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�COPYRIGHT 1994 BY FEDERAL INFORMATION SYSTEMS
CORPORATION, WASHINGTON, DC 20045, USA. NO PORTION OF
THIS TRANSCRIPT MAY BE .COPIED, SOLD, OR RETRANSMITTED
WITHOUT THE WRITTEN AUTHORITY OF FEDERAL INFORMATION
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PRESIDENT CLINTON: Well, thank you, Stephanie and
Denise, and thank you all for being here.
I want to thank ADAPT, the National Council for
Independent Living, the Consortium of Citizens with
Disabi 1 i ties.
(Cheers, applause.)
I recognize my good friend, Tony Coelho; Martha Bristow
(sp), the chair of the National Council on Disabilities
pending confirmation. (Cheers, applause.)
'1 am honored to be given this book of signatures of
genuine American heroes who are fighting every day for
,their own rights and for genuine health care reform for
all Americans. I want to say a special word of thanks to
Justin Dart (sp), who has risen above partisanship to
provide an example for all of us about what it really
means to keep fighting the good fight not only for
Americans with disabilities -- ·this is a fight for all
Americans who are touched by -- (cheers, applause).
And I want to say a special word of thanks to Kate
Miles (sp) and her family for being here today, for her
determin~ti~:m,,,,E..,,~}·_<courage,, . Jlt;.:!=: l.ove" and:.for·· her'-a·8:~it.~ ty, :..l
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THE FEDERAL NEWS REUTERS TRANSCRIPT SERVICE
x x x provisions.
And in a very moving and human way, Kate Miles and Robert
and their children and husband, all the families they
stand for all across America, they have reminded us of
,what this is all about.
.
The theme of your rally today is Bridge to Freedom, and
I want to talk a little about that. The Americans with
Disabilities law was a bridge to freedom, but it's 'only
. part of the equation. It's only part of the equation.
What about economic freedom? How many Americans with
disabilities are denied the chance to do work they are
able to do, not because of discrimination per se but
because of the way the health care syste~ works?
This
is not just a health car~ issue; it's
a work issue. How much better off would the rest of us be
if every American with a disability who was willing to
work could work because of changes in the health care
system? It's self-defeating to say'to the Americans with
disabilities, "You can have health benefits, but only if
you spend yourself into poverty, and above all, you must
not work."
Forty-nine million Americans with disabilities, 24
million with severe disabilities, half with no private
health insurance. The health care system is fafling
Americans with disabilities, but in so doing, it is failing
us all. It is making us less productive than we would
otherwise be, less strong than we would otherwise be. It
is costing more tax dollars and robbing us of taxes that
would come to America's treasury not from higher tax rates
but from more Americans working and paying taxes in the
ordinary course of their lives.
.
We had better fix it now. After all of the incredible
debates, after all of the amazing ads where -- and Justin
just referred to one of the~, you know, these ads where
they say -- somebody calls up and says, "Well, we'll have
to call the government to see if you can get your doctor, "
all these incredibly bogus ads, we had better do this now.
We had better do this now. Otherwise, the forces of
disinformation, organized disinformation will think that
the 'American people actually prefer to have the most
expensive, wasteful, bureaucratically cumbersome health
care insurance financing system on the entire face of the
E~rth, that they prefer that as opposed to giving a decent
�break to this fine family and to all of you.
MORE
BC..,.CLINTON-DISABILITY-GRPS 2NDADD t6487
THE FEDERAL NEWS REUTERS TRANSCRIPT SERVICE
x x x you.
I don't believe the American people prefer that, and we had
better make sure that no one draws that historic lessori
from this health care debate.
(Applause.)
You know, there's a lot of talk today about the whole
term-"empowerment." It risks becoming a buzz word.
There's an Empowerment Television Network. And -- but,
frankly, I like it. It encaptures something that is
uniquely American, the idea that people ought to be able to
live up to the fullest of their God-given abilities and
that the government should facilitate people fulfilling
themselves, not just be a paternalistic government doing
things for people ..
I have believed in that for years. Long before I ever
became president,I worked on things that I thought would
promote empowerment, more choices for parents and children
in education, tax breaks for lower-income working people.
Some of the things that we've also promoted here in
Washington: the Family and Medical Leave Act here in my
presidency was an empowerment bill that enables people to
be good parents and good workers at the same time; the
empowerment zone concept that we passed through the
economic program last time; lower student loans -~ lo~er
interest rates for student loans and better pay baGk is an
empowerment notion; national service is an empowerment
notion -- let people have the strength at the grassroots
level to 'solve their own problems.
Empowerment involves work and family and
self-fulfillment in a responsible way. How can we empower
the American people when 81 million of us live in families
withpreexlsting conditions? When the average American,
in the normal course of an economic lifetime now will
change jobs eight times, when this fine man cannot change
his job even if he gets a better job offer 'because he
can't insure his child, is that empowerment? No, it is the
very reverse. - So when we try to fix it, what do our
adversaries say? "They're trying to have the government
take over the health care ~ystem." False. Private
�insurance, private providers, empowerment for this man,
this woman, these children, their families and their
future.
(Cheers, applause.)
(Inaudible comment from audience.)
Can you stay around here till this is over?
(Laughter.) You're great!
Now, they say - let's not kid ourselves, if this were
easy it would have been done already, right? I mean it
would have been -
people have been trying to do it for 60 years. What is
the nub of this? The nub is th~ question of how to cover
everybody and then how to give small businesses the .iame
market power in buying insurance that big business and
government have, because all across America government and
big business are downsizing and small businesses are
growing.
MORE
BC-CLINTON-DISABIL!TY-GRPS 3RDADD t6487
THE FEDERAL NEWS REUTERS TRANSCRIPT SERVICE
x x x growing.
I might say that means we better fix this nowbedause 10
years from now you'll have a smaller percentage of people
working for government and big business and a larger
percentage of people working for small business, and if we
do not fix this now, this is going to get worse, not
better. We already have about 100,000 Americans a month
losing their insurance permanently. In the future, if
we're going to be caught up in the kind of a world ~hat I
want, where we have open borders and we trade and we have
these churning, fascinating ever- changing economies, we
better fix it now, because people will change jobs more
. often, not less often.
This is a profoundly important issue, but we cannot do
it unless we find a way for everyone to have access and
~ctu~lly be covered by insurance.
Nin~ oUt of 10
Americans who have private insurance today have it at
work. Eight out of 10 Americans who don't have insurance,
like this fine young man here, are in families where there
is at least working person. Therefore, it makes logical
sense to say that people who do work should be·covered
through work with a combination of responsibility, just as
�· this family has, from employers and the employees. And
then people who are not working should be covered from
a public fund. That is our plan -- hardly a government
takeover of health care.
And it makes sense for the government to empower small
business to be able to afford this by providing the
opportunity to be in buyers' co-ops so that small
businesses, self-employed people, and farmers can buy
insurance on the same terms big business and government
can and thereby can afford to hire persons with
.
disabilities, because they will pe insured in big pools so
that, if there is one big bill for this young man here, the
insurer does not go broke. And furthermore it makes sense
to give small businesses a discount because a lot of them
have financial burdens and lower profit margins, and so we
do that.
That is the role of the government in this: Require
people who don't provide insurance to their employees to
do it in partnership with their employees; let small
businesses go into big buyers' co-ops so they can buy
insurance on the same terms that the president and the
Congress can and people who work for big companies can;
eliminate discrimination so that people can move from job
to job by removing the problems of preexisting conditions;
and finally face the fact that, if you look at the aging
population and the disabled population, we must do
something to support long-term care that is
community~based and home-based.
MORE
BC-OUTLOOK
REUTER WORLD NEWS OUTLOOK
The following stories are expected today. All times
EST. Questions can be directed to the' Newsdesk, (212)
603-3748.
WASHINGTON - Hillary Clinton talks about health reform
at local safeway store 11 a.m.
bc-mrs-clinton-sked 05-02
First Lady Hillary Rodham Clinton Schedule for May 2
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�THE WHITE HOUSE
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��.
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1
The president of the united states
Democratic Leadership council
December 3, 1993'
I want to thank everyone here w.ith whom I've shared a great
political and intellectual adventure.
Just eight years ago, after we had lost another presidential
election, a group of Democrats gathered to define what we stood
for and where we wanted our party to go.
You know, sometimes getting knocked on the head can focus
your mind. So we appreciated the wisdom of something Hillary
likes to tell me: that insanity is doing the same thing over and
over again -- and, each time, expecting a different result.
We got to thinking that, as'long as we kept losing national
elections, we would never be able to give this country the new
direction it so urgently needs. And we knew we'd keep on losing
as long as the Republicans succeeded in convincing hardpressed,
middle class Americans that we cannot be trusted to grow the
economy, to defend our national interests abroad, to put their
values into social policy at home, or to run a government that
gives them value for their hard-earned tax dollars.
We in the DLe have always understood that, for our politics
and our policies to move a nation, they must express basic
American values. And the heart and soul of the American
experiment is a secure and growing middle class.
The American Dream that you and I were raised on is simple
but powerful: If you work hard and play by the rules, you will be
rewarded with a decent chance' for yourself and a better life for
your children.
Throughout our history, the Democratic Party has been the
fulcrum that allowed our working people to lift themselves up and
into the middle class.
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"And we believe that, if we are to be true to our historic
mission as the party of' the people, we must·~be the party of the
middle class and everyone who is struggling to join the middle
.... cl~ss .• We must fight their fight; we must give voice to their
'..~!~ concerns; we must give them the chance to build security in a
'··time>of change. Above all, we must honor their values:
opportunity r~sponsibility, and community; work, family, and
·faith.~' '.
'. That is;~what it means. to be a New.Democrat. I was proud to
as" a New Democrat; And I'm proud to ~overn as a New
Democrat.
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�Because we're Democrats, we believe in our party's historic
values: economic opportunity, social justice, and an unshakable
commitment to our working men and women.
Because we're New Democrats, we promote old values in.new
ways. We believe in expanding opportunity, not expanding
government; in empowerment, not entitlement; and in leading the
world, not r~treating from it. And, most of all, we believe in
individual responsibility and mutual obligation -- that
government must offer opportunity for all, and each of us must
give something back in return.
With that vision and those values, we have changed our party
-- and we are changing America.
When I was preparing this speech last night, I came across
the text of the talk I gave when I became your chairman in March.
of 1990. And I found a few words that are worth repeating today:
"Everyone of us hopes the 1990s will see a political
renaissance for the national Democratic Party. Everyone of
us knows that we can't realize all our goals until we elect
a Democratic President. But at least I believe that ••• in the
end, any political resurgence for the Democrats depends on
the intellectual resurgence of our party."
Together, we achieved the "intellectual resurgence" that
produced the "political resurgence." Together, we produced
policies that embody the values of opportunity, responsibility,
and community -- student aid in return for national service;
welfare reform that lifts the working poor into the mainstream of
society; reinventing government to make it accountable to the
taxpayers; and dozens of other ideas that answer the needs and
fulfill the values of the broad middle class in this country.
Ideas matter. We built the DLe on ideas. We won the election
on ideas. Day by day, idea by idea, we're taking the values that
are central to American life and putting them at the center of
public policy.
As we approach the end of the year, it is time to take stock
of how far we've come on our journey of change.
We have moved beyond the failed economic policies of the
past -- trickle-down and tax-and-spend. Our economic plan has the
largest deficit reduction in history -- nearly $500 billion, with
more than 350 specific spending cuts totaling more than $250
billion.
At last, we ask the wealthy to pay their fair share. At
least 80% of the new tax burden falls on those making more than
$200,000 a year. For working families making less than $180,000 a
year, there is now income tax increase -- none at all. Because
�·.
the very wealthy are paying their fair share, the middle class is
getting a fair shake.
Let me read to you from a thorough review of the new tax
law, written by the Kiplinger Personal Finance Magazine -- hardly
a subsidiary of the Democratic Party. They say: "About 110
million Americans will file individual tax returns next spring.
On 108 million of them, taxes will take a smaller bite than they
did this year. That's right: smaller."
"The fact is," Kiplinger says, "more"than 98% of us aren't
affected by the higher income tax rates, which reach back to the
first of the year. Our tax bills will go down a bit on the same
income, because tax bills are indexed for inflation."
If you're part of what we used to call the Forgotten Middle
Class, it is fair to say you are forgotten no more. In fact, as
the Willie Nelson song says, "You were always on my mind."
Because we are serious about change, interest rates are down
to historic lows, inflation is down, and investment is up.
Chances are your home is more affordable, because your mortgage
payment's lower; a new car is easier to buy, because interest
rates are down; your children will be able to go to college or
technical school, because we've expanded educational opportunity.
Your small business will have new incentives to grow; your
streets will be safer; and your job will be more secure.
In the last ten months, the economy has produced more
private sector jobs than in the previous four years. And now that
Congress has approved the North American Free Trade Agreement and
I have gone to Seattle to meet with the leaders of the Asian
Pacific economies, I know we can stimulate our jobs machine with
even-more exports.
In everything we do, we are honoring the values of work and
family.
We made Family and Medical Leave the law of the land. We are
finally sending our people the message that you can be a good
parent and a good worker. We said we'd do it -- and we did it.
We expanded the Earned Income Tax Credit for 15 million
working families with low and incomes. On April 15, when they
file their tax returns, they will see that, at long last, we are
using the tax code to lift them out of poverty. It's pro-work.
It's pro-family. And it doesn't create a new government
bureaucracy. We said we'd do it -- and we did.
We made student loans easier to get and repay. We are
sending the message to our young people that, if they study hard
and aim high, merit will get them into college. We said we'd do
it -- and we did it.
"
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.
,
We are strengthening the bonds of community all across
America.
We signed into law the National Service Act. Three years
from now, 100,000 young Americans will have the opportunity to
rebuild their communities from the grassroots up, while earning
money for their college education. We said we'd do it. And we
.dW.
We're making community policing a reality. Both Houses of
Congress have passed a Crime Bill that will put 100,000 more
police officers on 100,000 more street corners; build more
prisons; establish boot camps for young offenders; and ban
assault weapons. We have to pass that bill next year -- and, when
we do, we will send the moral message that our society will
defend itself against those who threaten the safety and the lives
of their fellow men and women.
For seven years, Jim and Sarah Brady, a family touched by
violence, have campaigned for a law requiring a five-day
waiting period before anyone can purchase ahandqun, so there can
be a check for someone's age, mental health history, and criminal
record. On Tuesday, I signed the Brady Bill into law. We said
we'd do it -- and we did.
We're beginning to restore people's faith that government
can reflect their values and give them value for their taxes.
Under the leadership of another charter DLC member, Vice
President Gore -- and following the recommendations of your own
David Osborne and Elaine Kamarck
we are literally reinventing
government.
"The Vice President's report recommends that the government
start doing what our most successful companies began doing more
than a decade ago: eliminating unnecessary layers of management,
empowering frontline workers, becoming more responsive to their
customers, and seeking constantly to improve the products they
make and the services they provide. This report is.not just
sitting on a shelf -- it is the blueprint for an historic
transformation of our government. We said we'd do it -- and we
are.
And we can only make government accountable if we liberate
it from the privileged special interests. We eliminated the tax
loophole that let corporations deduct their lobbying expenses.
And we are moving forward with lobby reform and campaign finance
reform. We said we'd do it -- and we are.
We are just beginning our journey of change. In the year
ahead, we must reform our health system, our welfare system, and
our system of education and job training.
�First, we must provide America's workers and businesses the
security that they will not continue to be bankrupted by
skyrocketing health care costs and terrorized by shrinking health
care coverage. We need to guarantee every American the security
of health care coverage that can never be taken away.
As with so many challenges, we can only achieve that goal by
moving beyond the tired old debates between Right and Left. On
one side, we're being told that the private health care market
will take care of all its own problems. But the tens of millions
who lack insurance and the double-digit cost increases prove that
promise is empty.
We also don't need to replace America's employer-based
system with a government-run system. In your book, Mandate for
Change, you said there was a different and better way to pursue
health care reform -- by changing the rules of the private health
care market in a way that produces universal coverage 'and lower
cost, better-quality care.
I agree. Our plan offers a new choice -- guaranteed private
insurance. We call for two crucial changes in the existing system
-- the guarantee of comprehensive health insurance that you can
never lose, and greater consumer power for families and small
businesses to choose health insurance at lower rates. In that
way, we rely on market forces and consumer choice to discipline
rising costs.
The most important thing we offer hardworking middle class
families is the security of health care that is always there. And
make no mistake about it: I will fight for health security with
the same effort and energy that I fought for NAFTA.
Our second reform will put the work ethic at the center of
our public policies.
We made real progress this year towards making welfare a
second chance, and not a way of life. We expanded the Earned
Income Tax Credit, which rewards work over welfare. We are
working with innovative efforts in Virginia, Georgia, and
Wisconsin. And we are working closely with many Governors and
Members of Congress -- some of them in this room today -- to
prepare a comprehensive, national welfare reform plan.
The American people decided this debate a long time ago.
There is overWhelming consensus across the lines of party and
region and race and class in this country that the existing
welfare system doesn't work, and we need to fix it. And nobody
wants to change the welfare system more than those who are
trapped inside it. That is why I want your help to build a broad,
bipartisan coalition in Congress next year to encourage and
reward work, and responsibility again in this country.
�Our third reform will revolutionize the way we educate and
train our workers for·. an economy where change is the only
certainty.
Building on the experience of reformers across the country
- including another charter DLC member, Secretary of Education
Dick Riley -- we are making a national effort to raise standards
in our schools. We believe the right standard for America isn't
whether we are better than we were but whether we're the best in
the world.
For the three-quarters of our young people who do not get
four-year college degrees, we must merge the world of learning
and the world of work. And, for those who lose their jobs and
will never be called back to work by their former employer, the
unemployment system is no longer good enough. Next year, I will
ask Congress to change the unemployment system into a continuous
reemployment system, so that people are always learning new
skills to be productive citizens. This is a perfect example of
our vision of linking opportunity and responsibility -- and
taking government fro~ the industrial age to the information age.
Everyone of these changes, every step we take, has to be
measured in a job that a mother or father finds, or an
opportunity a child gain s, or in b etter prospects for a business
owner.
But ultimately each of us must assume more responsibility
for our own life, for our family, for our community, and for our
country. There is only so much that government can do to change
our lives from the outside in; there is so much more that each of
us must do to change our lives from the inside out. In the year
ahead, I will use the bully pulpit of the Presidency to ask every
American to reach deep within themselves to find the courage to
change.
Our jobs won't be secure until workers are willing to learn
new skills for a lifetime. Our businesses won't be secure until
employers treat their employees like indispensable partners, not
disposable parts. Our communities won't be secure until people
who disagree about everything else stop shouting at each other
long enough to realize that we have to save the children who are
in trouble the same way we lost them,one child at a time.
The great challenge of our times is to find a way to offer
our people the security to take responsibility for their own
.
lives, to make change.our friend and not our enemy, to bring out
the best in each other and not the worst. Because you and I
believe in the power of ideas, it is our solemn responsibility to
make them come alive in the minds and the hearts and the lives of
all of our people.
We have the mandate to change America. Now each of us must
answer the call.
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PHOTOCOPY
PRESERVATION
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THE WHITE HOUSE
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Office of the Press secre~
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Internal Transcript
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May 7, 1993
REMARKS OF THE FIRST LADY
TO THE BUSINESS COUNCIL
Williamsburg, Virginia
MRS. CLINTON: Thank you very much. I am delighted to
be here and have this opportu~ity to visit with you. I know you've
already had a. number of very substantive and useful presentations
about health care. And I'm looking forward to the opportunity to
hear your questions and be able to do my best to try to describe
where the administration is in this process.
i . "
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I wanted to say just a key word about the process and
(inaudible) -- especially to this group. The process that the
President put into motion in order to seek out and find the best
possible approaches to dealing with our health care crisis, because
it is a crisis, has been unprecedented. It struck the President as a
bit odd that it would be viewed in Washington and somewhat unusual to
try to bring together in one effort people who cross all kinds of '
bureaucratic and other lines to work on behalf of a common agenda.
But apparently, as I was told the other day, there
hasn't belen anything quite like this effort since the planning of the
invasion of Normandy. And I think that's a sad commentary to some
extent on our domestic agenda in which we have allowed ourselves to
be viewing these problems that are national problems through the
prism of various bureaucratic agencies, various special interests,
and losing sight of what the national ~ommon interest should be.
To that end the process has, first of all, tried to pull
together from within the federal government itself those people with
expertise, and then to go out and seek advice from some of the people
you've already heard this morning, but many many others who have
brought particular points of view to bear.
I'd like to give you just one idea of how difficult this
has been and why it is so imperative that we follow through on what
we have started. When I began this process, I learned very quickly
that within the federal government itself there were at least five
major agencies using different economic models based on different
economic assumptions to drive different kinds of cost projections
with respect to health care. And there were many other less
important agencies who had pieces of health care who themselves were
engaged in comparable effort; with the result that if one turns to
the federal government and says, what wou19 this proposed benefit
,package cost? One would receive, as I did; answers that varied in
cost between $500 and $600, which on aggregate when one i's looking at
an entire nation, is an extraordinary amou~t of money.
We therefore concluded before we could go forward with
the kind of intensive policy debate that this issue required, we
first had to do everything we could to get the numbers right. NOW,
that may sound like an elementary conclusion to you, but it
apparently was rather revolutionary in Washington.
And we put into place a process that hasJnow been going
on for three months, where we got for the very first time all of the
actuaries and all of the economists from within the federal
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government who have influenced health care policy over the last 30
years, but who had never been convened together. And we began
forcing them as best we could to deal with one another, to examine
each other's economic models and assumptions, and to go through a
process that would give us the best possible numbers.
In addition, we convened a panel of nongovernmental,
outside actuaries and economists who deal with health care and some
of whom have been consultants to or in the employ of some of the
businesses in this room, to second-guess and double-check the federal
process. I cannot tell you how complicated it has been to reach some
consensus among the government employees themselves about this issue.
But I have said from the very beginning we would not go forward with
policy proposals until we had agreements on numbers. And we will
have the best numbers that the government has ever had before we do
so. And we are close to a revolution of this, because we are now
running various iterations based on the agreed-upon model.
u
But I wanted to start by giving you some sense of what
the President has been up against in trying to harness even the
resources of the federal government to speak with one voice about
what the health care crisis is costing us, what the projected costs
will be for the kind of policy recommendations that he favors, and
what these savings will be to try to reach some net figures that we
could consider credible.
In addition to the kind of hard work that underlies this
process, there has been an extraordinary amount of conSUltation.
Many of you in this room either through your individual capacity or
through your corporation or through associations with which your
corporations is associated, have been part of the more than 1,000
meetings that have been held between interested parties and persons
and members of this health care task force.
That process of consultation will not only continue but
intensify over the next weeks as we get to the point of hammering out
the policy recommendations based upon what we believe will be the
best available numbers to share,with you.
In addition to the analytical and evaluative and
conSUltative process that has gone on within the task force, we have
also worked very hard to begin a substantial public education effort;
because one of the principal difficulties we face is that the
American public is aware in a personal way of their health care
situation, but is not aware in the aggregate of what our health care
choices have meant to our economy, to our quality of life, to our
future stability. And so we are working very hard to reach out to
enable people to be participants in a very broad conversation about
what is the state of health care today; what ,is the real cost; and
what future policy changes will mean for them personally.
('.j
~
I think that it is also a real' difficulty for us is that
even sophisticated decision-makers in their own areas often have
overlooked the real impact that the rising and in some respects
uncontrolled health care costs have had on their business interests
'and on the long-term growth prospects for -- (inaudible).
(.'
!
\..:.;./
Many of you have had an occasion to hear presentations
about the im~act that health care costs have 'had on the deficit. But
I want to underline this, because particularly important to this
group, that we have worked very hard in the last several months to
put together a credible deficit reduction proposal -- the first that
our country has really undertaken seriously in several decades. But
it is also clear that given the growth of health care costs in the
federal budget that even were we to adopt the President's proposals,
which, of course, I hope we will, it will create $500 million of
savings in the deficit over the next years; that within five years
the deficit will continue to rise because we will failed to deal with
the principal driver of the rising deficit, which is health care
costs.
�.-j?~or-ocop-Y'--.,-".
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PRESERVATION
And I think that the interrelationship between our
economic fortune and the deficit reduction that is necessary for us
to reqain economic and financial stability for the long-term must
always be talked about in the same breath as health care reform. We
have' to make it clear to businesses of all sizes as well as to
individual citizens what is at stake in this health care reform
effort.
,~~
So we are attempting then to do a number of things at
once. We're attempting to educate ourselves, educate the American
public, come up with a credible set of cost and savings projections,
and create a policy that will reassure the American people that they
will continue to have access to the best possible health care. They
will be secure in their access, but there will be changes in the way
health care is delivered so that we can begin to try to discipline
the health care system and its costs that will eventually benefit all
of us.
'
So those are the kinds of multiple goals often times
difficult to describe but always
(inaudible) -- that are driving
this process.
~
And my final word on an introductory basis is this:
There are many good ideas about how to reform the health care system.
And you have heard from two of the leading advocates for the need for
change. You just heard from Dr. *Dreyheart and *Entopin. What the
process the President has begun, is attempting to do, is to put
together a workable solution that draws from a number of ,recommended
proposals that will be understandable to the American people and will
result in the changes we are seeking.
There will be plenty of opportunities for people to
argue over the details. But I hope that as we argue over the
details, we keep in mind the overriding imperative to change what we
are doing now and to do so with the goals of controlling costs;
providing universal access, because access and cost containment are
inseparable; and to retain and improve quality.
'
If we keep those overriding objectives in mind, I'm
confident that we can work out the details. We want you to be
involved in helping us work out these details, because there are a
number of issues on which your experience, both in the corporate
world and as reluctant but necessary managers of health care, can be
extremely beneficial.
But there is not any -- (inaudible) -- way to do this.
There is not any easy to do this. There is not any universally
acceptable.way to do this that is real. There are lots of folks on
the sidelines who are promising to be able to deliver on health care
reform with no pain and no change. This amounts to one of the most
important restructurings that you will ever be part of. If done
right, which I'm confident it can be~ it will also be the most
important role that any of us will play in ensuring the long-term
economic and social well-being of this country.
Thank you all very much.
(Applause.)
I would love to be able to answer your questions or to
describe further what we are thinking about, if any of you want to
pose a question. And I would appreciate it if you identify
yourselves, if that would be all right.
(.;
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Q
On the premise that disease prevention is one way
to improve the cost efficiency of the system, do you have any
encouragement in terms of your deliberation that delivery system as
it relates,·· for example, to immunization o:r:to delivery of services
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to rural areas can be improved under the auspices of the plan that
you're working on?
MRS. CLINTON: Yes, sir. Let me tell you where we
believe we can make a big difference, because we are not just
changing the way we finance health care, because the changes there
are not going to be all that significant; we are mostly concerned
with changing how we deliver health care, because we think for both
quality and cost reasons that is the key •
..!W.j
We are looking to have the kind of standard uniform
benefit package that Dr. *Entopin referred to at the end of his
remarks, which will heavily emphasize primary and preventive health
care; because we have had it backwards for so long now. We will pay
for your hospitalization for cancer, and we will not pay for your pap
smear or mammogram. We will pay for your being the victim of the
increasing number of measles epidemic in our country, be we won't in
our insurance system pay for much of the well child care and the
immunizations that would hopefully prevent that more costly
experience.
So in the benefit package that will be proposed by the
President, primary and preventive health care will be a part of it.
We think if we can begin to provide that primary care and begin to
encourage more people to utilize it, because it is now reimbursable,
we will in that way alone begin to lower a lot of the costs of acute
care.
In addition, in rural areas, we believe that the kind of
integrated delivery network of care that will be the result of the
proposal that the President will make, will benefit rural areas
particularly. There are many people in rural areas who do not have
adequate access to health care at this time. We need to provide that
access in two ways: We need to increase the number of practitioners
and facilities; we need to change a lot of the rules that will enable
us to do that; and we need to hook in rural providers into integrated
delivery systems so that they are part of providing care on a
continuum to residents of rural" areas.
Let me just give you a few examples. We have had for
the last year a system through Medicare, which has subsidized the
graduate medical education of specialists. It is not, therefore,
surprising that the specialists are now outnumbering by a SUbstantial
majority primary and preventive health care physicians. We need to
change those incentives so that we can provide more of the kind of
personnel that are required not just in rural areas but across the
nation.
We also need to encourage the use of other medical care
professionals, like nurse practitioners and physicians assistants.
They are particularly important in rural areas, but there is also a
role for them elsewhere. In order to do that, we have to do things
like change the anticompetitive statutes of a number of states that
have tried to keep many practices and procedures for the sole -
(inaudible) -- of physicians; or even if given the opportunity, to
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We have to
�skewed against rural areas as it is in many ways now, that we will
create a better supply of medical care in those rural areas and begin
to deal with a lot of the access problems that currently exist.
Q
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-- (inaudible)
MRS. CLINTON: Yes, sir. In fact, regulatory reform and
administrative reform are at the key of the cost savings that we
think are within the system. I believe that it is a fair estimate to
say that 20 to 25 percent of the costs that we currently have within
the system could be better allocated, as well as eliminated.
Much of that is because of the point you make. We have
over the last years, but particularly within the last 10 years,
particularly within the Medicare and Medicaid system, have created a
regulatory model in which checkers checked checkers, in which there
is constant second-guessing about decisions that are made which have
no value added to the delivery of health care or as the outcome of.
that delivery.
We believe that we will have to do two things
simultaneously -- well, actually a million things simultaneously
but two big things simultaneously. As we move on cost containment
and universal access, we will be moving on eliminating a lot of the
unnecessary regulation and paperwork and administrative bureaucracy
that is now eating up a large portion of our health care dollars.
There is no doubt that if we move, for example, as we intend to do,
to a streamlined reimbursement system, that fuses, we hope, one form,
but certainly very few forms, that we will save an enormous amount of
doctor and other practitioner time as well as money.
The average physician is actua~ly spending somewhere
between 30 and 50 percent, depending upon the nature of his practice,
on his income, on the kind of support services that consist of
filling out forms, arguing with insurance companies over who pays for
what, making sure that the proper kind of reimbursement protocols are
met -~ from the both private and. the public third payers. That has
to be gone. And it is one of our most important goals.
NOw, the cost savings that that will generate will come
over time. It will not be immediate. But we really believe that if
we focus on that, we will be successful in saving billions of
dollars.
And the other point I would make about the regulatory
reform issue is that part of the reason we have -- engage in so much
regulation over the past years is because there is this sense among
all of us, whether we are private payers or public payers to the
health care system, that there is a lqt of unnecessary costs and
flaws and abuses going on.
And there is now a growing realization as for the
reasons why. And one can see it anytime one looks at a hospital
bill. I saw it graphically illustrated the other day when someone
sent me a bill for a relative's stay in the hospital and showed me
,the comparable cost in the marketplace of some of the items that were
being billed for. And we all know about the '.$50 Tylenol. Well, we
also know about the latex gloves, which you can go and -- (inaudible)
-- wholesale and buy for $28. But if they're used when you're a
patient in the hospital you'll be billed for maybe $100. Or for the
foam rubber mattress that you can go and buy at some outlet for maybe
$100, but you'll be billed $1,100.
Why is that happening? Is every hospital administrator
in America a crook? No, of course, not. The reason it is happening
is because we have so much uncompensated and undercompensated care
=~i~; delivered in hospitals that you and I and our insurance
comp~nies are therefore billed, and the Medicare system is therefore
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- 6
billed, to be able to pick up the slack., That difference between the
$100 and the $1,100 for the foam mattress pays for somebody showing
up who is uninsured at the emergency room and being treated for
something they should have been treated for all along at much less
cost to the primary and preventive health care system.
So we have to begin to rid ourselves of the regulation
that has attempted to try to control this unsuccessfully and move
toward much more administrative simplification, which I think is
going to be the primary goal -- (inaudible) -- administrate the
changes -- (inaudible).
,"
Q
~'. ~.:~.
-- (inaudible) -
MRS. CLINTON: My answer is yes, I believe more is
necessary. And I don't know whether it will have as significant an
impact as some people argue it will. We have looked exhaustively at
every study that has been engaged in. And as Robert Reischauer, the
head of the Congressional Budget Office, testified in Congress
recently, the -- (inaudible) -- for saving are in the ballpark. I
mean, you've got a low of $2 billion, which are studies that are
obviously favored by -- (inaudible); and you have a high of $40
billion, which are studies obviously favored by physicians.
The truth is somewhere in the middle. I don't know that
we will ever know where it is. But the facts are that for whatever
reason and for whatever combination of factors, the medical
malpractice system has had an impact, an adverse impact, on the cost
of practicing certain kinds of medicine, absolutely. Obstetricians
are often viewed as the primary victims of this, and have had an
impact -- again, incalculable -- on the proliferation of checks and
procedures.
There is, however, a much more important reason for the
proliferation of tests and procedures, and that is the whole fee
for-service system where we pay on the basis of tests and procedures.
When you are in the Medicare system, you get paid on the basis of how
many tests and procedures you run, not on how well you treat this
single human being and what kind of outcome you get.
So what role the malpractice system plays in increasing
defensive medicine is -- again, I cannot tell you exactly. But we do
need malpractice reform in order to weed out whatever that cost is.
And we intend to come forward with that •
.\
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(
. Q
I'd like to ask a question about a more narrow
area, specifically the diseases of alcoholism and chemical
dependency. In the last three years as a result of the application
of -- or maybe misapplication of managed care -- people are being
denied the ability to go for treatment for these diseases. The net
result is 40 percent of the rehabilitation beds in this country have
been closed in the last -- months. How does your benefit package
deal with these important diseases?
MRS. CLINTON: That's an excellent question. And I have
,to say, this is a prefatory remark. Alcohol and drug abuse are not
only problems in and of themselves, they 'are contributing in
underlying cost problems within the entire system. I became
interested in this when I began to look at lengths of stay in
hospitals and compare like kinds of injuries among the same kind of
people -- a, you have two four-year-old white males had been burned
severely, go into the hospital; where there is an underlying alcohol
problem it takes 10 to 12 days longer'for the treatment to be '
effectual. So we are therefore, in effect, paying more for the
underlying alcohol problem, even though we're treating a burn
problem.
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So this issue is not just an alcohol, drug issue, it is
a much deeper and more -- (inaudible) -- health care problem. We
intend in the comprehensive benefit package to provide for mental
health treatments and substance abuse treatment. We are very
cons,9ious of the experience that a number of the corporations in this
room have had in trying to monitor effective mental health and
substance abuse treatment. But we believe that providing it as a
comprehensive benefit will create a bigger and more effective market
than we have currently have.
When Mrs. Betty Ford came to visit me recently to talk
about the Betty Ford Clinic, she brought with her documentation
showing that the cost of the Betty Ford Clinic, which is generally
acknowledged as a very successful treatment center, is substantially
less than many other treatment centers that don't have the same kind
of positive outcome. And yet many people because of the celebrity
connotations associated with that, would assume otherwise. And there
has been very little base information on which to make good
management decisions about the kinds of programs that really work
effectively.
i
And I would just throw in an additional point here. We
also need to be looking at ways that we can deal with some of the
hard-core problems represented by the severely addicted and severely
mentally ill. And here is a perfect example of why it is important
for us to move in a comprehensive way at once, if one looks at the
mentally ill community.
,
"-)
Twenty-five or more years ago, actually in the late
1960s; I think it was a combination of a Johnson-Nixon policy -- we
made the decision to deinstitutionalize the severely mentally ill.
And we were going to have home-based and community-based care for
them. We did the first part of this, and we never did the second.
The results are lying on the streets and in the parks of everyone of
our cities.
We, therefore, need to think clearly about how to deal
with these severe problems in an effe~tive way. And we are looking
at the creative ideas of such things as treatment with conditions, so
that people who receive treatment and then fail to follow through, we
will have to look at more -- perhaps more restricted confinement,
where if they are a danger to themselves and others, or where they
could possibly are public health dangers, such as the growing
tuberculosis epidemic.
So I hope that if we move forward in this policy debate,
substance abuse and the mentally ill will be seen as part of the
comprehensive problem that needs to be resolved.
( ,
\J
Q
Mrs. Clinton, building on that, you mentioned that
there's -- (inaudible). How much is the President's proposal going
to cost? What do your models say, and how do you propose or how will
he propose to allocate those funds?
MRS. CLINTON: Well, I assume since I I m talking to a ,
'group of business executives and off the record, unlike talking to
people on capitol Hill and off the record '-- (laughter) -- and what I
say to you will not be immediately told to the press because I want
to be as straightforward as I can in this process. I am learning
that that is a very difficult matter. (Laughter.)
(:-::~
o
,
And -- (inaudible) -- to my experience, because the
other day in a bipartisan meeting that was an exceptionally good
meeting where there was a lot of good give and take and a great deal
of honesty on all sides, I explained where we are in this cost issue,
and one participant in the minority, but with his own agenda -
- (inaudible) -- contact and carried off his particular point into the
sunset. It I S a real shame. I just -,- (inaudible) -- as I come from
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,I
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a primarily private sector experience, I wish you all would just take
a minute and imagine what it is like to try to make important
decisions with people peering over your shoulders who are running
their own agendas, and may therefore not keep in confidence whatever
you tell them from minute to minute. It makes public life very
challenging.
So what I would like to say, given those ground rules is
that we don't have a final number, as I said in my very opening
remarks. And I'm not going public with any numbers until I can
absolutely defend them and not be ticked off by somebody saying you
forgot assumption 942, which throws you off by $10 billion.'
We see two things happening simultaneously. If you look
at how we achieve universal access and cost containment at the same
time, there are very few options available to us. We can either move
towards an entirely government-funded system -- and I know there are
'some among you that.advocated a large VAT in order to achieve that
government-funded system, in part because you believed that you would
be better off competitively if you were out of the health care
business. But if you look at what it would cost to replace all of
the dollars currently spent in the private sector to support health
care in this country, the amount of a VAT would be extremely large.
There is some variation as to how large. Some people say a 17
percent progressive VAT that would eliminate food and rent and
utilities would be required. others say if it were progressive, it
would have to be 22 percent -- within 17 to 22 percent range. A
regressive VAT that included food, rent, and utilities would perhaps
be in the 8 to 10 percent range.
That is one alternative. There is another alternative
which is a government-financed system that keeps some private base,
but adds a VAT. And people have come forward with a proposal for
that, which is approximately a 7 percent employer-paid roll with a 7
percent VAT to try to get the equivalent dollars.
The President has rejected both of those for policy
reasons, for sUbstantive reason~ and for political reasons. It just
seems that it is very difficult to describe to the American people
why we would need a huge general tax increase to fund our health care
system in a more effective way when we believe there is a tremendous
amount of money within it that can be better utilized in ways which
can be eliminated.
So if we're not going to move toward a general
government-financed tax-based system, then we have the various
alternatives that fall under the broad rubric of a premium approach,
whether it is a pure premium in which there is some kind of mandate
for insurance obligation on the individual and the employer, whether
it is a premium as a percentage of payroll, there are a number of
possibilities there.
And then there -- our third alternative, which we do not
believe will solve our problems, which talk in terms of mandating the
individual, either through a medical IRA or some other means, to 00
'out ann
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combination, because of their direction relation to health care costs
-- that the whole package of investments would be about $100 billion.
And that is not $100 billion in new taxes, but it is $100 billion in
new funding that would go into the system.
At the same time, we believe there is approximately $100~
billion in public and private savings that would be -- (inaudible) --'
realized almost immediately. So what we are attempting to be able to
do to show you and to show your colleagues around the country is that
for most of the businesses in this room, and maybe all of the
businesses in this room, we believe that within a relatively short
period of time, your real costs of health care would decrease. We
believe we would stop your escalating costs and begin to decrease the
costs that you currently pay.
One model that we are looking at is a model in which we
do require all employers of whatever size to participate through an
employer contribution and the acquisition of health care for all
their employees and require all employees to make a contribution.
If we phase in what we believe will be the decreases
that many of you will realize with the new requirements on the
smaller businesses, we think we would get to a level of -
(inaudible) -- in terms of a premium-based payroll percentage that
would be about 7 to 8 percent .of payroll. I bet there are not many
of you in this room that are paying only 7 or 8 percent of payroll
for health care right now. We know that some of the car companies
are at 20 percent of payroll. And we know that some of the older
manufacturing industries are at 15, 16 percent of payroll. And many
of the rest of you are at 10 to 12 percent of payroll.
There are large sectors of the economy that utilize
large numbers of first-time workers that are not at 7 percent of
payroll; as well as small businesses that currently do not make a
contribution.
In addition to health care reform, howeyer, we think you
will not only get savings because everyone will finally be
contributing, which will stop the cost shifting, stop requiring you
to run health care businesses on the side to try to keep your costs
down, but we also intend to fold into health care reform the health
care portion of workers compensation and automobile insurance. If
you add to what you are currently paying for health care, your
workers comp -- (inaudible) -- your auto insurance-health care costs,
I think we will be able to show you that it will be greatly to your
economic advantage to support the kind of plan we are putting
together.
.
Most small businesses currently provide some kind of
insurance. The number is about two-thirds. And one of the points we
have begun to make to the small business community is that, the small
business that is currently providing health care, it sits on some
main street in Norfolk or Newport News, next door to a small business
that does not. It's subsidizing the next door business, because the
health...... care1..payments ...... l.. .... _.:_.: ..... _ _first_ make J keep . .the- _ . - - - - that the _ _ _ , ....
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PHOTOCOPY
PRESERVATION
I cannot give you this exact number until the end of
next week when we finish all of our economic work, but we really
believe that the gross investments will be offset by savings of an
equivalent amount. NOw, that will require action by the government
as well as the private sector. So let me just give you two more
quick examples to illustrate my point.
Medicaid currently provides health care for two
categories of people generally: there is the Medicaid disabled
population. Those are people with chronic disabilities under 65,
often confined to a nursing home. And there are the Medicaid-funded
nursing home patients~ And we have some fairly good evidence, :we
think now, that the right kind of managed care will benefit the
Medicaid disabled and -- (inaudible) -- less money, because there has
been some very good models that have shown how we can achieve better
quality care at less cost with that population.
The other category that is primarily children, if one
compares what we pay for the Medicaid child health care, with either
an insured child or an uninsured child who seeks comparable care, we
pay a lot more for the Medicaid child care. There are a number of
reasons but the principal reason usually is because they seek care
from the most expensive source. The emergency room is the family's
doctor.
By bringing Medicaid immediately into this comprehensive
system and imposing the same kind of competitive discipline that we
think will work with the rest of the system on that population so
that they are part of integrated delivery networks, they are eligible
to get access to a primary preventative health care physician, we
will save an enormous amount of money that you will no longer have to
subsidize, both directly through taxes and indirectly through your
insurance premiums.
o
And a second quick example is that if one looks at
Medicare, Medicare has done through regulation a job over the last
several years of trying to control prices. One of the results of
their attempt has been that volume has increased to a great extent.
If we leave Medicare outside this system completely, where it is not
-- not a part of the comprehensive health care reform, we will not
get an end to kind of cost savings from the entire system that we
want. So we will eventually, we hope, be able to move toward phasing
in Medicare as well. And once everybody is in the system with their
various payment sources, we think the total cost of the system will
not only stabilize at the frightening figure of 14 percent GDP, which
it currently is, and not go with the 19 percent projected for the
year 2000, but begin to decrease. And so that is where we are coming
from and looking at an employer-based system building on what we have
but with that kind of approach that we think will save all of you
money.
Q
-- (inaudible) -- it's been suggested by some that
during the transition period, and where we are today - (inaudible)
-- some form of inner price control would be required. Can you
comment on that?
�·
... :
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PHOTOCOPY
PRESERVATION
(inaudible) -- but I would argue a very patriotic thing to do at this
point in our country's history.
And as you know, from -- (inaudible) -- prospective,
several major institutions have come forward with just such a
proposal that the administration is looking at very carefully;
because it would be our preference to avoid price control if we can
do so. But we also know that in addition to the responsible members
of the health care industry, there are many who do not air that -
(inaudible) --,and will be intent upon pushing the system to the
limits because they are afraid of the new discipline that any reform
would impose.
~
So we are considering looking at voluntary price freezes
with legislative ,stand-by authority that could be triggered. The
only reason we would do so is to try to stabilize the system where it
is now; to try to send a message to the American people that not only
the President is concerned about this but even the responsible people
within the health care industry are concerned about this. They all
know what a crisis it is. And these will be sun-setted or lifted as
soon as we have made a SUbstantial enough transition to this new
system that we think will work. That is -- (inaudible) -- the
administration is thinking about.
There are those in Congress, as the majority of the
American people, who believe that price controls are the answer to
health care reform. That is how they view it. They believe that
everybody's made a tremendous amount of money off of the system in
the last years.
'
And so there is a tremendous political pressure to
impose price controls and do so as the answer to health care. The
President obviously doesntt buy that. But some effort to try to
st~bilize prices while we move toward a new system, hopefully in a
truly effective voluntary way, may be sought.
Q
The good news is that in ,the first quarter we are
seeing a dramatic reduction in our suppliers, both pharmaceutical and
surgical supply; 89 percent -- (inaudible) -- year-to-year price
increasing. I'm confident that the labor-intensive health care
provider sIde of the -- (inaudible) -- of health care system that we
can also bring dO,wn labor costs two to three to four percent year
to-year increasing. My big concern is how we win with voluntary or
mandated global budgets if over 50 percent of our business will be
frozen for up to two years as Congress is passing -- the House has
on the Medicare portion. It's just impossible to do, you can
(inaudible).
MRS. CLINTON: Let me say two things about that. And I
don't mean this to be critical but just as a comment. It's an
interesting comment on the market that any sector of the economy can
drop prices so dramatically in such a short period of time. I think
that that is a very salientary point to keep in mind, which is why I
think some kind o·f voluntary action is entirely wi thin the realm of
the economically feasible for most sectors of the health care
, economy.
Secondly, global budgeting, as the administration
considers it, is a fail-safe mechanism. If a competitive market
really works so that suppliers and deliverers of health care truly
are competing and don't have the kind of range of options to be able
to pick and choose their prices without much fear of any
accountability because they have no discipline then imposed upon them
in the marketplace, then we wontt need budgets.
I dontt think the country, though, can
t~ke
the chance
i-ilCtt that will work immediately. We have a lot of cultural and
attitudinal changes that have to take place in this entire system
starting with the individual and going up institutionals.
�,',
PHOTOCOPY
PRESERVATION'
-12
.•-- ............ - - - - - - - - -
So I believe that a budgeting system that sets targets
and gives a realistic view to the entire country of how much this
country is willing to spend on health care, which is allocated in at
the state level, will have varying effects on individual hospitals
depending upon where they stand currently within their own budget
disciplines.
I can't answer what the exact impact of freezing GRGs
and some of the other Medicare changes that the President is
proposing will be in the short run, but we hope that we will begin to
be able to move away from a lot of that regulation so that hospitals
and doctors together will make the right decisions for patients. But
we think that there has to be some sense of a budget within which
those decisions should be made; that until the market in this sector
of the economy -- and from.my prospective, the market hasn't worked
either in health care or in higher education financing or in a lot of
other surface areas, effectively -- so until we can get more
effective market mechanisms that work in this industry that had been
immune from the market, I don't see how we can count on the people
who are currently within it even effectively dealing with the changes
in the absence of a discipline of a budget.., So that's where we are •
Thank you.
END
(\
V
�OCT-18-199~
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DRA.!''1' -- October 18, 1993 (Monday) -
THE' ECONOMIC EFFECTS OF
Testimony of Laura
Chair,
Co~ncil
HEALTH
P.0~2/01S
12: 14pm.
CARE REFORM
D'~drea
Tyson
of Economic Advisers
Senate Labor and Human Resources Committee
,
,
October 19, 1993
Thank you, Mr. Chairman, fOr the opportunity to come before
-
'
your Committee to disc.uss' the economic' effects of health care
reform.
The United States is facing a
he~l,th
care crisis.
The rapidly
rising cost of health care hurts businesses, depresses wages, and
contributes to fiscal imbalance. The average working American will
. be charqed, directly and indirectly, over $7,000 for health care in
1994.
The lack of health security makes many individuals afraid to
leave their current jobs, discourages
~thers
from working for small
businesses or becoming self-employed, and keeps people on welfare
instead of working.
Reforming health care is a difficult challenge, but one that
"
we must face.
Let me first outline the problems that force us to
take action, and then I will move on to the economic effects ·of the
Health Security plan.
1
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18, 1993 (Monday) -- 12:14pm
Why Reform Health Care?
There are four reasons why urgent health care action is
needed.
The first problem i.s that our health care system does not
provide security to individuals. When people get sick, the cost of
their insurance can increase dramatically, or they can be dropped
from coverage. completely.
This situation is a result of risk
selection practices on the part of insurers.
Insurers spend large
amounts of money trying to select good health risks, and avoid bad
riSks.
This practice is profitable for anyone inSUrer but is
socially wasteful.
After all,
incurred by people who get sick.
someone must
cover the costs
The result is that many people
. cannot get coverage, and many more fear for their ability to get
coverage in the future.
The second problem with our health insurance system is that it
interferes with the employment decisions of individuals. Almost 40
percent of insurers exclude pre-existing conditions from thei;:
coverag~
of newly insured people, thus locking people into their
current insurance policies and jobs.
feel "locked" in.to their jobs.
Op to 30 percent Of employees
Others do not: form small businesses
or become self-employed because of the dit:fictilty of obtaining
insurance.
Finally, many people remain on welfare because they
will lose their Medicaid coverage if they take a job.
adapt
to
changing
domestic
and
If we are to
international
economic
circumstances, we must not penalize people every time they change
2
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or lose a job.
The third problelll with our health care system is that the
number of people who do not have access to affordable Jnsurance is
large and expanding.
insurance.
O~er
37 million people do not have health
And this is not a predicament unique to the unemployed.
Three-quarters of all uninsured people are in working families, and
over one-third of the uninsured are in families with at least one
full-time year-round worker.
We have a system in which millions of
people, many o·f them in working families, cannot afford the rising
costs of health care coverage, and they face the risk of being
financially crippled by events beyond their control.
It is a myth that insured people do not need to worry about
the uninsured.
Under our current system, when the uninsured face
catastrophic costs, the insured pick up the bill.
Currently, the
uninsured pay only 20 percent of the health care costs they incur,
while the privately insured pay 130 percent of their actual health
care costs.
According to. recent estimates, there will be about $25
billion of "uncompensated care" paid for by the insured 1n 1994.
Providing
health
insurance
for
all Americans
could therefore
generate savings that amount to almost 10 percent of existing
health insurance spending.
The fourth problem with the health care system is that health
care costs are high and rising.
spends more than 10 percent
States spends 14 percent.
~f
No other country in the world
its GDP on health care.
The United States spends more
3
Theunited
On
health
�OCT-18-1993
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care than on fuel oil, electricity, natural qas, other household
operations, oil and gasoline, transportation
used care purchases),
furniture,
cOmbined.
h~alth
Even though
(incl~ding
all new and
and. other household equipment
care inflation has moderated during
the last year, it is still three times as rapid as. overall consumer
price inflation.
Health care spending per working American will be over $7,000
in 1994.
American workers will, on average, pay $1,864 directly
for health care in 1994.
$3,409.
Their employers will pay an additional
And Federal, State, and local taxes for health care will
total $2,149.
Empiric~l
research suggests that businesses generally respond
to higher health care costs by lowering the wages they pay to their
employees.
Similarly
I
the taxes required to pay for government
health spending are born to some extent by workers in the form of
lower wages.
Thus, if employer contributions to health insurance
had remained constant at their 1975 share of compensation through
1992, and if employers had passed these savings on to workers, real
wages per worker would have been over $1,000 higher in 1992.
The fifth problem with our health care system is that it is
riddled with waste, excess supply, and ineffi9ienCies. Despite our
massive commitment of resources to health care spending, the United
States ranks 21st out of 24. countries in infant mortality and 17th
in'life expectancy for men (16th for women).
S80 billion a year to fraud and abuse.
4
We lose an estimated
Over 5 percent of our total
�OCT-18-1993
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-- October 18, 1993 (MOnday) -- 12:14pm
health care spending--approximately $45 billion or $0.25 out of
every $1 ,in hospital bills--covers administrative expenses and
paper~ork.
As many as one-third of cQmmon medical procedures may
be unnecE!ssary and inapprppriate. Hospital prices continue to rise
even though hospital beds are in excess supply in many parts of the
',.
country--defying the
l,a~s
of supply and demand.
HMO experience
indicates that the cost of ,medical care can be cut by as much as
10-20 percent without reducing the quality of care.
In addition,
recent evidence published in the New England
Journal of Medicine (March 4" 1993) showed that in 1989, after
adjusting for differences in age and gender, medicare payments for
doctor's care per beneficiary varied from lowS of $872 in San
Francisco and $954
in New York to highs of $1,637
Lauderdale and $1,674 in Miami.
medicare reimbursements
in Fort
If Congress arbitrarily slashed
for Miami physicians by a
global
20
percent, Miami physicians would still be absorbing 57 percent more
medicare dollars per beneficiary than would their COlleagues in New
York.
Do we really ,believe that tbis cost differential can be
justified by differences in quality of care?
These diverse indicators paint a compelling picture of the
inefficiency and waste in our current health,care system.
Perbaps
the most important economic reason for reform is to improve the
efficiency of this system.
This in turn will make resources
available to cover the uninsured and to address our other pressing
economic and social needs.
5
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The Egonomic Effects of Reform
The Health Security plan addresses
with the current system.
increase
the~e
fundamental problems
It will lower costs, provide security,
jOb opportunit;i.es' and increase the efficiency of the
economy.
Many businesses will see their costs fall,
and many
others will have access to coverage previously denied them.
cost growth will allow workers to enjoy
fa~ter
Slower
growth in their real
wage,s, and reduced job lock will inc,rease workers' ability to find
better jobs.
Let me describe what 1 believe to be the important
economic effects of health care reform.
First, many employers who currently offer health insurance
will see their .costs fall immediately.
U.nder the,Hea!th Security
plan, every business and individual will receive health insurance.
Eliminating' uncompensated care in the current system will lower
costs to businesses that provide care, thereby making resources
available for increased wages or additional hiring.
Eliminating
corporate "free riders" will also reduce spending for companies
that currently provide health benefits for their employees and for
their spouses who are not covered by their own employers,
Second, the Health Security plan gradually lowers aggregate
business spending on health insurance.
AJthoU9h the business
sector as a whole will initially pay more for health insurance, the
reduction in h,ealth care cost growth lowers the growth of premiums
over time.
In fact,
by
the end of this' decade,
preliminary
estimates indicate that aq9regate business spending on services
�OCT-18-1993
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12:42
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covered by the Health Security plan will fall by $10 billion.
Businesses can do many things with the resulting cost savings.
They can: hire more workers; raise wages or provide better benefits
for existin9 workers; inyest in more plant, equipment, education
and training, and research and development; increase dividends to
shareholders; or lower prices, thereby leaving consumers with more
income to spend on other goods.
Each of these outcomes will have
a stimulative effect on the economy and will increase employment.
Economic research has not reaChed clear conclusions about how to
apportion these effects.
Almost a.l,l models suggest that wage
increases are a likely response, but they differ about whether all
of the savings will result in wage increases.
effects
of.lo~er
Nevertheless, the
health care spending are clearly beneficial for
the economy_
Small
bvsin~§ses
will particularly benefit from the Health
Security plan .. Currently small businesses that provide insurance
face
administrative
businesses
face
costs
costs
of
of up to
only
5
40
percent,
percent.
while
Under
large
reform,
. administrative costs for small firms will fall by up to 25 percent.
Additionally, many of those currently insuring small firms will
receive discounts on their premiums.
Although small businesses that do not
currently provide
insurance will pay more, they are likely to receive discounts to
make health care affordable.
There is a common myth that small
businesses cannot afford to pay anything for health insurance _ In
7
�OCT-1B-1993
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P.009/01S
-~12:14pm
fact ,many small bu.sinesses report they would like to provide
health insurance for their employees if it were more affordable.
According to a recent study fOr the
NF~B
performed by Charles Hall
of Temple University, 64 percent of small business owners would
like to provide some or better insurance for their workers.
When
asked why they do not offer insurance, the most common response (65
percent) was that premiums are too high.
Ninety-two percent of
small business owners agree that the cost of health insurance is a
serious business prol;>lem .. Under· the Health Security plan,with
affordable health insurance and discounts for small businesses,
this will no longer be the case.
Third,
the Health Security plan will
employm~ntin
result
in greater
the health care sector in the short run and a more
efficient health sector in the long run.
With the.increase in the
number of insured Americans and the decrease in the administrative
burden of health insurance, there will be a significant expansion
of employment of health care providers and a decrease in employment
of health administrators and insurance workers.
By 1996, as many
as 400,000 net new jobs will be created in the health sector.
AS
the cost savings of the plan begin to accrue, employment in the
health sector will grow more slowly, althopgh .there will be no
absolute decline in the number Of employees.
Over time, the health sector will become more productive.
This benefits all of us.
We will be able to have the same or
better health care as well
as more investment,
8
research and
�OCT-18-1993
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development, or just plain goods and services.
Fifth, the efficiency of the economy will also be increased by
reducing job. lock and welfare lock. '" By ,providing health care
security, the reform will give workers the freedom to move to jobs
where they might be more productive without having to worry about
losing their health insurance.
benefit
from
this,
since
Small firms should particularly
they
attracting highly skilled workers.
often have
the
hardest
time
In addition, firms may be more
willing to hire workers with pre-existing conditions because the
new system does not penalize individuals witn a prior illness.
Tnis allows for better, more efficient matches between employers
and employees and increases the efficiency of the economy_
Some workers may decide to leave the labor force completely
when there is continuous health coverage.
Evidence suggests that
about 350";600,000 people will decide to retire early under health
care reform.
This increase in voluntary retirement may inorease
employment opportunities for younger workers.
XDe Shortcomings of Existing Studies on the Employment Effect§ 2'
Health Care Reform
As you know, some have claimed that the " Health Security plan
will cause substantial damage to the ecotlomy.
There is no denying
that some firms and individuals will pay more than they did prior
to reform.
In particular, the Health Security plan will increase
costs for some young, single individuals as well as for firms that
9
�OCT-18-1993
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DRAFT -- October 18, 1993 (Monday)
did not previously offer health insurance.
Americans,
however,
insurance
costs,
~-
P.011/015
12:14pm
The vast majority of
will benefit from the reduction in health
the' portability
administrative costs,'
th~
#"
of
,coverage,
the
lower
reduction of job lock, the lower Costs
for small businesses and the self-employed, and the reduction in
welfare lock.
In addition, as already noted, many employers, both
large and small, currently providing insurance will enjoy lower
costs immediately and the business sector as a whole will enjoy
lower costs within three years of the plan's full implementation.
There are some studies, including an often cited study by June
and David O'Neill, that criticize the Health Security pla~ as a
job-destroyer.
inaccuracies.
I believe these studies are riddled with error and
First, they completely overlook the discounts for
small "and low-wage businesses provided by the Health Security plan.
The lack of discounts -- coupled with the questionable assumption
that firms cannot shift any. costs to workers earning less than
$25,000
per
est imates of
year
lead directly
job loss.
to
Additionally,
massively
exaggerated
in the O'Neill stl,1dy,
employers are assumed to pay the full premium for all workers who
work more than 20 hours per week.
In the Health Security plan,
however, employers pay· a much smaller,
pro-r,~ted
premium for part
time workers.
Second, the studies assume a premium for the benefits package
that far exceeds the premium tor the Administration's benefits
package.
The O'Neill study assumes that employers pay a premium of
10
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$5,310 per worker with a family and $2,l60 per single worker.
Estimates for' the Health Security plan, however,
suggest that
employers 'will pay about $2,500 per woz;xer with a family, and about
$1,500 per single worker:
These estimates take into account the
fact that many families have two adults in the labor force, and
.,
that each working adult will have an ,employer contributing to
health care coverage for the family,
These studies also assume that business employment deeisions
are three to six t:i.mes more sensitive to increases in the costs of
hirin9 labor than most conventional estimates.
The O'Neill study,
for example, assumes that firms will layoff 3 percent of their
workforce if employee compensation rises by 10 percent.
Summary
estimates in the economic literature suggest that the employment
response might be
onlyone~sixth
to one-third as large.
Finally, and moSt importantly. the existing studies do not
allow fOr any new job creation in businesses whose costs will fall
as an immediate or gradual CQnseguence of reform .
. In fact, real-world evidence from Hawai.i suggests that the job
loss claims in studies like the 0' Neill study are exsqqerated.
Hawaii imposed an employer health insurance mandate in 1974 .. Since
the 1970s, total private non-farm
employm~nt
has qrown by 80
percent in Hawaii , compared to 54 percent in the Nation as a whole;
and retail and wholesale trade employment have qrown by more in
Hawaii in the Nation as a whole.
Although we cannot extrapolate
from these results and make sweeping judgments about the national
II
�OCT-18-1993
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DRAFT -- OCtober 18, 1993
impact of an employer mandate, the
(NoluSay) --
e~perience
P.013/015
12: 14pm
of Hawaii appears to
contradict the conclusions of studies suggesting that such a
mandate will destroy jobs.
Additional evidence from recent literature on the effects ot
increases in the minimum. wage on employment also calls into
question such conclusions.
We estimate that under reform the
increase in health care costs for currently uninsured low-wage
workers in small firms is equivalent to a very modest increase of
$.15 to $.35 per hour in the minimum wag-e.
This will leave the
real compensation cost for minimum wage workers below its averag-e
level 1n the 1980s.
Research by Lawrence Katz at Harvard and Alan
Krueger and David Card at Princeton finds that recent increases in
the minimum wage have had minimal or even positive effects on
employment.
These results lead us to conclude that the O'Neill
study greatly exaggerates the effects of reform on the employment
prospects of minimum wage workers.
Summary Conclusions on the Likely Economic Effects of Health Care
Reform
Nei ther the models nor the data are
~vailable
to yield a
precise estimate of the employment effects of health care reform.
In many other areas of economics, there are models that have been
tried and tested for decades, and. economists generally place a good
deal of faith in the outcomes they predict.
12
Standard macroeconomic
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models,fOr example, can make reasonably precise predictions about
how a tax increase or a spending cut will aftect aggregate output
or employment.
But there are no
ex1~ting
models that allow us to predict the
employment effects of health care reform with the same degree ot
'
precision.
..
This is because the appropriate mOdel for such an
exercise would have to make distinctions both between firms that
currently provide insurance and those that do not and between the
many ways that firms in either group might respond to a change in
their health care costs.
Such a model would also have to predict
how individuals might respond to new incentives in the plan,
particularly those affecting small business creation, job mobility,
welfare lock, and retirement.
In the absence of an appropriately specified model, one can
generate either small net positive or small net negative effects on
employment with existing models depending on the assumptions one is
willing to make--demonstrating the old adage that you get out what
you put in.
Not surprisin,gly, several private-sector economists
have concluded, as we at the CEA have concluded, that the net
effect of our health care plan on the aggregate employment level is
likely to· be small.
This is because altl:l0ugh there are some
factors in the plan that will tend to decrease employment, there
a.re others that will tend both to increase employment and'to change
its composition.
These offsetting factors are likely to cancel
each other out, although over time as business spending falls below
13
�OCT-18-1993
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October 18, 19S13 (Monday) -- 12: 14pm.
baseline, the factors encouraging an increase in employment are
likely to strengthen.
On balance, I am certain that the JJealtb Security plan is qood
for American :business anC; the American people.
lock, welfare lock and self-employment lock.
costs under control.
It diminishes job
It gets health care
".
It guarantees security to all Americans. And
it reduces waste and inefficiency in one-seventh of our economy.
_ ~eor9'anizing our health care system to use our scarce resources
more efficiently will help us realize our goal Of receiving hiqher
living standards for ourselves and Our children.
-1 will :be delighted to answer any .questions that you may have
at this time.
14
TOTAL P.015
�',California Hospital Association Remarks
October 13, 1993
I'm delighted to be able to talk to you this afternoon
about our shared concern for bringing hea,lth care security
to all Americans, and for slowing the march of health care
costs that are spiraling out of control. California
hospitals have a truly unique understanding and appreciation
of the problems with our health care system, and the urgent
need for reform.
First, hospitals and hospital Associations like yours
have been models of constructive policy making in the health
care debate. Your organization has helped'educate policy
makers on the need for reform, and has consistently focused
on the overarching goals, highlighted the areas of
agreement, and been committed to working together through
the areas where we disagree.
•
Second, California has its own place of honor in the
health care debate. While California may be three hours
behind us on the clock, California has been years ahead of
Washington in recognizing what's right about American health
care-- what works -- and ,moving the California health care
system in that direction.
We continue to learn from
California's shift toward more efficient, organized delivery
systems, from your successes in pooling consumers and
businesses together to guarantee choice and hold down costs,
and from your innovations in prevention and health
promotion.
I know that you in this audience understand and
appreciate the need for health care reform. You know full
well what the problems are, and you know that solutions are
out there. I personally am comforted by the fact that we in
Washington have spent a great deal of time studying this
issue, you in California have done the same, and we have
come ~ut at pretty much the same place.
We agree that any serious health reform proposal must
provide universal coverage. And every American must be
secure in knowing that he or she has access to a
comprehensive set of benefits that can never be taken away.
We agree that reform should build on the existing
employer-based system that works well for most Americans,
and involves the least disruption from our current system
for financing health care.
Your proposal calls for restructured delivery, local
�accountability, real and enforceable cost containment. It
calls for reduced bureaucracy, changes in anti-trust laws
and malpractice reform. In each and every area, we echo .
your call.
But as this audience knows well, there is more than one
route to the same destination, and there are different
approaches to many of these goals. When it comes to health
care reform, the devil is in the details. I'd like to focus
today on the specific solutions the President has proposed,
and talk through some of the implications for hospitals like
yours.
The first principle is security. All Americans need
the comfort of knowing they have a comprehensive set of
health care benefits that can never be taken away. Under
our proposal, every American and legal resident will receive
a health security card, guaranteeing them coverage. The
promise of universal coverage will strengthen America's
hospitals. It will mean that fewer people seek health care
too late because they couldn't afford to see a doctor. It
will mean that fewer people use emergency rooms for cuts and
bruises and flu shots, because they had nowhere else to go.
And perhaps most importantly, it will mean that fewer people
will walk through your hospitals' doors with no means to pay
for the care you provide them.
There is no question that universal coverage solves
many of the problems your hospitals face. But there is also
no question that it does not solve all of them-- many of
your hospitals have special concerns. For one, many of the
patients you currently see are not in this country legally,
and will not be guaranteed the same coverage as Americans
and legal residents. Secondly, hospitals serving small,
rural counties face provider shortages and rely heavily on
the public programs that pay for the health care. While I
cannot tell you that these problems will go away entirely, I
do think that this proposal goes a long way toward
addressing these needs.
For one, federal funds will continue to be targeted to
hospitals that serve undocumented residents. While we will
call for a reduction of so-called "disproportionate share"
payments under reform as a result of extending coverage to
millions of the patients your hospitals now serve, we will
continue federal funding to the hospitals burdened by
uncompensated care. In addition, the expansion of public
health and prevention programs will mean that everyone in
this country, regardless of immigration status, will have
access to immunizations and other preventive services that
are essential to protecting the health of everyone. By
providing new funds for community health centers, and by
allowing them to compete for the expanded base of privately
insured residents, they should have greater financial
�strength and a continued ability to serve those in the
community without coverage.
Rural concerns are also addressed in our proposal. No
'longer shall these communities go underserved. We realize
that a health security card means little to a family that
has no access to a doctor, so we propose a number of
specific initiatives to expand the availability of care in
these regJ.ons.
New workforce initiatives will include tax incentives,
increased reimbursements, retraining, scholarships and loan
forgiveness programs.
Technical and financial assistance will be available to
speed the development of rural-urban networks, including
grants for academic health centers to develop an
infrastructure of information and referral services
necessary for rural health networks to remain up-to-date.
Similar grants and loans will also be provided to
facilitate links between local practitioners, community
hospitals and aoademic health centers. Such links set the
stage for integrated practice networks or community-based
plans.
.
Eventually, under universal coverage, funds that in the
past have been sapped to compensate for the uninsured, will
be redirected to ensure further rural outreach, such as
follow-up, home visits, transportation, and child care
during office visits.
The second principle is simplicity -- stripping away
the useless layers of rules, regulations, paperwork and
confusing redtape to create a leaner and more navigable
health care system. Hospitals today are buried under a
crush of paperwork generated by the more than 1500 private
insurance companies and the various government health
programs.
You fac~ a never-ending set of requirements from peer
review organizations, government inspectors, industry
regulators, bill coders and fiscal middlemen. It's
ridiculous -- hospitals treat more paper than patients, and
the paper drains time and money better spent on providing
care. Last month, the President visited The Children's
National Medical Center in Washington, and the
administrators there told him that if they could be freed
from the paperwork that has nothing to do with quality,
nothing to do with patient care, the pediatricians on staff
could each see 500 more children a year. Well, we want to
free you up to do that. Streamlined paperwork requirements
�I
will lower your administrative costs, and allow you to focus
your staffs away from the file cabinets and back to the
bedside.
Standard claims forms and electronic data systems,
will streamline your billing, boost efficiency, and lower
overhead.
Health Alliances will be organized according to this
same principle. People wrongly assume that the proposed
health alliances will lead to more bureaucracy. As you have
demonstrated here in California, health alliances provide
more services at lower costs. Your state public employee
program is one example -- stripping away middlemen -- the
underwriters, the marketers, the benefits managers -- and
directly connecting those. who pay for care with the health
plans who provide it.
The third principle is savings. As I've traveled
around this country meeting health care professionals and
listening to their ideas on reform, I have yet to meet one
hospital admistrator, one doctor or hospital nurse, who
doesn't believe there's tremendous waste in today's health
care system, and that significant savings are achievable.
I know that many hospitals-- perhaps many of you in
this audience-- are concerned that our savings targets are
too aggressive. But we have been careful and conservative
in our estimates, and judging by the results in California
and other parts of the country that have pooled purchasing,
introduced competition, and boosted efficiency in health
care delivery, we know our estimates are realistic, and can
be reached without harming the quality of health care or the
facilities that provide it.
Our main mechanism for slowing the growth of costs
comes from increasing the choices and bargaining power of
health care consumers. This approach has proven very
successful in California, as groups like the Health
Insurance Plan of California and The California Public
Employees System have offered a wide choice of health plans,
and have experienced cost increases well below the national
average. CalPERS has seen cost increases average 1.5% this
year-- about one seventh the national average. We want to
bring this approach to the rest of the country, and couple
it with other cost-saving measures like reducing
administrative load, cracking down on fraud, reforming
malpractice laws and changing reimbursement incentives to
reduce unnecessary tests and procedures.
Let me be clear: we believe that significant savings
will result from these reforms, and should bring costs
within the targeted growth rates we propose. But we believe
that cost control has to be guaranteed, so we propose
�-
I
reinforcing the competitive forces with a fail-safe limit on
premium increases. These limits, which would only apply to
plans that bring growth targets above the target, will serve
as a reinforced incentive for savings.
We also believe that as long as we control costs in the
private sector, we can and should control spending on the
public side, through the Medicare and Medicaid program.
It is irresponsible public policy to continue to
squeeze down on these programs absent reforming the whole
system. During the budget debate the administration opposed
an "entitlement cap" for this very reason. The cap would
have forced reductions in the Medicare program -- whether or
not we accomplish overall health care reform controlling
private sector health care costs -- and whether or not
beneficiaries and hospitals could be protected from a
decrease in services or needed revenue. But we believe that
in the context of this whole package, we can slow these
costs while protecting your institutions and allowing time
for these savings targets to be realized.
In fact, research conducted in your state indicates
that hospitals respond to increased cost pressures with
resilience-- cutting expenses and increasing efficiency.
California hospitals faced strong competitive pressures and
prospective losses from PPS, and actually cut their costs by
4.3%. This plan does hot call for cutting spending, neither
in Medicare or in the private sector, but for slowing the
rate at which spending grows. We think that is achievable,
and, in the context of overall reform, responsible policy.
Additional principles are choice and quality.
Increasing choices is inh~rent in our shared approach to
reform, as is maintaining and improving the high quality of
American health care. We will reorient the way quality is
measured in the system, freeing you of regulatory micro
management and providing you with better tools and
information for constantly improving outcomes. And as part
of our quality initiative there is a strong commitment 'to
academic health centers-- the vanguard of our health care
system-- with the promise of increased federal funding,
including the support of research conducted at these
research institutions.
'
-
I
I'd like to close by talking about the final principle
the President set forth as a guidepost for reform -
responsibility. This is central to our approach: the
Health security Plan asks all Americans to contribute
something to the betterment of our health system. It ties
into everything we've talked about.
�I
•
'
..
•
It asks employers to provide every worker and their
families with a health plan that provides comprehensive
coverage of their health care needs. In return, the plan
provides small businesses, and all low-wage firms, federal
premiums discounts to make the cost of that coverage
affordable.
It asks our doctors and hospitals to reduce the rate of
growth in their costs so that health care is affordable. In
return, the Plan offers them millions of additional paying
patients, the virtual elimination of charity care, and a
significantly simplified system of administration.
It calls for slowing the growth in Medicare, and
increases benefits to Medicare recipients-- including
coverage of prescription drugs-- in return.
Most importantly, responsibility has to mean that all
of us are in this together, because health care reform is
not just about eliminating paperwork and bureaucracy or
making the antitrust laws make sense, or reaching universal
coverage on paper. Health care reform is about
reinstituting a sense of compassion and caring into our
society. It is about why you went to medical school, or why
you went into the health profession.' It is about common
sense, practical judgements about our economic piorities.
Health reform is about putting our national house in order.
Too may times in the past, individuals and interest
groups and the government have marched to the edge of health
care reform only to cower in fear and shrink away. You and
I know the result of this inaction; you see it everyday -
our problems have only gotten worse.
Now we have a real chance to fix this problem once and
for all, and we need your help. We need your help in your
communities as the primary care givers. We have witnessed
the empassioned commitment you have already demonstrated to
the cause of reform and the tenacious manner in which you
continue to actively participate in this process.
I look forward to working together as we move in the
direction many of you have urged for so long. Together, I
know we can and will make this lasting contribution to the
health and security of this nation. Thank you.
�/
�HEALTH CARE SPEECH
Introduction
President Clinton has been in office for just over a year now, and we have already
seen him move our economy in the right direction, start to restore our sense of security and
begin to renew America's spirit.
This President is dedicated to the proposition that people that work hard and play by
the rules should be rewarded for their work.
That's why he introduced a reemployment initiative to help people get good jobs with
growing incomes. That's why he passed the Fami1y and Medical Leave Act so good workers
can be good parents. That's why he expanded the earned income tax credit to reward work
over welfare.
And that's why he's dedicating himself to fixing this health care system -- to provide ..
hard-working families with the health security they deserve.
This year we have a magic moment. After 60 years of false starts and obstruction, we
have an opportunity to give every American health security. This is an opportunity we must
seIze.
Opponents of reform are trying to tel] you there's no health care crisis, but they're
wrong. [Chart 1]
The fact is: Even if you have good health insurance today, you can lose it tomorrow.
Two million Americans a month lose their insurance. And fifty-eight miUion Americans find
themselves without insurance at some point during the year.
Your benefits are threatened by insurance company fine print. Eighty-one million
Americans have "pre-existing conditions" that insurers can use to raise rates or deny coverage.
And three out of four insurance policies. -- that's 133 million people -- have lifetime limits
that cut off benefits when you need them most.
Even if you've got insurance, you know you're paying more and getting less. And your
choices are declining. I'm here to teU you how the President's reform will protect you and
your family from a future of being squeezed -- getting lower-quality care, fewer choices and
higher bills.
[Chart 2]
America faces three choices: government insurance for everybody, no guarantee of
coverage for anybody, and guaranteed private insurance -- which is the President's approach.
And the President has told the Congress he will veto a bill which doesn't cover everybody-
because without guaranteed private insurance for everyone, it's not real reform.
�The bottom line is this: the President wants to strengthen what's right about our health
care system and fix what's wrong.
We know the system is broken. We know that all of us are at risk of losing our
coverage at any time. Here's how we want to fix it.
We want to guarantee private health insurance for every American;
We want to protect your right to choose your own doctor and health plan, and
improve the quality of your health care;
We want to outlaw insurance company abuses;
We want to protect and dramatically improve Medicare;
We want to guarantee health benefits through the workplace, because that's the
best way to cover everyone.
Guaranteed Private Insurance For All
[Chart 3]
The President believes that everyone must be covered. Always. That's the only way
to guarantee security. As long as any of us.at any time can be denied coverage or dropped
from coverage -- none of us is secure. And as long as Americans who have insurance pay the
price for those who don't have insurance, we'll never get costs under control.
He's also said that the benefits package must be comprehensive. [hold up Health
Security card] Under the President's proposal, every American will get a Health Security card
that will guarantee benefits as good as what America's biggest companies offer -- as good as
what members of Congress get. PI us preventive care -- immunizations, mammograms,
physicals -- and prescription drugs. We must keep our people healthy, not just treat them
after they get sick.
And Americans must have protection against the devastating costs of serious illness.
That means low deductibles and no lifetime limits on your benefits. People must have the
peace of mind of knowing that no matter what happens, their health care can never be taken
away.
2
�Choices Preserved and Expanded
[Chart 4]
The President wants to preserve and expand your choice of doctor and health plan.
because that's the best way to guarantee high quality health care.
But choice and quality are threatened today. If we do nothing. rising costs will force
more and more employers to limit your choice of plan and doctor.
Under the President's approach. your Health Security card guarantees your choice of
doctor. Once you get your card. you -- not your boss or insurance company -- choose your
doctor and health plan. It can be a plan that lets you use any doctor or hospital that you
want. Or it can be a plan that lets you use a network of doctors or hospitals. Or. you can
join an HMO. It's your choice.
The special interests are trying to scare you on this issue in order to block reform. But
remember that they're trying to preserve their profits. And don't let them stand in the way of
your health security.
Outlaw Insurance Company Abuses
[Chart 5]
We want to guarantee affordable insurance that people can depend on. The President's
approach would make it illegal for insurance companies to raise your rates unreasonably ... to
drop your coverage or take away your benefits... to increase your rates if you get sick ... to use
"lifetime limits" to cut off your benefits ... or, to charge you more simply because you are
older or have a pre-existing condition.
If we do nothing, or worse, pretend to do reform, you will continue to be at .the mercy
of the insurance companies. And you'll continue to pay more and get less.
Insurance ought to mean what it used to mean. No more fine print. No more insurance
company abuses. You pay a fair price for security, and when you're sick. your health care
benefits are there for you -- no matter what.
3
�'j
Protecting and Expanding Medicare
[Chart 6]
The President believes very strongly that the true test of health reform is whether it's
good for older' Americans. That's why his proposal preserves and dramatically improves
Medicare. And the American Association of Retired Persons (AARP) says that the President's
approach is the "best option for senior citizens."
Under the President's approach, if you get Medicare you keep it. You keep your
doctor if that's your choice. Plus, your benefits are expanded. People receiving Medicare will
get coverage for prescription drugs, which costs older Americans more than anything today.
And we also begin to provide coverage for long term care at home or in your community.
The President wants to make sure that every penny of Medicare money is used for
seniors. Some want to take Medicare money away from seniors and spend it on other things.
That's why we must fight with the President for health care reform that protects Medicare and
older Americans.
Insurance Through The Workplace
Finally, if we're going to cover everybody, the best way to do it is to guarantee health
benefits at work. Every job should come with health benefits. Most jobs do today. And yet 8
out of 10 Americans who have no insurance are in working families.
[Chart 7]
We want everyone to have health benefits guaranteed at work, with the government
providing discounts for small businesses and the unemployed. This approach builds on what
works. And it's the easiest and simplest way to accomplish our goal of guaranteed private
insurance for everyone.
Providing health benefits at work not only makes sense; it's also the right thing to do.
Today people on welfare get guaranteed health insurance while people with jobs mayor may
not be covered. That's wrong. People who work should have health insurance.
If we are to guarantee this, we must protect small businesses -- and the President's
approach does just that. The President wants to provide discounts for small businesses, and
full tax deductibility for people who work for themselves.
That's how we make sure that everyone is covered. Anyone who works will get
coverage at work. Employers will be asked to contribute, as will employees. The government
will cover those between jobs, and will continue to cover older Americans with Medicare.
4
�"
i
'\
,~
/e
/'//
.
/conclusion: The President's Reform Works For You
The President's reform works for you and your doctor. That's why the people on the
front lines -- America's largest associations of family physicians, pediatricians, nurses and
pharmacists -- support it and believe it will work.
Opponents are trying to confuse the issue by making it seem more complicated, but it's
really pretty simple. You'll get a Health Security card, you'll pick any doctor you want, fill
out one form, and know exactly what's covered. And your health security can never be taken
away,
[Chart 8]
Guarantee everyone private insurance. Keep your choice of doctor. Outlaw
unfair insurance company abuses. Protect Medicare. And guarantee health benefits at
work. That's the approach. And this is our opportunity.
No wonder the special interests -- the people who profit off today's crazy system -- are
out in f~ll force. On~ group of health insurers has already spent $14 million -- money from
your insurance premiums -- on TV ads to scare you about reform.
But the President didn't design health reform for the insurance companies -- he
designed it for you. And we must not let the insurance companies stand in the way of real
reform.
Presidents from FDR to Harry Truman to Nixon to Carter have tried to guarantee
insurance to every American, but none have succeeded -- because special interest groups have
been just too powerful to overcome. But this time, if we work together, I am convinced things
will be different.
This time, we will make history and guarantee pri vate insurance to every American. I
ask you to join with me and help do what is right for America. Thank you.
5
�
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Chris Jennings - Health Securities Act
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Domestic Policy Council
Chris Jennings
Health Securities Act
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Description
An account of the resource
The Health Security Act (HSA) was an effort by the Clinton Administration to provide universal health care in the form of a comprehensive national health care bill which emphasized managed care and called for the creation of regional health care alliances. This series contains material which provides a detailed analysis of the Health Security Act. A chronological subseries within this file focuses on legislative strategies to enact the HSA, as well as efforts on the part of the Clinton Administration and its supporters to counter intense opposition to the legislation from opponents in Congress and powerful interest groups. This file also contains material which examines in detail the alternatives to the Health Security Act, particularly single-payer plans and a compromise proposal from a bipartisan group of moderates in Congress called the Mainstream Coalition. This series contains memoranda, correspondence, reports, press releases, briefing papers, statistical data, graphs, legislative drafts, publications, and news clippings related to the Health Security Act.
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Clinton Presidential Records: White House Staff and Office Files
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293 folders in 16 boxes
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HRC Speeches [4]
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Domestic Policy Council
Chris Jennings
Health Securities Act
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Box 44
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/Systematic/JenningsHSA.pdf" target="_blank">Collection Finding Aid</a>
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647904-HRC-speeches-4.pdf
647904