n e n t
e c o n o m i s t s and o t h e r s c h o l a r s as a s i g n e r o f a p u b l i c l e t t e r t o
President C l i n t o n , c r i t i q u i n g h i s proposed h e a l t h reform plan's
mandated use o f p r i c e c o n t r o l s .
The l e t t e r w i l l appear as a f u l l - p a g e ad i n The M a l l S t r e e t
Journal.
The ad i s b e i n g i n d e p e n d e n t l y o r g a n i z e d and s p o n s o r e d by
a group o f s c h o l a r s s e r i o u s l y concerned w i t h t h e C l i n t o n p r o p o s a l ,
and I was asked t o be o f a s s i s t a n c e .
As you may know, t h e p r o p o s e d C l i n t o n p l a n w o u l d c o n t r o l
p r i c e s c h a r g e d by d o c t o r s and h o s p i t a l s , cap a n n u a l s p e n d i n g on
h e a l t h c a r e , l i m i t i n s u r a n c e premiums, impose l i m i t a t i o n s on new
and e x i s t i n g d r u g s , and much more.
The impact o f such p r i c e c o n t r o l s w o u l d be e x t r e m e l y h a r m f u l
t o any h e a l t h c a r e system, e s p e c i a l l y f o r t h e d i s a d v a n t a g e d , as
h e a l t h c a r e q u a l i t y w o u l d s e r i o u s l y d e c l i n e and h e a l t h c a r e
s e r v i c e s w o u l d become s e v e r e l y r a t i o n e d .
As you may a l s o know, t h e I n d e p e n d e n t I n s t i t u t e i s a
s c h o l a r l y , p u b l i c p o l i c y r e s e a r c h o r g a n i z a t i o n , and we a r e t a k i n g
a major i n t e r e s t i n t h i s issue through our h e a l t h care p o l i c y
r e s e a r c h p r o g r a m , t h e C e n t e r f o r H e a l t h P o l i c y I n n o v a t i o n , under
t h e d i r e c t i o n o f Simon R o t t e n b e r g ( P r o f e s s o r o f Economics,
U n i v e r s i t y o f Massachusetts).
Time i s o f t h e essence s i n c e t h e ad i s s c h e d u l e d t o r u n soon!
P l e a s e m a i l o r FAX y o u r response u s i n g t h e e n c l o s e d f o r m t o a r r i v e
h e r e no l a t e r t h a n November 15.
I l o o k f o r w a r d t o h e a r i n g f r o m you.
Thank y o u .
Sincerely
David
yours,
J. Theroux
DJT:js
Enclosure
134 Ninety-Eighth Avenue, Oakland, CA 94603 (510) 632-1366 FAX: (510) 568-6040
�An Open Letter to President Clinton on Health Care Reform
Dear President Clinton:
Price controls produce shortages, black markets, and reduced quality. This has been the universal
experience in the four thousand years that governments have tried to artificially hold prices down using
regulations.
You insist that your health-care plan avoids price controls.
respectfully disagree. Your plan sets the
fees charged by doctors and hospitals, caps annual spending on health-care, limits insurance premiums, and
imposes price limitations on new and existing drugs.
In countries that have imposed these types of regulations, patients face delays of months and years for
surgery, govemment bureaucrats decide treatment options instead of doctors or patients, and innovations in
medical techniques and pharmaceuticals are dramatically reduced. Here in America, the threat of price
controls on medicines has already decreased research and development at drug companies, which will lead
to reduced discoveries and the loss of life in the future.
In the 1970s, govemment tried to regulate the price of a simply homogenous product, gasoline. The result
was a social and economic disaster. People were forced to waste hours waiting in lines to purchase
gasoline. Long waits for surgery and other medical care will have far more serious consequences.
Caps, fee schedules, and other govemment regulations may appear to reduce medical spending, but such
gains are illusory. We will instead end up with lower quality medical care, reduced medical innovation, and
expensive new bureaucracies to monitor compliance. These controls will hurt people, and they will damage
the economy. We urge you to remove price controls, in any form,fromyour health-care plan.
Please sign your name
;
Date
Please print your name
;
Telephone
Affiliation
Please sign your name
Please print your name
Date
:
.
Telephone
Affiliation
Please sign your name
Please print your name
Affiliation
;
Date
Telephone
�Q:
Haven't we learned from our past experiences in the Nixon era that price
controls don't work. Aren't we really going back to these price controls
under the guise of premium caps?
A:
We have considered -- but specifically rejected -- a policy imposing
price controls on health care. Our primary strategy for cost
containment is private sector competition -- creating the right
economic incentives to bring costs in line and encourage health plans
to compete on price and quality.
But we strongly believe that regardless of how quickly or how firmly
competitive reforms take hold, we need to build some discipline and
certainty into our system, so that businesses and consumers know that
their health insurance premiums will not suddenly spiral out of control
one year, and that the federal government is planning on living within
its means. That is why we reinforce the competitive system with a
fail-safe limit on health care premium increases. .
Price controls call for government micro-management of every health
care service, drug, technology and product. Price controls would have
the government substitute its views for the markets in hundreds —
maybe thousands - of decisions. We reject that type of micromanagement in favor of letting a market that truly competes work. We
will simply put a speed limit on how fast premiums can go up. These
limits will only apply to plans whose prices go up faster than the
targeted rate; it will not apply to any other plans in the area.
Today's system is like the Autobahn - where there are no limits
whatsoever and those who race ahead a^ reckless speeds endanger
everybody else on the road. Price controls would be like someone
stopping you every 5 miles to ask, "So, how fast are you going now?"
Our system would be neither of these. We would post a speed limit on
the road and monitor the system, assuming that people are staying
within the limits. Premium caps would apply only to those that go
above the limit.
�To: Gene
Fr: Jason
Re: Commerce Dept. study on manufacturing
Date: November 23, 1993
Attached is a draft of a Commerce Dept. study from late August on how different industries
would be affected by reform.
I think now might be an appropriate time to update the study so it reflects current policy and
includes estimates of what different industries will pay after reform. If it looks favorable, we
might give it to a reporter like Clay Chandler or Louis Uchitelle. They could use it as "An
internal Commerce Dept. report shows..."
Theoretically, these manufacturers are big winners under reform. Let's start getting that
message out there.
I would suggest that you contact Jonathan Silver at 482-5283 to get this going. Or I'd be
happy to contact him myself on your behalf. Let me know.
�FEB-16-1994 03:13
FROM
FEE-23-94 BED 09:24
THE URBflH IKSTITUTE
TO
FAX NO. 302223] M9
93953910
P. 02
The Urban Insttute
Onrtact
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U n a WDcra (202» W7-Mr7
H ill n y n l
CLINTON HEALTH PLAN HAS ONLY MODEST EFFECT ON
DISTRIBUTION OF BENEFITS AMD! CONTRIBUnONS
ACROSS INCOME CROUPS,
Atxjvnlittg to New Uthtm Institute Stntfy
WMfcjBgwiv D.C - rh«CBnkmH«^S««n^A»a<HSAJ wuuld hare only*:
eifcrt on tltf 4fitftHlwttoii cf licdIA c n b^iMfite MVI ooAbrfiKiilctw MTOBfr Incomo gmips 1999>
Its Afflt year of hill Unptemnnctoiir ^cccntBng to an Utbxn tniffynff study wtaywst today.
Wh0c fm/seAie* lit t2v boctont 30 pcfcrti olttwhtconc dtatritattaQ ffvuM cocttribwtc a
ttnalfe share of t h * tr™neforfwBK poBcj t^lysta
ZedfcwskJ, Mm Hofahsrv <u>a
Colbi VVInustNiMuuifcrundftatodMrtenfltoh^JduMiiillMtoiAoutllwu u s M0>qr<ioiuw.
Fattulies Inrii(Tpl>lititlflwny ^iUUpA ITOOld iCLdvA ^rtfff^Tff^^y
SUMI Mt Inttl CBC
frencfit»-he«iai care bmAts nc^t^d, Jen cDntzft«rttotM^iandertt«cH8A Mfl«^A? wider (he
pnocni •y<t* - As a you^ mU4fetnctMMfiunUteswoaU iuw 1 ifads bcttvf imdffftvUSA
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becauseranptoyer-tpoupbeunmotand itw tsxtaneflivilvtgownhawCTiklfc*
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ivuiukably wfTTtffar to S K CLLKSK syshaiv At luwiiltccs note
STUDY ASSUMfTKmS
TTfde Oielr diMritniaoaU ^n^cHtuug In 199* OuOnn. Tbej deftnad baXK
aotihec<Mt of
hsftftb anv ii^tiiwd by tfcv tianvidiBly from cH ps^ixMRl poanxs^ vid <kfin6d Iwdlki
Owtnwlro or Corotficra dha ttndjrdoo not account futiliuigts iR tbcwunuilfltbNlQi swtos
provided per doflar of beafih sppndlngX TlieiBeudienaimwmmrt
thittadMd^
pay foe «n health cue. That is. tBBfkrfvm wmtid Mtjr cUft tb» cm) of immntumu back to
wtMlcen. The Htndy usedfiledduiliifeiiidtlail's csduvlv of A* cost of dK uuiyfchtnlTC Iwnefti
}wOuige and atMunvdtitatttwpranioifi apt le^uiirf hf the H8A waudd befffattvt, luwts1ii£
tadh care coite by 10 pnurt. FtaBf, the stod^ ^taiBtttf facoBed on radimiiintaD acrow
Income gioafv. Otlwr imlbUlbiitioa wey occv OUOBJ groapa or gngmphic wcatt.
mglKWUllOW OT HEALTH CAM HWW IS
would cost about $431 bUlon under ihe Otnton patopbost a7in|md to ICZZtafioa under
cun^otcystasiORtmdolbnX Aamtnins
^
<»P ^Wla « P*w» wo«M prvflda
xudraul covmag* wtthout stgnlflcanfly kmaaatai^ hcvttfx care coat*, bm It would Aange Qw
Mmret of health benefit payments* 39foUowteTOdtractfetnQyapw^dtegtafkwuranoa and out*
P. 02
�FEB-16-1994
03=14
FROM
FHB-23-K WED C8;25
THE URBdK INSTITUTE
TO
FAX SO. ?0EZ23114B
93953910
P. 03
P. 03
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rtscfromHlO Uffionto$137 bCBon; and 0? tr»«ten (gi^Ktmnatt haaMt pognam md. tn th»
uximit sjrTton, vnoowpcraatcd curt) wouldtoanuwfrnaiaboiit SMS bflUoo to f136 WBon.
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of govcnunatt subsMBes to kiHiteem CnOlcs,tow-mgtbatfneMnu and todjr itllim, fla*
dettTfetttion pattern of tlnntf. ttaiMtwi nvuta ctoxeiy mftror the cgircat unr. nnda-boA^gtaowv
(andilcs In the bottom 2D peoc&tt of thetocoaiedtoUfbutlon would rpoetve about 25 pencnt of
M tmmfm. umnparad to 17 patentforndddlHnooBne fhimlBe* tnd Zl peicentfarthe top
Income qtitatUa LcmAncotnf persons vrouM IBCT^TB 75 pm«i< of * • sub(S(8ei to 9» vonworlirg or Mtf^mployedundHtbeHBA. BttOieenqA^nbMeehiSwHA WoaMbmft
feBBrfNe*te«U sntotoa grwps, areuuiiitg UMI aS iraiftm tnttxmwtth «abtlAn bmcflt ftm
thwe yovwnment tnnfrm.
DISTRreunON OF HEALTH CAM CONTlUBUnONS
The nonelderly woaJd ccmdlbute $5TO bfflkm andcr the H8A, ccsnpsrvd to $S99 fcOHoB
under the cumnt ajaten. CortribnUofa eweed bewflta beeaawftcmmatoty pay e hay
stare of 0K lues Hot Ammoe Medkait: bcnefito for the|rfAtrfjrToW tna and tRBefen
dcrotedtobeatti care would decBrw 6om $3J3 UDon under the camot«7Stein toC96babm
under the HSA. The diStiftutlcD of theae tax buriom *TaM tnweae giuu|ie woold mnatn
eswwfaQy die came; Ronl&ea In Ae bottom tncomc qotntfle would UDBUMUK eMwt 2 penenv
wdtodUea In thetopydrnfle would contribaiaabot* one-half of the combined teat iMtiwrttt
burdkm^ and whila lm».b«wTu>femfflMwoidd per 25 peieest of the new tobacxo taxes, their
ovwtArimeof the tax and tnucfct bwhw wotddrasaintowbecause these tms KV an
tnigciSaai share of heaMi OBre tax otttgeUuita*
In geDeroly faiidlfft woidd benett boatflieledaMonstot^tal flnandb^oUt^attone
uwJer the Cfcrtoo plan, beemisefteywouMI all p«y eboot thc«nne >hsi» of a freOcr base Ike
QlAl^ piupueal wuuld self onflnvlmsMldevedOvovi^iu^teiaUtuie cape and ItiecflsiliBUoqR
of niwimpwBdted « n to Snanc* >ubeUlesfarlow-locoineftoitlBe^qiiyluyeie, ud reareea
If Jieie cap^ w«p guocawfaC th"* uraM bg anaP mlueUonetofiMntfra>rtig>utkjui.
r o n t r IMI-UCATIONS
Tl>eHSAwo^tb«Ke«rtve^liBuiinc«oovewgebyieagog»tny
nation's health can doOan and redndqg therealcost of heaJBi ssTtaa. ft would ftmnrt
ootviderafale amtmnU of htaWi care dollarstoroaghdtBowrt dwflnris, bat R woaid do Hrte tn
redinUS/Uiv sptniio^ on he^tth benefits or coali Hnittans wnuii^ InoonM yiuupg. Whfle such tsck
u<ra0i»tjfl>uO3nla tnta^lfnot TuxmuAy a pTotife«a. dw iIlHj*mWon«lCTrtLimwmrid be
aiflRged tn ways that woold also tmprove poUcy.
Cotfo of "The OiRlea H«Mi Can Han: Who Woold PayT bytteUaZedlawai^ Jdm
BoIahi^andCft^WgihrtwCai^Kgfttwary Ws^
OffkeferniJW. A limited nombet of oopies en atrdUMe frem the Fab&c Atfattt Office
CW) «S7-S7S^ art no ebasatothe press.
7fe tff&Pii 2K(ffCQfc ft B pfhjul$ ttwt^tvfH pobcf itsouUi ipjfiwuRfofi enstfWtstffriWnfcfci^^ 0*0*
prvgpofH Amf yqftefcs iffV^ftaftooUrobfr fbose puMtn&^t
�"The Clinton Health Care Plan: Who Would Pay?" by Sheila Zedlewsld, John Holahan, and Colin
Winterbottom of the Urban Institute. Release date: Thursday; February 24.
o
Urban Institute analysts have written a paper detailing the contributions and benefits by
families of different incomes under the current health system and under the HSA. The
analysis is presented in 1998, the first year in which the HSA is fully phased-in. The
analysis covers acute care spending on the non-elderly who are not currently Medicaid Cash
recipients.
o
The analysis demonstrates that relative to the current system, the HSA does not substantially
change the distribution across income groups of contributions and benefits within the health
carefinancingsystem.
o
Below are the major points established in the analysis. The Urban Institute has done a
careful and complete job of displaying the distributional effects of the HSA. It should be
treated as a document that will give the Administration and others further insight into the
effects of specific aspects of the plan on different income groups.
The results of the analysis are not surprising, given that the Administration did not intend
the HSA as a tool for substantially redistributing income.
o
Health Care Contributions: Contributions by the non-elderly include taxes that finance
health care for themselves and others as well as family and employer payments (net of tax
exemptions) that pay for a family's own health carei Total taxes and transfers devoted to
health care would fall under the Health Security Act, however, the distribution of tax
burdens across income groups would be essentially ithe same as under the current system.
While families in the lowest 20 percent of the income distribution would contribute a
smaller share of their income for health under the HSA (17% of income versus 20% under
the current system), other families would contribute about the same as they do now.
o
For purposes of the analysis, family contributions include: payments by households towards
the cost of premiums less the federal tax subsidiesito families with "cafeteria plan" tax
exemptions and self-employment exemptions for al percentage, household out-of-pocket
spending, employer premium payments on behalf of the family net of tax subsidies, federal
income and payroll taxes paid by families tofinancethe tax exemption of premium
payments by employers, federal income taxes paid by families tofinancethe federal portion
of Medicaid spending and other federal health programs.
o
Govemment Transfers: The study shows that, in igeneral, the subsidies and tax exemptions
in the HSA would replace significant transfers in the current system provided through
Medicaid, tax exemptions, and uncompensated care. Although the household subsidies in
the HSA are targeted at low income families, thej employer subsidies benefit families in all
income groups, and the tax exemptions disproportionately benefit families in the top income
quintile, as they do in the current system.
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Identifier
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2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
[Democratic National Committee Material] [Loose] [2]
Creator
An entity primarily responsible for making the resource
Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F Segment 2
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Medium
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Preservation-Reproduction-Reference
Date Created
Date of creation of the resource.
2/6/2015
Source
A related resource from which the described resource is derived
42-t-12093080-20060885F-Seg2-023-002-2015
12093080
-
https://clinton.presidentiallibraries.us/files/original/add957144be9c7366259b9c8c79a66ed.pdf
56ddf8f74500cf4be65d4c535713b32d
PDF Text
Text
FOIA Number:
2006-0885-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Scries/Staff Member:
Jamieson
Subseries:
OA/ID Number:
4785
FolderlD:
Folder Title:
[Democratic National Committee Material] [loose] [1
Stack:
Row:
Section:
Shelf:
Position:
S
53
3
3
2
��Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
AND TYPE
001a. fax cover
sheet
001b. memo
001c. memo
00Id. charts
002. report
003. report
DATE
SUBJECT/TITLE
RESTRICTION
Kim Callinan to Paul Jamieson (1 page)
05/12/1994
Personal Misfile
Kim Callinan to Paul Jamieson; re: Economic Plan Trends (3 pages)
05/11/1994
Personal Misfile
Kim Callinan to Paul Jamieson; re: Health Care Plan (4 pages)
05/11/1994
Personal Misfile
re: DNC Polling Report - General Overview (13 pages)
04/29/1994
Personal Misfile
re: Manhattan Institute - DNC Research (3 pages)
01/27/1994
Personal Misfile
re: Manhattan Institute - DNC Research (3 pages)
01/27/1994
Personal Misfile
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4785
FOLDER TITLE:
[Democratic National Committee Material] [Loose] [ I ]
2006-0885-F
ip2727
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)]
Freedom of Information Act - |5 U.S.C. 552(b)|
PI National Security Classified Information 1(a)(1) of the PRA]
P2 Relating to the appointment to Federal office 1(a)(2) of the PRA]
P3 Release would violate a Federal statute [(a)(3) ofthe PRA]
P4 Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) of the PRA|
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA)
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA]
b(l) National security classified information 1(b)(1) of the FOIAj
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) ofthe FOIA]
b(3) Release would violate a Federal statute |(bX3) ofthe FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) ofthe FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) ofthe FOIA)
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA)
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) ofthe FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells |(bX9) of the FOIAj
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001a. fax cover
sheet
SUBJECT/TITLE
DATE
Kim Callinan to Paul Jamieson (1 page)
05/12/1994
RESTRICTION
Personal Misfile
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number: 4785
FOLDER TITLE:
[Democratic National Committee Material] [Loose] [1]
2006-0885-F
ip2727
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b)|
PI National Security Classified Information [(a)(1) of the PRA|
P2 Relating to the appointment to Federal office 1(a)(2) ofthe PRA)
P3 Release would violate a Federal statute |(aX3) ofthe PRA]
P4 Release would disclose trade secrets or confidential commercial or
financial information [(a)(4) of the PRA]
P5 Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(S) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA]
b(l) National security classified information [(bXl)of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency |(bX2) of the FOIA]
b(3) Release would violate a Federal statute |(bX3) ofthe FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) of the FOIAj
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy [(bX6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) ofthe FOIAj
b(8) Release would disclose information concerning the regulation of
financial institutions [(b)(8) ofthe FOIA)
b(9) Release would disclose geological or geophysical information
concerning wells [(bX9) ofthe FOIA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001b. memo
SUBJECT/TITLE
DATE
Kim Callinan to Paul Jamieson; re: Economic Plan Trends (3 pages)
05/11/1994
RESTRICTION
Personal Misfile
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4785
FOLDER TITLE:
[Democratic National Committee Material] [Loose] [1]
2006-0885-F
^2721
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)]
Freedom of Information Act - |S U.S.C. 552(b)|
PI
P2
P3
P4
b(l) National security classified information 1(b)(1) of the FOIAj
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) of the FOIA]
b(3) Release would violate a Federal statute 1(b)(3) ofthe FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) ofthe FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions [(b)(8) ofthe FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells 1(b)(9) of the FOIA]
National Security Classified Information 1(a)(1) of the PRA]
Relating to the appointment to Federal office 1(a)(2) of the PRA]
Release would violate a Federal statute 1(a)(3) ofthe PRA]
Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) ofthe PRA]
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
00Ic. memo
SUBJECT/TITLE
DATE
Kim Callinan to Paul Jamieson; re: Health Care Plan (4 pages)
05/11/1994
RESTRICTION
Personal Misfile
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4785
FOLDER TITLE:
[Democratic National Committee Material] [Loose] [1]
2006-0885-F
ip2727
RESTRICTION CODES
Presidential Records Act - (44 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b)|
PI National Security Classified Information 1(a)(1) ofthe PRA|
P2 Relating to the appointment to Federal office [(a)(2) of the PRA]
P3 Release would violate a Federal statute 1(a)(3) ofthe PRA]
P4 Release would disclose trade secrets or confidential commercial or
financial information [(a)(4) ofthe PRA]
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(a)(6) of the PRA]
b(l) National security classified information 1(b)(1) of the FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency |(bX2) of the FOIA]
b(3) Release would violate a Federal statute [(bX3) ofthe FOIA|
b(4) Release would disclose trade secrets or confidential or financial
information [(b)(4) ofthe FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) ofthe FOIA)
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) ofthe FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions [(b)(8) ofthe FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells [(bX9) of the FOIA|
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
00Id. charts
SUBJECT/TITLE
DATE
re: DNC Polling Report - General Overview (13 pages)
04/29/1994
RESTRICTION
Personal Misfile
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4785
FOLDER TITLE:
[Democratic National Committee Material] [Loose] [1]
2006-0885-F
IP
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)|
Freedom of Information Act - [5 U.S.C. 552(b)|
PI
P2
P3
P4
b(l) National security classified information |(bXl) ofthe FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) of the FOIA)
b(3) Release would violate a Federal statute |(bX3) ofthe FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information [(b)(4) ofthe FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIAj
b(7) Release would disclose information compiled for law enforcement
purposes |(bX7) ofthe FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions [(b)(8) ofthe FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells |(bX9) ofthe FOIAj
National Security Classified Information [(a)(1) ofthe PRA|
Relating to the appointment to Federal office [(a)(2) ofthe PRA]
Release would violate a Federal statute 1(a)(3) of the PRA]
Release would disclose trade secrets or confidential commercial or
financial information [(a)(4) ofthe PRA]
P5 Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(S) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
2727
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
002. report
SUBJECT/TITLE
DATE
re: Manhattan Institute - DNC Research (3 pages)
01/27/1994
RESTRICTION
Personal Misfile
COLLECTION:
Clinton Presidential Records
Health Care Task Force
Paul Jamieson
OA/Box Number:
4785
FOLDER TITLE:
[Democratic National Committee Material] [Loose] [1]
2006-0885-F
ip2727
RESTRICTION CODES
Presidential Records Act -144 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b)|
PI
P2
P3
P4
b(l) National security classified information 1(b)(1) ofthe FOIA]
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) of the FOIA]
b(3) Release would violate a Federal statute |(bX3) ofthe FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) ofthe FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) ofthe FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes |(b)(7) ofthe FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) ofthe FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells 1(b)(9) ofthe FOIA]
National Security Classified Information 1(a)(1) ofthe PRA|
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��/'.•
Commentary
Uudgrt Limits And Managed Competition: Allies, Not AntaRonnte
by Henry } . Aarom
Rudl^r Units oi mamKoJ u>nipciitk>u? Wionfi. Budgcl linurs and man;i|,«d cunperition! Far ftoni lieing at war with <ne another, rhese two
apnruaches to comrulling t h j grcrvth of health care sprnrlin^ should !«•
ii.>eO in fombirwitkai to rcinfnrce unr another
llkis i wi rural afTinicy u strongest in die case of h««pitai spoitJiii>>. Mosjni.il tosts lv»vc boon ^towing each year at a rate of about I ' . percent and now
r>vt-raj«e more than $1^00 pet pereon annually. Confnmting such high ar.d
rapidly growing hospital spending, advocates of managed coa^xtition ar.d
liultfrt Imitsgiwconflicting pmcri)itiuns fui a o t connul. Asexplancd in
Gxiimentary, appropriaiely defined lio&pital budget limits provide a
ntHural bridge to managed amipetition one simultiincuusly assure that
Ixspiul spendiitg will fall within specified linuu.
Advocates <jf managed competition note the lower r« tcs ol hoapiialiiai u n anc sotnewliat lower uvcrall COSTS among prepaid group pnerices. They
argue that in the curren: system, people arc sheltered fran a full awareness
of these costs by a combination of employer financing of insunnce premiums am! the unlimited exclusion of diese premiums from personal income
taxes. Tliey observe that peof le are onaUe ro com parr pricre of altetnativc
plans t:f<wtiwly because plans vary in the services they otfor. If health plans
provulcd identical benefits, and if the amounts that employers or governments paid fcr health cere were unifbrcn acrom health pkns, people would
be forced tofeicet^c full coats of chooaing plana that cost mote than some
ba»clinc plan. Tlic icsuk, advouito of managed competition hold, would
be competition amang plans TD advevc the mix of low cost and highqualiry
that patienu'want. l\ciple would choose die plans that offered die best
value. Costs would be reduced, and spending growth prubably would be
slewed as contpetilion led plan managers to scrutinize which teivkes were
worthwhile and how health plars were managed. To the extent t h i t
spending continued to rise, such growth would ref ect the informed, costliotry AJIUI is •kirau of On furonuiuc St+ka Propum. Ttt Dmolintgs JiuiUtftun, md ite.
<«*pf vfSetkm* and tkmahle Comhiiuo: Flnanci^ Amcncf'i Health Can: (Wathmgrcn:
t k Broofm^j JnvBtui.M, 1990-
COMMENTARY
13)
coutcuics ilccUtionsof iKNisclwlds .cuJ wutikl !«.• no C;IIIM: kit ccnccru.
Not S3, say the advocates of budget limits: a whole host of probleins
woiild prevent miinagoil compctittcn Irom reahziogthe hopes of its advocam>. People Wiiuk not jhift to low-cost pajvalersquickly and perlvaps rut
at all. f Jealth p b m wtxjJd have stmng incentives to try to "cherry-pick,*
enrolling only low-risk, low-cost parents; cfiorts to defeat these incentives
would m|iiirc intrusive rcgulatiom. Tl»e medical "arms race." i n which
each hoipital is dri/cn to buy every new gadget i n order lo attuct the best
phvsicsans, wi>ul«l continue tn drive up costs. Fven L'raan^gedcnni|ietition
eventually slows the growth or'heakh care spending, it is unlikely to do so
<juickly enough to relieve the budgetary woes of federal and stale, yovi-m
men ts, lur which rising Medicare and Medicaid costs jpcll fiscal ruiti*rio;-»—not in the disrant future, Ixit by the mic-1990s. Rcniuncleas conticl
of hce scuediilcs uiiJcr Medtcarc and Medicaid may delay this inevitability
slightly. But ^uch rcunbursemcnt controls have shifted cosu to priv-.it.bwiness and individuals and, i f intensified, would only exacerbate th?
prchlcmt facing private payers. The answer to rising costs, say advocates cf
health care bodyets, is an absolute limit on the growth of total health care
spending. One cannot bank on the sntried theory of managed competition,
say its critics. Stick to budget limits. They work abroad to control health
care spending; they will work liere loo.
In fact, budget limits b r huspitaU are not al war wtdi managsd coaipetir k n ; these limits can be consimcted tn strengthen unA channel the incerv
tivrt of nanaged competition. Here is how.
Omsidcr a hyix>thetical community of a million people with foui thousand iKKpital beds distrbuted among twelve hospttuls. As ir. most U.i>.
hotpitab. the avenge daily census in this hypothetical cDmmunity is well
below capiicity. Moreover, the average cccupmcy rate varies widely acroca
the various hospitals, as do average costs for typical proceJures.
Following the declared intent of the Clinton ackmnistxation, Ccngixas
would create health alliances chat offer a numser of approved health p l a n
to all btsinesses with fewer than a stipulated number of workers, to individuals, and ts sdoctcd others. Medicaid and Medicare would continue to
operate independently. Approved health plans, as a practical matter, would
purchase hospital xrrvices from one or note of the twelve area hospitals.
The plans could negotiate fees hospital by hospital, hut such negnriarions
would ctcatc opportunities for hospitals to engage in dtscriirurutory pricing
to extract the maximum poter.tial income irotn the various plans. If instead
the plans paid hoepitals a pn> rata share of f x e d budges, ducrimniatoty
prking woulii be eliminated. Rirttiennorc, each region would be assuneJ
duLt total lK»Jiial e n d i n g would not exceed a ^iccified maxinturn.
A healdi alliance, an independent health boarc, or some other entity
�" -p
IH
HEAL'IU AFFAIRS
Fall m\
wouW dcimninc csich l\ospitar* Imdga for a previous period, h il.cn would
(>rDjm a budgetforeach hospicul based on :he hospital's historical average
bidgi't and a projected rate of growth ilut incorporates inflanon, new
tcchix>lngy, and projected caseloads. The resulting total would be the
hospiTal's budget for a ^ripukued pcriotl. The budget may be Ltcrcascd in the
»hoit urn, W only if admissions >ignif;cantly exceed the ass jiucd census.
The budgetforeach hospital would equal or exceed the total charges that
rhc lto*pttnl could ctutge the various payers from wh ch it receives rtimburscnent. Ulurgcs would be calculated by asiignir^ a weight to each
admission liased >n a scale similar to that usedforrrimhuraemcnr under the
Medicare diagncsis-reiated group (DRG) system. For example, the Health
Care Financing Adininistraiion (HCFA) pays hospitab 4-48 times as much
kw pcrfonaing canioiomies on patients with mnltiplc and severe trauma
<DR(» 484} as for treating puticnts with viral meningitis (DRG 21). The
chatge for * particular admission would be equal JO the tom. Uidyet of the
hospital divided by the sum of the weightsforall admissions multiplied by
the weightforthe specific a.lmission.' For example, suppose .hat a 200-bed
liospital has a 60percent average occupancy rate, an average length-of-stay
offivedays, and a budget of$ 100 millionforone calendar ye v. It will have
ti,760 admissions per year. For an admission with an average weight, the
Ixispud would he tequirod to diargc all payers no more than $ 11,141. For a
norc complicated case with a weight twice the average, the charge would
be $22,282, and so on.The hospital would be permitted to charge less than
this amount, but it would have to provide the same percentage discount on
behalf of all patiaus to all payers.
Setting budgets for each hmpiud Li this fashion would confront ipproved health plans wirh a menu of wilely varying charges for admissions
to various hospitals. Hospitals with a Sistoiy of hi^h cosu per admission
would temporarily carry those costs forward and hive rclarively high
charges per admission, unless the hospitals exercised their op ion to charge
less than their allowed maximum. If a liospitai's charges were above average
and the quality of its service was below par, approved health plans would
have a powerful incentive to direct patients to lower-cost or higher-quality
fcciluie*. At this shifting of patients occured, the hospital's census would
decline. The budget it initially was given would be divided among a
reduced number of patients. As a result, the amount that the hospital can
charge would rise.'
If a hospital is losing patients because of high prces or inferior quality, it
faces some difficult managerial choice;. First, it may elect to charge leas
than the maximum it is permitted to charge, theceby directly reducing or
removing any price disadvantage. This strategy can work only in the shim
run unless the hospital succeeds in a second strategy: cuuiug costs or
OOMMliNTARY
1.35
improving quality. If it cuts costs or enhances quality uitd its success i
rcuogniaxl by health plans, its share of the commanltys patient caseload
should inctefcc. This success would be self-remforctng, as a rising caseloal
wculd permit the hospital to recover its entire budget but tX a reduced
charge per patient to each aealth plan, thereby further increasiag the
hospitafs atoactiveness to health plans. If the hospital fals to pursue either
of these strategics successfully and remains a high-cost or low-ipialir/ institution, it will continue to lose patients.
The rules under which the health authority nfierates&biHildnrquire it to
mluce rhe Widgets of peisistendy low-census hotphak In this fashion,
ItOkpitak must either bring operations up to standard orfacethe project of
declining cersuses and railing budgets. The cost oc" contmucc managerial
failure would be closure. TV u approach would delay rewards for highquality and low-cost hospicah and punuhmcots for low-quality and highcost hcupitals relaUve to a system that links total hospital reveaues directly
to caseload. This sacrifice in the ptomptness of market signals to hospitals
would be compensated by assated budget control for rhe comotunrty.
In short, the existence of a hospital badgetestab.ishesa fixed matiniuin
above which the outlay: of hospitals, individually and ccllectively, cannot
rise. This advantage, which no pure managed competinch plan can claim,
is an important assurance to governments and private payers dike. At the
same time, it provides a framework within which the pnxxsses of managed
competition can work unhindered. Indeed, theforcesof managed ccmpctiticn woald be reinforced, because the framework within which hospilaU'
rates arc set would be transparent and uniform across all payers. 1 lospituis
would be prohibited frost discriminating among payers in the charges they
set—a process that adroit managen could use to exploit plans with iounobile patients, thetdby boosting dieir total revenues. In pellicular, hospicas
would IXK be permitted to charge firee-choice-of-provider plaas any mote
(or less) char, the)- charge health maintenance otganizations (HMDs) or
other managed care plans. Hospitals owned and operated by a single approved plan would not be required to accept patients from othet plans
unless the managers of the hospital conclude that it should do so.
lite system described here could be applied to Medicare and Medicaid ur
could be blended with distinct systems of reimburse!sent inder those
programs. It could accommodate separate paymens for gradiare medical
education or other subventions to assist teaming hosf itals It could be
applied to large urban areas and to small communities. Isobied hospitals
would not be subject to competitive pressures any more than they would be
under other forms of managed competition. Nothing in the description of
this plan should be taken to minimise the enonnous technical tiifficidtie* in
appraising hospital quality in an. analytically defensible way. Nor does this
�1)6 * I U^vLTH Ai l AIRS
I Kili IJW
ap(uxRi«:l: u> ci)e.t cuiita>l adtrcss wlieihci and how to rcyjljic new investments in buildings, renm-ai ion, and cquipmeni.
Unlikr other systems of budget enntrd, this system docs not ciKmiraKe
iKepitalstoonioud services tofrccsunding cliriks, nursing hones, CM othcr
pmviders. Buyirrs of hospital s«Tvic«. assumed to be approved health plaiv,
would have ro pay for dr.ignostic railiok^fy. l^hiKatnry services, convalescent can.-, and various ot \er services ;uid most likely would puidiasc duvsc
SCTTICCS whetrver the bcit mu of cost and quality could l»e found. Tliu.\,
hospitals would not have iiM:e;-»tiv«> to shed these scrvica. The budgets cf
hospitals dial titke on or shed services should Le adjusted accordingly.
This method of combining budget limits and managed competition
assures prompt cost control. This is important for government pinners who
cannot delay budget savings intil such lime as managed enmpctitien succeeds. Many other tiatuitional cost control mechanisms son etimes suggested to bridge rhe interim between enactment and hill effectiveness of
mxiaged connctition simply tuhshiutc for managed compctitiDn and thus
threaten its ukimate implementation. Ixx example, fee limits on all payers
(unn'Cfsal DRGs) hold out the potential of cnnrmOing the price (hut net
the iiualky) of services, hut or.ly by completely short-circuiting the principal mechanism of competition at dte providei-level price. Premium limits
car.7 rhc risk that dtcy i:iay fall short of the cost of services that plans arc
act tilly itbliged hy cotttract to deliveT, thus carrying the ii»k of bankruptcy
at J disruption, but with no guiraulee dial actual costs will Ix: ^utitrolled.
The essential pant of this approach to cost control is dial the hostility
between advocates of managed competition and suppoitcs of budget limns
is entirely misplaced. I suspect that this hostility derives from the ideologies
of :he people on either side. Many ad/ocates of managed competition
simply do not trust government regulation of alnrat anything. Many supporters of budget limits io not mot makets, at lejst not for health care
services. In fact, the certainty that budget limics promise in no way hinders
achicvcncnr of the objectives of managed compcrition. The mixture of
hudeet limits and managed comperirinn described here would rcj^ilaiize die
puymenc system fo« rcimbuising bo>pitaL, thereby acliicving fi>r approved
health plans some jf the advantages dial advticatci of manatyxl compel tion claim will folh JW from the establishment of uniform benefit packages—
transparency for affected parties who wiil be enabled to evaluate alternatives more effectively.
NOTES
1. In sytahols, let D Ic ihe iiispital budget and W, be the nr^M asiitiiMxl to aJniuMHi i.
L
In tcnnurf theenialion .n Nou l,C,willrucasI, VCtkdmcs.
�SUMMARY OF "SOWING THE SEEDS OF REFORM IN 1994"
by Henry J. Aaron
This paper, which appears in the recent edition of Health Affairs magazine, is
more critical ofthe Clinton plan than his previous two pieces. While Aaron
lauds the plan's goals, he questions both whether the Clinton plan can
politically and practically achieve the "wrench of change" in the country's
health care system that the legislation requires. Aaron lists (1) the employer
mandate, (2) premium caps and global budgets, (3) the alliances and (4)
extent of change in insurance arrangements that will be critical for the scope
of health reform legislation.
Complexity Aaron argues that the plan would exacerbate complexity in the
current system because it relies on three mechanisms to finance reform: the
employer mandate, the individual mandate, and Medicare.
Cost Containment While Aaron says that national spending limits are
"correct", the plan's "ferocious" cost containment timetable is unrealistic and
would mean some form of rationing. Aaron predicts the premium caps will
not survive Congressional negotiations.
Administration The plan would "massively change the administration and
politics of health insurance" through alliances, of which "serious technical
and political" questions remain. Aaron is also wary of the National Health
Board's powers and ability to work with States.
Alternative plans Aaron is much more critical of Chafee's individual
mandate, which he argues makes insurance available but not necessarily
affordable, since "the Chafee proposal leaves fundamental questions about
the subsidy and the mandate for universal coverage unanswered." He
questions whether "the sponsors are genuinely serious about universal .
coverage." Aaron discounts single-payer proposals as politically unfeasible
and is largely neutral on the Cooper and Gramm proposals.
Conclusion Aaron predicts that "reform of health care financing will not be
achieved by one grand law enacted in 1994", but "the current debate is
extremely important..." Aaron is optimistic that the a law passed in 1994 can
serve as a seed for further reforms in extending coverage and controlling
costs.
V
�Poldotein criticism
Q:
or. F«ldst«in has vrittsn that you hava vastly undarastiaatad
tha impact of this program on tha daficit.
How do you
raspond?
A:
F i r s t , l e t me say that we w i l l get the Medicare and Medicaid
savings that Dr. Feldstein claims w i l l be impossible. Broader
employer coverage and system-wide reduction of cost growth
make these savings possible.
In Dr. Feldstein's a r t i c l e , he also alleges that broader
insurance coverage w i l l raise u t i l i s a t i o n of care-'-about 5
percent more than the we think i t w i l l . He assumes that the
currently uninsured w i l l greatly increase t h e i r use of medical
care. I n fact, however, the Health Security plan encourages
savings over spending. Even i f Feldstein were r i g h t , however,
there would be l i t t l e direct impact on the government. Most
of the cost of medical care under the Health Security plan i s
s t i l l spread over the employer based system.
Dr. Feldstein also argues that the Health Security plan's
requirement that employers provide health insurance to t h e i r
employees w i l l reduce wages and cut tax revenues t o the
Treasury. Quite irrelevantly, he calculates how much revenue
the Treasury would lose i f no firms provided health insurance
now and a l l were subjected t o a new 7.9 percent payroll tax t o
provide such coverage. I n fact, however, most people are
already covered by employer provided insurance. Many of them
have more expensive coverage than the Health Security plan
requires.
Firms whose costs were reduced by the Health
Security plan w i l l pay higher wages than they do at present,
providing more work incentives.
1
"^"^
\
�COMMENTARY 205
Commentary
Managrf Conyctitfaio: LittJ Cott CoMainwcnt Wkbout BuJert lAniti
by Henry J. Aanm and WiSiam B. Sckwarr;
1
Confroo.ed with a take dnjice between the two tedviiqucs most commonly achrenood for controlling the growth of health care spending—managed competition and a global budget cap—President Bill Clinton has
responded as Whnie die Pooh did when asked whether he nenicd honey
or sweetetvd condensed milk on he bread "Both,'* said Winnie—and
Uinion. This roponse ii fortunate, because, as we argue here, growth of
health care costs cannot be slowed significantly without global budget
limits. Neither economic theory roc less formal observation supports contentknts that conpetittve mechaiums alone will gencratt the right level or
mix of hedth cue spendir.g. However, budget limics cany the risk of
burcaacntk:rigidity.The rif£it mix of these two approaches to cost control
is still unknown and is '.ikely to vary within the United States depend ing or
local conditions. Therefore, the federal government should set targets for
health care spencing bat leave considcnble latitude to the states on how tn
meet those targets.
A Brief History Of Cost Control
•
The history of cost control is one of a powerful inflationaryfarcemeeting
linle resistzrce. The future holds both die promke and the threat that
inflationary forces will grow in strength.
The nearly irresistible force. Rising medical costs tre a problem because of the pcrvasiver«ss of third-party payment. These payments drive a
large wedge between social costs and private costs at the time care is
rendered. This distortion of incentives affects both partie* primarily responsible br purchasing medical care: patsents and physiciam. Because insured
patients besr little cost at rhe time of care, ther have incentives to consume
services that produce any amount of benefit, no ataner how small. Respocv
sible physicians acting as agents for their patients validate these prcfcrHemy Aona « Snaar of t
ences. Society must bear the cost* of such care other :han the small fraction
that patients pay.
These incentives can explain excessive, but not rising, medical outlays.
Some ohscrveis have attributed a chable part ofrisingcosts ro such forces a»
the extension of insurance coverage, inc seasing .admlrustrative complexity,
cefenj.ve medicine rnciiced by feat of malpractice litigation, or grosnh in
tebtive compemstion of provides. In our opinion, they are simply wiong.
These farces have contxifauted ID a needlessly bigh level ot medical eapciv
churr hut are- responsible (or only a small fraction of the growth of tood
spending. The explanationforrisirg outlays and for the trtrcaiLig anrnunt
of low-benerit. hi^h-cost care b tc be found in the extsaordinurily rapid
pace of technological advance in medical care.' ,
The very movable object. In rhc face of these rising outlays, public
policy reacted first with laascudc, then with ineflectuality, and most reoently wirh nrnrginal cfficctrrcncas. At fust, rising mcilfcal costs mostly
troubled these who wcic uninsuicd. Rapid growth of worker paxluctivity
coveted employees' health costs and scppunud rapidly rising monetary
•ages as well. Govcrrunenta easily paid for heahh benefits and still cut taxes
periodically :o oftct revenue growth front unindexed tax systeim.
This sense of limitiess posubikty gradually faded in the 1970s as economic growth slowed, k expired abruptly in the exty 1930s after federal
taxes were indexed, bkaldi care outlays had become major cos: items on
gavcrnmcntand buskiea budgecs. in the mid-1980S£av«mroen£ began to
shift costs to private payees by Increasing diagnosb-idated group (DRG)
payments much less rapidly than actual costs rose (cost shiftirig under
Medici id had long been the noon). With growth of labor pmduct.vity
diwn and dm: she of employee' hedth care budgets up, rising heahh costs
ate up 58 percent of additions to ccmpensatioa frort IVKC throu^i 1991.*
Hie pr.vatc sector relied on managed care. Most denents of nonaged can:
merely shifted costs. The entire effort increased administrative eons. The
rapid spread of managed care suggests that private benefits outweigh private
costs; whether social benefits exceed social costs remasra much ia doubt.
Policies by business and government may have retarded growth of health
care costs. During the mid-1980s the animal increase in pe- capita hospital
spending fell from 6 percent to aboat 2 percent, cunilating to a nearly 30
percent savings in hospital dap. These trends seemed tn panialty oflset the
cost-increasing effects of demography, input prices, and rcw technobey.
Nevertheless, the overal rate of growth a( acute care apendo^ during die
l9SCk closely resembled that of the preceding decade, perhaps because the
"succeaful" cost-control efforts of the 1980s merely sufficed to hold spendirg growth to whar it had been in earlier periods when such controls were
not in eflect, or perhaps because cost sarings in the hospital sector were
4
�J
106
COMMENTARY
HEALTHAWAIKS I S»ppl«nenrl993
ofbet by cast intjriiM*.selsrwb«Te. Iitlit r ih«>r» sufjgwts rxfiid future (powth
of ensts imitrrtifrpnf j-olicies.
More of the ume is coming. The pace of mctikal teclmohgy ud/nncc
<hows no signs of a baring and many signs of iccelerating. These advances
almost always add to oosis, by providing new treatmcno or new ways ro
dryplrp medically useful in fonnation. Typkary, innovations cieate procedures that are more costly than are the methods they replace. Whcic less
costly per patient, they so vastly increase the number of cases in whkh the
prooediire can he jsed (for eammplc, liecausc they are less itsky ci pctinful or
invasive) thjr total expenditures increase. Innovarions may cventuallv curb
growth of health core coots, but currently "cost-reducing medical advance"
is nlmosr an oxymoron.
We are persuaded that thisflow:>f new icclniolugy will m(»rc than offset
snysaving* that nay berealisedfrom aqueciing out entirely warefal procedures, sticanilining adininistratiou, elimiruitiiif redundani facilities, or curtniling growth of compensatioii ol' health case providers. Theresuk,we
believe, will he ancver-lengthcnin; menu of ever more costly yet beneficial
diagncsric and therapeatic procedmes that insured patients wiD want and
their physicians will Itave powerful Incentives to provide.
The Oversimpflfied Economics Ot Cost Control
Most U.S icsidciits are covered by high-quality insurance. Since fully
half of all health dollars are spent on patients for whom spendisg averages
|3O,0C0 per year, more :han half of all care b almost certain to be rendered
t J psit mns who have moveJ past stop-loss limits and are 100 percent
insured lit the margin. Patients in such situations have no ircentive to
reject any medical intervention, no matter how small d»e benefit or how
ostly the pmcedixe.
Thb problem can be illusrrated graphically with the use cf "hencfits
oirvcs," which show benefit per dollar spent on a particulir medical intervention, arraying dollars spent from highest benefits to lowest benefits.'
The shapes ofbenefits curves vary horn service TO service. Broadly speaking,
if all peticnD werefiilly insureJ, spendingon health case would be excessive
because parients who face no costs have no economic incentive to seject
any form of zart that generates even minor benefits, no matter how large
the total cat. While excessive, htalrh care spending could still be "efficient" 31 die odd sense used by economists; if sil beneficial care were being
rendered, no reallocation of spending within the medical sector could
improve outcomes
To control COSTS, policymakers need ro introduce a mechanism that
achieves two objectives: saving money and assuring that rmainin^ re>
207
sourues are uied in a way that maKimizcs medical Denefits. To acharc
savings, spending miisr be held below the level that oilly Inured parients
(and physicians acting on their behalf) would choose. To achieve savings
efNcicntly, rh= ratio of expecred marginal (social) benefits from consumption of health care to expectedraarpnal(social) costs must be kept equal
across all heahh resources. Rrcuctton in onlays below some baseline is the
measure of success of cost control. But egKgious inefficiency will discredit
the cost control effort because patients wt» could have benefited from care
are denied services wliile other patients who benefit little receive care.
What Managed Competition Cannot Do
Plans alleged ro embody managed competition are so diverse that, in our
view, the tern has lost value in org* tiring pubi c discusskm. For example,
rh; plan put forward hy Abin Enthoven and Richasd Krontck explicitly
and emphatically rejects budget limits. In contrast, a bedrock element of
the pbn offered by California Insurance Gmrnossioncr John Garamendi ts
a cap or. tax-favored premiums that ndividuah or businesses could supplement from after-tax dollars, tip to a maxinum limit. {Ganmendi's plan is
net presented in this volume, although it is dtscussed by several of the
contrfcutors.) This cap is, in effect, a global bucfeet lisnit enforced through
pmntum limns. This cap, in our view, is the defining characteristic of the
Garamendi plan, a feature that is whnfiy ahent from the fathoven/
Ktonkk plan md, irulred, is explicity rejected by them.
Lack of detail on how managed competition would be implemented is
alarming. So far as lack of specificity is concerned, the various managed
competition plans are no: inferior to those incotporabng explicit spencing
limits, which arc notabh vague on Just how the limics wnuld be impl<v
men ted. Global budgets differ from nanaged conpetition, hnwevrr. in that
global budgets and spending targets actualhr exist m various forms tn several
other countries where they actually have worked to suppress powrh of
health aire spendirg. Managed enmpctitien exists nowhere. The benefits
lis advocates assert wouldfollowfrnrihs tsaplewnentation are expressions of
faith, net experience. Plans such as the Federal Employees Health Benefin
Plan that are sometimes cited as suggestive of We undermasngedcoinpstiticr\ give one trrJ*- causeforoptimisni. as their costs hasre risen nearly as East
as those in sneiety at large. Per capfea health care costs in California, the
smre wirh
lararsr penetration of health mamtaiance mganiiations
(HMOs) in the continental United States,
the highesi in
the nation.
The key to significant cost controlfrommanaged competiban Hinges on
the belief that people will not buy hadth insunnce norc costly than that
�ma
COMMENTARY
HEALTH AFFAIRS I Sn>pleir.cnt 199)
vnwidrdrfwoughhealJi insurance puichasing cojpcrativcs [HIPCs) if
they hive to pay after-tax doBati to do « L The key to efficient cost control
is the belief that HIPCs will have the incentives and the qppropriaic levers
to curtail spending in a medically dficieat manner.
The little evidence that is available or the first issue sujgesu d wt people
will sightly cumil purchase of insurance if marginal oadays must come
from aftertax tncoroe. The price dasriciry of dcmaKl for healtn insurance
seems to be much below one; we use 04 as a point estimate.' The price
eboticity seems to decline with income, so that making msurancc taxable
will b: more cflcaive in discourajing the purchase of supplemental Insurance hy rhree with modest incomes than by the weL-to-do. The majority ot
broilies air nihject to mar^nal taut rates that amount to not more than
about JO percrnr- Thus, people mtrfit curtail insurance purchases on the
average byroughly12 percent, w.th smaller percentagereductionsby die
wealthy and larger rrdicrkms by the poor.
Whatformmight such cunallments take? Almost certainly peoplewould
not forgo coverage fcr catastrophic illnesses; if they dd, s u * behavior
would be tcBuaed as a social problen to be solved. Some might Join
HMOs. Others mightremainunder indemnity insurance of one kind cr
another aad accept higher cost sharing. Althocgh higher cost sharing
woukl assuredlyreducedie oven II cost of insurance, rrast of any curtail'
menr in insurance outlays would take the form of cost shifting—from
third-party payers to patients thraugh out-of-pocket payments. The belief
that instance refona would caase most people to join tightly managed
HMOsremainsunsippomd by empirical evidence* More importantly,
cviiLncc to date suggests that costs of HMOs arc somewhat l o w than, bat
grow at approKUiately the samerateas, those of other provideis.* Saving
beyond a one-time reduction irv coos will reiuh only if HMOs ration
services (HMOs claim not to be rationing now).
Wc do not tdknw diat advocates of managed compcrition have come
close to shouldering the burden of pmof that their preporak woddsufficiertly cvrail growth of medical costs. Our line of argumeiM suggests that
any nationalreformwill have to rely, at least at the outset, cn other
instalments than managed competition to slow die growth af health care
spetidii« and that rrfbrm eflbrti should experiment wirh managed competition as a device to promote effekmtresourceallocation.
7
Controlling Growth Of Health Cane Spending
Total health care expenditures (C) may be thought of in either of two
war>—« a product of prices of service. (Pi) and quantities of services (Si),
where E - ZPSi, or as the product cf the coot (/ services per petson (Cj)
209
nultiplicd by die number of people covered (Nj), so ihar E •» ECjNj. litis
symboScrepresentationof health care spending weffesn thse; ways hy
which health care spending might he son trolled: limits on per cspwa
premium payments; limits on prices paidforcervices, with quantity feedbacks; or direct ceilings on budgets of key ptoviiere. Here wc examine each
In turr, oonchsding that all three shoald be used in different puts ot the
healthcare system. We also argue diat experiments with manned coaipelitiun under such a system should be pursued vigorously.
Preauuai caps. Premium limits coold be "hard" or "soft." A hard premium cap wuukl be a capitation payment that could not be supplcinentedA soft cap could be supplemented by puichasc of extra inaurance, presumably on renm that are less favorabk: dian those that apply tn basic coverage.
The Garamendi plan Is ar example rf a soft premium cap. Individ uaJ»
would he requircc to have coverage under a basic plan, tic cost of which
would be btgely covered by state taxes. Individuals could buy additional
coverage oat of after-tuc income up to some iimit. fWhasc of insurance
beyond that limit would not be allowed. Many anangtments would be
possible,regardingthe tange of supplemental kunrance, tne types of benefits that itoould cover, the penalties attached lo purchase of sucli cover^>e,
the ability of providers torenderservices aider suppkmenral insurance, the
extent to which providers oould impose chaises dirccdy on patienn, and
nany other aspects of coverage. Such mks would define Just how lard a
^ioboi budgLt ceifing enforced by puraium limits acnially is.
The Garamendi pbn b based or. a natural complementarity between the
use of premium caps tc impose a global budget and managed competition.
While plan details remain cbscuie, the principle—setting a limit on resources available to die health care systen and linking that limit to a system
in which individsab or businesses could choose among health care financing vehicles and among providers in ovder to promote competition among
insurance vendors and among health care providers has considerable
intuitive appeal
Whether managed competition wouH promote efficient use of medical
resources is open to question. Considcnfale doubt exists about whether
major impediments to the nnplerecntanon of managed cotapctitian could
be cincuitnented. Would it be passfcle to develop a ride adjustment
formala that would prevent insurers from trying to select among parients!
Wou!d it be poss&le to test such a fbnrala tofindout f k was "ready for
prime timeT If HIPCs enjoy monopoly status, how will one aasre that they
behave in -he public interest? If HIPCs appsuved only a few plans, would
this create herriera to entry lor innovative provides? Is there any conceivable circumstance under which a HIPC could deselect a plan that had
achieved significant market share? Would HIPCs be subject to "tegdacotr
10
�(
210
\
COMWENTARY
HEALTH A HPAI RS I Suwlrmrr* 1991
r
cu|>Luc. V/nuldit [iM!«cr ifciii|J«»y<T!>, VIMJS*; liabihty will be limited to the
cost of n Iwic pbn, lose interest in giilcfcng employee choice anong plans:
More generally, will the incentives under which limited resources would
he admintsrered rhmugh conventional insurers selected by a HIPC rwult in
efficient nmallraent of medical care? Efficient arrtailoient requim cutbacks in most services, although ay va^ing araouats. Ir some cases these
cutbacks must b; supportec by investnent and staffing decisions. In the
case of medical services not depcrdent on specializrd medical equipment or
on pnviders with specialized skills, the cutbacksrei|uirecollegia! discussion
among providers, subject to external review.
In principle, efficient use of nedical resources tequires that socially
weighted benefits and costs be balanced at the margin actc*s all uses cf
medical resources. In practice, pwcnfcn in •valuating both jenefas and
costs is impossible. While HIPCs, insurers, or vendors of services ma* try to
cquaSze benefits and costs at the rorgin, we think it more likely that the?
will engage in the same marketing strategies that urananaged insurers
currently use—trying to select low-cost customers cr to entice customers by
offering appealing services that may provide few medical benefits.
HIPCs cr some other public agency will try to curb such behavior, no
doubt with imperfect success. In any event, ir is clear that the administrative and transaction costs ofoperating managed competition will be hrge—
not perhaps so larpe as those under the current systrm, but still formidable:
These costs would have to be weighed against twD kinds of possible efficiency gains. Fitst, managed competition would create an envirunmenr
favorable to change in a dynamic industry, as it would conrinualy pre
exist aig modes of tendering care at ownpetitrve risk. Secord. managed
enmpetidon mignr result in efficient rationing of mnJical care, althoagh for
the reasons presented above; we are doubthd.
In brief, it would be medically foolhardy, in our view, ro base an entire
national reform an such ur tried principles. Ic wmld he highly desirable,
however. .for a isatc cr part of a state m put s»ich a plan in operation in
combination with premium limits. The Ganmendi pbn is xx intriguing
modelforexperitnermrton; ir is nnr yet a model foi national reform.
Price ccntrok. Universcl price negidadon similar to that embodied in
rhe Medicare system is an altrmauve approach to cost control. All payers,
rather than just the Health Care financ ing Adminisnatian (HCFA),
would base payments to hospitals on a schedule of fees related so diagnoses.
TIMIfernpMiriuca u ruMvn>l>'a«l|ial«<l Imapllal hitc|||«t with a Milll In pni
ponional adjustment for admissions. A onivenal fee schedule for phyticiani
would embody a similar principle.
By themselves, price limits of this kind contain only weak incentives to
reduce use. They contain no incentives to promote efficient use of nedical
3
1
4
*1
211
services. The hospital cd mission or the outpatient treatment of a patient for
whore diagnosis x therapy promises bigr benefits precipitates a parmenr
ident ical co that triggered by another peticnt with the some diagnosis who
stands to gain little from diagnostic intervention or therapy.
Price limits of this kind can serve as a budget consoaint otily if rhcadjustmcnt facto* provides for diirinishmgreanbunementas ttse marascs.
Such fecsfljack isecbanisms can be applied in various ways. Hospitals or
pliysiciaiss can be given declining paytnents per case as aae rises beyond a
certain target. In die extreme cast, a price schedule with negligible adjustments for highei-than-planned occupancy rates is tantamuorx ro a fixed
budget ceiling. Alternatively, any adjustment could be defcnvd, K provided under the plans of soree Canadian provinces sr as has bem proposed
for Medicare's resource-basedrebtivevalue scale (RBRVS).
Priceregubrtcnis subject ro numerous shortcomings. Indeed, critics of
the CRG system expressedfearsthat hospitab would be tempted to seek out
low-cost perients on whom they could make profits that could be used tc
cross-subsidize more costly patients. V/hilei expetience under the DRG
system so far has not confirmed these feass, this potential problem should
not be wholly drsmissed when considering whether to unnrersalire price
regulation. Desp.te its shortcomings, priceregulationntey prove useful for
controlling physician cxpcnditiae inregionswhere population is sparse anc
meaningful managed competition is impracticable.
Imposed budgets. U.S. hospitals codd be subjected rofixedbudgets, as
hospitals are irv other countries. A centrit authority sets a budget for capita!
and curren: outlays and may impose somerequirementsforthedistributior
of expenditures. A governing body of the hospital determines how this
budget is ra be spent. The governing body, in principle, oou d consist of
some combination of trustees, physicians, odier providere,crhidsa, anc
comnunity representatives. Because hospitals and servicesrelatedto hospitalization accountformost acute medical care outlays in the Lnired States
and other countries, contrdling these outlays would deal with the lion's
share of rising nodical costs
Tbe chief strength of thb approach is that it is the only method a
conrrollinp cost; that sets ap incentives for die efficient use of available
resources. Confronted with a fixed budget, physicians who head the various
depaitmcnB within the hospital will beforcedby peer pressure to assess
systematically whether increased outlays oe service X will bring more
hmcnts than thr Rrnnr Amount spent on service Y. Of oourve. such fudgmencs are complicated by uncertain ties about efficacy and by die dificuliT
of comparing the valie of sach duparat: outcomes asreliefof pain, correcrinn nf a dtsahility, and extension of life. The internal politics of the debate
nboitr allotarion of fixedresourceswithin a hoapital inevitably will invoke
�212
1IEALT11.AFFAIRS I Supplement 1993
perunal uuenats and persunalitics, particularly when incomes are at stake.
Ncvenhrlesst a prrltminary assessment, which is far better than no assess'
merit at all, is entirely feasible and wodd help greatly in aspiring that
resources are allocated to their highest-valued uses..
A top-down budget link on hospitals also wndd have the virtue of
impa&ing relatively modest adaninisaative COMS. Some appeals proccat
would be necesaty to deal with hospitals that Wt shot tc hanged, but dis
process would impose only a small bunk-n on the system.
However, budget caps do have important shortcomings. Most impcrcandy, they can encourage a kind of boreauaadc ossification in the health
cane system. In the ahwnce of cootpetitive pressures, economic ihecmives
lo replace old and tamiliar practices with newer and more productive ones
are weak. In nddition, methods of controlling physician incorrcs that
maintain inocntives to work hard but not to inckicc demand (or care are
difficidr ro design. Ratioral methods for adjusting budget ceilings and
reirrJbiirsemcnt (bnnulae for physicians that ore not subject to inanipulatton
have nor yet been designed.
This list of shortcomings of budget caps, to which other dclkiencia
coukl be added, undcrtoores that no easy or perfect method of oontrodiag
heakh care costs exists. We believe that (or thisreason,and others presented beiow, die United States should set performance standaids lur
contmlling growth of acute care costs but permit stales to use different
methods of nweting those atandwds.
A Strategy For Cost Control
Political and techakal trade-offs will shape the dicice asmng varioas
sratEgies lor imposing ocpendtture limits. Price Units are cleady imiatis&ctory because they do not control volume except through a complex sliding
scak for reimbmacmcnt. If one were starting with z blank slate, there would
be strong arguments favoring a top-duwn budget cap. Administrative costs
would be lower than trith a system of managed competition. The hospital
staffand adsninistiation, five of the adrainisrtative burdens and compenrtve
preaaires of a managed competition system, could focus their energies cn
assuring that resources wex allocated to their highest-valued uses. I T e
major drawback would be that bureaucratic inertia woukl delay the elirninatkm of obsolete or ow-valued activities. In the real world, howerer, it is
highly unlikely chat a top-down budget system will be inplementec at ore
(ell swoop. The current insurance system is not likely to be dim mated
abruptly. Should the United States move to top-down badgeting. it s likely
tn do so slowly and incremtntalh .
Managed coopctition has ih= virtue that it would evolve from the
COMMENTARY 213
present health care system. It also preserves competitive furces that woukl
encojrage the ruth less dbrinatkn of wijustffled activities. On (he other
hand, a large numbei of ikflicuk problems would have to be addressed
betbre the idea became areality,inckdtng the reguhrton of HIPCs, the
arvoidanLc of risk selccrion, and theremovalof substandard pbns. IWthermure, moving to managed competition will be a coraplcatrd process because of the diversity wtrhhi the preserr. instnance tysmm.
Let fifty-one flowers bloom. Unfortunately, the world is a cluttered
place. For every California with a highh developed system of HMQs, there
are several other states in which HMOs are euros ities. For every state
consisting mainly of thickly settled metropolitan area* there are thinly
scaled scales in which sob practitioners are all that communities can
support and often more than they canretain.For every commuaity in
which physicians spanning every imaginable ^teciaky vieforpatients, there
arc other corammitics in which primary caie cannot readily he obtained
except from emergencyroomstaft.
Because any practicable reform of heakh care ftnancing will have to take
t he world as it is, not asrcforrnerswishit were, it is vital that the rrfomi be
desi&ied to accommoiate t wide variety of practice arrangements and to
permit states to employ a wide variety of cost-ccntrol mechantsns. We
therefore urge that thefederalgrvemsient allow states wide laticsde in
choosingrecriiodsfor meetingfederaltiandarrhforcost oontioL California
may elect to use a preaiium control mechanism limed to managed competition shnikat to that embodied in the Gannendi plan. We suspect that
should such a plan become law, those charged with impleroeniing it would
promptly dscovcr that although it may work well ir. San Francaco ot Santa
Barbara ccunties, it nay work poorly in such thinly settled counties as
Mono, Sicra, or Lassen, where it would be netcasaiy to use price controb
in dealing with physicians and. perhaps, fixed budgets in dcalinc wkh
hospitals. Such states as New Yosk or Mary land, radier than cmbaAing on
the entirely uncharted seas of managed competition, may choose to build
. on hospital budget controls they have JeveJopcd over a decade or more.
Other states may use still dffereat methods. Instead of imposing a single
approach on an exnenely diverse system. Congress shouldrerognbethat
allreformmust beginfromwhere the health care system is said simply insist
that each oate met specified standardsforlimiting expenditure growth
and assure financial access to all hscitnens.
Timhtgis everything. All of this indicates chat evenfl"managed compcrition is thr roac Congress cboosm to (bCow, many yeon will pass before a
natknal system is in place. Enabling legidaticn will almost certainly not be
passed und late 1993 at theearitest and, more likely, mid-1994. Implesncnt at ion is liely lo takt an additional eighteen months to two yean, arte!
�;f
214
HEALTI1AFPAIRS
COMMENTARY
I Siipfirroent 1993
«XjiBHlt.-ral>ly ItTigcj in rc^ioiu now nilhind I IMOj in oilitrr ligluly IOJ-II-
agnl sysnems. Thus, even i managed oocnjxtitioti is as dTeudve as its man
rnthiisiaattc Hclirocates atidcipat:, it cannot be expected to soppieM health
case spending Icfnre die incumbent preskfc-H must stand for leelecnon. By
thai dine liealtli can costs arc IScely to have risen from die current level cif
about 14 peiccnt of gross comes^c product to, perhaps, 16 percent
Hw budgetary imperatives confronting the Clinton admiaistntiion may
not permit such delay. Some reduction in projected fedenl spending JO.
health care is Iflcdy oi be essential to give the new admtntstntion a chance
of sgnifkantly cuttiag the federal budget deficit; such «vings are certainly
tndapeneble if the deficit is to be halved. Yet, if efforts are directed solely
to suppressing government spending, they arc Likely to exacerbate, the
already serious problem of cost shifting to private payers. liot dial reasm,
sigr.ifkasttredMCtkmsin rhe growth .if government health care spending
(other than by curtailing benefits) can he achieved only if linked to similar
controls on private spending.
Ve sec but one way out of this dilemma between the need to achieve
gnvemmcnt (and, perforce, private) saving soon and the inescapable delays in anplcamring any comprehensive seforav. Control of ensb in the
hospital sector alone, the largest single component of total acute care
spending, might well be achieved quickly. While the admmt^trative ohsracles to such controls are formidable, the necessary framework for achieving
sigr.ifrcant rrdwetiors in costs is in place in a few states arid could be
extended nationally in less thar. one year. Congtes could authorize states
to cse difrrmt technique; for neetine national target!forhospital speeding. It woukl he essential to prohibit hospitals from sloughing off various
services m older to Comply with spending linin or to penalee these
providers if they do.
A full->cale national reform would probably su perseie these short-terra
measates, althou^i this short-run appioach to cost control .mfeht play a rale
m longer-run reform. Whether or not shor-term measum sonriv* as elemcats of permanent reform, they promise to slow growth «rf heakh costs
more rapidly than comprehensive reform caa do. These savings may help to
pay fur the extension of insurance within a defkif-reducmg program.
An initial p:ogimii foosed on hospital ensr rontroi could ptomise ro
slow fhe growth of heahh care spending at least modestly. More stringent
'measures to deal with physician payment could be delayed, bi a long-tenn
reform, managed manperirinn with hi HIPCs is likely to have important
tees in promoting efficient use of resoiuces. It b Kill too early, however, to
know how much this untried concept can slaw th: growth of spencing. Let
the experimems begui.
'-'V
m
215
NOTES
1. J P. Nrrfiicoc.-^(ofical Carr Com i W Mixh Wcfaxe LcwT Jomoi of Economic
Prnfrntas (Summer 1992): 3-^ I ;H.}.Ammm4 W A Sehswm. I V Pctnfd PmrvpMm: Rjtkmmt I hapmi C m Wh+toftOK The IrookMgi tofdOMlo^ I5*4X««*d l i.J
Awun. SfriMi W UmtdM. ComJHm: Fmmc** AmtrooS H«aUO«« (W«hii«to.«:
The Biuoliinfs Institutian, 1991).
2. Thbnchtielepcd0O^kasl«en]p^enfbrln«de^dex
mnnua\ cn>«l» in toi haMi ewe qxnthag exzeded 5 perceTC, in ifc othet decile it
ettceeded 7 yeraent amaity. Ses also WJb. Schwara, He iMvfcable wtwe cf
Otrnt* Cm CoMdnnMt Snasegkse Whf They Can Fwvidt OnJy Inoporay
Jmmrmtof <W AmmiamhUkd Aaaotiaam 257(1987JL 220-224.
3. K ; . A a ^ ^ C l . S c » ^ b e . S m ^ r W ^ W « » * i « : WW
Co^rmmrmDof
(WahMigKxi^^The Eroofcavi Instmicn, 1992) 30.
4. W B. Schmcr and DX. V««Won. -Vhf Mwueed Care Cxmor Contair Ha^wl
Costs—Wafuuc RatomnB,- HeoU Affma {Sommet 1992): 10&-iO7.
5. For iKiogifana et bjicftocurro, «ee Assonand Schwani. The PaojU Putuipaion.
6. U. Hclmer. T n M k y and thr Denwad fartlohh Irmmnuc,"}imnmttjf Kcirfih
Eeoionks (DxesDlxr 1964): 20V22t.
7. Ewn chi» con ihilriag is^xicuiafee. so i«JiviAali wo»iW be nbjett» hl«¥lt*ni««Ti
frow vrodow of tainted I <idiMt' insuwraa. hmwradutcal atvwsal nf managed ewe.
indMdual* who were oonconed dxm denial cd bencfbial artvicei ni^v he tes^acd
to Kiy »ccondotiuun kaianmycc, htgh-cedpotuEy rldtn, i d mher corroy io till m
actnal or pnttived p»p«. Such pmidwliliq wc •dtinafly qeoubiivc. bai ito IIMK
ipecafatnc d m ihe cktmed henetefcrc v/motthat imnaimamanAtcamiucf.n!
an incinpiett one ar that.
8. Most «eew tmwsh of HMO mcsnbeniiip basoccimcd WNMI individual practice
associsrions (IPAs), sfcxwcfHMOdarifffcallyw^fae^.aCTvkeparwtir and (l«t
taa shown wocosi mhtsmici oTCTnon-l^»40 psjvtdm.
9 rRhfcwhow«Tat.."Aiefra-£KSCTnCbnbMacMn I
MtSodCM lAoeM «985k960-966.
10. Thew .^irstkia draw on a lho«eJ«*dreviewof how U P C i vooU OTtrarr •nder c if
Gacanieitdi plan. E. VPkki ce aL, "An Analysis «f the Gannendi PlanfatHeakh
Rciona In C»Wotti«,* (IranOMeferHealth Pfc&y Soktwra, SepawtbcT 1992)
e
�ACCESS #
HEADLINE
*
LENGTH
DATE
SOURCE
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*
*
930714-0113.
A Workable Alternative
By Martin Feldstein
ESTIMATED INFORMATION UNITS: 3.9
WORDS: 422
07/14/93
WALL STREET JOURNAL ( J ) , PAGE A14
There i s a growing p o l i t i c a l consensus that something should be
done to extend coverage to the uninsured, to protect those who fear
a loss of insurance, and to control the rapid r i s e in health care
costs. Doing so does not require a radical change in our health care
system. The broad goals of increasing protection and limiting health
costs could be achieved by three changes to our current system.
F i r s t , require employer-provided health insurance plans to allow
employees to coninue coverage at their own expense when they change
jobs ("portability") and eliminate exclusions and waiting periods
for pre-existing conditions. Extend the same benefits to dependents,
surviving spouses and divorced spouses. Any policy that did not have
these features would lose the current favorable tax treatment of
being regarded as an employer cost but not included in employee
income. These changes would eliminate the p r i n c i p l e concern of the
8 5% of the population who now have health insurance.
Second, use targeted programs to extend coverage to the 15% who
are now uninsured. For example, the unemployed could be covered by
using a fraction of unemployment benefits to pay for coverage.
Colleges and u n i v e r s i t i e s that receive federal funds could be
required to provide insurance or health services to students.
Targeted programs could also deal with most others who are currently
uninsured. These programs involve costs and taxlike distortions. But
since they deal with only 15% of the population, they involve much
less interference than programs l i k e the White House plan, which
would change the insurance of every American and r a i s e marginal tax
rates sharply.
Third, to help contain costs and make health care responsive to
patients' preferences, change the tax rules that currently weaken
cost s e n s i t i v i t y . Although many employers now use managed care to
improve the cost-effectiveness of their health benefit spending,
their net savings to shareholders and employees are reduced by the
tax rule that health insurance outlays are deductible as a business
expense without any limit and are not included in employees' taxable
incomes.
This special tax treatment also makes employees prefer very
comprehensive health nsurance with small deductibles and
co-insurance. Any arrangement that limits the value of the tax-free
health insurance benefits that employers can provide would encourage
corporate shopping for better managed care plans and would encourage
individuals to select health insurance with greater deductibles and
co-insurance and therefore to be more cost sensitive when they and
their doctors choose among treatment options.
(See relaed a r t i c l e : "Board of Contributors: What's Wrong With
the Clinton Health Plan" ~ WSJ July 14, 1993)
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Tax Rates and Human Behavior
By Martin F e l d s t e i n
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WALL STREET JOURNAL ( J ) , PAGE A14
The C l i n t o n administration contines to ignore the harmful
e f f e c t s of high marginal tax r a t e s . The White House now t a l k s of a
new 7% p a y r o l l tax to s u b s t i t u t e for employer premiums for health
insurance. I n fact', the new p a y r o l l tax would have to be at l e a s t 9%
j u s t to replace e x i s t i n g premiums. An a d d i t i o n a l tax equal to 6% of
p a y r o l l would be needed to pay for the a d m i n i s t r a t i o n ' s plan to
extend coverage to the uninsured and "underinsured."
The net e f f e c t of the new C l i n t o n taxes would be to r a i s e the
marginal tax r a t e of t y p i c a l employees by more than 15 percentage
points. The White House appears unaware t h a t taxes do more than
t r a n s f e r money from i n d i v i d u a l s to the government. High marginal tax
r a t e s a l s o d i s t o r t i n c e n t i v e s , and those d i s t o r t i o n s waste valuable
human and p h y s i c a l resources.
The proposed new taxes would come on top of marginal tax r a t e s
that are already remarkably high for ordinary working people. A
s i n g l e person who earns $25,000 or a married person i n a couple that
earns $40,000 already faces a 50% marginal tax r a t e — a 28% federal
income tax r a t e , a 15% employer-employee S o c i a l S e c u r i t y p a y r o l l tax
r a t e , and a s t a t e income tax t y p i c a l l y about 7%. The new taxes being
considered would r a i s e the marginal tax r a t e f o r these i n d i v i d u a l s
to more than 65%!
An employer who now pays $20 i n wagesand p a y r o l l taxes for an
a d d i t i o n a l employee hour d e l i v e r s only $10 of e x t r a spendable income
to an i n d i v i d u a l whose t o t a l marginal tax r a t e i s 50%. Adding a new
15% tax would mean that the $20 would d e l i v e r only $7 of a d d i t i o n a l
spendable income to the employee. Any economy i n which a $20-an-hour
employer cost gives only $7 an hour of spendable income to the
employee i s headed for trouble.
Under the C l i n t o n plan to replace e x i s t i n g employer premiums with
a p a y r o l l tax, the tax payments would be d i r e c t e d by the employer to
a health insurance provider. Proponents argue t h a t t h i s would
s i m p l i f y the insurance system and make i t e a s i e r to deal with
part-timers.
Some claim t h a t the change from premiums to a p a y r o l l tax doesn't
r e a l l y matter because " i t ' s j u s t another way of paying for the same
c o s t s . " T h i s misses the important point t h a t a p a y r o l l tax — unike
the e x i s t i n g premiums — would reduce the spendable income that
r e s u l t s from each incremental hour of work.
A 9% p a y r o l l tax on top of the e x i s t i n g 50% marginal tax r a t e
would cut the spendable income t h a t r e s u l t s from an incremental hour
of work by 18% of what i t i s today. This i s true r e g a r d l e s s of how
the p a y r o l l tax i s formally divided between employers and employees.
The sharp d e c l i n e i n the reward for working the a d d i t i o n a l hour
would induce employers and employees to reduce t a x a b l e wages i n
favor of untaxed f r i n g e b e n e f i t s , shorter hours and longer
vacations. This means a wasteful misuse of resources, a lower tax
base, and therefore the need for an even higher p a y r o l l tax r a t e to
�r a i s e the same amount of revenue!
Even i f substituting a payroll tax for the current premiums were
administratively desirable, the distortions from the extra p a y r l l
tax would be so large that t h i s idea should be shelved and
forgotten.
The Clinton plan to provide health insurance to those who are
currently uninsured or "underinsured" i s so l a v i s h that the
government's own experts estimate that i t w i l l cost between $100
b i l l i o n and $150 b i l l i o n a year. That's equivalent to between $2,700
and $4,100 per uninsured man, woman and c h i l d . To finance i t would
take a tax increase equal to an additional 6% payroll tax. I f the
Clinton planners recognized the adverse effects of high marginal tax
rates, they would scale back their plan and use employer mandates,
not taxes, to broaden coverage.
The Clinton administration's willingness to consider increasing
marginal rates for middle- and lower-income employees, as well as a
3 5% r i s e in the marginal rate of wealthy taxpayers, r e f l e c t s a
fundamentally incorrect view of how taxes affect individual
behavior. The policy o f f i c i a l s who advocate such taxes and the
s t a f f s that estimate their revenue impact assume that individual
behavior i s not affected in any substantial way by changes in
marginal tax rates. That false assumption implies that higher tax
rates produce correspondingly higher tax revenue and suggests that
wasteful distortions of taxpayer behavior are not a problem.
During the past20 years a substantial body of research by
economists has made i t clear that t h i s "no response" or "small
response" view i s wrong. S t a t i s t i c a l evidence has convinced the
overwhelming majority of the economics profession that individuals
respond very substantially to the incentives created by tax rules.
Much of t h i s research i s d i r e c t l y relevant to understanding the
impact of President Clinton's proposed tax hikes.
Economists agree that the behavior of married women i s
p a r t i c u l a r l y sensitive to tax rates, an important fact since nearly
60% of them are working. Most studies imply that r a i s i n g married
women's marginal rates from 50% to 65% would reduce t h e i r hours
worked by the equivalent of one day a week through more part-time
work and a decrease in labor force participation. Yet the Treasury
and congressional s t a f f s ignore such employment reductions when they
calculate the revenue effects of proposed tax changes. And the
policy advocates ignore the distortions in behavior and the f a l l in
national income when they propose massive tax rate hikes.
S t a t i s t i c a l research by economists also shows that individuals
who face the highest tax rates load t h e i r portfolios with untaxed
municipal bonds and low-dividend stocks instead of more highly taxed
bonds and that the incentive to do so would be much greater with a
40% federal tax on investment income than with the current 32% tax.
Fifteen years ago the s t a f f s of the Treasury and Congress denied
that the c a p i t a l gains tax influenced investors' decisions about
r e a l i z i n g c a p i t a l gains. The mass of evidence that has accumulated
since then has forced them to recognize that taxes do have a very
powerful effect on the r e a l i z a t i o n of gains. In analyzing President
Bush's proposal to lower c a p i t a l gains rates, the congressional
staff estimated that the increased willingness of taxpayers to
r e a l i z e gains would offset more than 80% of the revenue that would
�be lost i f there were no impact on behavior.
Marginal tax rates also have a powerful effect on tax deductions.
Although no one makes charitable contributions j u s t to save taxes, a
large volume of research shows that the amount of charitable giving
i s increased substantially by tax deductibility. Each 10% f a l l in
the net after-tax cost of giving r a i s e s the amount given by more
than 10% and reduces taxable incomes by an equal amount. Economic
studies also confirm that home ownership and mortgage deductions are
quite sensitive to higher marginal tax rates.
These substantial effects of marginal tax rates on earnings, on
portfolio income, and on tax deductions for charitable contributions
and mortgage interest, imply that higher marginal tax rates distort
incentives and that those distortions waste valuable human and
physical resources. They also imply that high marginal tax rates
reduce taxable income and therefore generate less revenue.
These effects are particularly important for assessing the
Clinton proposal to r a i s e marginal tax rates on high-income
individuals. Because of the way that proposal was designed, thee
would be a substantial distortion to incentives with l i t t l e revenue
gain. I f individuals reduce their taxable income by j u s t 10% of
adjusted gross income in response to the sharp jump i n marginal
rates, the Treasury would c o l l e c t only about one-fourth the revenue
that would be collected i f there were no behavioral response.
Although the Treasury and congressional s t a f f s claim that they
take some economic response into account n their revenue estimates
of the Clinton plan, they refuse to say how much. They do admit that
they completely ignore the change in employment and hours and any
other changes that affect r e a l income. My own estimates with Daniel
Feenberg at the National Bureau of Economic Research imply that the
government revenue estimators ignore almost a l l of the taxpayers'
l i k e l y response. The members of Congress should demand to know what
their revenue estimators are assuming before they enact a massive
and damaging increase in marginal tax rates.
Mr. Feldstein, former chairman of the president's Council of
Economic Advisers, i s a professor of economics at Harvard.
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Board of Contributors:
What's Wrong With the Clinton Health Plan
By Martin Feldstein
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Health care finance i s l i k e l y to be the most substantial
l e g i s l a t i v e battle,of the Clinton presidency. The plan being
completed by theWhite House staff would r a i s e marginal tax rates by
more than 12 percentage points for most taxpayers and make i t more
* d i f f i c u l t to slow the growth of health care spending. Fortunately,
such a radical increase in taxes i s not needed to extend
comprehensive insurance to the currently uninsured and to protect
others against the termination of their insurance through
unemployment, early retirement or the loss of a spouse.
The propoal that w i l l soon be on President Clinton's desk looks
something l i k e t h i s :
The government w i l l design a standard insurance package,
specifying a broad range of covered services and the amount of
out-of-pocket deductibles and co-insurance that patients w i l l pay.
Medicare w i l l continue to provide the coverage for those over age
65.
Current health insurance premiums w i l l be replaced by a tax equal
to 10% of family inome up to a maximum of $5,000 at a family income
of $50,000. Because of the limited taxes paid by lower-income
families, a substantial s h o r t f a l l would remain to be financed.
Although no decisions have been made about how to finance t h i s gap,
the l i k e l y annual cost of at least $50 b i l l i o n i s equivalent to a
further one-tenth r i s e in a l l personal income tax rates.
The effect of a l l t h i s would be to r a i s e marginal tax rates
dramatically for families with incomes under $50,000. With the new
taxes in place, a family with $40,000 of income would face a
combined marginal tax rate of more than 60%: the new 10% health
insurance tax, the current 15% employer/employee Social Security
tax, the 28% federal income tax rate (raised to at least 31% to
finance the projected health insurance s h o r t f a l l ) , a t y p i c a l state
income tax rate of 6%, plus state and local sales taxes.
In an attempt to disguise the true nature of the health insurance
tax, the White House plan would describe i t as a "payroll premium"
to be paid by employers, with a complex adjustment process to deal
with two-earner families and with nonpayroll income. But a tax i s a
tax. For families with incomes under $50,000, the payroll premium
would require the family to pay an additional 10 cents out of every
additional dollar of income.
The payroll premium tax would not go to Washington but would be
paid to state-level Health Insurance Purchasing Cooperatives (HIPCs)
* that, in turn, would contract with health care providers — health
maintenance organizations, managed care plans run by insurance
companies, hospital-based care systems, etc. — to offer the package
of benefits designed by the government. In principle, a l l plans
would be open to everyone without regard to pe-existing conditions.
In my judgment, t h i s radical reform plan i s bad in four
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significant ways.
— I t r a i s e s marginal tax rates on the 70% of families with
incomes below $50,000 by at least 12 percentage points: a 10% health
insurance tax and higher income taxes to finance the $50 b i l l i o n
s h o r t f a l l . Families with incomes over $50,000 would pay the $5,000
health tax plus additional income taxes.
— I t does not stengthen incentives to l i m i t costs and to
produce health care e f f i c i e n t l y . Since patients would pay l i t t l e or
nothing out-of-pocket at the time of care, they and t h e i r doctors
would have no inceptive to seek lower-cost sources of care. Major
employers that now use preferred provider plans to negotiate lower
costs from hospitals and physicians would no longer have any
incentive to do so i f their costs are set by the 10% payroll tax.
The future d i s c i p l i n e on health care spending would have to be
increased government regulations, with an inevitable decline in the
quality of care and personal service.
— I t provides no mechanism for patients and t h e i r doctors to
express their true preferences about spending on health care.
Personal health care now exceeds one-fifth of a l l consumer spending,
with an even larger fraction for lower income families. Many
households might prefer to spend more on housing, food and other
things and less on health care. But with comprehensive insurance
designed by Washington bureaucrats, households have no way of
influencing how they allocate their incomes between health care and
other things.
— i t would substantially increase suture budget d e f i c i t s . The
government revenue calculations assume that the health insurance
taxes would not a l t e r taxpayer behavio. But raising the marginal
tax rate to 62% from 49% on middle-income taxpayers — a 25%
reduction i n the net-of-tax share kept by taxpayers from each
additional dollar of taxable income — would reduce work effort and
cause s h i f t s from taxable compensation to nontaxable fringe
benefits. I f t h i s 2 5% reduction caused a f a l l of even 5% i n the
taxable incomes of affected taxpayers, the government would lose
more than $50 b i l l i o n a year in income and payroll taxes.
The government's f a i l u r e to take t h i s into account means that
future d e f i c i t s would be "surprisingly" large by an equal amount.
But recognizing i t e x p l i c i t l y would reduce p o l i t i c a l support for the
health plan by requiring even higher tax rates. Future budget
d e f i c i t s would also be enlarged by cost overruns when the massive
cost savings that White House o f f i c i a l s attribute to "managed care"
do not mateialize.
My own preferred approach to health care reform, described
b r i e f l y in the box accompanying t h i s a r t i c l e (see related a r t i c l e :
"A Workable Alternative" — WSJ July 14, 1993), would be very
different. But I also want to suggest an alternative plan that i s
much closer to the style and s p i r i t of the current White House plan
and therefore more l i k e l y to appeal to President Clinton and his
advisers. This alternative, dubbed he A-plan (for Alternative),
avoids the four serious defects of the current White House proposal.
The A-plan provides health insurance for the entire population in
a way that limits the maximum health care costs to the same fraction
of each family's income as the White House plan. Yet i t avoids the
large increases in marginal tax rates and the enlarged budget
�d e f i c i t . I t also helps to control costs and to make health care
responsive to the preferences of patients and their physicians. I f
President Clinton l i k e s the current White House plan, he should like
the A-plan even more.
Under the A-plan, the government would specify the same range of
covered services as under the White House plan. Employers and
employees would pay 10% of income (up to a $5,000 maximum) to a
HIPC, j u s t as under the White House plan. The government would make
up the cost s h o r t f a l l from general revenue.
Up to that point, the A-plan i s e s s e n t i a l l y identical to the
current White House proposal. But there the s i m i l a r i t y ends. The
c r i t i c a l difference i s that under the A-plan the family would
receive a Low Claim Refund at the end of the year equal to the
difference between their medical b i l l s and the amount that they and
their employer paid to the HIPC. Thus a family with $40,000 of
income and $1,200 of medical b i l l s would receive a Low Claim Refund
of $2,800.
The Low Claim Refund has two d i s t i n c t and important advantages.
F i r s t , the Low Claim Refund effectively eliminates the dramatic
10 percentage point increase in marginal tax rates. A family with
$40,000 of income that earns an additional $100 would pay $10 more
in taxes but would receive $10 more in their Low Claim Refund. Only
i f the family's health spending exceeded $4,000 ould an increased
tax payment not produce an equal increase in the Low Claim Refund.
Since only 40% of families with incomes under $50,000 have health
costs that exceed 10% of their incomes, 60% of those families would
receive rebates and would therefore not face the additional 10%
payroll tax on higher earnings.
For most families, the Low Claim Refund would make the total cost
of health care lower than the White House plan. To offset t h i s
difference would require a larger subsidy to the HIPCs from general
revenue. Preliminary analysis that I and my colleagues have done at
the National Bureau of Economic Research indicates that t h i s
additional subsidy could be financed with a 4% payroll tax even i f
t o t a l family health costs were the same with the Low Claim Refund of
plan A as they are with traditional insurance. In short, the Low
Claim Refund cuts the 10% extra marginal tax rate to less than 4%
for almost a l l families.
Second, the Low Claim Refund would make patients and their
doctors more sensitive to the costs of care. Since an extra dollar
of hospital or doctor charges would reduce the family's refund by a
dollar, the patient would have a strong incentive to seek the most
cost-effective care. With more than 60% of families e l i g i b l e to
receive refunds, the improved cost consciusness would be very
substantial. With patients and doctors having a greater incentive to
be cost-conscious, there would be less need for government
regulation to control costs. With lower t o t a l costs, the tax rates
required to finance the plan would be lower. Without Bureaucracy
Moreover, patients making decisions between more health spending and
greater Low Claim Refunds would help to shape the s t y l e and quantity
of care instead of relying on the political/bureaucratic process to
determine total health spending.
In practice, each family would also choose an insurance policy or
other prepayment option from the HIPC to pay for health spending in
�excess o f 10% o f f a m i l y income. To give them an i n c e n t i v e t o choose
c o s t - e f f e c t i v e options, f a m i l i e s would receive rebates f o r low
premium options and would pay extra f o r high premium options.
There are many matters of d e t a i l about the A-plan t h a t could be
modified. But the fundamental d i f f e r e n c e between i t and what appears
t o be the current White House plan i s the Low Claim Refund. I t would
permit l i m i t i n g the net h e a l t h spending f o r each f a m i l y t o no more
than the White House plan but without the adverse tax and budget
e f f e c t s and w i t h more favorable e f f e c t s on the cost and
responsiveness of h e a l t h care spending.
When President C l i n t o n decides during the next few weeks what
plan t o send t o Congress, he should recognize t h a t there are options
t h a t achieve h i s goal without higher taxes and t h a t increase rather
than diminish market pressures t o contain h e a l t h care costs.
Mr. F e l d s t e i n , former chairman of the president's Council of
Economic Advisers, i s a professor of economics a t Harvard.
(See r e l a t e d l e t t e r : "Letters t o the E d i t o r : C l i n t o n Plan, f o a
H e a l t h i e r America" — WSJ Aug. 18, 1993)
930714-0127
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Board of Contributors:
The Health Plan's Financing Gap
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Financing the C l i n t o n health plan would r e q u i r e s u b s t a n t i a l l y
more tax revenue than the a d m i n i s t r a t i o n admits. Unless there i s
r a t i o n i n g and government c o n t r o l s on the use of medical care, the
expanded h e a l t h insurance b e n e f i t s would cost muchmore than the
plan p r o j e c t s . And the changes i n the behavior of firms and
i n d i v i d u a l taxpayers caused by the plan would reduce t o t a l
government revenue by a t l e a s t $50 b i l l i o n a year ( a t 1997 l e v e l s ) .
There are two primary reasons t h a t the a c t u a l insurance costs
would exceed a d m i n i s t r a t i o n p r o j e c t i o n s : Medicare and Medicaid
savings would be smaller than projected and the p u b l i c ' s u t i l i z a t i o n
of medical services would be greate.
The C l i n t o n plan claims t h a t caps on Medicare and Medicaid
spending would cut the recent d o u b l e - d i g i t rates o f spending growth
to only 4% a year w i t h i n f i v e years. As a r e s u l t , Medicare and
Medicaid spending would then be 20% below the amount t h a t i s now
projected without the C l i n t o n plan.
No d e t a i l s are given about the reductions i n care t h a t would be
needed t o achieve these massive spending cuts. They cannot be
achieved (as Medicare savings have i n the past) by s h i f t i n g costs t o
other p a t i e n t s , since the C l i n t o n h e a l t h plan would be paying the
b i l l s f o r those other p a t i e n t s as w e l l . Nor can a 20% cut i n outlays
be achieved by reducing waste, fraud and abuse. I t would require
s u b s t a n t i a l reductions i n the a c t u a l volume o f services given t o the
aged and the poor. I t ' s not s u r p r i s i n g t h a t members o f t h e
Democratic leadership i n Congress have already made i t clear t h a t
they w i l l oppose such cuts i n health care spending.
Even a 10% reduction i n Medicare and Medicaid outlays would be a
remarkable and unprecedented achievement. I t i s as large a cut i n
these p o l i t i c a l l y s e n s i t i v e programs as can c r e d i b l y be imagined. I t
would nevertheless leave a financing gap equal t o h a l f o f the plan's
projected 20% d e c l i n e i n Medicare-Medicaid o u t l a y s . At 1997 l e v e l s
of Medicare and Medicaid spending, t h a t ' s equal t o $35 b i l l i o n a
year.
The actual costs of the C l i n t o n plan would also exceed t h e
a d m i n i s t r a t i o n ' s p r o j e c t i o n s because u t i l i z a t i o n would increase by
more than the a d m i n i s t r a t i o n assumes. The plan increases insurance
coverage s u b s t a n t i a l l y : covering the 37 m i l l i o n who now lack formal
insurance, r a i s i n g everyone's insurance t o the standard of the
Fortune 500 companies, covering a l l p r e - e x i s t i n g c o n d i t i o n s , and
i n c l u d i n g some care f o r mental health and substance abuse.
An increase i n insurance coverage i n e v i t a b l y increases the
u t i l i z a t i o n and p r o v i s i o n of medical services. The government
actuaries recognize t h a t but s u b s t a n t i a l l y underestimate the l i k e l y
magnitude of the increase. This underestimation occurs because the
actuaries base t h e i r estimates of u t i l i z a t i o n under the C l i n t o n plan
�on experiments a t the RAND Corp. i n the 1970s i n which samples of
i n d i v i d u a l s were induced t o swap t h e i r regular h e a l t h insurance
p o l i c i e s f o r new RAND p o l i c i e s t h a t had d i f f e r e n t deductibles and
co-insurance r a t e s .
The RAND analysts found t h a t i n d i v i d u a l s w i t h more comprehensive
insurance used more health services. But changing the insurance
p o l i c i e s f o r a sample of i s o l a t e d i n d i v i d u a l s i n t h i s way does not
a l t e r the p r e v a i l i n g standard of care i n a community. The RAND stuy
thus measures the extent t o which i n d i v i d u a l s w i t h more insurance
increase t h e i r demand f o r care but i t t e l l s us nothing about how the
p r e v a i l i n g standard of care would change i f everyone had the
comprehensive insurance proposed i n the C l i n t o n plan.
I t i s of course d i f f i c u l t t o judge how much the increased
insurance provided by the C l i n t o n plan would change the p r e v a i l i n g
standard of care and therefore by how much more i t would r a i s e the
volume and i n t e n s i t y of medical care than the r e a c t i o n s predicted by
the RAND experience. But the e f f e c t of p r o v i d i n g u n i v e r s a l
comprehensive insurance i s l i k e l y t o be very s u b s t a n t i a l . A very
conservative estimate would be t h a t t o t a l personal h e a l t h spending
would be increased by a t l e a s t 5%, a 1997 increase of $35 b i l l i o n .
Combining the administration's overoptimism about
Medicare-Medicaid savings and i t s understatment of increased
u t i l i z a t i o n implies a t least $70 b i l l i o n a year of extra program
costs. This i s not intended as a precise estimate, but as an
i n d i c a t i o n of the minimum amount by which the a d m i n i s t r a t i o n ' s
current estimates understate the t r u e f i n a n c i n g costs.
The only way t o avoid these increased costs would be t o impose a
system of c o n t r o l s and r a t i o n i n g t h a t denies p a t i e n t s the care t h a t
they and t h e i r doctors want. Perhaps t h a t i s what i s meant by
"global budgets" f o r p r i v a t e care. I f t h a t i s the essence of the
C l i n t o n plan, i t deserves t o be the focus of our n a t i o n a l debate.
The a d m i n i s t r a t i o n ' s estimates also e s s e n t i a l l y ignore the impact
of the plan on e x i s t i n g government revenue. Consider f i r s t how the
" p a y r o l l premium" tax would shrink taxable wages and s a l a r i e s and
thereby reduce a l l forms of income and p a y r o l l tax revenue.
Under the Clinon plan, employers would pay premiums of $2,24 0 a
year f o r employees i n two-parent f a m i l i e s (and corresponding amounts
f o r other types of employees), subject t o a maximum payment of 7.9%
of the firm's t o t a l p a y r o l l .
I t i s t h i s l i m i t of 7.9% of p a y r o l l t h a t converts the " p a y r o l l
premium" from a mandatory insurance premium i n t o a 7.9% p a y r o l l tax
t h a t generally discourages work and encourages i n d i v i d u a l s t o take
compensation i n nonpayroll form. I f a f i r m t h a t i s subject t o the
7.9% cap adds a new employee who i s paid $20,000, the employer must
pay an a d d i t i o n a l " p a y r o l l premium" tax of 7.9%, or $1,580. I f the
f i r m increases the pay of any employee by $1,000, i t must pay an
a d d i t i o n a l " p a y r o l l premium" tax of $79. I n other words, the p a y r o l l
premium i s a 7.9% a d d i t i o n a l tax on incremental wages (except f o r
those firms at which 7.9% of t o t a l p a y r o l l exceeds the t o t a l
mandated premiums.)
The immediate e f f e c t of imposing the p a y r o l l premium tax would be
to discourage h i r i n g , t o increase l a y o f f s and t o reduce p r o f i t s i n
f i r m s t h a t now pay less than 7.9% of p a y r o l l f o r h e a l t h insurance.
The r e d u c t i o n i n p r o f i t s would not be permanent because c a p i t a l
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plan. Unless voters want t o pay increased taxes of a t l e a s t $120
b i l l i o n a year, Congress should be working on a l t e r n a t i v e lower-cost
ways of dealing w i t h our h e a l t h care problems.
Mr. F e l d s t e i n , former chairman of the president's Council of
Economic Advisers, i s a professor of economics a t Harvard.
End of Story Reached
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WALL STREET JOURNAL ( J ) , PAGE A20
A recent Wall Street Journal/NBC News poll found that more people
now think that they w i l l be hurt by the Clinton health plan than
think they w i l l be.helped by i t . This sharp decline in the plan's
popularity since the president's September speech to Congress has
probably occurred because people don't l i k e the idea that they might
no longer be able to use their current doctors and would face
limited choices about medical care in the future.
The number of people who r e j e c t the Clinton plan i s l i k e l y to
r i s e even higher when the public begins to focus on the major tax
increase that the president has oroposed to finance i t .
Mr. Clinton has been careful co avoid any reference to a tax. He
talks instead about requiring employers to pay for the health care
of their employees.
But while the president can try to avoid the big T word, everyone
knows that a government requirement to pay money i s a tax. And even
though employers would be the ones required to write the biggest
checks, economists of a l l p o l i t i c a l views agree that such
employment-based taxes are ultimately paid by the employees in the
form of lower r e a l wages.
S p e c i f i c a l l y , the Clinton plan would require each employee to pay
a "premium" to the state "health a l l i a n c e " that the government would
establish. Premiums would vary, with larger premiums for married
employees than for single individuals. Mr. Clinton would also
require firms to pay premiums that are four times what t h e i r
employees pay (subject to a limit that would keep the t o t a l premiums
of any firm under 7.9% of i t s total p a y r o l l ) .
For a typical married employee, the required personal premium
would be $872 a year. For any couple that does not pay that much
now, the requirement in President Clinton's plan would be a new tax.
For firms that already spend as much on each employee as the
Clinton plan requires (e.g., $2,479 for each married employee with
children), there i s nothing extra to pay. But i f the required
premium i s more than the firm now pays, there i s no avoiding the
fact that the extra payment i s a tax. For the many firms that now
provide no insurance, the entire premium would be a tax. Similarly,
for the many employees who now take no insurance because they are
covered by their spouses' plans, the entire premium would be a tax.
And for those employees for whom the firm now pays less than the
required premium, the increased payment would be a tax.
Hitting employers with a new tax l i k e the Clinton mandatory
premium that i s based on the number of employees or the t o t a l value
of payroll would have three immediate effects, with the r e l a t i v e
importance of each effect differing from firm to firm. F i r s t , the
higher cost of employees would cause some firms to f i r e some
employees, especially those for whom the extra cost i s large
r e l a t i v e to their current wage. These would be primarily lower wage
employees. Second, the higher health care costs would temporarily
�erode p r o f i t s . And third, some employees might take pay cuts or
forgo pay increases to protect their jobs.
But although the short-term responses to the new tax would be
different combinations of these three reactions in different firms,
over a somewhat longer term the net effect would simply be lower
wages. Just as halth insurance premiums in the past have slowed the
growth of wages, higher taxes to finance health premiums in the
future would slow the growth of wages even more.
Nothing else i s possible. The market can provide jobs for a l l
those who are now working only i f the cost of employment to firms i s
no higher than i t would be without the required health premiums.
That means that the sum of the new wage and the required health tax
for each employee must not exceed what the firm now pays in wage and
fringe benefits. Those who i n i t i a l l y lose their jobs because of the
higher mandated health premiums would put downward pressure on wages
u n t i l t h i s occurs.
The key point in a l l of t h i s i s that the true cost of the taxes
— including the part that i s labeled a "required employer premium"
— would be borne by employees in the form of lower wages.
The reduction in individuals' gross earnings could be quite
substantial. For two-earner families with children, the Clinton plan
would require that the premiums aid by the husband and wife plus
the amounts that their employers must contribute would be more than
$5,800. I t would be a rare family for which t h i s would not mean a
substantial tax increase.
The recent disclosure that 40% of Americans would pay higher
out-of-pocket premiums under the Clinton plan than they do now i s
therefore just the t i p of the iceberg. In the end, we would also pay
for the much more substantial increased emplyer premiums by having
to accept lower net-of-tax wages.
Not c a l l i n g t h i s tax a tax i s more than j u s t p o l i t i c a l l y helpful
spin control designed to make i t easier to enact the Clinton plan.
The president's approach i s much more s i g n i f i c a n t . I t would keep the
tax out of the budget and would therefore not require congressional
action to raise the tax in the future. As the cost of health care
r i s e s , employees and employers would auomatically be forced to
increase their "premium" payments.
The 7.9% cap on the share of wages that a firm can pay means
that, in any firm subject to the cap, the employer premium i s
equivalent to a 7.9% payroll tax. A majority of employees would find
themselves working for such firms under the Clinton plan. When any
employee in such a firm earns an additional $100, the firm's total
payroll goes up by $100 and the firm must thereore pay an
additional $7.90 to the health a l l i a n c e . This tax on additional
earnings reduces the reward for working more hours, for taking more
responsibility, or for doing more arduous work. The Clinton health
tax would not only reduce take-home pay but would also distort
incentives.
The 7.9% cap converts the mandatory premium into a full-fledged
payroll tax on employees at every earnings l e v e l . Even an employee
whose current health benefit happens to cost h i s or her employer
7.9% of the employee's income would nevertheless face a new 7.9% tax
on any increase in the individual's earnings.
The administration's f a i l u r e to discuss the true nature of the
�tax increase makes i t impossible to have informed public debate
about Mr. Clinton's proposals for changing our health care system.
But even more seriously, proposing that a major new tax not be
called a tax i s a f i r s t step toward a new form of f i s c a l
i r r e s p o n s i b i l i t y in which future tax increases would occur
automatically without l e g i s l a t i v e action.
Mr. Feldstein, former chairman of the president's Council of
Economic Advisers, i s a professor of economics at Harvard.
End of Story Reached
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930818-0072.
Letters to the Editor:
Clinton Plan, for a Healthier America
ESTIMATED INFORMATION UNITS: 4.9
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08/18/93
WALL STREET JOURNAL ( J ) , PAGE A l l
Martin Feldstein's July 14 e d i t o r i a l page piece "What's Wrong
With the Clinton Health Plan" i s just that — wrong. The president
would never sponsor, nor would Congress ever vote for, a health plan
that woul r a i s e marginal tax rates by 12% for most Americans.
Mr. Feldstein's portrayal of the president's plan i s
fundamentally flawed. His doom and gloom predictions of what health
reform w i l l mean for families and the economy — higher taxes,
higher d e f i c i t s , i n e f f i c i e n t health care delivery and r e s t r i c t e d
doctor-patient decision-making — w i l l be the inevitable results i f
we don't reform health care, not i f we do.
Mr. Feldstein suggests the Clinton plan w i l l include a 10% tax on
family income and w i l l raise income taxes 3%. The president has
never suggested a 10% tax on family income and has stated repeatedly
there w i l l be no income-tax hike.
Mr. Feldstein suggests most families — those with incomes of
$50,000 or less — would pay more under payroll-based financing. He
would have done well to read the June 1 Wall Street Journal a r t i c l e
that evaluated a imilar financing approach and came to the opposite
conclusion: families with incomes of $50,000 or below w i l l pay less.
The driving theory behind market-oriented health care reform i s
that when providers are forced to compete on cost and quality, the
health care industry w i l l be driven toward greater efficiency and
more cost-effective uses of resources. In today's health care
system, the more tests and procedures doctors and hospitals do, he
more they get paid. Under the Clinton plan, health plans would be
paid a set amount per enrollee, forcing them to manage health care
delivery more e f f i c i e n t l y and effectively, and encouraging
cost-effective primary and preventive care to avoid having treatable
i l l n e s s e s turn into costly emergencies. The Clinton plan brings the
force of the marketplace to health care, giving consumers greater
choices and forcing plans to compete f r the f i r s t time on cost and
quality.
Failing to reform the health care system w i l l d e f i n i t e l y result
in an increased budget d e f i c i t . Exploding medical costs and their
effect on Medicare and Medicaid spending have made i t increasingly
d i f f i c u l t to lower the d e f i c i t . The only way to cut Medicare and
Medicaid spending i s to put them under an enforceable budget. The
only way to cap those programs without driving business and famil
health care costs out of sight through cost s h i f t i n g i s to bring
private sector spending under a budget as well, capping the overall
growth in a l l health care spending. That i s precisely what Mr.
Clinton proposes to do.
The so-called "A-plan" Mr. Feldstein proposes i s e s s e n t i a l l y a
tax on the sick. Under the plan, a l l Americans pay the 10% payroll
tax he derides, and an additional 4% payroll tax to finance
subsidies.He proposes that those who don't need health care get
money back, while those who do need health care would pay 14% of
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t h e i r income. Think about t h a t : a 14% p a y r o l l tax on a middle class
f a m i l y t h a t has a son who breaks h i s arm and a daughter who needs
her t o n s i l s out. A 14% tax on a small-business owner who gets i n a
car accident. A 14% tax on a secretary w i t h l i v e r disease, or a
couple w i t h a baby. And t h a t ' s before the s i g n i f i c a n t co-payments
and deductibles he recommends t o b r i n g cost-consciousness t o health
care.
The president's plan w i l l guarantee h e a l t h care s e c u r i t y ,
comprehensive b e n e f i t s , and high q u a l i t y h e a l t h care a t a p r i c e a l l
Americans can a f f o r d .
Sen. Tom Daschle, (D.,
S.D.)
Sen. J.D. Rockefeller IV, (D., W.Va.)
Washington
End of Story Reached
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931117-0097.
Clinton's Conservative Health Plan
By Alice M. R i v l i n
ESTIMATED INFORMATION UNITS: 11.0
WORDS: 1380
10/20/93
WALL STREET JOURNAL ( J ) , PAGE A18
The Clinton administration's plan for fixing what a i l s the
American health care system i s bold and comprehensive, but hardly
r a d i c a l . Indeed, i t i s conservative in at least three of the senses
of that term.
F i r s t , i t reforms the system with minimal disruption to the basic
mode of paying for health care that Americans are used to —
employer-based insurance. Second, i t r e l i e s primarily on market
incentives, not government regulation, to control escalating health
care costs. Third, i t can be financed — without smoke and mirrors
— primarily by reallocating resources already devoted to health
care and does not require large tax increses.
Almost everyone agrees that i f we are to have the productive,
competitive, f l e x i b l e economy that we a l l want, we cannot allow the
"health care tax" to continue r i s i n g . We are already using 14% of
our gross domestic product to pay for health care. Every time we l e t
t h i s "tax" d r i f t up another percentage point, we are allocating an
additional $50 b i l l i o n a year of the nation's precious resources to
health care. Moreover, a high-growth economy requires that people be
able to move into new jobs, but our current system locks people into
jobs and onto welfare out of fear that they w i l l lose t h e i r health
insurance. Finally, hardly anyone would deny that the way we now pay
for health care contributes to unnecessary cost increases and a
wasteful use of health resources.
Now that there i s such broad consensus that the current system i s
punishing the economy what i s to be done?
The Clinton team rejected radical surgery such as a single-payer
system or government-set health care prices in favor of
restructuring the current system and building on i t s strengths.
There are two types of evidence that such restructuring can work.
F i r s t , health maintenance organizations and other groups of
providers compensated on a per-capita basis have demonstrated that
they can deliver good care for appeciably lower cost. These groups
have incentives to emphasize prevention, to reduce unnecessary
procedures, t e s t s and hospitalizations, and to economize on the
acquisition and use of expensive equipment. Second, big-business
experience has shown that a large buyer can negotiate with competing
health plans and get a much better deal than i s available to
individuals and small firms that lack market power.
The Clinton plan would encourage doctors and other providers to
join health plans that would be paid per-capita premiums. I t would
give individuals and small employers access to the market power that
big business has used so successfully by organizing purchasing
cooperatives or health alliances to bargain with health plans for
the best deal.
The Clinton plan would ensure everyone at least a standard set of
health benefits — benefits that would not be at r i s k i f an
individual changed jobs, became unemployed or got sick. A l l
�businesses would have to provide health coverage, but subsidies
would reduce the burden on small and low-wage firms. Employees would
share in the cost, with a choice of plans and clear incentives to
choose the most cost-effective options for meeting t h e i r health
needs.
The Clinton approach r e f l e c t s strong f a i t h that consumer
incentives, combined with buyer power and better information about
quality and performance, can rein in escalating costs. That faith i s
strong, but not absolute. I f health care premiums continue r i s i n g
appreciably faster, than other prices, "global budgets" would control
the rate of increase of premiums. I f the market incentives work —
and the Clinton team believes they w i l l — then the controls w i l l
not be necessary.
Most of the cost of health carefor working people and their
families would be shared, as at present, by employers and employees.
The major new cost for the government would be the subsidies needed
to make the insurance affordable to small firms and low-income
individuals.
These subsidies, along with new benefits under Medicare for
out-of-hospital prescription drugs and home health care for the
severely disabled, and some other administrative costs, are expected
to increase government health spending by roughly $130 b i l l i o n by
the year 2000, when the program i s f u l l y up and running. Revenue
increases — p r i n c i p a l l y from a healthy increase in the cigarette
tax — are expected to produce only about $30 b i l l i o n . The rest
(roughly $100 b i l l i o n ) w i l l come from reallocating resources that
would otherwise have gone into existing government programs.
These offsetting savings in other governent programs are not, as
some c r i t i c s have alleged, vague caps or u n r e a l i s t i c hopes for
reducing "waste, fraud and abuse." Rather, the administration i s
proposing s p e c i f i c changes in program rules that are feasible
precisely because of the proposed reform of the private system.
For example, Medicare and Medicaid cover many working people.
Under the new rules, the working elderly and the working poor would
be covered by t h e i r employers instead. Both programs also make huge
payments to hospitals to help them cover the cost of treating the
uninsured. When everyone has insurance, these payments w i l l be
sharply reduced.
Increases in reimbursement rates for prove would also be slowed
— a change made more feasible because reimbursement for a l l
providers w i l l be r i s i n g less rapidly. In addition, upper-income
people would pay a large share of the heavily subsidized premium for
physician care under Medicare. These s p e c i f i c changes in the
Medicare and Medicaid rules would reduce the cost of the two
programs by more than $100 b i l l i o n in the year 2000. The cost of
other government health programs — for veterans, federal employees
and military dependents — w i l l also grow less rapidly as some of
their patients move into health a l l i a n c e s .
Under current p o l i c i e s , federal health expenditures are expected
to be about $680 b i l l i o n in 2000 — about $465 b i l l i o n of which w i l l
be for Medicare and the federal share of Medicaid alone. The
administration i s not proposing to reduce federal health spending -only to reduce the annual rate of growth from about 10% to about 5%
by 2000 as the new system phases in.
�In a Sept. 29 a r t i c l e on t h i s page, Martin Feldstein argued that
p o l i t i c a l opposition w i l l make large reductions i n the growth of
Medicare and Medicaid impossible. In the absence of health care
reform, he would be right. Broadened employer coverage and
system-wide reduction of cost growth, however, make these savings
feasible, while the new prescription drug and home health benefits
under Medicare make the package attractive to the elderly.
Mr. Feldstein also argued that the Clinton plan's requirement
that employers provide health insurance to t h e i r employees w i l l
reduce wages and cut tax revenues to the Treasury. Quite
irrelevantly, he calculates how much revenue the Treasury would lose
i f no firms provided health insurance now and a l l were subjected to
a new 7.9% payroll tax to provide such coverage. In fact, however,
most people are already covered by employer-provided insurance, many
with more generous coverage than the Clinton plan requires. Firms
whose costs ar reduced by the plan w i l l i n i t i a l l y have higher
p r o f i t s and ultimately probably pay higher wages than they do at
present.
In either case, Treasury revenues w i l l increase. Employers not
now providing health insurance w i l l have to pay more, but the impact
on them w i l l be reduced by subsidies. Very small firms w i l l have
their cost increase capped at 3.5% of payroll. A more accurate
reading of the plan would have led Mr. Feldstein to the conclusion
that t o t a l wages and Treasury revenue are l i k e l y to go up i f the
plan i s enacted.
There i s plenty of uncertainty about the future cost of health
care, but two current facts cannot be denied. One, the U.S. already
has an elaborate health care system that leaves millions of people
uncovered and whose costs are r i s i n g rapidly. Two, government
already pays more than 40% of America's health b i l l .
The question now i s whether, without scrapping the entire system,
we can introduce incentives that w i l l make health care delivery more
e f f i c n t , and whether we can reallocate some of the resources now
tied up i n costly government programs to making insurance affordable
for the currently uninsured.
The architects of the Clinton plan believe that we can, and that
we owe i t to the American people to t r y .
Ms. R i v l i n i deputy director of the Office of Management and
Budget.
(See related l e t t e r : "Letters to the Editor: Clinton's Radical
Health Plan" — WSJ Nov. 17, 1993)
931020-0107
YY93 MM11
End of Story Reached
�would move to other uses where i t can earn a higher return. After a
few years, the reduced demand for labor would cause wage rates to
decline by the 7.9%.
Experience shows that a tax on marginal wage and salary income
reduces working hours, encourages the substitution of fringe
benefits for wages, and shrinks taxable compensation in other ways.
Calculations with the National Bureau of Economic Research TAXSIM
Model imply that a new universal 7.9% payroll tax would cause
changes in behavior that reduce t o t a l 1997 wages by about $115
b i l l i o n and cut the federal goverment's tax revenue by $49 b i l l i o n
— $24 b i l l i o n less in personal income tax payments, $16 b i l l i o n
less in employer-employee Social Security tax payments and $9
b i l l i o n less in payroll premium payments. I f only two-thirds of
employees were in firms subject to the 7.9% cap, these amounts would
be reduced by one-third.
The Clinton health plan would reduce government revenue in other
ways as well. Providing health insurance to everone would encourage
more early retirement, less employment among second earners who now
work to obtain insurance, and more s h i f t s to the underground
economy. A l l of these changes would reduce income and payroll tax
revenue. The plan's complex system of subsidies and premium caps for
small firms and for firms with low average wages would also
encourage the outsourcing of jobs in ways that reduce payroll
premium revenue.
The combination of a l l these changes would probably reduce tax
revenues by at least $50 b i l l i o n a year. Adding to that the $70
b i l l i o n of extra costs implied by excess Medicare-Medicaid spending
and by increased u t i l i z a t i o n implies a total annual financing
s h o r t f a l l at 1997 levels of over $120 b i l l i o n .
Closing a $120 b i l l i o n annual financing gap would require a
massive increase in tax rates. In 1997, $120 b i l l i o n would be 18% of
currently projected personal income tax revenue. But an
across-the-board 18% increase in a l l personal income tax rates
wouldn't r a i s e an extra $120 b i l l i o n because higher marginal rates
cause reductions in working hours, changes in the form of
compensation to nontaxable fringe benefits, and s h i f t s to less
onerous but lower paid work.
Calculations using the TAXSIM Model imply that r a i s i n g an extra
$120 b i l l i o n in 1997 would require increasing marginal tax rates by
at least 24% even i f those higher tax rates only reduced taxable
income and wages by as l i t t l e as 2%. A taxpayer who i s now paying a
15% marginal tax rate would face a rate of 18.6%. A taxpayer at the
current top 39.6% personal rate would see that r i s e to 49% or
higher.
The Clinton plan promises a t t r a c t i v e features to a wide range of
interest groups to get t h e i r support. Senior c i t i z e n s would get free
prescriptions. Big business would be able to shed r e s p o n s i b i l i t y for
the health costs of early r e t i r e e s and would have health costs
limited to 7.9% of payroll. Small business would get subsidized
insurance. Most employees, and especially lower wage workers, would
get substantial improvements in their insurance coverage. A l l of
t h i s financed by increasing annual per-capita cigarette taxes by
$60!
The Americn public needs to know the true t o t a l cost of the
�Redesigning Public Policies to Make Private Markets Work Better:
The Case of Smaller Firms
by
Lynn Etheredge
National Academy of Social Insurance Conference
Washington, DC
January 28-29, 1993
(Revised)
�Revised
12/93
Social welfare strategies that rely on heakh insurance and pension benefits provided by
employers and assisted by federal tax subsidies are failing tens of million of workers in small
firms. The intensification of problems with health insurance for small groups has helped propel
health insurance reform to the top of the pohtical agenda. Furdiermore, the private pension
system also faces serious shortcomings in covering these people. Because over one-half of those
in the private sector workforce work for firms with less than 100 workers, these shortcomings
constitute major failings of social welfare policy.
Odier papers in these proceedings address the use of tax subsidies, mandates, meanstested programs, and social insurance taxes to finance more health and pension coverage. But
subsidies alone have proved less effective for workers in small firms than for those of larger
firms. This paper focuses on the factors that limit market performance and suggests the need for
structural reforms if private healdi insurance and pension plans are to play a large role.
In die health insurance arena, the reform debates have produced proposals for a
nationwide system of "Health Plan Purchasing Cooperatives" (HPPCs)that would radically
change the healdi insurance market for a majority of the population. These new HPPCs (now
often referred to as "health alliances") are a central feature of the "managed competition"
approach that President Clinton endorsed during his campaign. This paper discusses the HPPC
concept and, in the spirit of this conference of examining together the problems and solutions
of health and pension systems, it suggests similar market reforms -- Pension Plan Purchasing
Cooperadves (PPPCs) -- to improve the private pension system. Both approaches could be
combined with a variety of financing strategies to offer broader consumer choice among health
insurance and pension options.
�Coverage of Small Firm Workers
Over the past decade or more, some of the early successes of employer-based, taxsubsidized coverage have reversed. The percentage of employers offering pension insurance
coverage declined from 61% in 1979 to 55% in 1990, while die proportion of workers
included in such employer plans fell from 49.5% to 42.9%. In 1990, over 68 million workers
had no pension coverage.
1
In health insurance, the proportion of the nonelderly population
who were uninsured rose from 12.3% in 1978 to 16.6% in 1992. In 1992, 37 million
persons had no health insurance coverage.
2
Market-based strategies have been least successful in assuring coverage for workers in the
millions of small firms — donut shops, gas stations, beauty parlors, restaurants, and the like.
Although estimates from different sources vary, diere is no disagreement about the relation of
benefits to firm size.
Proportion of Private-Sector Workers Whose Employers Offer
Health Insurance and Retirement Benefits, By Firm Size. 1988
Firm Size
250+
< 100-249
25-99
<25
Workers
38.4 million
6.3
1 1.1
21.1
Health insurance
90%
88%
78%
46%
3
Retirement benefits
83%
62%
47%
18%
In effect, the nation now has a two class system of healdi and pension benefits for
workers, and employees of small firms are most often in die second class system. + Nearly threequarters of private workers without pension coverage work in firms widi fewer than 100
employees, and nearly two-thirds of those without health insurance are in such firms or are self2
�employed. 5 Dealing widi die special barriers to coverage of these workers will be central in
improving private pension and health insurance coverage.
Beyond the direct consequences of inadequate health and pension coverage for economic
security, access to health services, and redrement incomes, these patterns have broad
impHcauons for social equity and economic policy:
• Equity In general, workers for smaller firms do not benefit from federal tax subsidies to
the same extent as workers for larger firms. This difference has large economic consequences for
diese groups. In 1993, the net exclusion of pension contributions and earnings is estimated to
account for general revenue losses at the federal level of S56.5 billion, and the exclusion of
health insurance contributions by employers to $46.4 billion — a total of $102.9 billion.
6
Not
only are tens of millions of workers for small firms (and their families) excluded from this
assistance because their employers do not offer such coverage, but also they help finance the
benefits of diese other workers.
• Economic consequences Flaws in die private health insurance and pension systems also
impair labor mobility and savings. Polls now report that one in five workers say they or
members of their families are subject to "job lock" because they fear losing affordable health
7
insurance coverage. Workers are also reluctant to shift jobs because of the inadequate
portability of pensions and die potential loss of contribuuons under vesting rules. These issues
seem likely to impinge most on the ability of small firms to attract workers since they are least
likely to offer these benefits. Moreover, because these small firms account for a growing part of
the economy - and thus opportunities for benefits are relatively scarcer - workers are likely to
become even less mobile. Indeed, one could make a case that fully portable health and pension
�coverage is essential to a smoothly functioning labor market, and, on these grounds alone,
should be a top objective of reform.
Poorly-funcuoning markets for retirement savings may also be implicated in the
inadequate U.S. personal savings rate. A rise of even 1 or 2 points in the annual savings rate,
which is now about 5 percent, would make significantly more funds available for investment
and economic growth. Availability of better savings arrangements, along with portability of
pensions, will likely be increasingly important as the "baby boom" generation enters its high
earning (and retirement savings) years.
Health Insurance Reforms
What special problems does private health insurance coverage pose for employees of
small firms? A long list of factors helps to explain why "laissez faire" markets have not produced
8
satisfactory results. Four major shortcomings could be rectified by public policies.
• Medical underwriting and exclusions for pre-existing conditions Traditional
community-rating for small employers has virtually collapsed, and insurers now routinely use
medical screening and underwriting practices. Insurers refuse to cover pre-existing conditions,
screen out high-risk employees, and limit benefits to compete against each other on the basis of
risk selection rather than on the basis of cost control, quality and consumer satisfaction. With
such market practices and the resulting variations in premiums, health insurance coverage may
not be affordable, or even available. The individual small employer and consumer simply lack
the market presence to fight these practices.
�• Administrative expenses High marketing costs, broker commissions, and other
expenses, together with firms' switching of insurance coverage and workers' switching of jobs,
drive up administrative expenses for small firms. These expenses average 35-40% of health
benefit costs for firms with fewer than 10 employees, compared with 5-6% for employers of
over 10,000 workers. The administrative hassles employers and employees face in changing
coverage impose additional costs. Both groups have a legitimate grievance i f they must purchase
coverage from a market so poorly designed that it consumes this much of their premiums in
administrative expenses. Taxpayers also have a legitimate grievance i f they must subsidize such
expenses.
• Ineffective regulation As the health insurance market for small groups disintegrated,
neither the federal government nor most state governments took adequate preventive or
remedial action. Lack of knowledge and ideas about solutions has not been the problem. But
devising effective regulatory interventions to police hundreds of insurance companies in their
relationships to millions of very small firms has posed insurmountable political and practical
problems.
• Limited consumer choice Consumers in small firms lack broad, well-informed choices
in the health insurance market. Typically, a small firm will offer only one or two options, plans
are not standardized so comparisons are impossible to make, and, as yet, data on quality are not
routinely available to permit consumers to compare health insurance plans.
Can we design a better health insurance system for individuals working for small firms?
�The HPPC Model - A Brief Summary 9
The Heakh Plan Purchasing Cooperative (HPPC) model, designed to achieve a "radical
reform of the healdi insurance industry" (President Clinton's phrase), uses public policy to
address these problems on behalf of the majority of Americans who work for small firms. HPPCs
will consolidate employer, worker, and government healdi insurance contributions, offer
consumers choices among standardized health plans that are accountable for competing on the
basis of cost, quality, and patient satisfaction, and manage competition among these plans on
behalf of its members.
Name:
Sponsors:
Number:
Coverage:
Financing:
Functions:
Heakh Plan Purchasing Cooperatives
Quasi-government, non-profit, governing board representing
membership
One per geographic area, e.g. MSA, major market area, or state
Exclusive offerer of basic insurance for small business in area
Small employers <100 (perhaps to <1,000, <10,000, or universal)
Individuals outside the workforce, part-time workers
Medicaid recipients, perhaps Medicare
Covered employers and employees required to purchase nationally
standard health insurance plan through HPPC
Administrative expenses paid from premiums
Issues RFPs for standardized plans that include:
Standard benefits
Standard premium structure (modified community-rating)
Standard data reporting, e.g. outcomes/quality data
Guaranteed issue/open enrollment/portability
No pre-existing condition exclusions for continuously
insured persons
Other "qualified carrier" criteria established by HPPC
Selects plans to be offered, contracts with insurers
Sets standard employer contribution rate, based on cost of economical
plans
Distributes marketing material to small business employees,
operates annual "open season"
Handles Medicaid "buy-ins", COBRA continuity, coordination among
HPPCs
Manages competition among carriers, e.g. through risk adjusters,
negotiation
�Today's system, which reUes on willingness and ability of each small firm to arrange,
offer, and manage coverage, would be replaced by a system that largely eliminates the role of
the employer. A smaller firm would simply contribute a doUar amount for its covered workers to
the HPPC. Individuals would sign up for health insurance through the HPPC and choose
among the competing plans it offers. Coverage would be fully portable when an employee
shifted jobs among participating employers, or moved on and off Medicaid. HPPC proposals aim
to structure a market system that works at least as well for workers in small firms and selfemployed individuals as it does for the largest, most sophisticated purchasers. A notable
prototype is the Federal Employees Health Benefits Program. '0 A HPPC could combine the
purchasing power of upwards of 1 million or more people in negouating on behalf of its
enrollees.
This arrangement redesigns competitive markets to work better for die public than the
current system does. It is intended to assure affordable, high quality, and seamlessly portable
coverage, eliminate medical underwriting, screening and experience rating, reduce
administrative expenses, obviate die need to police many bad actors, and offer a range of quality
choices to informed consumers.
The HPPC model is compatible with, and can enhance, consumer choice regardless of
which financing sources are involved. The Medicaid program, for example, could purchase
coverage through HPPCs to assure quality care and portable coverage for its beneficiaries, and
eliminate the economic "notch" as individuals move between welfare and private employment.
The HPPC structure can also be used to provide Medicare enrollees with expanded choice to
purchase other coverage, as well as qualified Medigap plans. The California Garamandi bill.
�ColoradoCare, and a proposed West Virginia plan all combine tax-based health care financing for
the entire population with a HPPC structure to focus compeution and allow consumer choice.
Extending a HPPC Model to Pensions
In many ways, the nation's system of retirement income is better developed than its
health insurance system. Most of the population has been covered by the Social Security system
since 1935, with mandated employer and employee contributions; since 1974 pension plans
have had to meet standards including fiduciary responsibility, management and reporting,
government oversight, and public back-up insurance, and they have also faced limits on taxfavored employer contributions. For health insurance, in contrast, the degree of coverage,
employer and employee financial shares, basic standards for health insurers, and limits on taxfavored employer contributions are still very much at issue.
Yet it is already clear that the coverage of workers in small firms for pensions is so much
worse than for health insurance diat rethinking these market arrangements is also imperative.
Smaller firms fail to offer pensions for much the same reasons that they fail to offer health
insurance. In both instances, the experience of the past decade has been dismal, and the list of
contributing factors is very long. In this light, any argument that tax subsidies for voluntary
employer contributions, offered alone, will work better in the future than they have in the past
calls for heroic assumptions.
Five elements of the problem suggest that restructuring markets would improve the
situation:
�• Nature of the product
Retirement funds work best as long term arrangements, with
reserve build-ups from contributions over many years, plus substantial interest earnings on
these balances, to produce income decades into the future. Particularly for workers in firms and
in occupations with high turnover rates, it seems irrational to have to rely on a succession of
pension plans, with differing provisions and limited portabihty, to patch togedier an adequate
retirement income.
An on-going pension plan, which can receive payments from successive
employers, seems better-designed for the high job mobility that characterizes the typical
American worker and for substantial retirement-age balances.
• Firm turnover The problem of short-term employment arises, in part, from the
volatility of business formation and failure. Smaller firms have accounted for about 80% of new
jobs since the 1970s, but they have also accounted for about 80% of job losses. ' ' About 50%
fail within their first five years, and die uncertainty that many of them will be around for very
along makes it less likely that they will trouble to set up a company-based pension system. Such
benefits usually imply some confidence that the firm will be around and that employees can
plan a longer-term career. About 1/2 of die small firms diat do offer pension plans were in
operation at least five years before adoption of such a plan.
• Employee turnover
Smaller firms also tend to have a higher rate of employee turnover.
For example, waiters and waitresses, kitchen workers and short order cooks, cashiers, hotel
clerks, child care center workers, garage and gas station — occupations typical of small businesses
-- have median tenures of less than diree years. 12
�• Choice Pension plans offered by small firms do not usually involve individually
directed investment. Moreover, when benefits are provided through a company's own stock (an
employee stock ownership plan), employees may be exposed to high risk.
• Administrative hassle: Finally, small firms are less equipped to confront the
complexities of learning about, setting up and administering pension plans. To experts, setting
up a simplified employee pension (SEP) may seem quite manageable, but smaller firms do not
have benefit managers, and the time and energy ofthe owner may be better invested in
running the company. Anything more customized than such a plan requires much more
sophistication and paperwork. Furthermore, pension laws, regulations, and reporung
requirements change frequendy, thus adding to a firm's compliance costs.
Isn't it possible to design a better pension system for workers in smaller firms? Wouldn't
it be simpler to have market arrangements in which one has a permanent pension account, to
which each employer, as well as the employee, contributes? Couldn't this account also be fully
vested and completely portable, with minimal hassles and with broad consumer choice among a
number of quality products?
A Pension Plan Purchasing Cooperative (PPPC) Model
Extending the proposed HPPC model to pensions -- a Pension Plan Purchasing
Cooperauve (PPPC) model -- would achieve these reforms. Indeed, an HPPC and a PPPC might
be the same institution. A viable PPPC might be conceived in several ways. One such model is
oudined below.
10
�Name:
Sponsors:
Number:
Coverage:
Financing:
Functions:
Pension Plan Purchasing Cooperatives
Quasi-government, non-profit, governing board representing
membership
One serving each geographic area
Non-exclusive offerer of retirement benefits
All workers not now offered employer-sponsored retirement benefits
All employers required to offer automatic payroll deduction option to a
PPPC account for workers not covered by an employer-sponsored
pension plan. Worker deducts this PPPC contribution on his/her
own tax return, receives same tax advantage as enrollees in
employer-sponsored plans.
Administrative fees paid from revenues.
Issues RFPs for retirement plans, including annuities, mutual fund
families allowing self-directed investments
Selects plans to be offered, using criteria such as fiscal soundness,
investment performance, customer service; contracts with
offerers
Distributes comparative marketing material to eligible employees,
covering future benefits & rates of return, financial risk, customer
service
Collects contributions
Distributes contributions to the individually-selected retirement funds
Coordinates among other PPPCs to assure national portability and
continuity as individuals move to other geographic areas
Assures overall management responsibility
There are three key differences between the HPPC and PPPC models described here.
• Number and exclusivity HPPCs should be exclusive offerers in an area to prevent
health insurers from competing by "skimming" risks rather than through cost, quahty and
consumer satisfaction. PPPCs do not face the same constraint and need not supplant
arrangements employers already offer. Although HPPCs usually should be organized on a state
or sub-state basis because health plans compete by healdi market area, a PPPC might be statebased, or even multi-state in scope.
1 1
�• ^overage HPPC buy-ins for medium-to-large firms must be either mandatory or
subject to a carefully-constructed set of rules to prevent the HPPC being selected mostly by
high-cost firms. This selection issue does not seem to apply to PPPCs, and they can be open to
any worker not covered by an employer pension plan. In this way, every worker could be
assured of equal access to a payroll-withholding financed, tax-favored redrement plan.
• Financing Workers with a PPPC account should be accorded the same tax advantages as
workers with an employer-sponsored pension plan. This tax equity can be achieved by allowing
workers to deduct PPPC contribuuons on their tax returns, like Keogh and IRA contributions.
The combination of payroll deductions, tax advantages, immediate vesting, universal
portability, and choice of first-rate plans should encourage many uncovered workers to take
advantage of PPPC plans - particularly as uncovered members of the baby boom generation
confront the inadequacies of their future social security benefits.
Just as there are functioning prototypes for a HPPC (the federal employees health
insurance program and CalPERS), there is a national prototype to show now a PPPC would work
in practice. The Teachers Insurance and Annuity Association (TIAA), which covers primarily
college and university employees and non-profit institutions, provides each enrollee with a
personal retirement account. The employing institution simply makes a payment to diis
account for its employees, in lieu of setting up a separate pension system. Employees may
supplement these amounts through additional payroll withholding. All contributions are vested
immediately and are fully portable among the participating institutions. With TIAA, institutions
do not incur the expense of managing their own pension funds. TIAA is supplemented by
options for purchase of shares in a stock mutual fund (College Retirement Equities Fund) and
for life insurance. Why shouldn't smaller firm workers also have a system that is this good?
1 2
�As with HPPCs, a PPPC concept could be financed in various ways. A model embodying
voluntary contribuuons is described above, but die concept would also be compatible with a
mandatory employer contribution. Such a system, the Mandatory Universal Pension System
(MUPS), was recommended by the President's Commission on Pension Policy (1981). The
PPPC approach has advantages over Social Security. It offers a flow of savings to private
investment rather than to federal debt finance, and thus also offers a higher rate of return.
Assessing the HPPC and PPPC Models
Today's private market arrangements for pensions and health insurance -- even aided by
5103 billion of general revenue subsidies from the federal treasury -- have clearly hit their limit,
leaving uncovered tens of millions of persons, to whom more are added every year. The
proposed HPPC and PPPC models are intended to bring far-reaching improvements to these
markets and offer a way to cover many of die 37 million persons without health insurance and
the 68 million workers widiout pension coverage.
The HPPC managed competition model has become a major reform proposal only over
the past year, aided particularly by President Clinton's endorsement. Many complexities and
issues remain to be resolved. The related PPPC model, advanced in this paper, also calls for
discussion by experts in pension and small business issues. Some early reactors have suggested
that this approach might also be used for life insurance, for long term care insurance...even as a
vehicle for offering "cafeteria plan" benefits for workers in smaller firms.
This managed competition strategy for reform in health insurance and pension plans,
using HPPCs and PPPCs, offers a middle ground for debates often polarized by advocacy for
1 3
�employer-linked coverage and unfettered markets, at one end of a continuum, and elimination
of a private market and consumer role by social insurance, at the other end. Using public policy
to design rational new markets and market-facilitating institutions may make it possible to
expand both the coverage of health insurance and pension plans and consumer choice among
those plans. For millions of workers in small firms who do not benefit from current employeroriented strategies, such improvements are long overdue.
14
�1. Employer Benefils Research Institute EBRI Databook on Employee Benefits. (1992), pg. 69
2. CBO Selected Options for Expanding Health Insurance, luly 1991, cited in EBRI pg. 226, and EBRI Sources of
Health Insurance and Characteristics ofthe Uninsured. SR-16. Ian. 1993
3. Source: EBRI (1992), p 44. Data are for non-farm wage and salary workers.
4. President's Commission on Pension Policy Coming of Age: Toward A National Retirement Income Policy.
February 1981. pg. 21
5. Employee Benefit Research Institute EBRI Databook on Employee Benefits. (1992) pg. 44 (based on May 1988
CPS; calculations exclude "don't know" category) and Sources of Health Insurance and Characteristics o f t h e
Uninsured (Issue Brief #133), January 1993, (Based on March 1992 CPS, estimates include self-employed) pg. SO.
6. These estimates exclude foregone social security taxes, as well as slate and local taxes. From 1 992 Green Book.
Ways and Means Committee, pg. 984. Estimates by Joint Committee on Taxation.
7. Medical Benefits November 15,1992, pg 1. Data from Henry J. Kaiser Foundation/Louis Harris poll.
8. An overview of pension problems, which also applies to health insurance coverage, is Larry Atkins, "Proposals
to Expand Pension Coverage Among Small Firms" testimony to the Department of Labor ERISA Advisory Council
Work Group on Small Business Retirement Income Plans, September 11, 1991. Firm characteristics cited: low
profitability, uncertain finances, limited tax liabilities, owner motivation, industry wage and benefit structure,
labor characteristics cited: high labor turnover, young and old workers, low-wage and part-time workers.
External factors cited: pension benefit costs, administrative costs, regulatory complexity, regulatory uncertainly,
lack of awareness.
9. P. Ellwood, A. Enthoven, L. Etheredge "The Jackson Hole Initiatives for a 21st Century American Health System"
Health Economics, vol. 1 149-68 (1992). Reprinted in US. Senate Labor & Human Resources Commillee
Achieving ElTective Cost Control In Comprehensive Health Care Reform S. Hrg. 102-9SS, December 16 & 17, 1992
pp. 45-64. The HPPC concept evolves Enthoven's earlier proposals for a public "sponsor" for small employers and
individuals. HPPCs have also been called "health insurance purchasing cooperatives" (HIPCs).
10. T he FEHBP would need lo standardize plans, institute quality reporting, limit its employer contributions lo a
moderately-priced "benchmark", and become a more effective manager of competition among plans in order to be
fully consistent with the HPPC model.
1 I . Congressional Research Service Retirement Income for an Aping Population. WMCP 100-22, (1987) pg. 348
1 2. Bureau of the Census Statistical Abstract ofthe United Slates. 1 990 pg. 393 These statistics refer to tenure in an
occupation; an individual may have more than one employer during this period.
�CI
o
o
Si
Hi
Comprehensive Health
Care System Reform:
Market Forces or
Government Control?
•o
�n
o
o
19
Working assumption:
Market economies work better than
government controlled economies
The USSR didn't work
Socialist nations around the world are turning to market economics
Government-run programs in the US are riddled with waste
Most market failures in the US health system are due to misguided
public policies
CD
�o
o
&
Jackson Hole Group proposes
comprehensive system reform
using market forces
CM
�o
o
Si
Plan Comparison
•Universal
coverage
•Accountable
health plans
oo
CM
Employer mandate
Individual mandate
Low income subsidies
Integrated financing and
delivery systems
• Managed
value-formoney
competition
Open enrollment
Standard benefit package
Comparative information
Individual choice
Defined contribution
Tax cap
No payroll tax
No price controls
• Pooled
purchasing for
individuals,
small groups
Individual choice
Compulsory participation
Preserve pluralistic demand
Limited regulatory powers
•National
Health Board
Health standards board
Outcomes management
standards board
Insurance standards board
No global budgets
Clinton
Conservative
Democrats
Moderate
Republicans
�o
o
Si
Jackson Hole advocates
universal health insurance
Combine employer and individual mandates
Subsidize coverage for those with low incomes
No free-riders and cost shifting; all who can pay, must pay
Keep coverage in the private sector to extent possible
Do not link universal health insurance to large-scale income
redistribution schemes
�ro
o
Si
Traditional fee-for-service,
remote third party model
pays more for more-not better-care
tn
CM
•
•
Incentives are mostly wrong (wide variations)
Creates conflict between provider and payor
•
Blocks rational resource allocation
•
•
No match between resources and needs
No accountability for cost or quality
�1
OO
o
o
I§1
Better care at less cost through
accountable health plans
Integrate finance and delivery systems to link physicians,
hospitals and insurers
Responsibility for individuals' comprehensive care for fixed
periodic payment set i n advance
Put providers at financial risk for cost and "cost of poor quality"
Hold providers accountable for quality outcomes
in
i -
�oo
o
o
Lower cost and improve quality with
accountable health plans
Attract loyal, committed, responsible physicians
Give doctors incentive to provide high-quality, low-cost care
Use information systems to adopt cost-effective care
Match resources to needs
Concentrate costly specialized procedures in efficient regional centers
Achieve administrative economies of scale
Ability to access and reallocate capital appropriately
0
O
o
CM
Employ quality management and improvement
�o
Quality and economy go
hand-in-hand
Mistakes cost lives and dollars
Quality enhancement reduces cost
High-volume centers generally have lowest costs
o
o
CM
�o
si
Flaws could be cured with
rational architecture
Lack of primary care and preventive medicine
Wrong primary/specialty mix
Excess capacity of specialists and facilities
Need organization to collect and interpret medical data
No demand-side pressure to keep drug prices down
CO
�w
o
Market forces have failed to
motivate high quality economical
care through elastic demand
Price-inelastic demand
You can raise your
price and lose
few customers
o
00
rCM
Price-elastic demand
If you raise your
price you'll lose
many customers
�\1
o
Si
Price-inelastic demand is correctable:
Incentives + Information^^ Change
Employers pay more for more costly plans, reducing health
plan's reward for cutting price
Health benefits are tax free without limit
Non-standard benefits segment markets and make
comparisons difficult
No information on quality
Uncompensated risk selection
Group vs. individual choice of plan
o
00
�13
o
Si
Managed competition
can make demand price-elastic
Annual open enrollment
Subscribers fully responsible for premium differences
Limit tax-free employer contributions
Standardize benefit package
Consumer information on comparative quality
Individual choice of plan
0
o
�I*
o
Si
Clinton's plan fails to limit
tax-free employer contributions
Leaves a heavy (30-50%) tax on cost containment
Halves the accountable health plans' reward for cutting price
Leaves market incentives weaker than they could be
Reduces confidence that market forces will control costs
CM
O
�Risk selection causes unending
upward spiral of premium costs
70% of costs incurred by 10% of patients
Insurers avoid high-risk people
Healthy people avoid insurance-'free riders"
&
o
•rr
�to
o
Si
Managed competition
minimizes incentives to select risks
Annual enrollment
Requires plans to cover all comers
Guarantees continuity of coverage
Does not permit exclusions for pre-existing conditions
Standardized benefit package
Community rating with risk-adjusted premiums
Standards for access to specialty and tertiary care
n
o
OS
�o
19
Small employment groups
need to be pooled in large
purchasing cooperatives
Spread risks
Achieve economies of scale
Develop expertise to acquire and use information
Manage competition
Offer choice to individual subscriber
o
o
CNJ
�J*
o
19
The Jackson Hole HPPC
pools purchasing for individuals and
small groups (to 100)
•
&
o
•
•
•
•
•
•
Relieves employers of administrative burden; acts as
high-powered health benefits department
Contracts with accountable health plans
Contracts with employers, accepts all comers
Manages competition
Measures and monitors plan quality and compliance
Provides information to consumers
Ensures individual choice of plan
�o
CM
O
Si
CalPERS HPPC saves money
by managing competition
Covers over 800 agencies; 900,000 lives
Covers large and small groups
Offers 19 HMOs, 2 statewide PPOs
Sophisticated health benefits department
for less than 1% of premiums
o
Oft
�CM
O
The bad news: HPPCs won't work
if they're voluntary
Adverse risk selection w i l l cause premium price spiral
Need for "glue"
Make tax exclusion for small employers conditional on buying
through HPPC
Alternative HPPC designs could work
o
OO
�CM
CM
O
IS
Clinton's Health Alliance
goes too far
Covers everybody; groups over 5000 face powerful
incentives to join
Must be state agency,* Subject to political control; can't
behave like a private purchaser
Large implementation risks
o
00
CM
�«-5
CM
©
Si
Need for rules and boundaries
even in market economies
Jackson Hole National health board would be like federal reserve
board
Health standards board to make authoritative science and valuebased decisions to define "uniform effective health benefits" eligible
for tax-favored coverage
Outcomes management standards board like financial accounting
standards board to set data collection and reporting standards for a
national reporting system of patient outcomes and other quality
measures
<i-3
O
oo
CM
Health insurance standards board to set standards for accountable
health plans, underwriting and business practices, insurer-provider
relationships
�03
Si
Clinton's National Health Board
is a huge federal power grab
CO
o
\
CM
•
Establishes and enforces national health budget and
budgets for every health alliance
•
Imposes assessments on plans and providers exceeding
targets
•
Interprets and updates the benefits package
•
Establishes national quality management system
•
Not an independent agency; not insulated from political
control
�m
CM
o
(§1
National health reform
without raising the deficit
Employers must offer and contribute to coverage
Full-time employees must buy coverage
Individual mandate where employer mandate does not apply
Limit tax-free benefits to price of low-cost plan
Apply tax savings to subsidize the poor to twice the poverty line
Apply existing state funding for uninsured
CO
o
CM
�CN
o
Clinton's financing plan puts the
federal budget at risk
Government limits employer contribution to 7.9% or lower of
payroll, i f in Regional Alliance
Limits individual contribution to 3.9% of family income for some
Destroys interest in cost containment for those impacted by caps
Gives windfalls to employers (early retiree contribution). Medicare
beneficiaries (drug benefit/long-term care without joining an HMO)
Leaves market forces weak without tax cap
Capping federal subsidies won't work; Congress can't take back an
entitlement; w i l l always raise taxes to fund it (like Medicare)
CO
05
�CM
o
§1
Clinton plan must rely on
price controls
Real per capita health spending grew from 1985 to 1990 at:
4.6% per year in the US
3.5% per year in Canada
2.5% per year in the UK
Clinton's goal is 1.5% by 1996, zero by 1999
If not met, price controls will be first line of attack
oo
o
CM
�"2.
OO
CM
O
•9
Federal price controls won't work
The incentives are wrong: take advantage of every allowed increase,
then fight for more
Politically, regulators can't force insurers into insolvency, forcing
millions to change health plans, throwing thousands out of work
Fifth Amendment (due process and just compensation) guarantees
"fair rate of return", a form of cost reimbursement
Clinton proposes to suspend the Fifth Amendment for health plan
price controls; i f this worked, it would deter investment in health
care and lead to shortages, waiting lines, quality reduction
0
00
o
OB
CM
�<M
O
§1
Payroll-tax would reduce
the incentive to work
Raises marginal tax rate on earned income
Tax revenues used by politicians to create pork
CM
�o
O
Clinton's plan would create a
single payer in Jackson Hole clothing
•
o
CM
•
Most of the cost is paid by the payroll tax plus other federal
revenues
Money flows through state controlled health alliances
•
Federal price controls on premiums
�Si
Clinton's plan can be fixed
Limit tax-free employer contributions to price of low-priced plan
Maximize everyone's incentives to make the market work
Postpone consideration of price controls and global budgets until
market reform has been given a real chance
Maintain a pluralistic purchaser environment
Limit HPPCs to market perfecting role for individuals and small
employers
Keep employers involved in cost containment
Do not guarantee employers a maximum contribution
©
—<
00
OS
\
rCM
Eliminate windfalls to employers (early retiree contribution). Medicare
beneficiaries (drug benefit/long-term care without joining an HMO)
�o
o
Medicare for all would lock in
inappropriate incentives
Fee-for-service, remote third-party payment
No reward for economical consumers
No reward for efficient providers
Invites increasing federal micro-management
Dollars get spent on pork
ca
rCM
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Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
[Democratic National Committee Material] [Loose] [1]
Creator
An entity primarily responsible for making the resource
Task Force on National Health Care
White House Health Care Task Force
Paul Jamieson
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F Segment 2
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 23
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093080" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Medium
The material or physical carrier of the resource.
Preservation-Reproduction-Reference
Date Created
Date of creation of the resource.
2/6/2015
Source
A related resource from which the described resource is derived
42-t-12093080-20060885F-Seg2-023-001-2015
12093080