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[Political Power Structures Affecting Any National Health Care Reform Plan: Health care reform
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56
2
3
1
�POLITICAL POWER STRUCTURES AFFECTING
ANY
NATIONAL HEALTH CARE REFORM PLAN
Health Care ReForm Concepts versus S o c i a l and Economic Values
�•
R A F T
POLITICAL POWER STRUCTURES AFFECTING
any
NATIONAL HEALTH CARE REFORM PROGRAM
Elissa
Ornato
Delaney
J a n u a r y 1932
�C O N T E N T S
Introduction
Types
Policy
One
1
o f ReForm
Plans
2
F o r m u l a t i o n and
Implementation
Group
3
7
PersonalResponsibility
1C
Writer's
1E
ReForm
Suggestions
Canada
24
Germany
35
Cost
Containment,
Reducing
Cost
InFlation
S.144G, S e n a t o r
Robert
S.1177, S e n a t o r
Jay R o c k e F e l l e r
S.1227, S e n a t o r s
Riegle,
and
39
Kerrey
Mitchell,
47
Kennedy,
RockeFeller
50
S.700, S e n a t o r
David
61
H.R.3205, Rep.
Dan
Durenberger
Rostenkowski
S u b s t a n c e Abuse
Federal
Health
Care
62
S3
Programs
5B
Medicare
67
The
Tax
and M e d i c a i d
Administration
72
Bush
Treatment
Federal
State
oF H e a l t h
Financial
Care
BeneFits
Suggestions
Administration
oF
F e d e r a l Programs
State
L i c e n s u r e oF
State
I n s u r a n c e Commissions
State
and L o c a l H e a l t h
Physicians
Care
Plans
75
80
35
107
110
91
Missouri
92
Oregon
95
Michigan
99
Denver
and S a l t
Lake
City
H e a l t h I n s u r a n c e as a S t a t e - R e g u l a t e d
Pub l i e U t i l i t y
101
112
�Insurance
Companies
Brief
^4
History
Insurance
I n d u s t r y Power
Financial
Base
Considerations
115
118
HMOs a n d PPs
121
Antitrust
122
Exemption
Termination,
and
Cost
Cancellation
Uninsurabi1ity
130
and R e s p o n s i b i l i t y S h i f t i n g
Wickline
Genetic
American
Non-renewal,
v. C a l i f o r n i a
Engineering
Medical
142
143
1S2
Association
174
H i s t o r y , O r g a n i z a t i o n a l T e n e t s and
National Health
Insurance
HealthAccess
America
18S
Phy s i c i a n s
American
131
Hospital
Association
200
Malpractice
212
Labor
218
Unions
Employers
Small
220
Business C o a l i t i o n s
E.R.I.S.A. a n d S e l f - I n s u r a n c e
225
229
Consumers
230
Attorneys
233
Additional
Special
Interest
Groups and
Organizations
237
Conclusion
245
Appendix
243
Bibliography
Notes
253
2SS
1 1
�POLITICAL
POWER STRUCTURES AFFECTING
ANY
NATIONAL HEALTH
Health
Care
CARE REFORM
ReForm C o n c e p t s v . S o c i a l
PLAN
and Economic
Values
INTRODUCTION
Law d o e s
affected
by s o c i e t y
believes,
not
i n a vacuum.
and e v e r y t h i n g
paper
will
a f f e c t change
intended
cover
that
i nour current
t o provide
indepth
health
already
provide
t o provide
which
care
will
that
a more p a n o r a m i c
problems
during
care
reform
discussion,
that
has f i n a l l y
must
eration,
tion.
politics
Special
be s t u d i e d
this
t o play
i n t e r e s t groups
is
care
t h epurpose
political
attempt
here
power
a generation
fact.
of
When
now h a v e , p o l i c i e s
At t h e p o i n t
a major
struggles
a t reform.
After
as t h e y
and r e f o r m e d .
begin
health
become an u n d i s p u t e d
point,
I t
of the currently existing
i snecessary.
a critical
be r e c o n s i d e r e d
view
and t h e v a r i o u s
o r may o c c u r
reach
Rather,
system.
that
on any a s p e c t
concerning
information.
Health
problems
i s
thinks,
structures
care
information
b e c a u s e many p u b l i c a t i o n s
health
society
some o f t h e p o w e r
covered
is
The l a w a f f e c t s a n d
and a c c o m p l i s h e s .
This
will
notexist
role
and t h e power
of reconsid-
i npolicy
they
forma-
wield
must
carefully.
A national
health
care
plan
-1-
will
be t e c h n i c a l l y
complex,
�will
and
be d i f f i c u l t
must
aided
to formulate
be f i s c a l l y
by l e g i s l a t i o n
t o avoid
responsible.
which
will
conflicting
Fiscal
alter
criteria,
viability
c a n be
some o r g a n i z a t i o n a l
power s t r u c t u r e s .
Any
affect
plan
will
not only
organizations,
not
be p o l i t i c a l l y
t h e bottom
but also
line
balance
because
and
of influence.
will
The p l a n
Power
of choice
will
t h e i n t e r e s t s o f many o r g a n i z a t i o n a l a n d
factions
while
adequate
health
assuring
care
i t will
f o r many c o r p o r a t i o n s
spheres
be e a s i l y r e l i n q u i s h e d .
volatile
the primary
f o r an e n t i r e
goal
have t o
corporate
of providing
population
a t reasonable
cost .
It
system
remains
will
reform,
t o be s e e n
d r i v e t h e economic
or vice
categories
c u r r e n t l y before
of plans,
Canadian-style
insurance
business,
of
care
health
Play
with
value
of health
care
be r e q u i r e d
would
contribution
toward
to fall
a r e opposed
basic
insure
health
employers
government
within
of types
insurers
of
of their
tax increases,
waiting
to either
subject
tend
three
plans.
1
government-administered
relieve
t o heavy
due t o l o n g
a government-sponsored
option
advocate
could
lead
o r Pay p l a n s
Congress
some o v e r l a p p i n g
plans
which
insurance
would
considerations
social
Plans.
Bills
health
the Nation's
versa.
o f Reform
Types
whether
health
and r a t i o n i n g
lists.^
by s m a l l
their
care
businesses
employees
plan.
who
o r pay
into
The 'Pay'
t o a 7- t o 9 - p e r c e n t - o f - p a y r a l l
support
-2-
of premiums.^
The
high
�Tha
Policy
Policy
Formulation
Agenda S e t t i n g
Phase
Opportunity
is created
3
Evolving
Policy
Window
when
"procasa
streams"
converge
--problems
- - p o 1 i c i es
--politics
Cycli
'olicy
• eve 1 opment
Phase
Implementation
Policy Operation
Phase
Legislative
E n a c t men t
Critical
Vari ables:
- o r g a n i z a t i on
-goals , o b j e c t i ves
- a p p r o p r i a t i ons
-standards
Policy
Reactive
>
ModiFication
Phase
changes
--amend
- - e l i m i nate
--reformulate
(P.A. P a u l - S h a h e e n , " O v e r l o o k e d C o n n e c t i o n s :
P o l i c y D e v e l o p m e n t and I m p l e m e n t a t i o n
inStat-Local Relations"
15 J o u r n a l o f H e a l t h P o l i t i c s , P o l i c y a n d Law 8 3 3 , a t 8 3 4
a n d 8 3 5 , W i n t e r 1 9 9 0 . M o d e l d e v e l o p e d by K i n g d o n , 1 9 8 4 .
�number
of businesses
overwhelm
the
which
might
opt
For
the
'Pay'
plan
could
system.
Insurance
Market
ReForm
plans
"...may h a v e
the
best
oF
plan
4
political
would
into
chance
oF
r e q u i r e the
one
lower
insurance
or
those
America's
issues
has
and
prolong
the
picture
oF
oF
will
be
base
For
a new,
The
components
illustrates
interactive,
linking
the
The
policy
and
policy
eFFective
Further
viability
Major
the
FiFty
high-risk
h e a l t h care
years.
addressed
at the
and
the
and
can
solved
by
to adopt.
To
merely
and
an
s e l e c t e d reForm
will
and
A l l the
outset will
provide
process
( F a c i n g page)
process
which
oF
policy-making
model
Formulation
analysis.
reFusing
plan
a strong
system.
as
evolutionary."
continuum
oF
oF
conditions.
reForm
we 1 1 - s t r u c t u r e d
S
oFFering
current conglomeration,
u n a s c e r t a i n a b 1e.
Paul-Shaheen.
policies
companies
From
the n a t i o n decides
problems
the
oF
the
dealing with
m u s t be
plan
the
oF
the past
us
a l l the
agony
insurance
prohibited
pre-existing
over
Facing
to solve
be
type
Implementation.
h e a l t h reForm
accurate
many s m a l l
terminating
with
evolved
neglect
by
or
This
to Facilitate
c u r r e n t method
currently
whatever
i n order
revoking
Formulation
insurance
oF
A l l i n s u r e r s would
or
individuals
soon..."
Formation
l a r g e group
rates.
Policy
passage
7
one
that
is
Additionally,
"dynamic,
Paul-Shaheen
used
as
described
succinctly
implementation
be
are
explains
creates
a Framework
administrative
and
^
that
an
For
political
8
interaction
and
power
shifting
become m o r e e v i d e n t .
-3-
Too,
the
�model
i s an
aid
to
implementation,
understanding
i t is far
that
easier
to
" I n the
defer
world
the
of
program
proposed
than
to
g
dismantle
the
Using
three
existing."
the
process
model,
the
streams:
Agenda-Setting
problems,
Phase
i s composed
p o l i c i e s , and
1
politics.
P r o b l e m s " a d v a n c e t o t h e p o l i t i c a l f o r e f r o n t i n two
a.
"through the s y s t e m a t i c monitoring of
key
i n d i c a t o r s " w h e r e t h o s e key i n d i c a t o r s m i g h t
be t h e d e v e l o p m e n t o f a p a t t e r n o f u n u s u a l
b u t r e c u r r i n g e v e n t s ; i . e . , t h e AIDS e p i d e m i c
has t r i g g e r e d a demand f r o m t h e p u b l i c f o r
t r e a t m e n t and
cure.
b.
of
0
ways:"
" f o c u s i n g e v e n t s " s u c h as n a t u r a l d i s a s t e r s .
When e v e n t s r e c e i v e w i d e s p r e a d m e d i a c o v e r a g e ,
t h e p u b l i c i s s p u r r e d t o demand a c t i o n . ' ' ' '
Policy
analysis,
Development
includes
generation
of
ideas,
research,
1
and
reformulation. ^
P o l i t i cs
includes
plus
the
opinion
polls,
"the
special
i n t e r e s t groups,
mood o f
the
public
demands, p o s i t i o n s ,
key
changes
as
and
reflected
actions
in
of
in administrations,
and
1 3
election
results."
Each
whether
of
a window
facilitate
primary
the
of
and
Once
program,
of
will
play
a part
opportunity
will
occur
are
and
constituents
legislation
to
are
the
and
the
government
formulation
variables
factors
authoring
variables
branches
groups
those
enactment
roles
their
goals
and
-A-
will
legislation.
executive
a
this
assigned
with
and
shifts
point,
to
objectives,
"The
legislative
special
legislative
activity
At
determining
which
interface
i s enacted,
organizations
program's
the
in developing
implementation.
the
of
of
in
proposal."
from
"(t)he
carry
out
program
interest
1 4
policy
critical
the
�appropriations,
and t h e r u l e s ,
standards,
and
policies
15
established
t o guide
Policy
to
tion
The
"covers
internal
design.
implementation
1
ment
nation
Rashi
1 7
Fein
coverage
merely
and b e n e f i t s ,
review'
cntrol
pressures
solution
with
language.
policy
parts
of t h e h e a l t h care
broad
agenda
some
that
'gains*
sector, the historical
Without
t h e complete
and l o c a l
e m p h a s i s on
t o expand
Similarly,...
lead)
access.
f o r presumed
to control
program. . .the
costs.
various
are i n t e r r e l a t e d . ..Without
o f compromise
that
o f t h e many p a r t i c i p a n t s
gridlock
and c o n t i n u e d
governments
to control the
be c r i t i c i z e d
the kinds
f o r each
leave the
p r o t e c t i o n ... ( w o u 1 d
a comprehensive
enables
would
and p r o v i d e r s .
controls
sector
Depart-
t h e problems of
s e r v i c e s t o a l l and/or
develop
School's
[ n e c e s s i t a t i n g ) cutbacks
without insurance
we m u s t
state,
legisla-
during formulation of
increased
patients
t o ease c o s t
to provide
Medical
and s t r o n g e r e f f o r t s
Thus,
health
formal
the original
one o f t h e g o a l s
Furthermore, . . . p r o v i d e r s would
provide
affect the
statutory
solving
a t t h e same t i m e ,
of individual
expenditure
advocates
an " u n s t a b l e
'utilization
failure
which
initiate
the original
of t h e Harvard
Attaining
with
behavior
may
i n response
6
and c o s t
reform.
changes adopted
p h a s e s may m o d i f y
of S o c i a l Medicine
access
stages."
and e x t e r n a l ,
Others
t o amend o r e l i m i n a t e
•r.
to
both
policy
intent! "
in
Modification
conditions,
original
the implementation
will
might
i n the
18
continue."
support
and c o r p o r a t e
a
and
of federal,
organizational
�interest
process
groups, the p o l i c y
o f any
national
Formulation
health
and
c a r e reForm
implementation
program
will
not
succeed.
The
primary
the
players
Federal
i n the process w i l l
government
State
governments
Local
governments
the
Insurance Industry
the
American
Medical
the
American
Hospital
•Labor
Association
Association
Unions
Employers,
problems
both
Consumers,
State
the r e c i p i e n t s
and
local
during
implementation
with
downturns,
tax revenues
oFten
when C o n g r e s s
approved
It
Fall
elects
so
that
subject
insurance
changes,
dollars
oF
health
care.
will
health
or l o c a l
cost
Face
care
Fiscal
program.
economic
Additionally,
entitlement
cutting
not to appropriate
necessary
oF
small
any
prey t o heavy
be
major
oF
regional
Fall.
will
The
and
Funds
i n such
For
times,
already-
programs.
constantly
use
national,
program
care
large
governmental e n t i t i e s
When F a c e d
programs
be:
one
to thoughtFully
i t s Fiscal
integrity
to the vagaries
industry
the least
universal
oF
claim
in administrative
will
be
oF
required
-S-
be
i n order
expenses.
will
economic
which w i l l
Form
Formulate a
not
be
Fluctuation.
to
undergo
a changeover
t o save
There
must
health
to the
millions
be
oF
legislation
�prohibiting
expenses,
client
prohibiting
professional
population
One
one
group.
medical
would
It
medical
physician's
the e n t i r e
nation's
group.
each
person
component
be
community
which
one
reflect
and
be
another
there
by
would
insurance
into
be
insured
group,
be
need
f o r Basic
n o t be
state
income
were r e q u i r e d
no
necessary
because
to f i l l
insurance.
Changing
f r o m one
with
person
pending
a
Basic
an
the
burdens
national
group.
a national
productive
scale.
to continue
arbitrary
high-risk
level.
groups,
I f a l l were
to insure
Pre-existing
history
conditions
i n s u r a n c e company
employers
would
.
•
f o r Basic
out a medical
when c h a n g i n g
each
of
under
segmented,
status,
or
considered
c o n s i d e r e d as
the e n t i r e
small,
be
goals
i n s u r a n c e , on
sex,
adequately
population
national
rated
age,
would
irrelevant.
a different
purchase
or
to
moving
his
own
policy.
Insurers
employees
render
will
borne
insurers
when a p p l y i n g
would
U.S.
employment
location,
group
coverage,
form
n o t been
s h o u l d be
o f one
individuals
has
i s not e c o n o m i c a l l y or s o c i a l l y
geographic
of
that
of the current
everyone
separate individuals
groups
to
i s that
high-risk
This
the e n t i r e
B e c a u s e one
plan,
individual
in
one
of excessive
of attending
requiring
of reform which
is that
legislation
to
and
c o n s i d e r e d as
aspect
considered
of
substitution
judgment,
be
because
Group.
An
as
desertion
claim
t o be
the plan
t h e need
insured
economical
to
impose minimums
within
For
a particular
them
-7-
to provide.
on
the
group
The
number
i n order to
concept
of
�Government expenditures for health as a percent of total government expenditures: 1965-97
Feae'ai
Slate ano local
25 -
2C -
i
is
a
10 -
1955
1985
1995
Years
SOURCE rieann Care rmancmg Aommistration. Ottice 01 :ne Actua'v
1
Daia trorr. T.e O^ice o' Natronai Hea;: - Statistics
13
Itallh C a r t Financini; Revievt Kail I W I
National health expenditures aggregate and per capita amounts, percent distribution, and average
annual percent growth, by source of funds: Selected years 1965-2000
Projectec
Item
1965
1975
1980
1985
1989
Naiiona: neaim exoenditures
Private
PuDilC
Feaera
Slate and loca:
S41.6
31.3
10.3
4.8
5 5
Si 32.9
77.6
55 1
36 4
16.7
S249 1
143.9
105.2
72.0
33.2
S420.1
245.0
175 1
123 6
51.5
S504 1
350.9
253.3
174 4
78.8
U.S. poouiation'
204.0
224.7
235.3
247.2
257.0
1990
1991
1992
1995
2000
S736.2
421 i
317 1
215 7
101.4
S809.0
457 4
351.6
236.6
112.8
Si.072.7
592.2
480.5
324.6
155.7
Si.615.9
859 4
756.5
517 6
236 8
262.1
264.6
272.0
282.9
5.650
6.045
7.284
9.865
2.817
1.607
1.210
823
387
3.057
1.729
1.329
902
426
3.944
2.176
1.767
1.194
572
5.712
3.035
2.674
1.830
844
100 0
57.0
43 0
29.2
13.7
100.0
56 5
43.5
29.5
13.9
100.0
55.2
44.6
30.3
14.5
100.0
53.2
46.8
32 0
14.8
13.4
14 7
16.4
9.9
9.0
11.0
10.8
1 1.3
0.9
6.4
8.5
7.7
9 5
9.8
8.9
0.8
6.3
Amount in billions
S670.9
389.3
281.6
192.2
89.4
Number m millions
259.6
Amount in billions
Gross nalionai oroauc;
705
1.598
2.732
4.015
5.201
5 463
Per capita amount
Nationa neailh expenditures
Private
Public
Federal
State and locai
204
154
50
24
27
592
346
245
162
83
1.059
612
447
306
141
1.699
991
708
500
206
2.351
1.365
985
679
307
National health expenditures
Private
Publi:
Feaerai
State and local
100.0
75.3
24.7
11.6
13.2
100.0
58.5
41.5
27.4
14.1
100.0
57.8
42.2
28.9
13.3
100.0
58.3
41.7
29.4
12.3
100.0
58.1
41.9
28.9
13.1
vJationai health expenditures
5.9
8.3
9.1
10.5
2.585
1.500
1.085
741
344
Percent distribution
100.0
58.0
42.0
28.7
13.3
Percent of gross national proauct
11.6
12.3
13.1
Average annual percent growth trom previous year shown
National health expenditures
Private
Public
Feaerai
State and local
J.S. population'
Sross national product
—
—
—
—
—
—
—
12.3
9.5
18.3
22.4
13.1
1.0
8.5
13.4
13.1
13.8
14.6
12.1
0.9
11.3
11.0
11.2
10.7
11.4
9.2
1.0
8.0
9.5
9.4
9.7
9.0
11.3
1.0
67
11.1
11.0
11.2
10.2
13.3
1.0
5.0
10.0
8.2
12.6
12.2
13.4
1.0
3.4
9.6
8.6
10.9
10.7
11.3
1.0
7.0
July 1 Social Security area poouialion estimaies.
'iOTE: Columns may not add to totals because ot rounding
SOURCE Heatlh Care Financing Administration. Office ot me Actuary Data trom tne Office ot National Health Statistics
Health Carr Financing Review Tall 199r\„iim
�considering
solve
the entire
national
population
as one g r o u p
would
t h e problems o f :
..
t h e a b o v e - s t a t e d minimum
the
..
smal1-business
t h e unemployed
of
..
paying
percentage requirement;
employer
who h a s t o o f e w
employees;
who a r e o r a r e n o t f i n a n c i a l l y
capable
premiums;
t h e s e l f - e m p l o y e d who p a y h i g h e r - t h a n - g r o u p - r a t e
premiums; and,
..
t h e segmented
different
The
by
the
Basic
insure
theory
which
benefit
One
promote
services
establish
which
Employers
find
i t
necessary
blocks of persons,
method
Consumers w o u l d
representative
and s u p p l e m e n t a r y t o
may w a n t
i n s u r a n c e p l a n s as p e r k s
of services
to protect
health
be b a s e d
plan
would
n o t on t h e
on t h e m e d i c a l
purposes,
insurers
g e o g r a p h i c a l areas or
wards m i g h t
f o rdividing
their
f o r employees.
but instead
to define
t h e n have
to offer
benefit
and would
voting
purchased
i s being considered to
I f ,f o radministrative
non-discriminatory
holders.
not apply t o insurance
who make up t h e g r o u p ,
covered.
still
plan
related to
groups n a t i o n w i d e .
n a t i o n w i d e and a B a s i c
uniformity
individuals
problems
be i n a d d i t i o n
nation.
health
group
need
would
health
the entire
supplemental
would
and d i s p a r a t e
one-group
individuals
administrative
prove
t o be a
blocks of policy
a specific
interests
legislative
i n dealing
with
insurers .
Insurance
of
medical
those
policies
bills.
premiums
are a form
Everyone
of financial
pays h i g h
g e t h i g h e r each
year
-8-
monthly
because
a i d f o r payment
premiums, and
many
people
overuse
�insurance
For b i l l s
insurance,
For
which
c a n and s h o u l d
and t h e u n i n s u r e d .
would
pay For
scale
oF a b i l i t y
Basic
health
insurance
t h e advantage
spread
the cost
across
the entire
become
involved i n insuring
medical
an
oF p r e m i u m s
care
W i t h i n each
because
while
period
, the situation
itselF
t h e Following year.
The
terms
become
term
by
'pre-existing
that
would
income s c a l e ,
o f premiums
share
portion
Person
public
sector
The
just
We
year
between
costs
one-group
incapable
page
plan
rates
year
aFter
risk'
burden,
year.
should
insurance.
The
t o and
limited
t o pay premiums.
premiums would
which
oF b e a r i n g
reverse
reality.
unable
premium
no
one-year
t h e same
be d i m i n i s h e d
be l i m i t e d t o
the individual
himself.
The
infor-
indicates the current dispersion of
p u b l i c and p r i v a t e
should
or
B may r e q u i r e
completely
become a
f o r those
of those
high-risk
d u r i n g t h e same
must each b e a r
would
individuals
n o t have t o
and P e r s o n
as e a s i l y
should
would
A may r e q u i r e v i r t u a l l y
care
of the monthly
on t h e f a c i n g
expenditures
sliding
t h e premium
t o a n y d i s c u s s i o n oF h e a l t h
be F i n a n c i a l l y
mation
to a
nationwide
c o n d i t i o n s ' and ' h i g h
government's r o l e
government's
only
care
American
and h i g h - r i s k
t h e same b e n e F i t s
'portable insurance'
t h e payment
The
may
and e n j o y
irrelevant
The
according
o r c a r i n g For e i t h e r
e x o r b i t a n t a m o u n t oF m e d i c a l
same r i s k ,
each
Government would
d u r i n g one c a l e n d a r
the
reform,
oF o n e g r o u p
For poor
population.
individuals.
be e q u a l
With
oF
t o pay.
Additionally,
would
without
and i n s u r e d p a t i e n t s s u b s i d i z e t h e c o s t
t h e poor
poor
be h a n d l e d
sectors.
Under
reform,
decrease.
i s capable
-9-
of r e l i e v i n g
t h e government
�of
bearing
too great
An o v e r b u r d e n e d
population
socially
with taxes
the process
Personal
since
President
include
personal
Johnson
limit
care
program.
overburden i t s
services.
t o Formulate
t o solve
I t
a plan
a n d manage
initiated
government
and M e d i c a i d ,
each
is
which
will
t h e problem.
reducing
smoking.
continued
h a s t h e p u b l i c become
F a t and s a l t
alcohol
I n these
groups
nationwide.
and F i t n e s s
oF a n d r e s p o n s i b i l i t y
conduct w i l l
to
a i d increased,
has t h e a b i l i t y
lower
Security
For c a r i n g For p a r t i c u l a r
years
own h e a l t h
Foods w i t h
content,
eliminating
Five
Social
involvement
government has
decreased
individual
on h i s / h e r
control
Roosevelt
expanded
i n the past
eating
this
inevitably,
I n r e t r o s p e c t , as g o v e r n m e n t
that
Fiber
itselF
responsibility
Only
are
wiser
i t s responsibility
people.
impact
will,
or severely
President
Medicare
broadening
aware
i n a national health
Responsibility.
Ever
oF
government
and e c o n o m i c a l l y
require
and
a role
t o have
levels.
ways, t h e y
For t h e i r
a meaningFul
Many
content,
consumption
more
people
greater
and c u t t i n g
back o r
are assuming
own w e l l
have p o s i t i v e
impacts
on F u t u r e
the traditional
value
oF p e r s o n a l
greater
being,
hie a 1 t h
and
care
costs .
Rekindling
in
our c u l t u r e
political
values
medical
The
would
have
a positive
responsibility.
can have
The r e g e n e r a t i o n
a s a l u t a r y impact
malpractice,
re-establishment
health
eFFect
cost
oF s o c i a l
on c o r p o r a t e
of strong
on e x c e s s i v e
containment,
responsibility
- 10-
responsibility
and
social
litigation,
and s u b s t a n c e
can spur
us
abuse
along
�the
road
to a
'kinder, gentler
as d e t e r m i n a t i v e o f q u a l i t y
health
of l i f e
Social values
are
as a r e e c o n o m i c and
issues.
Health
hospitals,
care
i s a social
against
the risks
insurance
of health
contract,
i t i s a contract
attendant
moral
witness
service.
I t i s provided
p h y s i c i a n s , and o t h e r c a r e g i v e r s .
made a c c e s s i b l e by
companies.
care
costs
considerations.
The
has been
beneficial.
to protect
decade
The
interest
past
prevailing
the insurance
decade
a
legal
with
has
been
c o n t r a c t s whenever
policy
industry.
o f excess has y i e l d e d
people
i s not merely
i n the public
by
But i t i s a l l
Insuring
to the dispatching of insurance
economically
1980s
nation.'
i n the
Now
that
U.S.
the
t o t h e 1990s d e c a d e o f
19
decency,
we
are f i n a l l y
seeing
disappointing
corporate conduct
Congressional
legislation.
but
may
industry
During
premiums
to
this
i n t h e form
of
pending
Health
would
circumstances
refusing
contract,
shift
reform
the protections
of health
care
n e g o t i a t e on
that
insurance
are greater than
t o honor
their
unexpected
abrogation.
As
of
risk,
assessing
may
i n that
include,
policy
of
protectionism.
preserve
the risk
costs
care
t h e 1980s, c o n s u m e r s had e x p e c t e d
economically
that
to
not, a status-quo-a 1tering
insurance
against
challenges
they
that
had
their
own.
Yet, i t i s under
these
companies have been p r o c l a i m i n g
expected
and, t h e r e f o r e ,
obligations.
expenses are not a v i a b l e
they
purchased
e x p e n s e s t o o g r e a t f o r them
contractual
insurance
increased
have
-11-
a reduced
I n any
reason f o r
companies are experts
should
they are
i n the
business
expectation of
�being
relieved
While
caps
question
the
with
any
the
their
i t is true
monetary
generally
of
on
cost
and
such
massive
that
i n s u r e r s should
their
financial
as
bills.
be
hospitals
policies
will
ne*. e r
them
I t i s under
on
to confront
susceptible to
circumstances
t o i n s u r s . as
as
not
lives
have
such
insurance
do
are
(2) everyone
render
pressured
are,
insurance
consumers
savior
from
are
barred
refuse
only
homeowners
prohibited
to
issue
from
i n most cases,
from
prohibited
I n Massachusetts .
from
insurance
doing
automobile
insurance
picking
prohibited
c o m p a n i e s must b s
dumping/desertion.
they
any
business
policies
policies.
and
from
i n the
but
state i f
prefer
to
issue
I n s u r s r s must
which
choosing
be
they
persons
will
to insure.
Consider
public
the
utilities
service.
measures
A l l are
of
need
only
refer
carry
as
paid
security
for security
must
modern
such
upon
owner
would
sole reliance
dumping,
companies
deign
which
and
they
place
most c c n s u m e r s
(1) insurance
that
policies
ruin.
Just
client
insurance
adhesion,
hope
medical
most
contract.
reimbursement,
c o n t r a c t s of
health situation
patient
that
caps because
belief
proclaim
legal/social
by
fire
gas,
by
relied
consumers.
consumers.
to the
state
insurance
before
upon
Any
who
will
- 1 2-
telephone
~or
different
i s also
issue
a
that
-.-.at e v e r y
t o r e g : £ter a
against
by
=nd
question
requirements
insurance
provided
Insura.~~e
i n order
they
l i ' s
electricity,
f o r and
Banks r e q u i r e homeowners
devastating
n e c e s s i t i e s of
rbe
relied
premise
automobile
vehicle.
possibility
Tvcrtgage
loan.
of
�Health
insurance
Many
to life
s t a t e s have n e g l e c t e d
consumers
i n dealing with
motivations
of state
to
determine
on
the benefits
extent
i s as n e c e s s a r y
that
how
insurers.
insurance
deeply
their
responsibility
be
t h e commissions
by i n s u r e r s - - o f t t i m e s
t h e needs o f t h e g e n e r a l
public
utility.
to
The p e r f o r m a n c e
commissions must
dependent
bestowed
as a n y p u b l i c
and
questioned
have
t o such
have
become
an
n o t been
considered.
There
impose
are
of
i s no q u e s t i o n
a primary
legal
risk
gamblers
to their
benefits.
however,
duty
that
and p u r c h a s e
are purchasing
and
their
They
T h o s e who p u r c h a s e
against risk.
concerning
t o shareholders.
investment.
them
laws
shares
knowing
bet their
to
may
be n e c e s s a r y
t h e 'goods'
and
bad b a i t h
health
produce
responsibility
child
to
Manufacturers
i s held
perceived
four
wheels
could
t h e laws
a r e n o t so o u t r a g e o u s l y
do n o t o p e r a t e
defect.
merely
on
perceived
to protect
liable
have
of product
industry.
foreign
t o issues of
to their
when p r o d u c t s ;
should
or are expected
in tort
f o r t h e damage
because
their
n o t be
product
p a r t s which
on t h e m .
perform.
- 1 3-
They
immune
does
they
t o , the*
c a u s e d by
from
n o t r u n on
a r e so s m a l l
have
liability
Negligence
t h e same d u t y
I n s u r e r s should
choke
f o r investment
However,
as t h e y
o r does n o t have
easily
reasons
t h e odds
policies,
i s meant
by t h e i n s u r a n c e
as i n s u r e r s d o .
manufacturer
the
t o apply
produced
insurance.
shareholders
are opposite
money
company
which
shareholders
purchase.
It
These
However,
insurance
a product
corporations
that
a comparable
a
duty
�Physicians
incongruous
to
sufficiently
sever
it.
have a d u t y
contend
into
to
that
this
relationship
as
denying
a physician
to
prescribe
treatment.
be
tolerated
i f e f f e c t e d by
of
rights
As
widespread
rationing
to
and
into
based
Insurers
Insurers'
treatment
of
susceptible
has
not
health
have
caused
procedures
This
attempts
m u s t be
of
the
the
Yet
his
would
one
situation
i t is a
to the
duty
not
of
of
dictator
i n making
of
to
patient,
such
pay
ethical
f o r care
thus
secondary
damage by
effect
of
effects
expanding
do
i t s root
begin
any
the
is
the
physicians
provider
spiraling
by
use
of
itself,
cost, o f
malpractice
the
the
the
harm."
Malpractice,
health
to reduce
- 14-
no
suits
tests
further
highly detrimental
Therefore,
by
takes
is
moral c o n s t r a i n t s .
protection against
costs.
have
interest
which
alter
of
providers
more
physician
may
already
is proving
ways t o
whose
and
rendering
a f f e c t e d the
far
his decision,
for malpractice.
the
at
least,
of
p a t i e n t to
proposition, "First,
devoid
a method
addressed
out
possibility
the
to minimize
several
patients.
the
very
greater
secondary
same
position
i s becoming,
the
a suit
But
as
The
payor
appreciably
care.
but
2 0
third-party
refusal
the
to
government.
At
operate
i s the
to carry
the
on
effectively
f o r care
by
account
ethically
to
themselves
insurer's position
against
detrimental
economic.
individual
as
opportunity
not,
rail
their
imposed
insert
i t is
care.
a n a t i o n , we
care
so
t o pay
The
should
to health
rationing
purely
payor
the
p a t i e n t s and
i n s u r e r s may
Insurers' refusal
third-party
their
lawsuits.
to
malpractice
reform
malpractice
and
plan.
any
problem
One
is to t r a n s f e r
�the
policing
The
function.
power
o f t h e American
mammoth p r o p o r t i o n s .
its
se1f-po1icing
physicians'
decline.
has
n o t been
will
wrested
carried
from
With
to that
professional
conduct
professional
structure,
ability
care
there
original
will not
the policing
Because
reform,
the function
t o a body
that
which
p o w e r m u s t be
incorrectly believes
require
review,
state
with
control
i t has a
federal
of health-care-
control
and a c c r e d i t a t i o n .
licensing
will
t o move h i s p r a c t i c e
practice
neglect of
2 1
licensure
federal
body.
has reached
policing of
whether
i t m u s t be moved
which
should
adequate
be d e b a t e d
health
function.
of studied
of malpractice
t o another
out,
t h e body
Legislation
care
Without
the specter
be moved
perform.
right
duties.
conduct,
will
Association
I t has a h i s t o r y
I t c a n no l o n g e r
function
Medical
remove
from
to a different
when h i s c o n d u c t
With
health
that
new
a physician the
state
consist
that
Professional
of a certain
number b e i n g
consumers
and a c a d e m i c i a n s
who a r e n o t
of a state
Reform
It
should
50 p e r c e n t o f
decision
suspend
Board
in his
o f members, w i t h
i n the health
agency
Review
wanting
number
employed
federal
Conduct
found
t o resume
state.
Each s t a t e ' s
has been
of
would
care
field,
t o remove
or a r e l a t e d
a physician
be n o t i f i e d
and t h a t
industry.
from
practice, the
body
would
revoke or
licensure.
Suggestions.
may be h e l p f u l
f o r t h e reader
- 1 5-
Upon
t o know
the position
�advocated
by t h i s
Consequently,
are
writer
concerning
the following
health care
suggested
policies
reform.
and
rationale
stated.
Insurance
Companies.
a.
provide Basic
Would
minimum
benefit
insurance
coverage t o every American according t o f e d e r a l 1 e g i s J a t i o n .
A i l B a s i c p o l i c i e s w o u l d c o v e r c a t a s t r o p h i c and long-term i l l n e s s e s .
b.
Would
health
not
insurance.
Health
be c o n s i d e r e d
c.
from
Would
government
would
be c a l c u l a t e d
than
risks.
experience
with
would
premium
checks
section.
negotiation
o f premiums.
on n a t i o n w i d e
or industry,
rated,
status
individual.
or quarterly
based
f o r Basic
risk
or geographical
would
be c o m m u n i t y
the entire
factors,
area
rated
nation being
rather
d e f i n e d as
commun i t y .
e
-
which
Will
would
be r e p r e s e n t e d
study,
health
care
reduce
incidents
f.
plans
cost
May
which
marketp1
control,
judgment
provide
will
bear
to reimburse
a treating
education
boards
concerning
of providers to
health care
a t premium
insurance
r a t e s s e t by t h e
t o achieve
Insurers
dinosauers
They
will
that
be
their
judgment.
are i n t h e business
a r e t h e most
logical
to
organizational
of providing
accessibility
individual.
the benefit
i n the twentieth
a Canadian-type
tightening
companies
t h e d e s i r e d goal
have
not.
would
p h y s i c i a n ' s medical
They
f o r every
will
f o r treatment
n o t be p e r m i t t e d t o s u b s t i t u t e
Insurance
against risk.
h e a l t h care
a belt
including
Insurers will
over
structure
under
a n d make r e c o m m e n d a t i o n s
any s u p p l e m e n t a l
t h e market
Rationale.
become
and s t a t e
of malpractice.
Refusal
permitted.
insure
analyze,
on t h e f e d e r a l
ace.
g.
ing.
any
i n annual
The p r e m i u m s
apply
and employment
premium
participate
n o t on i n d i v i d u a l ,
presumed
to
insuring
Would
Premiums
and
when
history
receive monthly
the federal
d.
the
be r e q u i r e d t o i n s u r e a l l who
plan--but
they
will
century--as
they
would
will
the entire
n o t be a l o n e ;
o f knowing
experience
nation will
become
a cut in profits,
also
in profit reduction.
- 1G-
not
be
experienc-
�•F
health
from
primary
care
concern,
services of
p h y s i c i a n s over
diagnoses
i n s u r e r s cannot
the
future.
treatments
made i n a b s e n t i a .
has
contributed
for
consumers
Federal
a.
to the
and
and
State
Upon r e c e i p t
employers,
the
provided
misplaced
current crumbling
m u s t be
allowed
to define
They have w r e s t e d
t o be
This
be
based
control
on
management o f
state
of health
care
care
terminated.
Governments.
of premiums from
I.R.S. p r e m i u m
individual's
premium
are
individuals
s e c t i o n would
b.
Monthly
disperse
having
one
unable
the
quarterly,
premium
p r e m i u m s due
c.
be
or
from
the
s u b s i d i z e d by
the
that
the
federal
premium
agency
insurer
represented
would
as
subscribers.
who
full
premiums
each
t o each
check
Individuals
t o pay
including
credit
contributed.
employer
account,
and
are
unemployed
premium
or
government
any
and/or
part
f o r the
of
financially
the
premium,
will
unaffordable portion
of
premiurn.
d.
An
independent,
representative,
Board
the
premium
insurance
..negotiate
providers
Would
provision
of
geographical
but
with representatives
industry;
procedures
with
annually;
premiums
e.
rates annually
r a t e s f o r s e r v i c e s and
..negotiate
to
non-political,
would:
..negotiate
from
non-profit,
rates annually
f o r Basic
perform
expensive
area.
health
contributions
insurance.
certificate
technology
Close
f o r employer
of
need
and
reviews
concerning
services within
monitoring to avoid
a
unnecessary
duplication.
f.
Federal
physician
Forty
review,
percent
and
State
and
o f each
board
companies,
the
members s h o u l d
no
way
i n f l u e n c e d by
g.
any
Social security
wages/salaries
to
and
f o r the
would
control
cost
insurance
board
boards
of
should
i n c r e a s i n g percentages
officials.
of
the
contributions
entire
year
review,
health care p r o v i d e r s .
knowledgeable
segment
facility
c o n s i s t of p r o v i d e r s ,
government
be
oversee
with
f o r higher
Sixty
consumers
h e a l t h care
should
be
who
are
of
in
industry.
deducted
deductions
salaried
percent
set
persons.
From
according
�Rationale.
Government
should
not
be
business.
Government's r o l e
in insuring
unemployed
should
a minimum
premiums.
For
perform
be
kept
other
to
consumers,
the
role
as
Health
Care
Would
be
pose a c o n f l i c t
investment
These
own
the
by
poor
merely
government
precluded
of
from
engaging
and
the
subsidizing
may
merely
premiums.
interest;
i n medical
investment
for
insurance
Providers.
a.
conduit
the
i n the
i.e., physician
technology
activities,
patients for testing
i n businesses
or
care,
or
laboratory testing
to which
and
ownership
physicians
are
which
services.
guide
commonly
their
referred
to
as
'self-referral.'
Such
if
the
enter
physicians
friend's
and
into
so
b.
schools.
would
no
each
physician
business.
and
would
taught
longer
care
to
increase
for
overusage
utilization
of
with a l l other
Physicians
medical
because--even
informal networking
to monitor
courses
permitted
physicians
that
medical
be
therefore increasing profits),
investment
impossible
not
p r a c t i c e were m o n i t o r e d
p r e s c r i b i n g unnecessary
business
could
should
i n v e s t o r ' s medical
[i.e.,
the
investment
only
Course
meet
be
the
would
Over
costs
agreements
steer
p a t i e n t s to
utilization
would
be
out
would
of
work
the
premises
which
annual
in
of
i s taught
be
control.
required to e n r o l l
on
a
annual
recognized
in resort
settings
s t a t e l i c e n s u r e renewal
require-
ments .
Unnecessary
medicine
by
possibility
required
and
of
physicians
of
i n order
a malpractice
medical
course
intellectually
Improved
procedures
work
importance
of
to
performed
avoid
suit.
would
the
increase
as
only
be
d i l i g e n c e i n the
a l l annually-
provided
in a
classroom
o p p o r t u n i t i e s and
physicians'
defensive
all-too-real
Therefore,
challenging university
continuing education
l i c e n s u r e should
are
p r a c t i c e of
setting.
annual
awareness
serious
of
control
the
medicine.
Emp1oyers.
a.
time
Would c o l l e c t
and
full-time
premiums
being
from
identically
- 18-
a l l employees,
administered.
with
part-
�b.
to
an
Wbuld
income
Wbuld
premium
Federally-negotiated,
exacted
income.
Figure
A lower
From s m a l l e r
a l l premium
according
percentage
businesses.
F u n d s t o t h e I . R . S . 's
section.
Finding
and
the cost
become
w o u l d be
transFer
Rationale.
ing
employee's premiums
to the employer's taxable
taxable
c.
oF
toward
annually-established,
according
oF
contribute
E m p l o y e r s would be r e l i e v e d
negotiating
oF
selF-insuring.
insurers.
a larger
negotiated
rate
oF
percentage
Additionally,
coverage
which
required
by
oF
or bear the F u l l
providing
Federal
with
cost
insurers
supplemental
than
corporate
oFFer
or
bear-
n o t have t o
oF p r e m i u m s
job-enhancing
responsibility
be p e r m i t t e d
t h e premium
e m p l o y e r s may
w o u l d be
the
Employers should
Employers would s t i l l
contribute
as a m e t h o d
group p o l i c i e s
oF
to
the
For
Federally
employees
beneFits.
or p r o v i d e
to the Basic
insurance
coverage
law.
Consumer/Patients.
a.
health
Would
care
b.
just
Would
Freedom
be a b l e
must
t o choose
decision
than
be
able
t h e Freedom
and
satisFaction
ProoF
s h o w n on
coverage
will
which
case
d.
be
order
and
that
income
be
rated.
Family
can
Basic
Fairly
Factors
soup
according
which
will
Failure
important
to
quality,
produce
insurance
rates
- 13-
tax return,
be
be
premiums.
a
each
would
level
in
individual
t o pay.
diFFerent
2 2
certain
t o income
which
in
insurance
i s below
expected
should
the
care
set according
reasonably
required
t o purchase
health
coverage at prices
be
society
insurance
would s u b s i d i z e
income
oF
to maintain
t h e income
whose
The
or a slab
i s i n Force w i l l
For B a s i c
would be
premium/deduct ible/copayment
physician.
i s a Far more
Inability
through
those
and
own
carrier
consumption i n a Free market
government
premiums
to provide
t o choose
i n penalty.
For
their
insurance
a c a n oF
tax returns.
premiums
own
physicians
insurance
discerned
Insurance
level,
oF
health
the Federal
community
minimum
price--three
result
co.verage w i l l
and
t o choose
at the point
be
to purchase Basic
their
t o choose
the r i g h t
reliability,
to
statute
t o choose
insurers
Consumers have
c.
by
insurance.
as p e o p l e
meat.
be r e q u i r e d
For
The
each
�$1,000 o f
From
income
For
$30-50,000,
$ 2 , 0 0 0 oF
increase
e.
t h e p/d/c
income.
For
every
t o pay
subsidized
F.
by
rates
$ 1 0 , 0 0 0 oF
the
can
employed,
..iF
the
h.
basic
Not
i.
in
care
and
the
aFForded,
with
s/he
the
would
be
remainder
be
the
individual:
deductions;
employer
section
Service.
with
him/her;
For
another,
i . e . , a l l health
portable.
care
services
insurance.
will
by
will
Diseases
which
(common c o l d )
be
encouraged
manner t o a v o i d
be
placing
insurable
under
are reasonably
would
n o t be
to conduct
covered.
themselves
unnecessary
costs
on
system.
the employer
insurer
whether
It
i s not
oF
adhesion
chooses
either
i n an
the
will
he
be
portable.
current
For
This
situation
consumer
company
what
For
choosing
the sole
or
to sign
same
oFFered
by
i t will
a
Y.
contract
employer
the c a r r i e r ,
oF
purview
i n S t a t e X or
had
the
to
employer
the policy
eliminate
employees t o remain
purpose
the
that
t h e e m p l o y e e has
insurance policy
requires
to retain
interest
i s p r e F e r a b l e because
which
From
o c c u r s when an
Historically,
By
insurer
A o r B,
employee's
is actually
coverage.
employer
each
individual
subscribe to the
without
t h e c h o i c e oF
allow
works
insurer.
go
single
Removing
which
or
be
would
to a specia11y-organized
travels
will
A l l persons
Rationale.
oF
premiums,
Revenue
not serious
a responsible
every
income.
l e a v e s one
individual
a l l health
health
rates
through payroll
the I n t e r n a l
policies
preventable
be
unemployed,
insurance policy
insurance
t h e p/d/c
t o pay
paid
..iF
IF the
i n c r e a s e For
less.
government.
P r e m i u m s would be
g.
would
i s $30,••• or
additional
i s unable
whatever
oF
income
Above $ 5 0 , 0 0 0 ,
IF a person
required
t h o s e whose
retaining
with
will
the
a
the a b i l i t y
to
insured.
There
will
preparation
For
plan.
oF
Each
be
scores
oF
the Formation
these
bills
bills
oF
will
-20-
introduced
a national
have
by
Congress i n
health
advantages
and
care
reForm
disadvantages
�to
each
o f t h e power
a result,
process,
hoped
there
benefit
will
and dead
that
Potts,
new
attempts.
emerge
at the least
a former
the source
i s there
the l e g i s l a t i o n
bill
because
will
i s a group
have
i ti s
the
greatest
cost.
author
staff
of every
He
effort,
member,
provision in
contends
someone w a n t e d
and
i t i s often
i t svaried
clear
provisions,
which
i t
each
that
there."
individual
"Every
2 3
Even
should
specific provisions.
consider
that
disclose
these
Freedom
i t does
not
to subject
medical
sources.
not apply
itself
greater
the
income
of physicians
always
can a f f o r d h e a l t h
a decline.
advocate
insurability
to
executive
regulatory
because
that
Congress
agencies.,
preferred
2
t h e incomes
other
care,
experience
refuse
to Federal
of hea1th-insured
and
usually
requirements. ^
the lower
t h e number
members
and
the government r e g u l a t i o n
prrofessions,
actually
i n t e r e s t i n g t o note
independent
t o FOIA
greater
could
and
t o Congress
The
people
Act applies
indiscernible
who
Congressional
I t i s very
the Pentagon
but
The
were
t o be p r i v i l e g e d i n f o r m a t i o n
of Information
departments,
l e g i s l a t o r s approve of a
i t i s generally
the i n d i v i d u a l s or i n t e r e s t groups
authored
the
which
As
stalled
Ultimately,
Congressional
and
care.
identified.
Although
who
will
by h e a l t h
discussion,
l a w be p u b l i c l y d i s c l o s e d .
provision
be
affected
considerable
legislative
t o consumers
recommends t h a t
if
be
legislation
Robert
every
structures
imposed
of a l l providers.
people,
caregivers.
physicians'
For t h i s
on t h e
the
Thus,
income
reason,
and
i f fewer
prestige
providers
and r e j e c t r e g u l a t i o n ,
-2 1 -
higher
will
including
�regulations
With
of
concerning
providers
t h e h e a l t h care
quickly
evolve
peer
review.
a n d i n s u r e r s g e n e r a l l y on t h e same
reForm
Fence,
a c o u n t e r v a i l i n g Force
consumer
advocates
which
strength
t o aFFect
and c o n t r o l
countervailing
but
should
political
Force
hold
there
oF c o n s u m e r s a n d
be o r g a n i z e d
a n d oF
t h e reForm
process.
suFFicient
The
may n o t be i n o p p o s i t i o n o n a l l p o i n t s ,
a position
oF c o n s i d e r a b l e ,
consumer h e a l t h c a r e
the process
health
will
that
i F not equal,
strength.
Ideally,
in
i t i s imperative
side
care
oF p o l i c y
services
interests
Formulation.
have
already
Basic
been
will
be
Foremost
minimums For
outlined
by p e n d i n g
legislation.
As e x a m p l e s
considered,
order
oF some oF t h e l e g i s l a t i o n
a number
to p r o v i d e
oF b i l l s
an i d e a
oF
consideration
here
'what
by C o n g r e s s .
bills
covered
process
For passage
will
t o occur
with speecial
advocacy
oF a n y p a r t i c u l a r
the
be b r i e F l y
into
law.
because
interests
reForm
plan.
insight
currently
oF p r i m e
interest
i n Washington
detriment
contact
oF c o n s u m e r s .
thei. r l e g i s l a t o r s
preFerable.
into
which
i n the
unresolved
and a r o u n d
most
know w h i c h
the Nation.
a r e more
to the
be up t o i n d i v i d u a l
t o l e t them
e a c h oF
areas are
i n d u s t r y , sometimes
I twill
oF t h e
Nevertheless,
a r e p r o t e c t i v e oF c o n s u m e r s ,
oF t h e i n s u r a n c e
none
and i n s u F F i c i e n t consumer
valuable
protective
that
oF t o o many
provides
the b i l l s
and under
I ti s too early
bills
While
being
described i n
i s out there'
I t i s expected
pass
problems
will
currently
voters to
bills
are
�HEALTH INSURANCE
SELECTED SOURCES OF HEALTH INSURANCE,
BY WORK STATUS AND FAMILY INCOME: 1990
- PRIVATE COVERAGE EMPLOYER COVERAGE
DIRECT
INDIRECT
TOTAL
PUBLIC COVERAGE
NO HEALTH
INSURANCE
MEDICAID MEDICARE CHAMPUS COVERAGE
TOTAL
TOTAL
PRIVATE
213.7
160.4
140.8
71.2
69.6
19.7
26.2
18.5
3.2
5.9
34.4
Family-Head Workers
74.9
60.9
54.6
51.2
3.4
6.3
4.3
2.1
0.3
2.0
11.6
Other Family Workers
48.1
39.8
35.0
17.7
17.3
4.8
2.3
0.9
0.2
1.3
7.2
Nonworkers
27.5
15.2
11.7
2.2
9.5
3.5
8.4
5.4
2.7
1.3
5.7
Children
63.2
44.4
39.4
0.1
39.4
5.1
11.2
10.1
0.0
1.3
9.9
Under 55,000
12.6
2.3
0.9
0.5
0.4
5.9
5.6
..
$5,000-59,999
14.8
4.1
2.4
1.5
0.9
6.4
5.7
--
--
5.0
510,000-514,999
16.5
8.0
5.9
3.7
2.2
3.7
3.0
--
--
5.6
$15,000-519,999
16.9
10.8
8.8
5.1
3.7
2.3
1.6
--
$20,000-529,999
33.8
26.4
23.1
12.1
11.0
2.6
1.4
$30,000-539.999
32.0
18.2
25.5
12.3
13.2
1.7
$40,000-549,999
26.0
23.7
22.0
10.3
11.6
$50,000 and over
61.0
57.0
52.3
25.7
26.6
TOTAL
OTHER
PRIVATE
IN MILUONS
TOTAL
W O R K STATUS
F A M I L Y INCOME
4.7
4.6
5.9
0.5
-.
1.2
0.3
--
2.4
0.5
3.2
-._
1.9
3.3
SOURCE: FOLEY. JILL D. UNINSURFD IS THE VNTTED STATES: THE NONF.I.Dt.Hl.Y FOPULATIOS W n i l O U J HF^LTH INSVHiNCE. ANALYSIS OF THE MARCH /WO CURRENT
POPULATION SURVEY. EMPLOYfil: ULNIiFIT RLSLAKCII I N S I I H I I I . W/VSII IN( i I ON. I) C. AI'Kll. I ' ^ l .
91-3
The Universal Healthcare Almanac
(Phoenix:
S i l v e r
K
Cherner,
Table 6.7
Ltd
199 1 )
�Each
of the b i l l s
and
assures
The
facing
and
uninsured
approve
such
plan--such
will
health benefit
f o r t h e 37 m i l l i o n
of coverage
maintain
i n the nation.
the viability
that
industry.
launch
severely
Insurers
because
of the health
health
limit
I t i s expected
i t s own f u l l
of insured
uninsured
a national
insurance
insurance
or destroy the
that
h e a l t h care
plan
uninsured.
f o r t h e number
to insure the currently
as C a n a d a ' s - - w o u l d
will
a minimum
the figures
i s concerned
insurance
industry
the insurance
reform
campaign
1992.
Basic
coverage
meant
will
i n which
whatsoever.
purchase
Those
consumers
many h a v e
Nevertheless,
not provide
t h e Basic
no c o v e r a g e
t o do s o w i l l
health insurance
o f h e a l t h care
f o rreform
primarily,
and b u s i n e s s e s
t o make money, b u t c o n s u m e r s
facilities
greatest
to stay
to lose
alive
i f provision
the greatest to gain
choices
and w e l l .
f o rreform.
utilize
They,
health
will
their
benefit
Businesses
care
therefore,
their
be d i f f i c u l t
t o make
legislators in
secondarily.
o f h e a l t h care
-23-
care
be a b l e t o
attempt
to their
by v o c a l i z i n g
I twill
the current
coverage.
should
known
plans
a n d r e c e i v e no
f o r a p p r o p r i a t e d e c i s i o n s t o be made w h i c h
consumers
They a r e
i s an i m p r o v e m e n t o v e r
who c a n a f f o r d
and c h o i c e s
will
f o r some p r e v e n t i v e , l o n g - t e r m , a n d
and t h a t
supplemental
All
beliefs
everyone
plans
s e r v i c e s and p r o c e d u r e s .
catastrophic care.
situation
exist
health insurance
t o be u s e d m a i n l y
cover
order
national
f o r a l l medical
possibly
and
by t y p e
which
coverage
provides
of efforts
industry
in
page
action
health
insurance
advocates
have t h e
i s inadequate,
d e c i s i o n s and
t o f o r m u l a t e new
�health
of
care
plans, programs,
conflicting
concerned
interests,
with
and p r o c e d u r e s
a l l o f which
given the plethora
a r e so
basically
t h e outcome.
In
t h e words
o f Joseph
problem
of r i s i n g
health
we f i x
C a l i f a n o , "How
i t . "
care
c o s t s may
we
well
define the
determine
how
CANADA.
Differences
success
In
the
i n power
or f a i l u r e
Canada
o f an o t h e r w i s e
and Germany,
health
care
structures
system
i s a prime
viable
t h e government
and i t i s s u e s
reason f o r
health
care
i s strongly
clear
system.
in control
and e f f e c t i v e
27
of
policy
28
statements
"...the
its
i n order
interests
are permeable,
rather
Despite
than
those
of a Canadian-type
f o r t h e U.S.
financed
health
America,
however,
available
with
requirements
would
industry
plans
denied
programs
contributes
ond
two
very
adoption
would
well
tend
because
availability
health
t o which
t h e groups'
i s not a
and
viable
nationally-
i n other countries.
to reject
of the plan
of services.
Additionally,
i n the health
insurance
t h e Canadian
program
federal
In
t h e success
the r i g i d i t y
a n d i s a d m i n i s t e r e d by e a c h
territories.^^
abet
by t h e U n i t e d
i f the American
continuation
Canada's n a t i o n a l
twelve
about
be g r e a t d i f f i c u l t y
were
fragmented,
of the State."
p l a n , Canada's p l a n
work
people
reduces
are
Centra 11y-administered
plans
such
In contrast,
and i t s t r a d i t i o n s
29
a l l the rhetoric
solution
there
control.
A m e r i c a n ... [ g o v e r n m e n t a l ) s t r u c t u r e s
processes
States
to maintain that
insurance
insurance
field.
is actually
government
of the ten provinces
�The
on
the
Canada H e a l t h
provincial
monetary
Act
of
programs which
g r a n t s would
imposed
had
Five c o n d i t i o n s
t o be
met
before
BeneFits
a l l medically necessary
were r e q u i r e d t o
inpatient
services,
inpatient
dental surgery,
and
m e d i c a l l y necessary
surgery.
Because each
the
provinces
Financed
mental
psychiatric
Mental
mainstream
the
U.S.
oF
wards w i t h i n
oF
had
health services, hospitals
h e a l t h care
any
occur.
Comprehansive BeneFits.
include
1984
thus
the
conFines
became
h e a l t h care
and
oF
cosmetic
previously
had
included
general
hospitals.
incorporated into
i s not
separated
the
as
i t is in
3 1
Un i v e r s a l i t y .
One
hundred
percent
oF
the
population is
32
entitled
to h e a l t h care
Accessibi1ity.
physicians
and
government
deducts
provinces
For
"user
Financial
poorest
patients.
Portabi1i ty.
accrue
dependent
on
citizen
seeking
country
will
diFFerence
dollar
dollar
"extra
hospitals,
From
extra
accessibility
billing"
the
Federal
i t s grants to
billed.
by
This
the
method
t o h e a l t h care
For
even
the
3 3
B e c a u s e oF
to the
place
discourage
F e e s " by
one
every
insures
beneFits
To
beneFits.
oF
care
a highly
person,
residence
and
or
in a distant
have b i l l s
p a i d , and
between
are
mobile
not
society,
completely
employment.
province
may
be
the
or
A
a
liable
Canadian
Foreign
only
For
the
t h e p r o v i n c e ' s b e n e F i t a l l o w a n c e and t h e
34
hospital's actual
charges.
P u b l i c A d m i n i s t r a t i o n . C a n a d a ' s g o a l was t o a c h i e v e
25
�administrative
capability
non-political,
non-profit,
Department maintains
advisory
committees
the
myriad
2.5
percent
of
total
official
fees
fee
negotiated
agencies
between
and
Physicians
each
Canada's p l a n
States
but
will
will
politically
be
over
percent
the
of
with
necessary
met
with
physicians
are
an
who
choose
rewarded
under
Hospitals
eliminated
Each
year
physicians
adjustments
for
have been
over
a higher
operate
receive
fee
new
i n the
Association
rural
because
on
or
problem
which
each
hospitals.
Deficits
northern
-26-
now
payments
there
and
those
areas
are
3 7
a
which
line-item
increase
which
volume
expanded
have
basis.
of
considers
services
programs.
with hospitals
d u p l i c a t e programs
are
50
year
3 8
nearby
which
available,
i n p a t i e n t days,
new
the
more t h a n
"global budgets"
and
United
Canada's p r o v i n c i a l
schedule.
a growing
programs
administering
nation.
a percentage
system,
are
increase
o p p o s i t i o n from
physicians
under
f o r changes
i s , however,
initiating
of
There
The n e g o t i a t e d - f ee aspect
impose
budget
p r a c t i c e i n the
life-support
There
i n the
fees,
by
association.
Medical
administrative control
they
government
270,ODD member p h y s i c i a n s ,
i n c r e a s i n g number
to
costs
percentage
massive
American
to
expenditures."^
annual
to
by
amount
hospitals.
medical
Health
advised
and
provincial
Even w i t h n e g o t i a t e d
to
an
care
3 5
be
The
I t utilizes
are
plan
f ee - f o r - s e r v i c e .
powerful
represents
insurance
province's
receive
independent,
Administrative costs
to physicians
the
an
w i t h and
c o n t r o l s heath
schedules,
by
responsibility.
consult
health
paid
cost
r e p r e s e n t a t i v e body.
groups.
Canada c a r e f u l l y
regulating
low
overall
which
interest
at
occurring.
offered
by
of
�Instead
hospitals
of receiving
receive
payments
monthly
Because
of this
method
itemize
prices
amounts
on a p e r - p a t i e n t
installments
o f payment,
of administrative
or b i l l s
hospitals
to patients
costs
of their
allotment.
do n o t h a v e t o
and save
f o r them
basis,
considerable
and
insurance
39
carriers.
The
financing
nationalized.
companies
covered
and
Canadian
access
percent
a plan
Canadian
provincial
federal
income
t o medical
according
provinces
f o rnursing
services,
and a m b u l a t o r y
--
appeal
the federal
After
effect
relinquished
t a x a n d one p e r c e n t
This
care.
$20 p e r c a p i t a ,
This
home, a d u l t
care
plan
contributions
some
trial
i n 1977.
12.5
of corporate
a m o u n t was c h o s e n
o f t h e 1975-197B
t o t h e GNP.
of this
f o r services
contribution tothe
and h o s p i t a l
are granted
increases
The
system.
i s completely
insurance
insurance
government
o f 50 p e r c e n t
provinces
private
the federal
tax to the provinces.
contribution
services
was l e g i s l a t e d a n d t o o k
of personal
representative
the
refuse
of health
i n determining
provinces,
The
laws
t o sale
by t h e f e d e r a l
error
income
o f Canada's h e a l t h
as
federal
Additionally,
with
amount
annual
i s used
by t h e
r e s i d e n t i a l a n d home
care
services.
i s that:
are n o t dependent
on p r o v i n c i a l
expend!tures;
--
the provinces
which
--
may
t h e method
are solely
exceed
responsible
t h e annual
o f payment
increase
eliminates
-27-
f o r a l l expenditures
i n GNP;
pilotage
by t h e f e d e r a l
�government
completely
--
a n d a l l o w s d e c i s i o n m a k i n g t o be
by t h e p r o v i n c e s ;
the Federal
i
i
in control
oF i t s
40
budget.
Each
province
residents
methods
government remains
retained
determines
For t h e h o s p i t a l
t h e method
insurance
oF p a y m e n t
plan.
by
Some oF t h e
used a r e :
--
increasing retail
sales
--
i n c r e a s i n g income
taxes;
--
payroll
--
individual
t a x p a i d by
anywhere
payment
From
t a x From
employers
oF
and
insurance
8 t o 38 p e r c e n t
3 to 5
percent;
employees;
premiums
oF
which
the cost
oF
yields
the
programs.
Those
From
are
provinces
payment
on
public
subsidies
those
using
r e s i d e n t s who
assistance
t o those
t h e premium
with
method
are over
65
have
and
p r o g r a m s , and p r o v i d e
incomes
t o o l o w t o be
exempted
those
who
premium
able
to
handle
41
the
entire
premium
amount.
Currently,
h e a l t h care
province's
annual
consumes a b o u t
30 p e r c e n t
of
42
each
budget.
Taylor
advises
that:
. . . ( T ) h e p r e s s u r e s For i n c r e a s e d s p e n d i n g
a p p e a r i n e x o r a b l e : t h e a g i n g oF t h e p o p u l a t i o n ,
the expanding p h y s i c i a n supply, the d i s i n c e n t i v e s
For e F F i c i e n c y i n h e r e n t i n t h e F e e - F o r - s e r v i c e
m e t h o d oF p a y i n g p h y s i c i a n s , l a c k oF i n c e n t i v e s
For h o s p i t a l e F F i c i e n c y , b r e a k t h r o u g h s i n
m e d i c a l t e c h n o l o g y , a n d t h e d i F F i c u l t i e s oF
i n t r o d u c i n g p o t e n t i a l i n n o v a t i o n s i n h e a l t h care
d e l i v e r y b e c a u s e oF t h e u n i F o r m t e r m s a n d
c o n d i t i o n s r e q u i r e m e n t s oF t h e Ganada H e a l t h
Act. 4 3
Additional
—
cost
the shiFting
concerns are:
emphasis
From
sickness
care
to
wellness;
�--
the possibilities
health
of
services
high
of introducing
d e l i v e r y system
i n the
(From) r a p i d
expansion
technology;
--
increasing
--
the diFFiculties inherent
hospital
--
innovations
costs
oF m a l p r a c t i c e
budget
and t h e unknown
litigation;
i n Fee n e g o t i a t i o n s a n d
setting;
impact
oF t h e AIDS e p i d e m i c
on h e a l t h
44
care
resources.
To
For
care
Taylor
2.5
by
those
which
about
that
From
three
styles
oF w a i t i n g
mortality rates
1931 t o 1 9 8 5 , a n d l i F e
years
For both
rate
oF n u t r i t i o n ,
or t o t h e eFFects
Taylor
reports
a s t o be d e t r i m e n t a l
infant
The i m p r o v e m e n t
knowledge
about
a r e so l o n g
explains
percent
1985.
concerned
expectancy
increased
men a n d women b e t w e e n
better
housing
oF a g o o d
R. G. E v a n s o f t h e U n i v e r s i t y
to health,
d e c r e a s e d by
may be a t t r i b u t e d
relates material
periods
to greater
and i m p r o v e d
health
provided
1971 and
care
system.
t o h i m by
of B r i t i s h
liFe45
Professor
Columbia
concerning
the
c o n t r i b u t i n g f a c t o r s f o rthe differences
and
Canadian
the
i n c r e a s i n g u s e o f e x p e n s i v e t e c h n o l o g y by h o s p i t a l s .
D u r i n g t h e p e r i o d 1971-82, t h e volume o f
s e r v i c i n g p e r c a p i t a r e c e i v e d by C a n a d i a n s f r o m
t h e h o s p i t a l s y s t e m r o s e D.B p e r c e n t p e r y e a r ,
w h i l e i n t h e U n i t e d S t a t e s i t r o s e 3.7 p e r c e n t
annually.
Over t h e e l e v e n y e a r s t h e d i f f e r e n c e
c u m u l a t e d t o S.4 p e r c e n t v e r s u s 4 8 . 8 p e r c e n t .
With respect t o physicians, t h e d i f f e r e n c e i s
a c c o u n t e d f o r a l m o s t e n t i r e l y by t h e d i f f e r e n c e
in fees, which, a f t e r extraordinary increases i n
1 9 6 9 - 7 1 ( w h e n M e d i c a r e was i n t r o d u c e d i n C a n a d a ) ,
-29-
cost
levels.^
Some o f t h e s e
between
factors
American
include
�d u r i n g t h e e l e v e n y e a r s 1972-1382 a c t u a l l y d e c l i n e d
r e l a t i v e to the general p r i c e l e v e l 2 percent
per
y e a r on a v e r a g e , w h i l e F e e s i n t h e U n i t e d S t a t e s
w e r e o u t s t r i p p i n g i n F l a t i o n by 1.4 p e r c e n t
per
year.
T h i s d i F F e r e n c e oF 3.3 p e r c e n t p e r y e a r
c u m u l a t e d o v e r t h e p e r i o d as a w h o l e t o 33.8
percent."
Canada
i s now
American
considering
concept
oF
that
health
the
introduction
maintenance
oF
the
o r g a n i z a t i o n s may
be
47
a
v i a b l e method
There
citizens
2021.
For
holding
i s concern
will
double
However,
that
the
costs
the
cost
down.
i n c r e a s i n g number
oF
h e a l t h care
i t is speciFically
noted
high-cost
e q u i p m e n t , and
the
care
senior
between
that
p e r c e n t a g e oF t h e e l d e r l y r e q u i r e e x t e n s i v e
T h o s e h o s p i t a l s t a y s do n o t i n c l u d e t h e use
oF
only
2001
a
and
small
hospital stays.
oF
high-technology
is usually provided
at
small
48
local
lower-cost
Taylor
hospitals.
Based
on
two
major
studies,
states:
The e l d e r l y p o p u l a t i o n ' s use oF h e a l t h
c a r e r e s o u r c e s i s s t r o n g l y i n F l u e n c e d by
Factors
o t h e r than "need."
The a v a i l a b i l i t y oF h o s p i t a l
b e d s , how p h y s i c i a n s p r a c t i c e m e d i c i n e , a n d t h e
increase i n p h y s i c i a n supply over the next
s e v e r a l decades w i l l undoubtedly
inFluence
h o s p i t a l c o n s u m p t i o n more t h a n w i l l t h e a g i n g
of s o c i e t y . "
4 3
Canada
expects
a S,032-physician
surplus
by
the
year
Each
one
oF
50
2000,
new
with a projected supply
physicians
annually
to the
overhead,
and
oF
the
i s expected
t o add
provincial
medical
diagnostic tests,
like.
physicians
British
billing
oF 5 6 , 9 7 3 .
care
hospital
Columbia
the
$ 1 5 0 , 0 0 0 and
bill
government
-30-
$250,000
For
admissions,
attempted
For
to
those
income,
prescriptions
limit
services
the
by
number
�restricting
was
t h e issuance
challenged
of b i l l i n g
numbers.
and r u l e d u n c o n s t i t u t i o n a l .
The p r a c t i c e
Within
one
51
w e e k , 2 , 0 0 0 new n u m b e r s
is
expected
surplus
the
the United
issued.
States
oF 7 0 , 0 0 0 p h y s i c i a n s ,
year
It
that
that
were
2 0 0 0 oF 1 2 0 , 0 0 0
i s a recognized
Fact
oF e v e r y o n e
but also
environment,
advances.
cultures
At t h i s
make c o n c e s s i o n s
Further
depends n o t o n l y
liFe
biological
point
diverge.
and a p r o j e c t e d
52
styles,
s u r p l u s For
and a c c e p t
residents
individual
oF a d e q u a t e
on
medical
and t e c h n o l o g i c a l
however,
appear
t h e two
more w i l l i n g t o
burdens
care
States
c l e a n l i n e s s oF t h e
research,
oF a g r e e m e n t ,
Canadian
t h e common g o a l
a 1990
i n Canada and t h e U n i t e d
on i n d i v i d u a l
earth's
i s experiencing
physicians!
the health
care,
As c o m p a r i s o n , i t
i n order to
For a l l a t reasonable
cost .
Canada
has imposed
a Federal
carton
oF c i g a r e t t e s i n o r d e r
reduce
the costs
and
lung
Antipollution
are
disenchanted
t o discourage
i n c u r r e d For care
cancer.^"
t a x oF F o u r
d o l l a r s per
smoking
and
thus
oF r e s p i r a t o r y d i s e a s e s
3
c o n t r o l s on i n d u s t r y h a v e
with
American
reFusal
increased.
to enter
into
They
an a c i d
54
rain
a
treaty.
treaty,
power
There
except
and l e s s
environment
that
moral
than
i s no r e a s o n
American
interest
For America
t o reFuse
i n d u s t r y has g r e a t e r
i n the health
e x i s t s i n Canada.
-3 1 -
such
political
oF p e o p l e
and t h e
�In
C a n a d a , h o s p i t a l i n s p e c t i o n and
accomplished
by
the
accreditation.
This
Canadian
Hospital
tion
the
and
i n the
public
would
oF
Far
interest
eFFective
tion
Canadian
t o be
be
as
too
the
great
such
quality
well
as
costs.
health
care
sensitive
handling
diFFicult
to
would
this
be
reason,
tax
but
U.S.,
annual
i t s own
more
likely
not,
membership
For
by
those
that
and
there
conFlicts
and
For
accredita-
Canadian-style
plan
would
to
keep
i s not
budget.
health
the
interests
care
to r e t a i n
up
with
known
spending
For
be
its
more
than i t
environment.
a
For
competitive
to a governmental
c o n t r o l costs
eventually
I t would
in a competitive
commit
may
croniism
basis,
annual
i t i s more r e a s o n a b l e
i n d u s t r y than
oP
paid
appear
a
government
c o n t r o l government
with
insurer
which
a resultant
burden.
According
choice
care
oF
are
special
insurance
Our
to c o n t r o l spending
insurance
may,
costs.
hospital's
For
oF
I n the
an
Associa-
costs
hospital inspection
on
maybe e v e n
Medical
The
I t would
a consortium
raise
the
m i n i s t r i e s consider
5 5
health
rising
each
Facilities
members o f
Canadian
a possibility
government-administered
taxes,
of
Association,
health
States.
Health
Association.
c o n t r o l oF
United
the
Hospital
operating
From
i n the
Nur s e s
process,
on
consists
Association,
Funds because
charges
Council
council
Canadian
accreditation
dues
Canadian
accreditation is
oF
under
to c u r r e n t
providers
Basic
and
health
providers
insurers
or
Free
insurance
Supplemental
t h i n k i n g about
choice
and
oF
limits
are
given
Free
insurer--with limits
on
insurance—consumers
whose r a t e s
reForm,
too
reimbursements
would
high.
avoid
on
under
those
Government
�control
never
equals
become
Free
Canadian-type
be
Rather
their
be
be
by
t h a n have
oFF
The
Farmer
waiting
to
which
illustrations
Koop, t h e
and
For
method
oF
oF
care.
has
been
To
all.
accept
The
waiting
lists
are
way
pay
hospitals
pay
diFFerence
occur
will
with
a
employees
administration.
the nation
insurance
insurance
would
industry.
industry
readily
very
For
would
U.S.
are
legendary.
available
Surgeon
radiation
The
in
periodi-
General,
treatment
waiting
apprehensive
c a r e , even
For
lists
about
though
relates
are
an
rationing
the
rationing
years.
i s to accept
planned
scarcity
to avoid the r a t i o n i n g
For
oF
t o the U n i t e d S t a t e s or o t h e r
care
partially
between
to provide care
the American
that
endure
non-oFFicia 11y-sanctioned
plan
their
the Canadian
between
the
For
Canadians
agreements
P r o v i n c e pays
would
For
For
are
health
the poor
i s to travel
contractual
American
The
and
on
oF
Canadians
are
oF
a Canadian
only
countries
we
employees c o n t i n u e
government,
Former
imposing
rationing
imposed
industry
by
wait
Americans
oF
would
insurance
heart surgery.
eFFective
possibility
as
the competitive
i s a Four-month
cancer
health
which
consumers.
lists
Everett
there
breast
employed
government r e g u l a t i o n
C.
From
jobs unless those
For
insurance
retaining
Many a n e c d o t a l
cals.
eliminate
the government
more b e n e F i c i a l
that
would
Functions while
EFFective
a deFicit
insurance companies,
plan,
hired
better
and
Free.
Eliminating
would
spending
For
and
-33-
with
oF
at the
There
and
re (questing i t .
same r a t e i t
the p a t i e n t
the actual
pocket.
provinces
Canadians
hospital
Facility,
rate
Canadian
out
rate
bearing the
charged
by
the
�American
States
provider.
adopted
experiencing
Where w o u l d
t h e same s y s t e m
A m e r i c a n s go i f t h e U n i t e d
which
a n d , i n some c a s e s ,
t h e Canadians
enduring?
Canada d o e s n o t p r o v i d e t h e s t a t e - o f - t h e - a r t
care
services
States.
which
are currently
I F t h e U.S.
technological
detrimental
nations
were
advances
which
Canada h a s r e c e n t l y
inFlation
rate
annual
health
proven
that
Canadian
be
oF g r o w t h
by m e r e l y
plan.
Additionally,
That,
tally
oF t o t a l
i n itselF,
diFFerence
We
values.
be
does n o t i n c l u d e
health
explain
are a diFFerent nation
The A m e r i c a n
anothep
adequate
to a
care
oF
between t h e
oF g r o w t h
could
system,
Canadian-type
a s many
expenses
at least
rate
statistically
t o our c u r r e n t
changeover
care
items
as A m e r i c a
a percentage
does.
oF t h e
i n cost.
to- o u r n a t i o n a l
advocate
could
rate
other
expertise.
a health
diFFerence
changes
Canada
be t o many
I t has n o t been
a complete
an o u t c o m e as
inFlation
and t h e American
making
than Facing
their
t h e U.S.
care spending.
rather
in
experiencing
i s twice
system, our
on o u r m e d i c a l
t h e 2.5 p e r c e n t a n n u a l
rate
oFFset
which
depend
been
diminish,
as i t w o u l d
health
i n the United
t h e Canadian
likely
t o o u r own w e l F a r e
oF t h e w o r l d
available
t o adopt
would
are
reForm
concerns.
nation's
For t h a t
From C a n a d a ,
plan
with
s h o u l d be u n i q u e l y
I ti s insuFFicient
plan
merely
nation.
-34-
diFFering
because
geared
reasoning to
i t happens t o
�GERMANY.,
In
G e r m a n y , almost a l l are covered by comprehensive h e a l t h
insurance.
The
initiatives,
and
to
governmental
Financing
capital
p r o v i d i n g compulsory
W e s t Germany
within
a
total
number
oF
provided
oF
is limited
expenditures
arbitration.
( i n 1980)
had
only
increased
beds per
1,000
to
to
by
5 7
hospitals,
120,000
physicians
proFessiona1s.
1 9 0 , 0 0 0 by
people
legislative
5 6
about
700,000 h e a l t h c a r e
physicians
11.5
role
1990.
w i t h 3.7
The
Hospitals
oF
those
58
allocated
For
There
oF
are
physicians
practice,
and
hospitals.
on
an
long-term
actually
those
who
Because
oF
private
practitioners.
service
to-private
payers.
A private
hospital
"loses
during
receives
choice
Uwe
Economy
as
but
at
the
are
this
maintain
employees
diFFerence,
that
Eight-Five
a
categories
private
oF,
and
h o s p i t a l s do
would
be
percent
oF
the
sends a p a t i e n t t o
and
economic
hospital
events.
a hospital
Princeton
stay."
The
not
allowed
i n the
the
For
the
over
the
merely
their
private
same F r e e d o m
oF
physician.
James M a d i s o n
"to exercise
Face
choose
that
59
treat
third-party
physician
ProFessor
U n i v e r s i t y , summarizes
mandate
From
control
P a t i e n t s may
not
Fees
who
medical
work i n ,
i n F r i n g i n g on
physician
Reinhardt,
resources"
who
salaried
because
g e n e r a l l y are
a statutory
care
statutora11y-contro11ed
is derived
both
concerning
E.
two
care.
practitioners
a r e p o r t oF
physician
special
i n Germany...those
o u t p a t i e n t basis
patient
or
economy
of p h y s i c i a n s '
-35-
the
oF
Political
German
i n the
use
plan
oF
health
"Fiscal incentive
�BO
to
service
free
of
voucher
are
patients
insured
All
their
services
charge
reimbursed
physician
which
on
between
annual
this
the
rate
mandate,
federal
negotiation
which
the
of
government
pharmaceutical
on
give
to
received
with
state
health
gross
and
the
level.
are
a National
of
rate
drugs.
t h a t the
rate
exceed
Consistent
annually
with
at
to accomplish
Conference
both
this
convened
representatives
from
sickness
physicians,
funds,
and
Ministry
6 1
does n o t
negotiated
Health
diem
The
requires
budget
In order
funds
sheets.
national product.
prices
fees
a per
prices
Act
care
on
a
Physicians
sickness
paid
the
patients
physician.
cost
Containment
f o r the
the
approved
by
Individuals receive
the
are
authorizes
Cost
process,
includes
are
delivery.
Hospitals
and
a l l fees
and
of
they
based
1977
increase
growth
supplies
government-administered
Economics reviews
the
point
associations.
German
and
a fee-for-service basis,
is negotiated
The
of
the
q u a r t e r l y which
negotiated
of
at
generously."
a l l the
is
interest
groups:
hospitals,
the
r e p r e s e n t a t i v e s , employers,
52
. . .
and s t a t e and f e d e r a l g o v e r n m e n t .
Compulsory a r b i t r a t i o n
is
. • .
53
r e q u i r e d i f n e g o t i a t i o n s are
non-productive.
The
government
Committees
which
"Physicians
per
i n d u s t r y , consumer
has
screen
exceeds
selected
for further
tion
the
are
can,
cut
Economic
Monitoring
the
profile"
of
every
services
or
prescriptions
average
by
30
whose a v e r a g e
case/voucher
for
established
observed
accordingly.
t h e r e f o r e , be
"charge
number
their
of
class
examination.
In the
d e v i a t i o n , these
Under
held
absence
physicians'
percent
of
are
justifica-
reimbursements
this
system
the
fiscally
liable
for excessive
- 36-
physician.
individual
physician
prescribing
�64
of
drugs."
Reinhardt
an
attempt
of
market
to replace
forces
professional
toward
summarizes:
provided
left
a new
of market--one
and e c o n o m i c
by s t a t u t e . "
market
5
sees
in this
should
they
people
refuse
In
are
covered
earns
that
to negotiate
national
collectively
constraints
replaces
Although
those
espousing
individual
are
different--
t o i n d i v i d u a l freedoms
90 p e r c e n t
insurance
(gross
coverage
companies.
monthly
that
o f t h e common
of the population
insurance
by l a w t o c o n t r i b u t e
Reinhardt
unilateral regulation, i t
f o r the benefit
DM3,000.•• o r l e s s
required
that
the cultures
health
by p r i v a t e
i n which
generally
sector."
a r e so d e v o t e d
West G e r m a n y ,
compulsory
care
t o impose
be c o n s i d e r e d
American
by c o n t r a s t ,
difference
a r e so r e a d y
a set of
erosion
by d i r e c t a n d o f t e n u n i l a t e r a l
BE
of the health
freedom
within
States,
forces
by t h e s e c u l a r
5
regulation
irony
type
represents
i n t e r e s t groups b a r g a i n
consensus
The U n i t e d
"eroding
t h e vacuum
with
a national
" I n e f f e c t , t h e law
a percentage
has
and 9
percent
Everyone
earnings,
good.
who
1/1/79), i s
of the gross
salary
through s p e c i a l taxes t o t h e n a t i o n a l h e a l t h i n s u r a n c e coverag:
,
p l a n . 68
I n t h e F e d e r a l R e p u b l i c o f Germany (FRG, West
G e r m a n y ) , t h e s t a t e i s t h o u g h t o f as a s u b s y s t e m o f
t h e s o c i e t y ... The p r i o r i t y o f t h e i n d i v i d u a l a n d
s o c i a l forces i s expressed i n a r t i c l e 1 of the Basic
Law o f t h e C o n s t i t u t i o n o f t h e FRG.
The d i g n i t y o f man i s i n v i o l a b l e .
I t i s the
d u t y o f a l l s t a t e power t o r e s p e c t and p r o t e c t t h i s
d i g n i t y . . .''69
-37-
�. . . ( A ) r t i c l e 2 r e q u i r e s t h a t the r i g h t s of
o t h e r s n o t be v i o l a t e d - .
and) p o l i t i c a l Freedom
e n d s w h e r e t h e F r e e d o m oF o t h e r s b e g i n s .
The
B a s i c Law p r o c l a i m s t h e e q u a l i t y oF a l l . ^ ...
( w h i l e ) the Fact t h a t unequal r e s u l t s Follow
F r o m t h e same e F F o r t s i s n o t o n l y t o l e r a t e d b u t
F u l l y a c c e p t e d , s i n c e i t i s v i e w e d as an
e x p r e s s i o n o f t h e " n a t u r a l " i n e q u a l i t y oF
individuals.
. . . v a l u e s i n t h e FRG ( i n c l u d e )
t h e t r a d i t i o n a l v i r t u e s QF i n d u s t r i o u s n e s s ,
t h r i F t , and
Fruga1ity."73
7 0
7 2
Erik
(MIC)"
in
K l i n k m u l l e r uses
to describe
health care,
The
not
term
"medica1-industria 1
a l l o r g a n i z a t i o n s and
including
medica1 - i n d u s t r i a 1
government
the
only
insurers,
complex
i n the
individuals
schools
maintains
Form
oF
and
complex
involved
even p u b l i s h e r s .
representation in
a cabinet-1eve1
the
minister,but
74
also
in a parliamentary
our
own
who
represent
an
system
entire
industry
e l e c t e d and
individual
industry.
are
The
oF
committee.
also
appointed
However,
i s i n contrast to
government o F F i c i a l s
c o n s t i t u e n t s and
c o r p o r a t i o n s , but
c o m p o n e n t s oF
c o n s t i t u e n t s and
are
the
health
represented
acquires
i t s Financing
through
s u b s i d i e s , compulsory
budget
German MIC
This
contributions
For
voluntary
insurance
compulsory
contributions,
contributions
are
and
product
e s t a b l i s h e d as
by
not
care
lobbyists.
general
health
insurance,
sales.
7 5
a percentage
The
oF
net
76
income.
Klinkmuller
limit
the
people
to
dollars
1.
demand
want
they
time
states that
For
there
health care"
to maximize
the
are
"three
i n a system
s e r v i c e s they
spend:
expenditure
-38-
main
Factors
which
receive
that
encourages
For
the
�2.
justifying
time
lost
a t work
because
o f medical
treatment;
3.
fear
While
and
brief
those
treatment.77
p a t i e n t s contend
session
requiring
services
o f medical
people
them
hours
i nwaiting
Klinkmuller
t o pay s p e c i f i c
taxes
rooms
believes
for
that
health
t o make m o r e d e m a n d s f o r p r o v i s i o n o f
services.
I f those
of their
taxdollar
portion
long
with physicians,
frugal
spurs
with
services
From
were p a i d
t h e general
for outofa
budgetary
fund,
78
demand
could
decrease.
79
•r.
Bradford
Kirkman-Liff
states:
"The
h e a l t h c a r e system i n t h e . . .Federa 1
R e p u b l i c o f Germany [ i s ) b a s e d on a s e t o f v a l u e s
t h a t i n v o l v e mutual o b l i g a t i o n s between p r i v a t e
p a r t i e s . . . A d i s c u s s i o n t h a t f o c u s e s on
" o b l i g a t i o n s " r a t h e r t h a n " r i g h t s " may be a more
u s e f u l approach f o r t h edesign o f reforms o f t h e
A m e r i c a n h e a l t h s y s t e m i n t h e 1990s.
Such a
d i s c u s s i o n w o u l d f o c u s on t h e m u t u a l r e s p o n s i b i l i t y
of a l l p a r t i e s t o c r e a t e and m a i n t a i n a u n i v e r s a l
p r i v a t e h e a l t h care s y s t e m "
8 0
COST CONTAINMENT, REDUCING HEALTH CARE COST
U.S. S e n a t o r
care
reform
German p l a n .
of
bill
Bob K e r r e y
i nJuly
Kerrey's
[D-Ne.) i n t r o d u c e d
1991 which
bill
and u n i v e r s a l
administered
Kerrey
financing
i smodelled
i se n t i t l e d
1 9 9 1 " [S.144E) and i s i n t e n d e d
equitable
INFLATION.
after the
the"Health
t o provide
national health
a health
care
USA A c t
f o r an
program
by t h e S t a t e s .
states
health
that
care
o u r "employment-based
i s a t t h ecenter
-39-
system o f
of our s p i r a l i n g
�Health U S A
Change In Household Health Care Spending
FAMILY INCOME
A V E R A G E CHANGE
Under $10,000
- $611
61%
$10,000 - $14,999
- $841
65%
$15,000 - $19,999
-
$969
58%
$20,000 - $29,999
-
$492
53%
$30,000 - $39,999
-
$479
50%
$40,000 - $49,999
+ $53
41%
Over $50,000
+ $1,320
26%
A L L FAMILIES
-
% WITH REDUCED SPENDING
50.2%
$236
Source: Illustrative Projection based on Lewin/ICF Estimates
Source •
News
media
release
From
Steve
J a r d i n g ,
Press
Secretary
to
U.S.
Senator
Robert
Kerrey
(p. 12)
•
•
(
�health
care
of
firms
to
make
c o s t s because
and i n s u r e r s
i t r e q u i r e s hundreds
each
d e c i s i o n s about
t o become e x p e r t s
benefit
packages,
of
thousands
on h e a l t h
to evaluate
care,
risk,
81
to
worry
"(A)n
about
and u t i l i z a t i o n ,
employment-based
we c a n ' t
ability
spend
of
costs
control
care--one
poor — t h a t
some,
health
t o decide
on h e a l t h
how
care
much
care,
system
Americans
Payments
costs...It
f o r t h e employed
degrading
shifting,
risk
82
plan
will
care
income
means
we w a n t t o
a two-tier
and i n a d e q u a t e
system
f o r the
care f o r
and h e a l t h
i s intended
f o r p r e v e n t i v e and l o n g - t e r m
o f premiums
health
and a n o t h e r
skimming,
care
forms."
precludes our
of our n a t i o n a l
i n f l a t i o n f o r the rest."
Kerrey's Basic h e a l t h
all
of financing
a n d i t l o c k s us i n t o
guarantees
and c o s t
system
t o process
care
t o cover
83
care.
be made t o f e d e r a l
and
state
84
Health
will
T r u s t Funds.
be p r o h i b i t e d
coverage.^
5
from
A l lplans
utilization,
order
I n s u r e r s a n d managed c a r e
will
t o stay
within
their
plan
that
quality
will
simply
any a p p l i c a n t
be r e q u i r e d
administrative
"Any
on
rejecting
programs
f o r Basic
to control
c o s t s , and m a r k e t i n g
budgets
over-restricts
drive
and m a x i m i z e
utilization
expenses i n
profits.
or
i t s subscribers to a
scrimps
competing
86
plan."
This
requirement
Kerrey
binding
statement
i s r e m i n i s c e n t o f t h e German
B7
t o p r o v i d e a d e q u a t e and q u a l i t y c a r e .
a l s o a d v o c a t e s n e g o t i a t e d f e e s and r a t e s w i t h
expenditure
targets
f o r p h y s i c i a n s and
-40-
.
38
hospitals.
�Health USA
C o s t Control
1400
i
Sivisgt
$717
Blon
Under Current Policy .
looo
Under Health USA
1091 1002
1M3
1094
1006 1000
On LnrtrvXF E*lmo*t
Source:
Ziir*^
r e l e a s e
F r o m
5 t e v e
j
1097
1098
1999 2000
d i
- ^ - p-3 s
B
ecr-etary
t o U.
S.
Senator
Robert
K e rr e y
er
(•-Ne)
�This
method
will:
" ( E ) n a b l e us t o i m p r o v e t h e w o r k e n v i r o n m e n t
F o r h e a l t h p r o f e s s i o n a l s , who i n c r e a s i n g l y h e a r
t h e i r c l i n i c a l d e c i s i o n s q u e s t i o n e d by a new
i n d u s t r y o f t h i r d - p a r t y c o s t managers whose
mission i s to slash u t i l i z a t i o n .
Health
USA
moves us away f r o m a r e l i a n c e on t h e s e
invisible
s c r u t i n i z e r s , and i n s t e a d t r u s t s o u r h e a l t h
p r o f e s s i o n a l s t o make t h e b e s t d e c i s i o n s a b o u t
q u a l i t y and u t i l i z a t i o n w i t h i n t h e i r o v e r a l l f e e
s c h e d u l e s and
budgets."
8 3
Financing
revenues
civil
from
for
accomplished
f o r Medicare,
service health benefits,
employers
FICA,
a new
and
health
care
shares
into
Kerrey
saving
of
expansion
and
top
bracket
of
income
distilled
costs,
plus
an
on
USA
r a t h e r than
billion
taxes,
that
a s i n g l e payer
to
CHAMPUS
5%
payroll
of
income
increased
system,
which
tax
wage
taxes
drive
trust
on
up
States'
h e a l t h care
base
tax,
excise
because they
a l l the
the
and
Medicaid
fund.
above m o n i e s ,
plus
would
a
enable
a l l Americans.
a budgeted
open-ended
government
a new
a l l federal
in administrative costs
i s t o be
an
Medicaid,
c o n t r i b u t i o n s from
i s convinced
coverage
shifting
expansion
spirits
and
by
personal
a federal dedicated
$11.2
Health
federal
employees,
corporate
cigarettes
be
be
appropriated
increased
is)
will
spending
with that
will
program
[as
Germany's
commitment.
s i n g l e payer
provide
funds
I t will
being
the
for state health
9 1
programs.
a
formula
state's
health
in
of
average
h e a l t h care
plans
their
targets
Funds w i l l
be
per
trust
a l l o c a t e d to the
capita cost
fund
will
a r i s k - a d j u s t e d amount
plan,
will
negotiate
for physician
fee
of
then
services.
pay
will
on
Each
"participating
for individuals
schedules
s e r v i c e s , and
_4 1 -
s t a t e s based
and
enrolled
expenditure
negotiate
budgets
�92
For
hospitals."
For
the
to
use
oF
To
demand F o r
care
which
Basic
would
be
covered
$1,500 For
or
more.
and
reduce
would
a
Family
From
months
exact
80
with
the
oF
and
$2,000 For
will
not
be
oF
Free
percent
oF
Kerrey
bill
nursing
an
cost
Fee
There
individuals,
and
a Family
required
barriers.
For
coinsurance
$100D F o r
low-income
94
9 3
deductible.
two;
and
order
encourage
stays.
percent
a $100
charged
necessity
oF
Financial
be
members i n
sharing
Cost
three
their
hospital
a 20
and
limits
hospital services,
protected
be
services
cost-sharing
will
hospital services
would
there
plans
by
imbue c o n s u m e r / p a t i e n t s
consciousness,
For
health
hospital services
c o n t r o l the
physician
Managed
For
oF
three
preventive
i n d i v i d u a l s would
AFter
home c a r e ,
the
such
i n d i v i d u a l ' s Social
be
First
care
would
Security
beneFits .
The
should
be
I t has
portions
oF
in
which
meetings
Kerrey
by
took
Oregon's p l a n
were
held
period.
From
Nebraska's
as
a practical
the
basis
be
bill
For
rather
more p o l i t i c a l l y
a Canadian-sty1e
great
care
plan
had
across
Farmers,
been
the
developed.
s t a t e oF
into
the
parents,
Nebraska
plan
were
doctors
hospital administrators
-42-
Over
and
and
which
health
than
care
adopted
palatable
would
in Formulating
i t i n a manner s i m i l a r
Incorporated
Faculty,
be
German p l a n ,
i t could
developing
year
school
the
i n t e r e s t s than
Senator
USA
adapted
i t , and
American
Health
to
seriously considered
reForm.
to
appears
the
to
be.
plan
the
way
100
over
a
2^
suggestions
medical
patients,
For
�insurance
e x e c u t i v e s and p o l i c y h o l d e r s ,
Democrats
and
Republicans.
Senator
a free
Kerrey
makes v e r y
clear
that
" H e a l t h USA
ride.
I twill
i n c r e a s e c o s t s on some
individuals.
I twill
highlight
i snot
businesses
the responsibility
and
each o f
96
us h a s t o t a k e
expects
objections
increases,
with
care
o f o u r own h e a l t h . "
from
small businesses
a n d i n s u r e r s who
97
different
contemplate
rules."
'creative
The
"will
disruption'
immediacy
of t h e problem
long-term
national
which
operate
B u t he a p p e a l s
Senator
will
in a
marketplace
t o a l l who
t o look beyond t h e
t o the long-term view,
interest
see c o s t
ahead
o f your
and " p u t t h e
own s h o r t - t e r m
98
interest ."
Many
plea
same
Congressional
in different
aware
of the fact
ultimately
goal
It
Office
reach
in
our
which
health
has been
that
each
care
what
Medicare
t h e U.S.
automobile
must
work
That
become
will
i sthe
t o achieve
reform.
by t h e C o n g r e s s i o n a l
and M e d i c a i d
by 1 9 9 5 .
are expected
cost
must
f o r the nation
individual.
individual
t o make t h e
a l lcitizens
i s good
t o each
projected
$300 b i l l i o n
The
ways. . . t h a t
be b e n e f i c i a l
toward
effective
that
members a r e b e g i n n i n g
by
health
care
Total
t o reach
of American h e a l t h
and s t e e l
spending
$1 t r i l l i o n
care
industries
-43-
Budget
itself
will
expenditures
by 1 9 9 6 .
so a d v e r s e l y
a n d so many
affects
other
�products,
the
at
global
the
those
the
we
are
reasons
In
here
cost
barred from
often,
product
express
Part of
they
less i s that
national
Americans
imports.
i s because
competing
cost
and
spends
health
anger
reason
less,
t h e U.S.
on
the
care
in
one
of
12
while
Japan
percent!
America,
available
poor.
they
of gross
S
Too
of Japanese
imports are
spends
effectively
marketplace.
presence
percent
health
to the
What
recently
for
that
care
has
always
and
has
often
wealthy
is disturbing
Secretary
As
Joseph
that
A.
playing
King
p u t , Uncle
Solomon
rationing
and
Sam
with
our
readily
i s now
Welfare
will
to
the
Americans
Califano, Jr., a
of Health, Education,
"Bluntly
more
been r a t i o n e d
a g r e a t number o f
i s the r e a l i z a t i o n
a l l of us.
been
soon
fathers
looming
former
stated:
be
and
99
mothers
and
Califano
because
their
increases
stagnant
in health
been
and
i s burdened
we
will
have
by
allocate
30
could not
costs.
dollar
debt.
percent
to h i g h - t e c h medical
y e a r t o l i v e . ,.100
"
of
of
whether
Reality
health
" . . . i t
care
s e r v i c e s f o r those
who
strongly
which
reform.
Medicare
have
U.S.
recession
makes s e n s e
mu1tibi11ion-do11ar
-44-
i n the
the n e c e s s i t i e s with
i n developing
our
Britain
major
of a double
trillion
questions
absorb
economy
out
i s one
i n Great
The
itself
to contend
blatantly
began
to pull
rationing
Califano
rationing
economy
care
struggling
that
us."
explains that
has
suggests
with
to
bill
less than
a
�"The
health
h e a l t h problems
care
utilizers
of
the
top
d r i v e the
few
overall
p e r c e n t i l e s of
h e a l t h care
costs
101
of
the
entire
of
Ohio's
insured
$794
group."
Blue
Cross/Blue
persons
annually
remaining
benefit
10
are
million
of
of
figures
f o r the
the r e m a i n i n g
the
top
correspond
90
percent
Those
figures,
that
the
entire
such
people
of
who
While
who
insured
burden
of
the
use
the
90
share
the
burden
$79.7 m i l l i o n
10
the
i n the
i t is important
still
of
mere
the
litany
of
of
care
cost
have
physicians,
1
decreased
-45-
that
that
the
who
cost
have
paying
been
hospitals.
bearing
i t i s only
insurers
there
health
is
the
fair
also
profits.
i n the
3
million
and
and
severe
healthy. ^
to those
physicians
t o remember
the
mental
37
i . e . , the
containment
for
indicate
and
the
for
group
s u f f e r e d from
f o r years,
of
million
this
spent
i s always
h e a l t h care
$79.7
figures
were r e l a t i v e l y
insurance;
form
of
further,
percent
is transferred
hospitals,
When c o n s i d e r i n g
field,
of
annual
$53.3
1 percent
a r i s e concerning
uninsured's
with reform,
just
services
consumers
totals
down t h e
percent
group
the
overall
d i s t r o p h y , cancer
to carry
that,
a
In contrast,
Breaking
the
uninsured,
funds
average
versus
translated
muscular
for this
sufficient
patients
as
percent
percent,
the
discussions
are
caring
of
group,
while
Whenever
ten
shows t h a t
group.
disorders^J
1 0 2
90
r e q u i r e d average
to
percent.
million
illnesses
and
executive
$10,529.
$29.1
of
that
insureds
high-cost
for
requires
found
healthy,
relatively
percent
ten
Shield
Jr., chief
in benefit payments.
payments
These
John B u r r y
care
strong
�precedent
f o r the p r a c t i c e of insurer-imposed
stated
Havighurst:
by
Ordinarily,
that
businesses
reflects
above
irrelevant
setting
than
price
c o n d i t i o n s a n d may
o f any p a r t i c u l a r
comparable
basis
t o t h e methods
rates.
are motivated
1
0
4
and
rates.
used i n
(.emphasis
t o demand
full
The
on p r o v i d e r s , and t h a t
nationwide
be
seller.
made s u p p l y
cost
supplied.)
r e i mbursement
imposition of negoti-
r a t e s a r e an e x c e l l e n t d e v i c e
consciousness
the price
t h e market
however,
As
h o s p i t a l s on a
insurer-imposed
ated p r o v i d e r
determines
and p a i d
public u t i l i t y
Hospitals
supported
the costs
Cross systsem,
nonmarket
rather
a n d demand
or below
demand
can c h a r g e ;
supply
The B l u e
competition
pricing.
f o r imposing
s t r a t e g y needs
by p u b l i c a n d p r i v a t e
cost
t o be
i n s u r e r s , and
employers.
Providers
consumers care
unquestioning
fact
that
about
h a v e no i n c e n t i v e t o r e d u c e
so l i t t l e
acceptance
insurance
paying
f o r h e a l t h care
reform
must
adherence
Placing
of governmental
that
from t h e
of the concern
The
Health
h e a l t h care
and e x p e c t e d
restrictions
government
much
infinite.
when
Consumers'
i s derived
has removed
Americans
A number o f t h e p e n d i n g
expansion
cost
h a s become
and t h e p r o p e r
t o new
subject.
o u t o f o n e ' s own w a l l e t .
demand
commodity
that
of high
coverage
f o r care
convince
about
costs
response
is a
will
consumer
care
finite
be
on i t s a v a i l a b i l i t y .
health reform
roles
in the role
i n t h e area
bills
propose t h e
of subsidies.
of i n s u r e r i s encouragement
-46-
�to
insurers
t o abandon
care
costs
will
turn
to public
public
In
coverage,
1988, t h e l a t e s t
Federal,
"spent
T h o s e who
as t h e i r
state,
$227.5 b i l l i o n
services,
research
government
share
causing
date
and l o c a l
are not p r i v a t e l y
health
sector.
the
increase.
more and more p e o p l e
For which
levels
t o Fund
cost
data
shiFting to
i s available.
oF g o v e r n m e n t
medical
and m e d i c a l
represented
major
combined
and h e a l t h
Facility
insured
care
construction.
42.1 percent
The
oF t h e t o t a l
105
national
health
Federal
expenditures."
spending
on M e d i c a i d
in
s e r v i c e s which
beneFited
is
a result
in
1 9 8 7 oF $ 5 2 . 1 b i l l i o n .
oF F e d e r a l
23 m i l l i o n
budget
1
0
F o r 1988 was
cutbacks
6
people.
1
0
7
This
billion
Figure
From a s e r v i c e
The F e d e r a l
M e d i c a r e i n 1988 was $ 8 5 b i l l i o n .
and t h e i r d e p e n d e n t s ,
and v e t e r a n s
$48.7
share
level
For
M i l i t a r y personnel
c o s t $ 2 . 8 b i l l i o n . '108
10 9
Federal
civilian
Americans
employees,
beneFited
$5.1 b i l l i o n ,
From $1.2
b i l l i o n .
1
1
and N a t i v e
0
Nitlonal Hitltli Eiptndlturet in Blllloni iseifcreu calendar yurc i970-:9Mi
1970
1975
19M
19S5
1986
1987
1988
$74 4
46.7
27.7
17 7
99
$132 9
778
55 1
36 4
18.7
$249.1
143 9
105.2
72.0
332
$420 1
2452
174 9
123 4
51 5
$450.5
259 8
190.7
132.8
57 9
$4888
280 5
208 3
144 0
64 3
$539 9
312 4
227 5
157 8
66 63
StalionaJ heaim
Bnponditures
Prrvaie
Public
Feoeral
State, local
SOURCE
L S O X C Tnmn
ntwm
• - " S o u r c e b o o k oF H e a l t h I n s u r a n c e D a t a 1 9 9 0 "
H e a l t h I n s u r a n c e A s s o c i a t i o n oF A m e r i c a
Senate
Bill
Senator
p.35
S.1177.
John
0. R o c k e F e l l e r
-
17-
[D-W.Va.) i s t h e C h a i r m ;
�of
t h e Pepper
which
would
was named
•-Fla.,
Commission
provide
aFter
the late
concerned
catastrophic
Health
with
through
to provide
employer
Claude
bill,
who
insurance
t h e Pepper
reForm.
Commission
1931 ( S . 1 1 7 7 ) ,
access
health plans
was
oF t h e e l d e r l y ,
A c t oF
universal
I t
Pepper,
oF h e a l t h r e F o r m
and c h r o n i c c a r e
RockeFe11er's
a plan
For a l l Americans.
the plight
C a r e A c c e s s and ReForm
intended
t o Formulate
Representative
advocate
illness,
Senator
worked
health insurance
t h e well-known
especially
which
t o basic
and a p u b l i c
is
health
health
care
insurance
11 1
plan.
Managed
diminished
care
i s encouraged
Freedom t o choose
S.1177 i s a P a y - o r - P l a y
by
statute
employees
qualiFied
his
to enroll
who
all
the public
Full-
does have
plan
private,
health
or p r i v a t e
gives
a l l public,
care
Senator
coverage
plans i s
oF e n r o l l i n g
1 14
year.
oF e n r o l l i n g
and t h e i r
and t h e i r
t h e employer
to enroll
the cost
F o r one
and p a r t - t i m e e m p l o y e e s
Feature
and p a r t t i m e
113 •
p e r week
in a
who n e g l e c t s
a choice
( 2 ) a l l p a r t - t i m e employees
This
employers r e q u i r e d
employees '
An e m p l o y e r
i n the public
The e m p l o y e r
or
with
t o a p e n a l t y oF t h r e e t i m e s
employees
all
Plan,
t e n o r more h o u r s
in either
translates to
o n e ' s own p h y s i c i a n .
Fulltime
health plan.
employees
subject
work
which
either
Family
Family
(1)
members,
members.
1 1 5
t h e o p t i o n oF p r o v i d i n g a l l
or a mixture
oF p u b l i c
and
to diFFerent
groups
employees.
Rockefeller's b i l l
oF
i s more d e t a i l e d
private
ini t s
A16
proposals
regarding employers
-48-
and e m p l o y e e s
than
S.1227 i s .
�S.1177 a d d r e s s e s
the
needs o f
small
employers
and
"small
117
employers
that
are
not
very
small
employers"
seasonal
118
and
temporary
part-time
employees,
119
will
p u b l i c or
penalty
1 2 0
annually
cost-sharing
far
too
based
on
high
of
on
insurance
the
health
the
has
chosen
to
Premiums w i l l
"very
pain
premium
on
in
of
public
coverage
will
return.
1
2
services.
1 2 2
should
be
amended
to
f o r incomes below
$5 0 , 0 0 0
be
1
limit
to
be
and
community
or
basic
of
enroll
impose a $3,000 a n n u a l
c o n d i t i o n s are
denial
under
insurance
Pre-existing
from
plans
annual
health
f o r many p e o p l e
scale
required to
f e d e r a l income t a x
f o r basic
a sliding
$75,000.
statutorily
to double
Proof
Rockefeller
on
be
private
amounting
insurance.
required
and
employees."
Individuals
either
p a r t - t i m e employees
health
not
rated.
1
grounds
insurance
This
2
limit
is
limits
3
for
after
exclusion
the
passage
of a s i x - m o n t h w a i t i n g p e r i o d , f o r b a s i c p u b l i c
125
insurance
or f o r b a s i c e m p l o y m e n t - r e l a t e d
insurance.
1 2 4
'1 'B
Hospitals
will
not
be
which
choose
permitted
to participate
to charge
more t h a n
under
the
Title
XXII
deductible
and
1
coinsurance
The
same r e q u i r e m e n t
One
the
payments
of
the
requirement
which
are
stipulated
i s imposed
cost
control
that
insurance
on
i n the b i l l .
12B
physicians.
measures p r o v i d e d
claims
by
be
submitted
t o be
submitted
S.1177 i s
129
electronically.
uniform
claims
A l l claims
form,
which
are
uses
-43-
uniform
on a
1 ^0
definitions.
�Medical
the
malpractice
A d m i n i s t r a t o r For
would
For
develop
persons
availability
providers
provide
There
care
which
requirement
oF
to undergo
appropriate
defensive
a f F o r d a b i 1 i t y of
schools.
results
assuring
reducing
more s t r i n g e n t
medical
are
C a r e P o l i c y and
practitioners,
quality
attend
the
and
and
i s no
Health
means o f
injured,
issues
and
will
i n the
malpractice
which
compensation
malpractice
assuring
insurance
For
providing incentives to
reduce
bill,
this
by
Research
medicine,
malpractice
however,
continuing education
I t skirts
studies
issue
and
i n s t e a d oF
suits.
that
1
3
1
physicians
at q u a l i F i e d
merely
addresses
i t s causes.
1 32
A Foster
employers
in
1383,
that,
Higgins
For
and
iF the
reFormed,
by
health
was
survey
insurance
over
$3,100
conglomerate
indicates that
For
in
to
employees averaged
1330.
'system'
costs
we
The
survey
currently
$2,GOO
projected
have
is
not
the
year 2000 t h e a v e r a g e c o s t per employee w i l l
13 3
be $ 2 2 , 0 0 0 p e r y e a r .
D u r i n g 1390, 78 p e r c e n t oF l a b o r
134
disputes concerned h e a l t h beneFits.
The U.S.
s p e n d s 40
p e r c e n t m o r e t h a n Canada on h e a l t h c a r e , 30 p e r c e n t m o r e
1 35
than
W e s t G e r m a n y , and
Senate
•
Bill
Americans
Public
1391,
Senators
and
RockeFeller
(D-NY),
entitled
the
Hea 1 t h A m e r i c a :
Act."
Health
Internal
what
Japan
spends.
1227.
I n June,
Riegle
double
The
Service
Mitchell
(D-W.Va.) i n t r o d u c e d
AFFordable
Hea1thAmerica
Act,
R e v e n u e Code oF
(D-Me.), Kennedy
the
bill
Social
198B.
-50-
Health
Care
legislation
For
CS.1227) w i l l
Security
Act,
(D-Ma.
All
amend
and
the
the
�S.1227 i s b a s i c a l l y
HealthAmerica
health
and
insurance
the other
program
provides
plans.
will
and t h o s e
replace
One
cover
plan
Medicaid
those
pay.
AmeriCare
will
will
persons.
The b i l l
necessary
to insure
an e f f e c t i v e
credits
methods
of State
and
to
f o rmalpractice
addressing
that
their
each
families
coverage
employees,
basic
p o i n t s covered a r e :
under
t h e employer
AmeriCare
businesses
inflation
health expenditure
purchasing
may
board
consortia
reform.
shall
enroll
AmeriCare.
either
benefit
enroll
the b i l l
full-time
i n a h e a l t h b e n e f i t plan
137
f o r them
system f o r
cost
employees
o_r c o n t r i b u t e
For p a r t - t i m e
them
i n a health
p l a n o r c o n t r i b u t e t o c o v e r a g e f o r them under
38
AmeriCare.
The r e q u i r e m e n t t o p r o v i d e c o v e r a g e o r c o n t r i b u t e t o
1
-5 1 -
to
f o r l o w - and
of the issues
health benefits f o r a l l ,
employer
services.
to ability
o f premiums
h e a l t h care
of a Federal
requires
according
h e a l t h care
establishment
In
care
and medium-sized
establishment
methods
do n o t o f f e r
insurance
f o rsmall-
f o r reducing
insurance
long-term
health b e n e f i t s f o r a l l through
of small-group
employers,
i s intended
a d d r e s s e s many
Some o f t h e i m p o r t a n t
reform
tax
cost
by
AmeriCare
except
subsidize
o f two basic
be p r o v i d e d
be a p u b l i c
be c h a r g e d
no-income
basic
The c o n e o f t h e
whose e m p l o y e r s
f o r a l l care
f o r AmeriCare
future.
will
who a r e u n e m p l o y e d .
Premiums
the
Plan.
For t h e e s t a b l i s h m e n t
p1an--AmeriCare--wi11
which
coverage
to
bill
a Play-cr-Pay
�AmeriCare w i l l
voluntarily
139
n o t be i m p o s e d
on any s m a l l
of
i n s u r e s 75 p e r c e n t
their
business
which
previously
uninsured
workers .
An
e m p l o y e r may
enrolling
to
meet t h e r e q u i r e m e n t s
i n any h e a l t h
140
employees
the b i l l ' s
of t h i s
p l a n which
requirements
benefit
bill
and i n c l u d e s c o v e r a g e
(1)
inpatient
and o u t p a t i e n t
hospital
(2)
inpatient
and o u t p a t i e n t
diagnostic
(4)
prenatal
conforms
for:
physician services
(3)
by
who
(5)
tests
care
and w e l l - b a b y
a r e one y e a r
-- w e l l
child
-- pap
by
the b i l l ,
but are subject to
a r e some
(1)
items
(2)
routine
than
very
the b i l l
explicit
does
bill
health
and s e r v i c e s t h a t
physical
care
are l i m i t e d t o :
necessary
limitations.
exceptions to
payment f o r :
are not medically
necessary;
or p r e v e n t i v e
Items
[other
1 4 3
part
an i n c r e a s i n g
t o a system
-52-
included i n
of the overall
and s e r v i c e s t h a t
become
c o n s u m e r s h a v e become u s e d
procedures.
t o payment have been
t o reduce
have
coverage.
i n ( 4 ) and [ 5 ] , a b o v e ;
three exceptions
i n an a t t e m p t
or c o u n s e l i n g are covered
142
examinations
described
expenditures.
medically
younger;
not include
e x p e r i m e n t a l s e r v i c e s and
These
provided to children
care
141
-- mammograms.
disorders, psychotherapy
Specifically,
the
which
care
smears
There
(3)
o f age o r
preventive services,
Mental
care
national
are not
problem
because
of t h i r d - p a r t y
payers.
�The
Pepper Commission
ineffective
estimated
h e a l t h care
added
that
"unnecessary or
as much as $ 1 8 b i l l i o n
annually
144
to
health
care
insurance
tend
costs."
companies
will
cost
as t h e 1 3 5 0 s a n d 1 9 6 0 s ,
t o those
have
be l i f e
which
services
b u t may
serious
side
saving
limits
offer
four
experimental
their
their
of
view
also
view
very
will
problem
leaves
broad
wherever
as
having
one
assenting
of accurate
analysis
the b i l l ,
intent
their
and p u r p o s e
was
used.
The
f o u r p a r t s o f t h e h e a l t h care
cost
problem a r e :
. .
cost
..
..
shi fting
unnecessary care
excessive a d m i n i s t r a t i v e costs
. ,
open-ended
The
accept.
b u t d i s t r e s s e d by some o f
in drafting
explaining the b i l l ' s
to
with
expenses
explanation
In the interest
of the Senators
treatment
be d i f f i c u l t
the health cost
problems,
o r may
t h e s e c t i o n o f S.1227
increasing costs
of their
remedies.
Summary
are not only
some e x p e r i m e n t a l
people,
procedures
of four overall
the intentions
Executive
S.1227 a d v o c a t e s a
methods o f d e c r e a s i n g
A reading
suggested
As
bore t h e
benefit to the patient,
However,
America's
The S e n a t o r s
parts.
no r e a l
and f o r t h e s e
at different
possible.
people
system.
consumers r o u t i n e l y
and p r o c e d u r e s
effects.
S.1227 a d d r e s s e s
attempts
services,
days.
Experimental
expensive
that
d e m a n d s on t h e p r o v i d e r
of r o u t i n e physical examinations.
return
to
pay f o r a l l p r o v i d e r
t o make m o r e f r e q u e n t
recently
can
When i t i s p e r c e i v e d
Senators
state that
cost
reimbursement
shifting--the
-53-
146
to providers.
cost
of the uninsured
�is
passed
and
on t o t h e i n s u r e d
higher
i n t h e Form o f h i g h e r
provider services--wou1d
premiums
be e l i m i n a t e d by u n i v e r s a l
147
coverage.
But, t h e u n i v e r s a l coverage
AmeriCare
care
by
(replacing Medicaid]
coverage
w i t h premiums
t h e Federal
considered
method
provide
oFten
such
reductions
will
tions.
Neither
occur
would
would
subsidized
can h a r d l y
be m e r e l y
oF t h e c o n s u m e r
that
t h e Federal
be F i n a n c e d
when g o v e r n m e n t
one more
higher
taxes t o
under
Medicaid
i s insuFFicient indication
however,
i s the obvious
be
paying
pay h i g h e r
BeneFits
nor t h e pending
will
citizens
be
itselF
by s t a t e a n d F e d e r a l
the currently
The
contribu-
1
3
which
uninsured.
S.1227 Summary s t a t e s :
Universal h e a l t h insurance coverage i t s e l F
s i g n i F i c a n t 1 y r e d u c e s t h e c o s t oF h e a l t h c a r e t o
b u s i n e s s e s and i n d i v i d u a l s c u r r e n t l y
purchasing
insurance.
Uncompensated care r a i s e s p r i v a t e
h e a l t h i n s u r a n c e p r e m i u m s an e s t i m a t e d 10 t o 15
percent.
...
The p u b l i c p r o g r a m w o u l d be F i n a n c e d by s t a t e
and F e d e r a l c o n t r i b u t i o n s .
States would r e c e i v e
an e n h a n c e d F e d e r a l m a t c h , p h a s e d o u t o v e r t i m e ,
For c o v e r a g e o f n e w l y e l i g i b l e p e r s o n s and o t h e r
new p r o g r a m c o s t s i n t h e p u b l i c p r o g r a m . ^
This
e n h a n c e d m a t c h w o u l d be a s p e c i F i e d
percent
i n c r e a s e over a s t a t e ' s c u r r e n t matching r a t e For
the Medicaid
program.
The S e n a t o r s ' " s o l u t i o n " F o r u n n e c e s s a r y c g r e ' i s
-54-
devised
explains
c o s t - s h i F t i n g addressed
1 5 0
that
Neither the
legislation
insures
have
The
Financing w i l l
148
deFicit.
by
medical
be e l i m i n a t e d i n t h e F u t u r e .
not increase
t h e program
they
and t h e r e
could
Summary
Instead
be p r o v i d e d
be B a s i c
arrangement
subsidies.
do s t i p u l a t e ,
Executive
will
reduced,
This
Fees,
For government
been
which
shiFting.
would
o f low-income
when A m e r i C a r e
and p r o v i d e r
Senators
how
a solution
oF c o s t
premiums
government.
which
would
�Frightening
a lack
because
i t exhibits
inadequate analysis
oF u n d e r s t a n d i n g oF t h e c a u s e s
other
oF u n n e c e s s a r y
The
only
the
Senators preFer n o t t o acknowledge
unnecessary
reason For t h e i n c o r r e c t
c a r e For Fear
Association.
eration
but
By
has r e s u l t e d
does
undermine
permitting
decision
the provision
third
parties
even
necessary
t o make
S.1227
accurate
a program
which
While
in
there
this
those
remedy
and
care
care w i l l
t h e causes
care.
with
power t o
For
third
i n absentia.
be r e d u c e d
research
passed
until
unnecessary
oF t h e b i l l
would
imposed
the practice
have
care.
oF d e F e n s i v e
-55-
oF
patient,
i s paid to
Four
Fortitude,
proposed.
considered that
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be
IF these
or g r e a t e r
because
1
the d r i v e r s
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attention
insight
5
oF u n n e c e s s a r y
to c u r t a i l
care unnecessary,
greater
1
o r u n n e c e s s a r y . . ."
to limit
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by
to determine
oF u n n e c e s s a r y
the Senators should
has been
concerned
consid-
nothing
I t i s not possible
i s necessary
had e i t h e r
section
a.
Medical
health
i s provided
medical decisions
legislation
t h e causes
Instead,
oF
the physician/patient
I t makes no s e n s e
that
politicians
this
which s o l v e s
has been a g r o w i n g i n c i d e n c e
causes.
labelling
causes
t h e American
oF a d e q u a t e
party
oF o u t c o m e s
care
country,
adddressed
i s that
states:
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(1)
the true
t o oversee
care.
"solution"
care.
oF t h e l e g i s l a t o r s '
in a "solution"
process, the t h i r d
eliminate
parties
oF a n g e r i n g
The i n s u F F i c i e n c y
and/or
suits;
physicians
152
�b.
investments
manufacturers
and
by
providers
technological
i n medical
services
equipment
providers,
and
153
laboratory
own
services.
patients
to
The
these
subsequent r e f e r r a l
businesses
i s commonly
of
their
known
as
'self-referral . '
1 54
c.
consumers'
Therefore,
the
unnecessary
overruns.
care
to
second
guess,
and
malpractice
be
of
judgment
should
not
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services.
address
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a third
1984
should
which
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not
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what
and
only
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care
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every
of h e a l t h
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physician
to
for
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-5G-
help
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care
S.1227.
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1 5 6
than
is
insurers
is
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insurance
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or
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guidelines
These two
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from
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for procedures
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and
unnecessary
which
should
makes
physicians
maintain
care.
guidelines
which
payment
unnecessary.
the
unnecessary
Practice
legislation
to
knowledge
are
point
prohibit
interest,
physicians
medical
eliminate
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and
in conflictsof
improve
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duty
i n which
problems
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Orwell's
office,
require
to
the
s u b s t i t u t e the
guidelines
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solve
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D e v e l o p m e n t o f p r a c t i ce g u i d e l i n e s t o a s s i s t
p h y s i c i ans i n p r o v i d i n g o n l y n e c e s s a r y c a r e
and a s s i s t i n s u r e r s i n d e c i d i n g w h a t c a r e
s h o u l d be r e i m b u r s e d . 1 5 5
Practice
to
manner
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physician.
reform.
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and
sensible
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which
demand f o r
Additionally
health
primary
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infinite
in
to
in
reality
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physicians
physician
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not
and
has
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is
insurers to
could
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and
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should
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been
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Instead,
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legislaunder
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to h e l p determine t h e useFu1ness o F expensive
med i c a 1 t e c h n i q u e s . 157
Orwellian
oF
medical
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more b e n e F i c i a l i n t h e
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will
S.1227 i s .
reimbursement--which
guise
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legislation
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and
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For
Four
And
meant
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concerning
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continued,
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The
will
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to
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-57-
out
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cannot
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the
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of
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to consider
the
i n c i d e n t s oF
Future
cutbacks
h e a l t h oF
in
technology
mankind.
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technological expertise:
1.
"The
m o s t e F F e c t i v e way t o t r e a t a u t o - i m m u n e
diseases
s u c h as m u l t i p l e s c l e r o s i s i s t h r o u g h d r u g s t h a t
s u p p r e s s t h e immune s y s t e m .
But t h e s e d r u g s a l s o
l e a v e p a t i e n t s a t r i s k For i n F e c t i o n s .
• r . H o w a r d W e i n e r , c o - d i r e c t o r oF t h e C e n t e r F o r
N e u r o l o g i c D i s e a s e s a t B r i g h a m S Women's H o s p i t a l i n
Boston i s t r y i n g to t r e a t m u l t i p l e s c l e r o s i s ,
r h e u m a t o i d a r t h r i t i s , a n d o t h e r d i s e a s e s by F e e d i n g
patients certain proteins.
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e x a m p l e , T c e l l s - - t h e b o d y ' s key deFense a g a i n s t
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e F F e c t s " e x p l a i n s D r . D a v i d H a F l e r oF H a r v a r d U n i v e r s i t y .
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organs.
R e s u l t s From human s t u d i e s s h o u l d be a v a i l a b l e
w i t h i n a year."''SB
2.
" E v e r s i n c e t h e v i r u s was d i s c o v e r e d ,
scientists
h a v e b e e n t r y i n g t o u n d e r s t a n d how AIDS d i s a r m s t h e
body's deFenses.
The p r e v a i l i n g t h e o r y i s t h a t HIV
i n F e c t s t h e immune s y s t e m t h r o u g h t w o r e c e p t o r s on
t h e s u r F a c e oF c e l l s t h a t n o r m a l l y F i g h t oFF i n F e c t i o n s .
But r e s e a r c h e r s a t Medarex, I n c . , a b i o p h a r m a c e u t i c a 1
c o m p a n y i n P r i n c e t o n , N.J.,
and D a r t m o u t h
Medical
S c h o o l h a v e F o u n d t h a t one oF t h o s e s i t e s a c t u a l l y
r e s i s t s HIV i n F e c t i o n .
The s c i e n t i s t s s a y t h a t w i t h
t h e h e l p oF a new c o m p o u n d , t h e s o - c a l l e d Fc r e c e p t o r
c a n t u r n t h e immune c e l l i n t o a h i g h l y e F F i c i e n t k i l l e r
oF t h e v i r u s . ... M e d a r e x i s h o p i n g t o s t a r t t e s t s oF
b i s p e c i F i c a n t i b o d i e s on humans n e x t
year."'-'
3
The
anyone
to
above
to
impose
are
too
the
radical
crucial
cost
For
that
comprise
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that
are
reductions.
survival.
oF
while
5 percent
these
suFFicient
technology
the
oF
i s not
H.
the
area
Magazine,
Association
purchase
may
in
p r i c e oF
h e a l t h care
technologies
example
Technological
Alan
Industry ManuFacturers
explained
devices
developments
comprehend
Health
D.C.
two
which
advances
President
oF
Washington,
technological
costs,
increase
in
For
the
that
percentage
�From
10
t o 40
percent.
Thus,
to
F o c u s on
technological
160
innovation
For
cost
cutting
Over u t i l i z a t i o n
deFensive
Fear
oF
result
medicine
the
advanced
adequate
available.
physician
usage
oF
never
and
less
be
a result
and
Over u t i l i z a t i o n
American
whatever
ails
public
them,
c o s t l y m e t h o d s may
Forementioned
technological
who
care
blame
waste.
the
incentives
They
patients
will
For
be
the
a
most
though
readily
practice
the
oF
increased
procedures.
Fruits
techno1ogy--For
the
i s also
even
also
oF
hospitals in
se1F-reFerra 1 c o n t r i b u t e s g r e a t l y to
Fix
oFFer
For
can
goal.
physicians
the
A d d i t i o n a l l y , the
"Those
health
i n s i s t a n c e oF
Far
by
litigation.
treatments
and
technology
practiced
malpractice
oF
oF
i s a misplaced
innovation--that i s ,
sins
i n our
only
longer,
the
oF
oF
system
stop
the
utilization,
that
lead
medical
more p r o d u c t i v e ,
to
will
overuse
innovations
and
higher
that
quality
lives."
On
Fact
the
that
opposite
the
U.S.
scanners
while
scanners
enable
oF
the
body.
dollars
and
Fact
provides
Canada has
The
costs
are
passed
only
to break
incentive to
possible
oF
on
adding
to
issue,
15.
three-dimensional
i n order
as
this
2,000 m a g n e t i c
a h o s p i t a l must
day
oFten
has
oF
Each s c a n n e r
each
as
side
the
For
new
costs
scan
even
resonance
Nuclear
viewing
between
$2
on
the
potential
lies
resonance
soFt-tissue
and
oF
4
e i g h t people
162
investment.
to prescribe
devices
parts
million
This
such
patients...oFten
technological
the
imaging
magnetic
oF
a minimum
providers
consumer.
-59-
however,
testing
unnecessarily
i n each h o s p i t a l
�American
For
these devices which
equipment
Thus,
i n hospitals
Americans
Hospitals
cost
to
units
this
expensive
equipment
with
consumer
exorbitant
guidelines
which
their
hospitals
Center
a l l their
Stand-alone
For
to
other.
access.
the highFurther
are within--For
other--shou1d
n o t be
permitted
on a d a i l y
b a s i s For
Duplication
oF
such
when t h e n a t i o n i s
bills.
i n conjunction
with
t o deal
hospital
and
hospitals are
Current certiFicates
insuFFicient
oF
with
p e r c e i v e as e F F e c t i n g b o t h
Funded
patients
be t o h a v e
require
Centers
such
would
t h e a m o u n t oF d u p l i c a t i v e
beFore
speciFically
would
n o t reduce
medical
care.
prescribing
because
a centrally
by a l l t h e h o s p i t a l s
who
Technology
Full-service
Fees
easy
should determine which
might
area, b u t would
pause
each
need
this
mounting
their
prestige
pocketbooks.
Technology
given
which
necessary.
oF
a little
i s not u t i l i z e d
commission,
equipment.
An a l t e r n a t i v e
reducing
to travel
oF e a c h
medical
are obviously
which
nearby
i s economically wasteFul
representatives,
receive
to duplication
by s u c h
Hospitals
which
locations
t o have t o s h a r e
have
i s deFinitely
A governmental
by
'spoiled'
will
drive
equipment
which
and
has l e a d
are r e l a t i v e l y
technology.
a 30-minute
duplicate
problem
which
have become
treatment
to
oFten
and consumers
utilize
Faced
demanded c o n v e n i e n t
oF t h e F u t u r e a r e g o i n g
example,
to
consumers have
and
expensive
have
located
Frequented
procedures.
the beneFits of
equipment
available
t h e t y p e s oF e q u i p m e n t
The C e n t e r s
may
treatments u t i l i z i n g
in their
- SO -
proFit
base
needed
cause
providers
such
equipment
i ti s not immediately available
n o t be i n c l u d e d
in a
which
t o them, and
may
reduce
�the
incidents
break
even
of
on
unnecessary
their
Considering
in
S.1227, and
patient
care
of
the
reform.
a huge
the
everyone
the
use
in a
that
this
the
containment
proposals
Expenditure
Board
of
of
health
rate
care
goals.
The
quality
data
others
can
use
Senate
Bill
Senator
Health
imposes
i n S.1227.
will
be
this
providers
which
the
most
gather
48
While
insurance
state
insurance
in
place.
some
valid
cost-
Health
will
"establish
and
a
providers
health
expenditure
publish
cost
patients,
efficient,
1 6 3
American
purchasers
and
that
by
solution, i t is
included
between
so
solved
A Federal
created
also
legislation
already
within overall national
will
appeasement
forms.
more t h a n
have
of
t o be
billing
health
pending
of
h i s t o r y of
of
Senators
Ourenberger's
Act
of
high
requirements
as
equally
on
players
wno
and
as
legislative
1931
c o n t r i b u t i o n to
industry
other
are
for
and
insurers,
quality
and
providers."
S.700
Security
industry's
to
included
of
statement
s o l u t i o n i s not
negotiations
Board
on
150-year
challenge
form
e f f i c a c y of
f o r decades
Fortunately,
process
dangerous
the
protection
meet t h e
standardized
with
of
a political
in the
of
existence
i n order
protectionism
lack
a d m i n i s t r a t i v e costs
that
commissions
insurer
S.1227 d o e s n o t
agrees
astonishing
and
of
correspondent
industry
requiring
amount
I t i s merely
Excessive
imposed
investment.
the
rights,
procedures
(S.700) addresses
the
health
penalties
i t imposes
lack
offering,
on
the
the
American
insurance
care
problem,
this
power-packed
regulations
such e x t e n s i v e
-6 1 -
and
and
penalties
influence.
1 E 5
�As l o n g a s h e a l t h c a r e c o s t s c o n t i n u e t o
r i s e a t e i g h t t o t e n percent a year Faster than
t h e r a t e oF i n F l a t i o n - - a s l o n g a s h e a l t h s p e n d i n g
c o n s u m e s 12 p e r c e n t o r m o r e oF o u r g r o s s n a t i o n a l
product--doomsday i s j u s t around t h e corner.
How
can A m e r i c a hope t o c o m p e t e i n t h e w o r l d economy i F
m o r e a n d more oF o u r n a t i o n a l r e s o u r c e s a r e b e i n g
c o n s u m e d on h e a l t h c a r e ?
Clearly, real cost control
must F i g u r e p r o m i n e n t l y i n any r e F o r m e F F o r t - - a n d
r e a l c o s t c o n t r o l i s a m a j o r p a r t oF t h e b i l l I am
i n t r o d u c i n g today.
-- Rep. Dan R o s t e n k o w s k i , C h a i r m a n
C o m m i t t e e on Wgyg a n d Means
A u g u s t 2, 1 9 3 1
The H e a l t h I n s u r a n c e C o v e r a g e a n d C o s t C o n t a i n m e n t A c t oF
1 9 9 1 , H.R. 3 2 0 5 , w o u l d c o n t a i n c o s t s b y p l a c i n g a n a t i o n a l
1 5 5
limit
on h e a l t h e x p e n d i t u r e s ,
national
be
product
permitted
through
are
through
2000.
control
and
growth
using
i n 2 0 0 1 , h e a l t h care
This Act
statutorily
cost
is
elects
r quired
For payment
t o pay a minimum
plan,
that
o p t For the
pay p l a n .
i n t i e public
medical
insurance
plan
penalty
which would
168
p l a n . 169
would
be d o u b l e
unemployed
Failure
subject
A
to
by i n s u r e r s
with
167
employers
oF t h e
i s expected
oF
employer;
would
to enroll
the individual
the cost
-62-
increases
t h e employer
15 p e r c e n t
The
GNP
providers
oF t h e t a x - - w h i c h
It
i s expected
over
oF 80 p e r c e n t
oF p a y r o l l - - w h i c h e v e r
would
be e x p e c t e d
rates with
a pay-or-play
o r 80 p e r c e n t
GNP
a s GNP.
would
9 percent
t o do.
enrolled
basically
above
cost
oF g r o w t h
Commission
r a t e s as c e i l i n g s
oF p r e m i u m s
be a b o u t
would
Containment
t o gross
t o one p e r c e n t
by n e g o t i a t i n g a n n u a l
those
be t i e d
increase
1994, d w i n d l i n g
Starting
Care Cust
would
A 4 percent
t o be l i m t e d t o t h e same r a t e
Health
to
(GNP).
which
oF p r e m i u m s .
be
in a
to a
170
basic
�Standards
Plans
not
would
pr •
be
For
Vi
coverage
ding
"sub j e c t
m u s t be
s e t For
the e s t a b l i s h e d
to a tax equal
minimum
to FiFty
premiums
c o l l cted
and
employer
p l a n 3 For
purposes
oF
the plan
would
and
a health
Financin
taxes
on
empl y e r s
corporation^
surtax
with
in
For
the
the
hospiti1
taxable
tax
Substance
an
to
derived
surtax
and
as
qualiFied
From
the
imposed
trusts.
171
payroll
on
The
health
liability
172
t o 9 p e r c e n t by
The
199S.
tax would
Social
climb
to
eFForts
Increases
be
imposed
Security
1 .55
on
hospital
percent
both
insurance
1
i n 1996.
'
and
7 3
po i n t s
ov e r c r o w d e d ,
t h e r e s e e ns no
overcome tne
the
is actually
health
care
children,
a result
abuse
oF
oF
'substance
drugs
end
and
oF
newer
and
-63-
on
an
police,
whom
suFFer
abuse.'
health
care
alcohol.
oFFicials
spending
Prohibiting
oF
can
As
increases, prisons
public
t o government
problems.
dev e l o p m e n t
oF
abuse
oF
by
term reFers to
Facilities,
many
out, organized crime
corruption
undermined
correct
increase i n spending
to increased
174
the p o l i t i c a l l y
unborn
as
the
c o n t i n u e t o be
the a c t i v i t y
innocent
h a l F oF
traced
spurs
be
estates
aFFects
b i r t h deFects
One
and
status
the
a 6 percent increase i n tax
Though
which
socie
Thornton
p e r c e n t oF
i n c r e a s e From $ 1 2 5 , 0 0 0 t o $ 2 0 0 , 0 0 0
•ate w o u l d
a SL b s t a rn e e ,
oF
become
would
abL se
Families,
be
ase
hea1thcoverage
the pay-or-play requirements.
insurance payroll
c o r t a inment
substance
severe
their
insurance,
Abt s e .
Cost
entire
be
and
and e m p l o y e e s .
wage
SSHI
abuse
ndividuals,
19 33 w o u l d
lose
also
b u r d :n c l i m b i n g
emp1oyers
the
For
would
health
each
increases,
i n vain
substance
more p o t e n t d r u g s .
attempts
merely
The
�methods
u s e d i|n t h e
r e c o g n i zed
the
p rovides
his philosophy
i n merely
a general
lesson
that
i n the
United
must
be
one
sentence:
s o c i e t y can
States
no
than
in
175
Union
As
Auburn
abuse
engineered
succes|s F u l l y
Soviet
substance
n e F F e c t i ve.
provides
"Prohibition
t o stem
175
as
Thornton
more be
past
A s s i s t a n t ProFessor
oF
Economics
at
Universi
ty , Thornton
that
heeded
the
lessons
oF
the
of
problems
urges
1 9 2 0 - 1 9 3 3 be
Prohibition
a
on
ational
scale.
today,
Thornton
when we
Face
drug
contends:
1.
Proh ib i t i o
2 .
Consumpt i o
3 .
a c t u a l l y r o s e s t e a d i l y a F t e r an i n i t i a l
drop.
G o v e r n m e n t 1 s p e n d i n g i n c r e a s e d s i g n i F i c a n t 1y d u r i n g t h e
p r oh i b i t i
p e r i o d t o c o v e r t h e e x p e n s e s oF:
did
a.
b.
t h e Bu
Coast
over $
Custom
Police
c.
d .
Thornton
not
e l i m i n a t e the
consumption
oF
alcohol.
eau oF P r o h i b i t i o n ( o v e r $13
million);
5uard a c t i v i t i e s d e v o t e d t o p r o h i b i t i o n
[also
13 m i l l i o n p e r
year.
S e r v i c e b u d g e t i n c r e a s e d 123 p e r c e n t .
173
F o r c e b u d g e t i n c r e a s e d more t h a n 11 p e r c e n t .
1 7 7
also
explains
that
p a t t e r n s of
alcohol
consumption
c h anged d u r i n g P r o h i b i t i o n .
Alcohol's
ness
yo j n g
i t b e c a m e "a
to
a s s o c i ated
product
oF
the
sellers
increased^
and
i n c -eased
higher
reFused
drinking
Also,
and
intrigue."
Prohibition
because
proFits.
t o be
told
defiantly,
a k i nft o f d e d i c a t e d
today .
. . .by
w re
because
excitement
during
i n c d e n c e oF
drink..."Men
oF
heightened
with
immi g r a n t s
newer
purpose,
was
drinking
attractive-
Also,
that
glamour
The
oF
the
older
they
with
you
Americans
could
a sense
that
number
of
not
high
don't
see
much
1 80
"P r o h i b i t i o n
i n c r e a s i ig t h e
may
actually
availability
-64-
of
have
increased
drinking
a l c o h o l " i n many
more
�e s t a b 1 i shment
than
there
had been p r i o r
Prohibition,
Additionally,
regu1ated the
number o f l i q u o r
and
t i m e s o f day
prior
which
liquor
those
political
speakeasies
And s 3 we s e e t h a t
occurred
wi t h
jrohibition
private
regula ion
reduced
absent e i s m ,
was
tried
of
tools
sold,
and l e d t o t h e
middle-
were
formerly
t h e e x a c t same s i t u a t i o n
drug
reduced
use.
•181
drinking
In
improved
industrial
has
contrast,
the
productivity,
accidents
wherever
1 82
b
during
and a f t e r
prohibition,
the af
ermath
Mi s e s
be
locations that
employees'
and
fore,
In
of
could
i n business d i s t r i c t s ,
c l a s s n e i g h b o r noods , a n d o t h e r
d r y ..."
l a w s had
l i c e n s e s and t h e l o c a t i o n s
during
e s t a b 1 i shment
it
to Prohibition,
eL i m i n a t e d
"Prohibition
t o the onset of
of P r o h i b i t i o n ,
economist
Ludwig
von
wrote,
Ince t h e p r i n c i p l e i s a d m i t t e d t h a t i t i s t h e
o f gov e r m ;ent
t o p r o t e c t t h e i n d i v i d u a l a g a i n s t h i s own
s e r i o u s o b j e c t i o n s c a n be a d v a n c e d
against
foolishness, n
duty
further
183
encroa hments."'
voluntary
1i b e r t y
in
now
as i t s
the Progres ive
For
than
too
e x c h nge
the m
enactment
Era."
close to advocating
t h a t may
evil
downturn
to the restoration
t o t h e cause
there
of
of
of b i g
government
1 8 4
timid
prospect of legalizing
the release
not prove
Though
i n u s a 3 e,
was
of a l l p r o h i b i t i o n
of Americans--more
Mark T h o r r t o n - - t h e
unleashed
•N
F
i s as i m p o r t a n t
jority
a society
The r e p e a l
of a deeply
capable
legalization
is likely
-65-
of soul,
drugs
appears
evil
f o r c e on
of containing
may
surely,
eventually
t o be an e a r l y - o n
that
see a
increase.
�"Ordinarily,
approve
the
i
takes
a generation
a ma j o
piece
oF s o c i a l
c u r r e n t be i e F s
laws h e l d
by a m a j o r i t y
suFFicient
numter
a c k n o w l e d g e th<
would
drug
legislation."
abuse and d r u g
oF A m e r i c a n s ,
agree
accuracy
time
i s not et
y
As a r e s u l t ,
enForcement
correlation
H a r r ii s
s
For implementation
h da 1 t h c a r e
costs
will
continue
The
cost
to society will
too
retarded
continue
as t h e s e
a productive
place
t o pay For i t s d i s i n c l i n a t i o n
between
6
i s right.
views.
t o climb For
w i t h d r u g - r e l a t e d and a 1coho1-re1 ated
continues
that a
oF T h o r n t o n ' s
newborns
t o take
Considering
w i t h o r have t h e c o u r a g e t o
oF T h o r n t o n ' s
ripe
1 8 5
i t i sn o t l i k e l y
^. t o
a n d d r g u s e a n d p r o h i b i. i. n .
alcohol
The
about
o r more F o r C o n g r e s s t o
birth
babies
within
deFects.
grow,
a society
t o change
many
which
t h e unworkable
s t a t u s quo.
FEDERAL HEALTH CARE PROGRAMS.
During
proposed
succeeded
and
insurance
that
issue
For t h e presidency,
For t h ee l d e r l y .
he w o r k e d
Caspar
environment
a national health
t o pass
campaign
t h e Medicaid
When L y n d o n
on e n a c t m e n t
i n h i ssuccessFul
i n 1964.
political
legislate
was a b l e
F. K e n n e d y ' s
t o t h e Presidency,
Goldwater
difficult
to
health
included
Barry
John
campaign
Weinberger
surrounding
care
plan.
Johnson
oF M e d i c a r e
against
described the
t h e many
President
plan by:
" . . . e 1 i m i n a t ( i n g ) t h e o p p o s i t i o n oF t h e
v a r i o u s h e a l t h c a r e p r o v i d e r s by a g r e e i n g i n
advance t h a t t h egovernment would n o t t r y t o
r e g u l a t e or c o n t r o l t h eh e a l t h care s e r v i c e t o
be p a i d F o r by t h e g o v e r n m e n t ; a n d a s e v i d e n c e
oF g o o d F a i t h . . . t h e r e w o u l d be no g o v e r n m e n t
challenge t o t h en e c e s s i t y For t h e service--no
-66-
he
attempts
Johnson
�government i n q u i r y i n t o the p r i c e of the
s e r v i c e o r t h e q u a l i t y oF t h e s e r v i c e F u r n i s h e d .
The o p p o s i t i o n c r u m b l e d s u F F i c i e n t l y so t h a t t h e
n e c e s s a r y v o t e s w e r e s e c u r e d , and we h a d
Medicare.
For s e v e r a l years t h e government k e p t i t s
p a r t oF t h e b a r g a i n .
T h e y d i d n ' t make any
inquiry
i n t o t h e need o r t h e c o s t o r t h e q u a l i t y , and
we
w e r e w e l l l a u n c h e d on t h e r o a d t o h e a l t h c a r e c o s t
inFlation.
OF c o u r s e , t h e r e a r e s e v e r a l o t h e r
c a u s e s , and I w o u l d n o t w a n t t o say t h a t
Medicare
was t h e s o l e c a u s e , b u t i t s u d d e n l y i n j e c t e d t h i s
e n o r m o u s new demand i n t o t h e s y s t e m , a c c o m p a n i e d
by a g u a r a n t e e d p a y m e n t F o r w h a t e v e r t h e s e r v i c e .
T h a t s i m p l y m e a n t t h a t t h e r e was now h e a l t h c a r e
a v a i l a b l e t o be u s e d n o t as n e e d e d , b u t s i m p l y
b e c a u s e i t was
there."
I n a d d i t i o n , b e c a u s e oF t h e d e s i g n oF t h e
M e d i c a r e i n s u r a n c e ... t h e r e was a h e a v y e m p h a s i s
on t h e u s e oF t h e m o s t e x p e n s i v e a n d , I s u p p o s e ,
s o m e t i m e s t h e m o s t u n n e e d e d t y p e oF c a r e
(namely,
h o s p i t a l i z a t i o n ) w i t h o u t s u F F i c i e n t e m p h a s i s on
o t h e r t y p e s oF c a r e . " ' '
8 7
-Pending
inFlationary
Most r e F o r m
rates
For
Medicare
care
Fee-For-service
plans
are
oF
Medicaid
relation
to health
Congress
because
would
insight
currently
For
providers.
annua 1 1 y - n e g o t i a t e d
study
on
those
study
into
plans
plans
the eFFects
the
costs
oF
that
and
are
any
state
being
paper
being
address
potential
out
Federal
now
such
has
set
eFFects
oF
the
oF
expansion
government
in
in
n e e d s oF
the
provides a
reForm
of
plans.
Medicaid
expenses,
"elsewhere
of
the
value
considered
expansion
impacts
borne
-67-
the
to the problem
Their working
reForm
points
considered
a solution
a l l these
Noting
impact
method
the
hospitals.
as
of u n i n s u r e d .
The
payment
addresses
Medicaid.
millions
uninsured.
Weinberger
legislation
proposing
Hoiahan/Zedlewski
expansion
better
reForm
p h y s i c i a n s and
and
The
health
Caspar
i n the
while
health
�Percent: I n c r e a s e s i n M e d i c a i d Caseloads and Costs b y S t a t e
A f t e r Program Expaflion t o 100 P e r c e n t o f P o v e r t y ^
-
1989
Caseload
(Thousands)
1989
Cost
(Millions)
Enrollment
Scenar i o ^
(2)
(3)
(1)
Enrollment
Scenario^
(2)
(3)
(1)
21,410
128%
-79%
38%
S25,700
85%
59%
35%
460
520
85%
87
40%
45
24%
15
S840
690
54%
47
30%
27
21%
13
Middle A t l a n t i c
New J e r s e y
New York
Pennsylvania
550
2,020
980
91%
82
83
52%
50
43
25%
25
22
$860
3 , 980
1,240
68%
49
53
47%
33
33
27%
21
20
East N o r t h C e n t r a l
Illinois
Indiana
Michigan
Ohio
Wisconsin
1,240
310
1, 150
1, 150
400
88%
247
68
80
93
51%
126
36
45
53
26%
61
22
24
31
$1,080
530
1,200
1, 350
430
69%
138
55
60
59
48%
81
39
37
39
32%
49
28
24
25
400
390
580
95%
138
171
54%
80
110
23%
38
41
S480
360
650
60%
113
128
41%
71
89
20%
42
39
720
510
420
270
300
260
440
254%
153
179
159
177
119
103
170%
90
100
101
106
76
60
66%
52
49
50
64
43
27
$770
710
580
280
350
180
690
180%
119
110
100
139
91
61
132%
81
75
75
92
71
46
63%
57
49
45
65
43
25
340
450
330
390
229%
104
144
173
143%
57
93
115
83%
39
47
56
$260
480
260
420
148%
92
106
141
103%
58
73
108
71%
48
44
58
510
1,040
450
165%
281
240
114%
197
173
78%
86
89
$510
970
480
132%
192
169
99%
148
138
77%
77
81
262%
159%
65%
S690
158%
104%
53%
83%
108
165
52%
69
110
21%
38
52
S3, 540
490
350
61%
61
117
44%
43
87
23%
26
52
U.S. T o t a l
New England
Mass
Other (Conn,
Maine, N.Hamp,
R . I . , Verm)
West N o r t h C e n t r a l
Minnesota
Missouri
Other (Iowa,
Kansas, Nebr.,
N.Dak, S.Dak)
South A t l a n t i c
Florida
Georgia
No. C a r o l i n a
So. C a r o l i n a
Virginia
West V i r g i n i a
Other ( D e l . ,
D.C, MD)
East South C e n t r a l
Alabama
Kentucky
Mississippi
Tennessee
West South C e n t r a l
Louisiana
Texas
Other (Ark.,
Oklahoma)
Mountain States
(Colo., Idaho,
590
Mont., Nev., N.Mex
Utah, Wyom.)
1
1
1
1
1
I
I
1
.
3
I
Pacific
California
Washington
Other (Alaska,
H a w a i i , Oregon)
SOURCE:
(CPS) .
3,510
440
320
The Urban I n s t i t u t e ' s T r a n s f e r Income Model
(TRIM2), based on t h e March 19BB C u r r e n t P o p u l a t i o n Survey
, e
NOTES:
1.
I n c l u d e s persons e l i g i b l e f o r M e d i c a i d f o r at l e a s t one month d u r i n g t h e y e a r and persons e l l o " ~
under 1989 r u l e s who do not e n r o l l .
2.
E n r o l l m e n t S c e n a r i o (1) I n c l u d e s a l l persons under t h e p o v e r t y l i n e ; E n r o l l m e n t S c e n a r i o (2)
I n c l u d e s o n l y persons below p o v e r t y who do not c u r r e n t l y have e m p l o y e r - s p o n s o r e d I n s u r a n c e ; S c e n a r i o (3) I n c l u d e s
o n l y persons below p o v e r t y who do not c u r r e n t l y have e m p l o y e r - s p o n s o r e d I n s u r a n c e and work l e s s t h a n 25 hours a
el
et
*' -
SOURCE:
J. Holahan
Americans:
Institute,
and S h e i l a Z e d l e w s k i , " I n s u r i n g Low-Income
I s M e d i c a i d t h e Answer?"
(Wash.DC: The U r b a n j
J u l y 1 9 9 0 ) , p a g e .15.
�189
sector
"
(i.e.,
"Medicaid
h i g h e r i n s u r a n c e premiums)
expansion
third-party
would
payments
reduce
private,
o u t - o f - p o c k e t and
t o p r o v i d e r s . . .(and) also
1 90
t h e a m o u n t oF
care."
reduce
Additionally,
1 9 1
Such
expense
uncompensated
may
increase taxes,
already-too-prevalent
entitlement.
As
and
Holahan
unacceptable
(i.e.,
above
200
...and
and
would
counter-productive
and
"politically
those
care
s i g n i F i c a n t 1y
p e r c e n t oF
expand
notion
Zedlewski point
to insure
charity
oF
o u t , i t would
higher-income
poverty
the
level)
be
Americans
through
public
192
programs.
To
poverty
would
level
insure
a l l persons
reduce
below
t h e n u m b e r oF
200
percent of
u n i n s u r e d by
61
193
percent
( i . e . , From 37 m i l l i o n down t o 1 4 , 4 3 0 , O D D ) ; b u t
w o u l d a l s o i n c r e a s e M e d i c a i d e n r o l l m e n t by 6 1 . 1 m i l l i o n p e r s o n s ,
—
194
w h i c h w o u l d be a 283 p e r c e n t i n c r e a s e .
F e d e r a l and s t a t e
Medicaid
c o s t s would
more
than double
iF a l l e l i g i b l e
persons
1 95
actually
did
•ne
adverse
oF
enroll.
the major
eFFect
such
expansion
and
ultimately
are
c o n s i d e r e d t o be
employer
which
beneFits
insurance
j|p^
the consumer.
t o employee
result
concerns
i n reduced
disproportionately
or,
on
have
on
m a n d a t e s and
through
( 3 ) Fewer
expansion
i s the
employers,
employees,
Medicaid
expansions
they
passed
are
From
(1) increased deductions
wages;
the cost
small
Medicaid
c o s t s oF
take-home
i n o r d e r t o bear
charge;
would
The
employer
either
about
oF
jobs.
the
196
(2) r e d u c t i o n
i n other
increased Medicaid
Costs
b u s i n e s s e s , nfiich o F t e n
-68-
tend to
do
not
Fall
even
�Percent I n c r a a a o a i n Medicaid Ca«elo«d» and Costa by S t a t e
A f t e r Program Expaalon to 100 Percent of Poverty*
2 98 9
Caseload
(Thousands)
'J.S.
Total
2 1 , 410
New England
Mass
Other (Conn,
Maine, N.Hamp,
R . I . , Verm)
11 )
: 98 5
: o r. t
! 1 -.c.r.r)
t?)
. 2 t! i
En r i i - i ment
J8V
J
/ i
X
;25,70:
851
851
87
40*
24*
15
S840
690
54%
47
30%
27
21%
550
2, C2C
980
91%
82
85
52%
5C
25%
25
22
S860
3, 980
1,240
68%
49
5 3
47%
33
27%
i , 24C
310
1,150
1, 150
400
88%
247
68
80
93
51%
126
36
45
53
26%
61
22
24
31
51,080
530
I , 200
i , 350
430
69%
138
55
60
59
48%
31
39
:7
39
32%
49
28
24
25
400
390
580
95%
138
171
54%
80
110
23%
38
41
S4 30
360
650
60%
113
128
89
20%
42
39
720
510
420
27C
300
260
440
.Middle A t l a n t i c
New J e r s e y
New York
Pennsylvania
460
520
254%
153
179
159
177
119
103
170%
90
100
101
106
76
60
66% ' 1
52
1
49
1
50
1
64
1
43
1
27
|
S770
710
580
280
350
180
690
180%
119
110
100
139
91
61
132%
81
75
75
92
71
46
63%
57
49
45
65
43
25
I.
r-
20
East N o r t h C e n t r a l
Illinois
Indiana
Michigan
Ohio
Wiscons i n
West N o r t h C e n t r a l
Minnesota
Missouri
Other (Iowa,
Kansas, Nebr.,
N.Dak, S.Dak)
South A t l a n t i c
Florida
Georgia
No. C a r o l i n a
So. C a r o l i n a
Virginia
West V i r g i n i a
Other ( D e l . ,
D.C, MD)
!
I
1
1
1
id:
if,:
i
East South C e n t r a l
Alabama
Kentucky
Mississippi
Tennessee
340
450
330
390
229%
104
144
173
143%
57
93
115
83%
39
47
56
1
1
1
!
S260
480 •
260
420
148%
92
106
141
103%
58
73
108
71%
43
44
58
1
West South C e n t r a l
Louisiana
Texas
Other (Ark.,
Oklahoma)
t'
510
1, 040
450
Mountain S t a t e s
(Colo., Idaho,
590
Mont., Nev., N.Mex
Utah, Wyom.)
165%
281
240
114%
197
173
78%
86
89
1
[
1
3510
970
480
132%
192
169
99%
148
138
77%
77
262%
159%
65%
1
S690
158%
104%
53%
83%
108
165
52%
69
110
21%
38
52
I
I
1
S3,540
490
350
61%
61
117
44%
43
87
23%
26
52
0 "
.
Pacific
California
Washington
Other (Alaska,
H a w a i i , Oreoon)
SOURCE:
(CPS) .
3, 510
440
320
The Urban I n s t i t u t e ' s T r a n s f e r
Income Model
(TRIM2),
based on t h e March :988 C u r r e n t
P o p u l a t i o n Survey
; e
NOTES:
1.
I n c l u d e s persons e l i g l o l e f o r M e d i c a i d f o r at l e a s t one month d u r i n g zhe year and p e r s o n s e : i a " "
under 1989 r u l e s who do not e n r o l l .
2.
E n r o l l m e n t S c e n a r i o (11 i n c l u d e s a l l persons under t h e p o v e r t y l i n e ; E n r o l l m e n t S c e n a r i o (2)
i n c l u a e s o n l y persons below p o v e r t y who do not c u r r e n t l y have e m p l o y e r - s p o n s o r e d I n s u r a n c e ; S c e n a r i o (3) i n c l u d e s
o n l y persons below p o v e r t y who do not c u r r e n t l y have e m p l o y e r - s p o n s o r e d I n s u r a n c e and work l e s s t h a n 25 hours a
wee>1
-
SOURCE :
J . H o l a h a n and S h e i l a Z e d l e w s k i , " I n s u r i n g L o w - I n c o m e
Americans:
I s Medicaid the Answer?"
(Wash.DC: The U r b a n
I n s t i t u t e , J u l y 1 3 9 0 ) , page .15.
�197
insure
their
The
mandate
actually
have
own e m p l o y e e s
because
of the cost.
F o r F i n a n c i n g s u p p o r t oF M e d i c a i d i n s u r a n c e
has t h e eFFect
oF b e i n g i m p o s e d
on e m p l o y e e s
no i n s u r a n c e F o r t h e m s e l v e s , a n d who a l s o
who
are n o t covered
under
Medicaid.
M e d i c a i d expanded
large
proportion
oF t h e s e u n i n s u r e d may a c t t o r e d u c e ,
avoid,
t h e adverse
eFFects
suFFiciently
on e m p l o y e r s
and
t o cover a
iFnot
1 9Q
employees.
199
Although
share
the costs
revenue
would
each
also
currently
and
eFFect
historically
aggressive
by
governments
able t o Finance.
Thus,
i n Federal Medicaid requirements
oF M e d i c a i d c o v e r a g e
oFFered
higher-income enrollees
be r e q u i r e d
t o pay p a r t
how many p e r s o n s
201
and Z e d l e w s k i e x p l a i n
been
to provide
(who a r e
oF
would
generous
i n containing
Central
states
costs
lower
than average,
would
approaches
(with
that
in their
i n c r e a s e s i n t h e New
North
their
be
eligible
" S t a t e s which
eligibility
p o l i c i e s and
be r e l a t i v e l y
than other
England,
have
less
states.
The
Middle A t l a n t i c ,
the exception
oF I n d i a n a )
aFFected
and E a s t
would
be
and t h e i n c r e a s e s i n t h e S o u t h e r n and
202
Mountain
The
regions
states
which
by
i n t h e program.
Medicaid expansion
caseload
whether
and ( 3 ) aFFect
enroll
Holahan
i t is
the extent
u n i n s u r e d ) would
would
local
has a u t h o r i t y
oF a n y c h a n g e
( 2 ) aFFect
costs,
and sometimes
state
coverage
( 1 ) aFFect
state,
coverage
and each
additional
overall
state,
oF M e d i c a i d , a l l F u n d s come From g e n e r a l
Funds
whatever
the
Federal,
would
be g e n e r a l l y
would
bear
higher
the largest
-69-
than
average."
i n c r e a s e s would
be
�Coverage Under Medicaid: The Current Role of Medicaid in Insuring the Nonelderlv
Type of Insurance: Percent Distribution
Population
Characteristics
Population
*2
Medicaid''
Other
Insurance
Uninsured
Income Relative to Poverty
Threshold
Less than 100%
100%-200%
200% - 300%
Greater than 300%
32.9
35.0
38.3
106.4
51.4%
8.9
2.5
.5
20.3%
65.7
84.4
93.6
28.3';
25.4
13.1
5.9
Total
212.6
10.1
76.0
13.9
1.1
5.9
2.5
75.2%
64.9
30.1
13.1%
15.2
31.3
11.7%
19.9
39.6
4.9
9.6
0.8
72.5
64.7
30.0
12.3
15.3
23.2
15.2
20.0
46.8
3.1
1.3
3.7
11.7
24.0
31.2
24.7
34.9
57.1
53.0
41.1
1.1
4.4
5.4
2.9
5.0
5.5
2.2
1.3
5.1
64.0
43.6
44.8
35.4
61.5
48.3
34.7
59.6
18.0%
16.2
23.1
23.5
19.5
18.1
30.3
30.7
15.6
Persons with Income
Below Poverty Threshold
Pregnant Women
Mothers
Fathers
Children, age:
under 5
6-17
18+
Other Adults, age:
under 30
30-39
40 and older
Persons with Income
Below Poverty Threshold
by Region
New England
Middle Atlantic
South Atlantic
East South Central
West South Central
East North Central
West North Central
Mountain
Pacific
SOURCE:
Notes:
19.8
31.7
45.1
20.4
21.4
34.6
24.8
The Urban Institute's Transfer Income Model, based on the March 1988 Current Population Survey.
1.
2.
Millions; Estimates for the nonelderly (under age 65) excluding persons in institutions and in Puerto Rico.
Includes persons with other insurance.
SOURCE:
J. Holahan and S h e i l a Z e d l e w s k i , " I n s u r i n g Low-Income
Amerxcans:
I s Medicaid t h e Answer?"
(Wash .OC: The C r b a n
I n s t i t u t e , J u l y 1 3 9 0 ) a a r \ P EL
�Indiana,
and
Florida,
outlay
Alabama
F i g u r e s would
and Texas,
although their
caseload
be c o u n t e r e d by h i g h e r - t h a n - a v e r a g e
203
Federal
matching
The
oF
Table,
coverage
indicates
that
uninsured,
program
coverage
covered
only
by o t h e r
employers
employee's
"Even
would
3.
"Would
care reForm
drop
women
with
women a r e
health
plan
coverage
Medicaid
would
rely
insurer.
Medicaid
For employees
would
t o such
they
an e x t e n t
to retain
also
current
by a l l
program,
or
perhaps
increase the
that
than employment-based
were e s a e n t i a l l y
participation
as
oF a n e x p a n d e d
oF t h e c o s t
were
which
import
i n s u r a n c e c o s t s Faced
Or, a l t e r n a t i v e l y ,
employees
oF t h e c u r r e n t
government
group
i F employers
participation
pregnant
q u e s t i o n s oF p r i m a r y
t h e expansion
more a t t r a c t i v e
low-income
The
F u t u r e g e n e r a t i o n s by
13.1 p e r c e n t o f t h o s e
pose
and t h e p r e s e n c e
become
The T a b l e
insurance.
the increasing
share
increases.
by M e d i c a i d .
t h e v a l u e oF p r o t e c t i n g
on t h e F e d e r a l
dependents?
would
increases.
11.7 p e r c e n t a r e c o v e r e d
a health
employers
the percentages
5 7 . 1 p e r c e n t oF p o v e r t y - 1 e v e 1 a d u l t s a r e
and Z e d l e w s k i
with
"Given
would
that
as M e d i c a i d c o v e r a g e
as income
a t a t i m e when o n l y
extensively
2.
declines
juxtapositioning
program
indicates
7 5 . 2 p e r c e n t oF be 1 o w - p o v e r t y
Holahan
when
page,
be r e d u c e d
while
reFlects
providing
For
Facing
u n i n s u r e d would
Medicaid
1.
rates.
group
apply For M e d i c a i d
204
Medicaid
coverage?"
coverage,
coverage i F
Free?"
decline
i ntroduced?"
-70-
substantially
as p r e m i u m s a r e
�4.
"Would
only
in
a severe
individuals
Medicaid?
average
t h e most s e r i o u s
costs per enrollee
premium
5.
Are s t a t e s
contributions
an i n s u r e r
Three
1.
with
from
i n t h e U.S.
reasons
health
o f adverse
the healthier
capable
health
occur
i n which
problems
enroll
have h i g h e r
selection
system?
government
costs are generally
without
enro11ees."
oF a c c e p t i n g a l a r g e r
care
For encouraging
as o p p o s e d
problem
Medicaid would
because
Financially
Administrative
Medicaid,
selection
I n t h e worst case,
the
as
adverse
role
2 0 E
control
would be:
3 p e r c e n t oF r e v e n u e s
For
t o 1 2 - t o 15 p e r c e n t F o r c o m m e r c i a l
i nsurers .
2.
Expansion
oF M e d i c a i d
same t y p e oF p a y m e n t
those
hospitals
elderly.
to
3.
payer
a l l those
mandates
third-party
Under
this
enable
oF a l l r a t e s
control
and
t o impose t h e
as M e d i c a r e
who p r o v i d e s e r v i c e s
power
p l a c e s on
tothe
t o t h e government
to a l l providers
as
oF a l l s e r v i c e s
Medicare.
oF t h e m a r k e t
oF M e d i c a r e
the states
on p r o v i d e r s
p r o v i d e market
on M e d i c a i d
Establishing
state
policy
and p h y s i c i a n s
This would
third-party
would
could
also
and M e d i c a i d payment
"...permit
rules
For a l l
insurers.
t y p e oF b r o a d
control:
" ( T ) h e r e w o u l d be no s y s t e m a t i c d i F F e r e n c e s
i n p r o v i d e r r e i m b u r s e m e n t ; t h e r e F o r e , t h e r e w o u l d be
no a d v a n t a g e s t o F a v o r i n g some p a t i e n t s o v e r o t h e r s .
S i m i l a r l y , t h e c o s t s h i F t i n g t h a t now o c c u r s From
M e d i c a i d t o p r i v a t e i n s u r e r s b e c a u s e oF l o w M e d i c a i d
p a y m e n t r a t e s w o u l d be e l i m i n a t e d .
P r o v i d e r s would
have l i t t l e c h o i c e b u t t o c o n t r o l c o s t s i n l i n e w i t h
r e v e n u e s p e r m i t t e d by p a y m e n t p o l i c y .
I n t h e long
r u n , t h i s t y p e oF a p p r o a c h s h o u l d p e r m i t t h e n a t i o n t o
c o v e r t h e u n i n s u r e d w i t h much l e s s oF a n i n c r e a s e i n
the a l l o c a t i o n oF r e a l r e s o u r c e s t o t h e h e a l t h s e c t o r . " "
-7 1 -
�It
i s not
governments
an
answer
to the problem
t o become i n s u r e r s .
For
Federal
I n s u r e r s must
be
and
state
required
to
insure .
The
Bush
Administration.
209
•avid
President
changes
Blumenthal
Bush
appears
advocates
in health
care
to express
when he
cautions that
should
not
be
the
same v i e w
wholesale
made e a r l i e r
than
the
l a t e 1990s.
He b a s e s h i s a s s e r t i o n s on t w o o b s e r v a t i o n s :
1.
" . . . t h e p o l i t i c a l r e q u i r e m e n t s For s u b s t a n t i a l h e a l t h
r e F o r m a r e n o t y e t i n p l a c e " and
2.
In
that
care
"American p o l i t i c a l i n s t i t u t i o n s Favor i n c r e m e n t a l over
r e v o l u t i o n a r y c h a n g e , m a k i n g i t l i k e l y t h a t any r e F o r m e d
s y s t e m w i l l p e r p e t u a t e a t l e a s t some oF t h e c u r r e n t
s y s t e m ' s i n e q u i t i e s and i n e F F i c i e n c i e s . " ^ ^
c o n s i d e r i n g the
eFFective
reForm,
n o t - y e t - i n - p 1 ace
Or.
Blumenthal
political
requirements
For
explains:
B o t h c o s t c o n t r o l and e x p a n d e d a c c e s s c a r r y
major p o l i t i c a l r i s k s .
Cost c o n t r o l i s not
i n h e r e n t l y p o p u l a r w i t h t h e p u b l i c a t l a r g e , and
i t has t h e p o t e n t i a l t o r e d u c e t h e a v a i l a b i l i t y
oF s e r v i c e s as p r o v i d e r s c u t b a c k i n t h e F a c e oF
lower reimcursement.
E x p a n d i n g a c c e s s t o care:
F o r t h e u n i n s u r e d w i l l r e q u i r e h i g h e r t a x e s on
m i d d l e c l a s s A m e r i c a n s ( i F i t i s F u n d e d by
g o v e r n m e n t ) o r i n c r e a s e t h e F i n a n c i a l b u r d e n s oF
small businesses ( i F i t i s achieved through
mandating
t h a t employers p r o v i d e h e a l t h care
insurance) . ^
To b r a v e t h e s e a d v e r s e c o n s e q u e n c e s i n h e a l t h
c a r e r e F o r m , p o l i t i c a l l e a d e r s w i l l h a v e t o be
convinced t h a t the v o t i n g p u b l i c , i n c l u d i n g a
s u b s t a n t i a l s e g m e n t oF t h e m i d d l e c l a s s , i s
deeply d i s c o n t e n t e d w i t h the h e a l t h care
system.
T h a t l e v e l oF d i s c o n t e n t d o e s n o t y e t seem t o e x i s t . 212
The
Bush
addressing
politically
WoFFord
as
the
Administration
issues
necessary
Democratjc
oF
had
health
t o do
so
Governor
been
care
aFter
oF
rather
reForm
the
reticent
until
victory
Pennsylvania.
72-
they
oF
The
about
Found i t
Harris
Governor-
�elect
r a n on
a platform
a week
after
health
care r e f o r m would
State
election
advocating health
of the Union
William
domestic
Policy
day,
the Administration
be
address
and
addressed
assistant
director
Development,
wrote
that
1392.
t o P r e s i d e n t Bush f o r
of the White
of three
announced
within
i n P r e s i d e n t Bush's
i n January
Roper, deputy
policy
c a r e r e f o r m and
Bush
House O f f i c e
initiatives
of
which
213
reflected
Those
initiatives
expansion
and
"careful
concerned
of Medicaid
"setting
national
t h o u g h t and
well-chosen
physician
coverage
research into
214
payment
t o poor
effective
priorities."
reform,
women a n d
medical
children,
practice
as
a
priority."
Mr.
Roper
explains
what
the nation
f a c e s when i t
considers
reform.
Our h e a l t h s y s t e m h a s p l e n t y o f money; we a r e
j u s t n o t s p e n d i n g i t w i s e l y . ... E x p a n d i n g
access
t h r o u g h M e d i c a i d r u n s up a g a i n s t t h e p r o b l e m o f
l i m i t a t i o n s on t h e s i z e o f s t a t e a n d f e d e r a l b u d g e t s .
E x p a n d i n g a c c e s s by way o f m a n d a t i n g
employer
insurance p r e s e n t s r e a l problems t o small
employers
a n d makes more d i f f i c u l t t h e i r t a s k o f c o m p e t i n g
w i t h f o r e i g n companies i n our i n c r e a s i n g l y g l o b a l
economy.
Changing our t a x t r e a t m e n t of c u r r e n t l y
u n l i m i t e d t a x - f r e e h e a l t h b e n e f i t s t o w o r k e r s , and
u s i n g t h e t a x revenue produced t o expand h e a l t h care
access, runs counter t o the long-standing t r a d i t i o n
o f p r o v i d i n g t h e s e b e n e F i t s t a x f r e e . ... We m u s t
undertake serious-cost containment to permit
expanded access .
Mr.
between
Roper
Canada
also
and
the
Canadian
has
a parliamentary
radical
balances
as
a possibility
system
while
shared
out a major
t h e U n i t e d S t a t e s as
program
changes,
and
pointed
which
t h e U.S.
powers
political
reason
f o r our
i s capable
has
which
-73-
a
i s Far
of
system
difference
f o r discounting
own
nation.
more
oF
rapid,
checks
more v u l n e r a b l e
and
to
Canada
�<r
pressures
from
Because
exercise
tive
Enacted
during
much-needed
of
1.
i ssatisfactory
tradition
choice
t h e Bush
Reconciliation
has t h e a b i l i t y t o
of physician
t h e American
and f r e e
groups.
government
control
t h e i r system
with
'216
interest
t h e Canadian
markets
Budget
special
monopsony
services,
variance
• , •
and h o s p i t a l
for
them
but at
of advocating
by h e a l t h
care
Administration
competi-
consumers.
was t h e O m n i b u s
A c t o f 1 9 9 0 (OBRA ' 9 0 ) w h i c h
protective
health
care
and s o c i a l
provided
policy.
Some
i t s benefits are:
Creation
families
o f an e a r n e d
income
taxcredit
for
low-income
t o use s p e c i f i c a l l y f o r
purchasing
private
health
insurance;
2.
Expansion
below
3.
up
4.
of Medicaid
poverty
insurance
authority
"Fundamental
public
the
by
that
policy
pervasive
seeks
people
payment
within
to
include
t h e next
o f employee
decade;
health
to establish
that
t h e enactment
n o t an a b e r r a t i o n
but,
rather,
shiFts
there
inpolitical
a r e "...two
thinking."
power
One v i e w
The o t h e r
be t h e d e c i d i n g
Factor
view
o f OBRA'90
a r e f l e c t i o n of
•218
and p r o c e s s . "
ideologies
(entity) i n national
Canada's s y s t e m .
should
insurance
1
deFinitely
explains
for
health
premiums.^ ''
Etheredge
was
o f government
million additional
Medicaid
a tor
level;
The i n c r e a s e
to five
t o cover a l l chi 1dren i i v i n g
that
i s that
health
She
dominate
government
policy,
i s that
as
consumer
i n the Formation
-74-
oF a
much
should
be
illustrated
choice
national
�2 19
health
policy.
broad-based
Leadership
I n between
proposals
such
Commission,
and
"recommendations
For
in
political
the
For
irreconcilable
the
issues
which
are
a l l supposedly
as
behind
been
health
care
politically
the
National
about
to
are
negotiated
care
centered
system
whereas
money, p o w e r ,
to
previous
the
debates
in
and
on
the
status
negotiation.
is diFFerent
neither
Formulas
that
ideology,
on
whose
makes c l e a r
health
which
Commission
action
amenable
opposed
B u s h has
are
Etheredge
centered
a d d i t i o n a l Factor
President
Force
are
two
Pepper
a national
1990s
views
Waxman b i l l ,
e
government
diFFerences
administration
t h
the
consensus."
1970s a b o u t
An
as
these
during
this
administrations,
initiator
legislation.
nor
Instead,
the
is
that
propelling
"...health
I
policy
leadership
branch--with
Tax
views
has
health
on
oF
Stuart
strong
moved
impressive
Treatment
Or.
has
Health
M.
on
Butler
the
care
decisively
221
results."
Care
the
legislative
i
BeneFits.
oF
the
eFFects
cost
to
Heritage
the
problems.
Foundation
Internal
Revenue
has
Code
Currently:
"The
tax code s t r o n g l y e n c o u r a g e s . . . e m p l o y e r p r o v i d e d c o v e r a g e as a F r i n g e b e n e F i t b e c a u s e s u c h
p l a n s a r e e x c l u d a b l e w i t h o u t l i m i t From t h e
employee's t a x a b l e income.
While l i m i t e d tax r e l i e F
i s a l s o a v a i l a b l e t o t h e se 1 F - e m p 1 o y e d and
those
incurring unusually
heavy m e d i c a l c o s t s , For most
A m e r i c a n s t h e c o m p a n y p l a n i s t h e o n l y way
oF
r e c e i v i n g a t a x b r e a k For m e d i c a l c o s t s .
The
tax
exclusion
. . . i s . . . a m a j o r c a u s e oF u n i n s u r a n c e
and
rapidly excalating health
costs."
"Policymakers should recognize t h a t the
d e f i c i e n c i e s i n t o d a y ' s h e a l t h c a r e s y s t e m as dus i n
l a r g e p a r t t o p o w e r F u l and p e r v e r s e i n c e n t i v e s
r e s u l t i n g From t h e c u r r e n t t a x t r e a t m e n t
oF
health
care."223
2 2 2
c
_7 -
�The
1.
remedy
Replace
reFundable
packages
income
tax
who
today's
tax exclusion
tax credits
provided
credits
by e m p l o y e r s
would
W-2
would
who
oF
Health
beneFit
as
taxable
Simultaneously,
For out-oF-pocket
premiums and p r e p a i d
d i d n o t spend
system
be i n c l u d e d
t a x Form.
be p r o v i d e d
a v a i l a b l e t o those
w i t h a new
For h e a l t h expenses.
on t h e e m p l o y e e ' s
insurance
be
is to:
health plans.
costs
new
For
The c r e d i t s
would
do n o t i t e m i z e d e d u c t i o n s .
as t h e a l l o w e d
as much
Those
receive
credit
would
224
a reFund
would
t h e I.R.S.
household
would
be
Care
would
initiate
hospital,
basic
a
correspondingly
deductibles
of Features
and p r e v e n t i v e
and c o p a y m e n t s
a d j u s t e d g r o s s income would
.
g o v e r n m e n t . 226
The
Heritage
the
best
health
encouraging
portable,
Plan
consumers
utilize,
would " ( 1 )
insurance
would
their
have
exceed
premiums,' and ( 5 ) a l l o w
catastrophic,
Cut-oF-
10 p e r c e n t
consumersto
t o change
beneFits
oF
F o r by t h e F e d e r a l
cost,
shop For
thereby
would
at
be
will;
be r e d u c e d ; [ 4 )
i n order
the uninsured
would
employers
an i n c e n t i v e t o l i m i t ,
h e a l t h care
a Federally-
(2) the insurance
a d m i n i s t r a t i v e costs
Family
insurance.
at the least
a l l o w i n g t h e employee
head
a l l
to enroll
care
encourage
plan
Each
including
which
be p a i d
insurer competition',
employers'
Contract .
containing at least
package
physician,
Social
r e q u i r e d by law
i n a health plan
prescribed
•sv
"-
oF t h e F a m i l y
credit.
members
(3)
oF t h e c r e d i t
health costs
E s t a b l i s h a "Health
pocket
The a m o u n t
t o a percentage
according
but higher
higher
of
From
be d e t e r m i n e d
income,
2.
check
instead
oF
to avoid
t o be p r o t e c t e d
overhigher
at a
�Far
lower
cost
Senator
to
the
5.84
to the
Durenberger
Federal
would
term
government
tax
than
(R-Mn) h a s
other
approaches."
proposed
six
2 2 7
amendments
code.
provide
a tax c r e d i t
h e a l t h care
For
For
insurance
selF-purchase
taxpayer,
oF
long-
spouse,
and
parents;
5.85
would
allow
premiums
IRA
S.8S
5.87
IRAs, and
that
be
gross
employers'
provides
Senate
taxpayers
a
100%
Bill
who
84
The
amendment w o u l d
exceed
or
more
The
oF
income
not
be
by
From
the
the
I.R.S.;
to retirement
considered
as
part
savings
account
trusts
For
insurance;
deduction
For
premium
costs
For
individuals;
deduction
oF
is intended
purchase
employment
the
amount removed
gross
will
insurance
health insurance
premiums
se1F-emp1oyed .
the
oF
that
health
contributions
For
h e a l t h care
a permanent
provides
the
plans
tax c r e d i t s
provides
For
long-term
income;
se1F-emp1oyed
S.8S
oF
considered
insurance
long-term
5.88
oF
not
provides
oF
payment
out
would
health
the
arena
long-term
t o ease
long-term
For
qualiFying
and
a credit
health insurance,
$ 3 0 0 f o r one
burden
h e a l t h care
themselves
provide
the
For
For
oF
i t does
or
outside
aging
percent
providing
qualiFying individual,
older
insurance
their
15
on
parents
the
cost
not
$300 f o r
two
individuals.
term
'qualifying
individual'
long-term
h e a l t h care
insurance
-77-
means t h e
i f such
beneFiciary
individual
is
the
�taxpayer,
t h e spouae
taxpayer
or parent
of
the taxpayer,
or t h e p a r e n t
of the taxpayer's
spouse
of the
i f a joint
return
will
to a
229
is
Filed.
The
beneFit
parent
oF
the taxpayer
parent
oF
a tax credit
or the taxpayer's
spouse
apply
even
iF
that
i s not a dependent.
230
The
term
'long-term
health care'
means n e c e s s a r y
preventive,
t h e r a p e u t i c , and
rehabilitative
maintenance
or personal
s e r v i c e s r e q u i r e d by
ill
individual
An
individual's
the
cost
cost
the
oF
oF
in a qualiFied
the care
individual
Facility
home i s c o n s i d e r e d
the care
treating
care
provided
provided
have
s e r v i c e s , or
a
chronically
a qualiFied provider.
a qualiFied
t h e r e would
Facility
t o be
and i F
w i t h o u t horns c a r e
that
cared
iF
n o t exceed the
i n a state-1icensed Facility
physician certiFies
would
by
diagnostic,
For
the
i n a state-1icensed
Faci1i ty. " ^
Senate
Bill
85
i s intended
speciFic
amounts
accounts
For payment
premiums.
their
The
spouses
which
t o exclude
are withdrawn
oF
long-term
amendment w i l l
who
have
From
gross
beneFit
t h e age
oF
income
individual
h e a l t h care
only
reached
From
insurance
those
59
retirement
taxpayers
years
and S
and
months
233
on
or beFore
Also,
t h e annual
31,000
For
joint
oF
payment
e x c l u s i o n From
individuals
Retiree Health
1991
employees
care
oF
o r 32,000
oF
the insurance
gross
income
premium.
i s n o t t o exceed
For m a r r i e d
couples
Filing
a
return.
The
Act
the date
(Senate
Bill
to p a r t i c i p a t e
insurance
P r o t e c t i o n and Long-Term
85) p r o v i d e s
economic
i n employer-provided
For r e t i r e e s .
-73-
When e m p l o y e r s
Care
Insurance
i n c e n t i v e s For
long-term
contribute
health
to a
2 3 1
�qualiFied
voluntary retiree
h e a l t h plan, those
contributions
will
income
by an i n d i v i d u a l
earned
when t h o s e
the
n o t be c o n s i d e r e d
long-term
employee
those
oF t h e g r o s s
or h i s spouse.
h e a l t h care
retires,
as p a r t
employer
beneFits
beneFits
Additionally,
are received
also
will
aFter
n o t be i n c l u d e d
234
in
t h e gross
income
employee
must
disabled
i n order
have
consideration
employee
the
either
as g r o s s
was a l r e a d y
t o t h e death
Senate
bill
oF
up t o $ 2 0 0 a n n u a l l y
trust
Legislation
the
Financial
people.
would
long-term
such
economic
employee
The s a v i n g s
accounts.
to that
account
must
each
many
in
the interest
or
$600 c r e d i t
oF t h e s e
le-islators
insurance
i n order
premiums
citizens
purchase
i n order
wind
long-term
and w i l l
as p o s s i b l e t o v o t s
oF t h e F e d e r a l
insurance
- 79-
notto
_
be p a r t o r a
only
t o ease
on o l d e r
at
(A.A.R.P.]
persuading
For passage.
to provide
the p o s s i b i l i t y
up on t h e M e d i c a i d
care
work
government
to avoid
oF
3
i s necessary
bills
credits
care." ''
The A m e r i c a n A s s o c i a t i o n oF R e t i r e d P e r s o n s
Favor
Tax
account
F o r t h e p u r p o s e oF p a y i n g
as t h i s
consumers
For t h e e s t a b l i s h m e n t
contributions
health
only iF
immediately
i n c e n t i v e s For
savings
From
deceased
beneFits
235
employee.
be g r a n t e d
b u r d e n oF h i g h
as
senior
will
exclusively
individual's
oF a
these
h e a l t h cars
accounts
created
The s p o u s e
receiving
with
236
$2,000 p e r y e a r .
exceed
one
long-term
t o be e x c l u d e d
t h e same as t h e F o r m e r
37 p r o v i d e s
establish
savings
income.
However, t h e
t h e age oF 70 o r be
beneFits
oF t h e F o r m e r
to
such
attained
For these
i s considered
spouse
prior
oF a n i n d i v i d u a l .
rolls.
are Fortunate
I t
is
t h e 3300
of having
People
who
t o have t h e
�Financial
their
capability
independence
Federal
Financial
t o make t h a t
From
purchase,
government
and/or
thus
their
children.
Suggestions
"The
h e a l t h c a r e e c o n o m y oF t h e U n i t e d
a p a r a d o x oF e x c e s s and d e p r i v a t i o n . "
2
is
maintaining
3
States
8
"The
American h e a l t h care Financing
and
d e l i v e r y system i s becoming i n c r e a s i n g l y u n s a t i s F a c t o r y
a n d c a n n o t be s u s t a i n e d . " ^
2 3
The
$125
Joint
billion
annually
Economic
Committee
i n unnecessary
because
oF
oF
tests
economic
Congress
and
estimated
procedures
i n c e n t i v e s which
are
are
that
perFormed
inherent
in
2 40
our
present
h e a l t h care
Enthoven
based
on
and
Financing
Kronick
system.
explain that
"cost-unconscious
health
d e m a n d " as
care
t h e system
Financing
contains
is
more
241
incentives
system
to
i s an
spend
open-ended
more
treatment
they
are
are
than
and
they
and
are
spend.
invitation
impose
appropriate
insured,
to not
more and
necessary
not
cost
t a n g i b l e purchases.
and
believe
choose
their
bargaining
provider
This
the
power."
writer
could
to
They
as
choose
ultimately
provide
more p r o c e d u r e s
whether
or
not.
Because p a t i e n t s
as
they
Additionally,
"deprives
thereFore
a built-in
believes
to
p e r m i t t i n g consumers
physician
insurance
Freedom
which
own
that
that
their
-an-
the
Freedom
insurer
recommend
price
are
to
oF
preFerred
242
rgulator.
physician...it
whether
usually
Enthoven
consumers s h o u l d
own
aFFect
Fee-For-service
to providers
conscious
when m a k i n g
Kronick
The
they
live
be
permitted
is a
choice
healthy
�lives
or
die
From
the
or
lack
oF
knowledge
e F F e c t s oF
i t .
Fees c o u l d
be
negotiated
Fees c o u l d
be
established
ments
which
the
'purchasing
make s u c h
an
care
access
(HMO,
1.
important
to
PPO)
drive
the
system
For
Managed
as
decision
annual
'recommended'
procedures
a guideline
and
in
making
individual's
has
greater
are
designed
treat-
Freedom
priority
than
proposals
choice
oF
to
give
eFFicient,
managed
Fallows:
reForm
by
oF
economic
imposing
incentives
strong
incentives
which
to
would
give
value
money ;
Z.
use
a subsidized
as
Comprehensive
various
or
care,
power.
Enthoven/Kronick
everyone
For
physician's
managed
C e r t a i n l y an
insurer's bargaining
The
an
than
providers,
can
decisions.'
to
Rather
For
consumer
a particular
care
at
competition
relatively
3.
Restructure
the
uninsured,
which
low
tax
and
would
high-quality
cost;
subsidies
to
provide
to
encourage
create
the
incentives
insursd
to
to
be
cover
cost
conscious;
4.
Create
subsidized
public
institutions
coverage
For
those
to
not
broker
and
accessing
market
plans
through
243
their
employers.
Enthoven
provided
and
health
Kronick
care
are
strong
insurance.
They
e.FFect
is irresponsible behavior"
insure
their
the
cost
oF
employees
care
Falls
because
on
advocates
-a 1 -
should
and
those
employer-
that
when e m p l o y e r s
i F one
taxpayers
contend
oF
do
become
"the
not
i l l ,
consumers
who
�are
insured.
" [ i ] t
Those e m p l o y e r s
i s hard
to
justiFy
For
"are
raising
For
coverage
the employed
are
required to contribute
taking
taxes
a Free
on
uninsured
the
ride"
and
insured to
unless
those
pay
uninsured
244
advocate,
however,
that
their
these
Fair
share.
employers
They
apply
to
the
do
Public
245
Sponsor
i n order
The
the
by
P u b l i c Sponsor
Federal
subsidize
their
PuBlic
to provide
Reserve)"
enrollment
emp1oyers.
Sponsor
AmeriCare
would
be
For
"a
their
i n insurance
2 4 6
by
plans
What E n t h o v e n
identical
Senators
employees.
q u a s i - p u b l i c agency
e s t a b l i s h e d i n each
i s almost
authored
coverage
state
For
and
those
state
would
not
Kronick
to the
Mitchell,
which
covered
call
the
agency
Kennedy,
(like
named
Riegle,
and
247
RockeFeller.
I t i s also
be
provided
by
Representative
Cost
by
the Health
1
Act
and
provide
Funds For
persons.
Their
play
plans
pending
cover
employers
less,
or
circulsting
Full-time
seasonal
have
enough
employer
oF
reForm
employees
people
or
who
attachment
to provide
t o be e s t a b l i s h e d
Insurance
imposing
Coverage
the
tax
i s very
Washington
i n the
SpeciFic
warning
that
be
too
who
are
are
and
s t r o n g an
249
t o one
employer
-32coverage."
2 5 0
to
oF
numerous
and
incentive
state,
who
age
justiFy
pay-or-
employers
They
under
would
uninsured
to Enthoven
requiring
and
which
to the
Form
se1F-emp1oyed,
retired
to
similar
bills.
would
a tax
to disperse
to p a r t - t i m e workers.
"(m)any
work,
recommend
around
is their
to shiFt
that
Health
the P u b l i c Sponsors
concept
however,
T r u s t Fund
would
1391.
Kronick
h e a l t h care
Kronick,
oF
to the s e r v i c e which
Insurance
Rostenkowski s
248
Containment
Enthoven
similar
55
to
For
neverthe-
have p a r t t i m e
years
requiring
do
the
not
�Enthoven
choice
of
either
$22,500 o f
or
early
employment
An
the
or
would
gross
be
of
For
on
payroll
tax
p a r t - t i m e and
an
employer
on
the
seasonal
other
who
are
r e q u i r e d t o pay
an
First
privately-
se1F-emp1oyed,
reasons not
covered
8 percent
the
employees,
i n a Federally-approved
Those
are
through
tax
on
income.
c o n s i d e r a t i o n which
include in their
contribution
Federal
imposing
8 percent
plan.
are
essential
to
personal
an
propose
employees
medical
retirees,
careFul
paying
those
basic
adjusted
Kronick
wages/salaries
enrolling
insured
and
level
tax
proposal
would
in order
be
is that
levied
to deter
From t h r e a t e n i n g t o move t o
Enthoven
by
and
the
payroll
and
collected
large corporate
another
state
Kronick
which
are
and/or
at
employers
does not
impose
.
^
251
such a t a x .
Enthoven
income
tax
employee
be
the
that
those
and
and
payroll
maximum
people
plans
who
with
this
change
that
amount
their
both
other
own
equity
and
that
costly
about
"Thus,
impose
Congress
a limit
on
tax-Free
percent
permitted i n order
h e a l t h care
plans
2 5 2
Enthoven
and
budget
applied to
Finance
subsidies
the
tax
h e a l t h care
tax
change would
and
would
reForm
The
Enthoven/Kronick
-83-
$11.2
Congressional
plan
would
For
From
estimate
the
on
Budget
be
and
the
make p e o p l e
is deFensible
assure
billion
For
improve
would
to
pay
Kronick
Federal
this
change
Eighty
the
eFFiciency."
the
that
money, w i t h o u t s u b s i d i z a t i o n
save
Additionally,
care.
estimated
be
to
contribution
taxpayers.
could
could
conscious
laws
d e s i r e more
that
uninsured.
recommend
to health insurance.
tax-Free
or
managed
tax
contributions
employers
cost
Kronick
more
market
grounds
OFFice
budget
For
oF
has
neutral.
2 5
"^
�Enthoven
benefits
because
which
c a n be a c h i e v e d
artery
rate
77C
rate
coronary
and median
administrators
providers
a result
similar
with
satisfaction
within
costs
system
each
they
lower
with
sometimes
a 3.8
Managed
exorbitant
would
result
geographic
lower
and
system
must
administrative
be s i g n i f i c a n t l y
because
i n which
improve
or
area.
-84-
i s often
t h e same o r
of the
and
expertise.
reduced
insurer
patient
experienced
and K r o n i c k
and n o n - p r o f i t
the
HMOs
efficient
f a i l . " ^
5
costs currently
o f an e v e n t u a l
i n a minimal
percent
which
level
Enthoven
of profit-oriented
market
hospital
i s superior to the
of the satisfaction
utilization
11.4
out those
s u p e r i o r knowledge
28 p e r c e n t
an
care
and seek
perform
care
California,
Another
cost because
a solo p r a c t i t i o n e r .
of the Future
would
which
with
and t h e i n e f f i c i e n t
insurers
with
to recognize
o f managed
i s 95 p e r c e n t
broader
The
grafts
performance
with
fee-for-service/so1o practice/third-party
a "restructured
prosper
with
i s consonant
s e r v i c e s from
propose
o f $59,000.
includes high q u a l i t y ,
coupled
efficiency
i n the
bypass g r a f t s
o f $16,•••.^
the a b i l i t y
procedures,
traditional
bypass
charges
performance
which
charges
artery
of the frequency
Often,
in
have
whose
efficiency-
method,
and m e d i a n
occur
system
44 c o r o n a r y
death
may
care
I n 1986, a Los A n g e l e s ,
"performed
which
a managed
of the
providers.
performed
which
through
example
variations
percent
by
a striking
o f t h e wide
hospital
with
relate
of different
levels
death
and K r o n i c k
5
being
by t h e m a n a g e d
borne
care
" c o m p e t i t i v e shakedown"
number o f managed
care o r g a n i z a t i o n s
�State
A d m i n i s t r a t i o n of Federal
States
toward
medical
Funds a r e
MedlCal
capita
then
depend
payments
exceeds
the
i s 55
with a statutory
per
capita
income would
States
by
are
percent.
minimum
the
oF
5D
provide
to
IF
the
per
Federal
A
For
75
per
capita
share
income,
capita
diminishes,
1ower-than-average
s t a t e w i t h a maximum
government. '
even s u b s i d i z e d
Federal
a s t a t e ' s per
2 5
Federal
a
These
IF a s t a t e ' s
percent.
the
For c o n t r i b u t i o n s
i t s citizenry.
n a t i o n a l average
n a t i o n a l average,
but
Funding
For
computation.
to the
share
government
states according
Percentage
i s equal
Federal
percent
Federal
a l l o c a t e d among t h e
income
income
the
assistance
Assistance
the
on
Programs.
oF
83
7
percent
oF
the
cost
oF
258
medical
The
and
utilization
states, in turn,
States
must
bear
at
review
must
by
peer review
provide
least
40
local
percent
oF
organizations.
governments
the
cost
with
oF
Funds.
medical
259
assistance,
However,
with
lack
local
local
oF
duration,
scope,
under
plan
the
political
Funds c a n n o t
or
quality
i n any
part
Under S.1227, t h e
addition
then
to
have
those
oF
result
services
the
or
the
s t a t e s may
without
Full
cost
Federal
to
ensure
requirrements.
enForcement
and
would
oF
the
oF
install
with
would
Federal
a system
remainder.
in "lowering
level
the
amount,
oF a d m i n i s t r a t i o n
elect
to provide
but
the
such a d d i t i o n a l
2G1
beneFits
states
in
will
coverage
by
subsidies.
compliance
States
the
State.
S.1227 o u t l i n e s r e g u l a t i o n s w h i c h
states
bearing
Federally-required basics,
to bear
themselves,
oF
entities
have
Federal
For
be
imposed
health beneFit
to provide
standards
For
would
plan
guidelines to
health plan
r e c e i v i n g customer
-35-
on
ensure
beneFits^
263
complaints
5 2
�and
provide
carriers
information
that
regulatory
state
of Health
t o meet
membership
insurance
and
be
about
c o v e r e d by
care
states
2 5 7
of valid
(d)
attempt
t o reduce
and
providers
uniform
billing
administrative
payment
would
and assessments
and c l a i m
costs
would
companies f o r
submitted
the funding
contributions
and employ
claims
labor,
of the consortia
a claim
2 5 6
of health
business,
insurance
(b) establish
G 5
consortia
and p u r c h a s e r s
including
i f they
Act.^
purchasing
health
t o review
t o determine
The p u r p o s e
to the consortium;
develop
form
i n the state,
by t h e c o n s o r t i u m
[c]
be s u b j e c t
of the HealthAmerica
a l l small-share
and p r i v a t e
would
a l l providers
i n the cortium;
enrollees
public
that
organizations.
to (a) enroll
membership
or
i n t h e area
S Human S e r v i c e s
t o include
and h e a l t h
consumer
payment
plans
programs
the standards
S.1227 r e q u i r e s
with
benefit
regulatory
the Secretary
continue
health
e m p l o y e r s and consumers
author ity.
The
by
offer
t o small
by
fund f o r
providers
be d e r i v e d
on
from
enrollees;
form
procedures;
and b u r d e n s
on
enrollees
2S8
of health
services.
2B9
States
will
S.1227 p r o v i d e s
regulaating
power
small
However,
S.1227 " s h a l l
under
cost
to regulate
borders.
this
invokes
insurers
Act."
according
t o form
containment
insurers.
states
that
Thus,
regional
industry
do n o t c o m p l y
t o receive
S.1227 w h i l e
with
assistance
to utilize i n
have
to federal
states
legislation.
without
had t h e
within
its
the strictures of
made
acknowledging
to require
the states
-86-
states
residing
of t h e purse
contra], over
consortia."
methods f o rs t a t e s
Traditionally,
the insurance
be i n e l i g i b l e
270
t h e power
maintaining
be p e r m i t t e d
available
state
powers,
to regulate
small
I t i s a method o f
actually
pre-empting
�state
powers.
The
Federal
review
which
states
do F a c e p r e e m p t i o n
government
programs.
determine
under
There
government
state's
power
Congress
2.
Implied
p o w e r s by t h e
§2793 r e g a r d i n g
are several principles
preemption.
Federal
1.
S.1S27
oF t h e i r
would
Preemption
result
i n loss
utilization
oF
preemption
oF t h e F i e l d
by t h e
oF a s e g m e n t
oF a
structure.
may
preempt
state
l a w by e x p r e s s
statement.
2
7
^
272
preemption
may
be d e t e r m i n e d
i n two ways:
(a)
C o n g r e s s i o n a l i n t e r e s t may s o d o m i n a t e a F i e l d t h a t t h e
F e d e r a l g o v e r n m e n t w i l l be a s s u m e d t o h a v e p r e c l u d e d
e n F o r c e m e n t oF s t a t e l a w s on t h e same s u b j e c t . 2 7 3
(b)
S t a t e law w i l l
conFlicts with
There
not
i s an o v e r r i d i n g
intend
t o preempt
Senators
in
their
However,
eFFort
that
presumption
state
Mitchell,
Summary
health
be p r e e m p t e d ^ t n
Federal law.
2
law. '
Kennedy,
oF S.1227 t h a t
care
reForm
implied
will
preemption
Feel
state's
sections
§2793.
rights
laws
likely
have
government d i d
n o t been
stated
preempted.
be a F e d e r a 1 1 y - i m p o s e d
i s expected
t h e eFFects
a t the very
the Federal
7 5
state
will
S.1227 c o n t a i n s t w o c l e a r
into
that
R i e g l e , and R o c k e F e l l e r
a n d , as p e r v a s i v e as r e F o r m
the states
the extent that i t
t o be, i t i s l i k e l y
through the p r i n c i p l e
oF
least.
illustrations
and i n d i v i d u a l s '
lives
oF F e d e r a l
intrusion
and p r i v a c y . ^
The
are quoted:
Favorable
Treatment
oF U t i l i z a t i o n
Review
Programs.
(a)
PREEMPTION OF STATE LAWS R e s t r i c t i n g U t i l i z a t i o n R e v i e w
P r o g r a m s T h a t M e e t F e d e r a l S t a n d a r d s . -- I n t h e c a s e oF a h e a l t h
b e n e F i t p l a n t h a t i n c l u d e s a u t i l i z a t i o n r e v i e w p r o g r a m , no S t a t e
law o r r e g u l a t i o n s h a l l p r o h i b i t o r r e g u l a t e a c t i v i t i e s u n d e r
such
p r o g r a m , e x c e p t i n s o F a r as such law o r r e g u l a t i o n i s c o n s i s t e n t
w i t h t h e s t a n d a r d s e s t a b l i s h e d under s u b s e c t i o n ( b ) .
-87-
�Cb)
ESTABLISHMENT OF STANDARDS F o r U t i l i z a t i o n R e v i e w P r o g r a m s .
(a)
I n G e n e r a l . -- The S e c r e t a r y s h a l l p r o v i d e , by
r e g u l a t i o n , F o r t h e e s t a b l i s h m e n t oF F e d e r a l s t a n d a r d s F o r
u t i l i z a t i o n r e v i e w p r o g r a m s oF h e a l t h b e n e F i t
plans...to
assure, within a plan, the cost-eFFective
and m e d i c a l l y a p p r o p r i a t e u s e oF s e r v i c e s . ...
(c)
U T I L I Z A T I O N REVIEW PROGRAM DEFINED. -- ... t h e t e r m
' u t i l i z a t i o n r e v i e w p r o g r a m ' means a s y s t e m o F :
r e v i e w i n g t h e m e d i c a l n e c e s s i t y and a p p r o p r i a t e n e s s
oF p a t i e n t s e r v i c e s ( w h i c h may i n c l u d e i n p a t i e n t a n d
outpatient services] using speciFic guidelines.
Such
a s y s t e m may i n c l u d e :
preadmission c e r t i f i c a t i o n
t h e a p p l i c a t i o n oF p r a c t i c e
guidelines
continued stay review
[See inFra, Wickline)
discharge planning
p r e a u t h o r i z a t i o n o f a m b u l a t o r y p r o c e d u r e s , and
retrospective
review.
According
will
be a b l e
t o t h e above-quoted
to require
to
reappraise
In
consideration
as
i s deFined
derived
would
From
each
and r e v a l u e
i n the b i l l
deFensive
s t a t e government
every
oF t h e F a c t
decision
t h a t such
strategy
physician
physician
and a t t o r n e y
oF m a l p r a c t i c e
physician
Such r e v i e w
should
tion
because
the
is
review
impose
investment
escalation
selF-reFerral,
require
be r e q u i r e d
prior
oF t h e g r e a t e r
on p a t i e n t ' s r i g h t s ,
an i n v a s i o n
the r i g h t
oF a p a t i e n t ' s
p r a c t i c e s which
within
doctor/patient relationship.
with
review
i t
review
oF:
cases; and,
(c)
would
physician.
competence;
(b)
the right
utilization
t o the cost
to statutorily
(a)
number
strenuous
and p h y s i c i a n
government
t o reserve
made by e v e r y
i s due i n p a r t
medicine
be a m o r e p o i n t e d
s e c t i o n j . t h e Federal
the medical
t o imposing
detrimental
Revaluation
oF c o n F i d e n t i. a 1 i t y b e t w eon
-38-
medical
utiliza-
such
oF c a r e ,
and an
physician
review
a n d on
oF p h y s i c i a n
privacy,
the
Field.
eFFects
eFFsctiveness
individual
excEiserbate
decisions
interFerence
and p a t i e n t .
�The
can
devastating
already
discussed
potential
be
2 7 7
discerned
in this
For
eFFects
by
the
reading
text.
harmFul
oF
The
health
conditions
.Wickline
strictures
care
v.
oF
imposed
State,
by
a
§2793
case
§2793 i m p o s e a
p r a c t i c e s and
should
not
strong
be
underestimated.
The
rights
second
imposed
§2791.
by
National
(a)
health
illustration
or
Federal
S.1227 c o n c e r n s
intrusion
managed
into
states'
care.
Standards.
P r o h i b i t i o n s . --
care
oF
any
other
No
law
requirement
or
oF
any
State
regulation shall
insurance,
--
(1)
p r o h i b i t a m a n a g e d c a r e p l a n From F r e e l y s e l e c t i n g
t h e h e a l t h c a r e p r o v i d e r s , o r t h e t y p e oF h e a l t h c a r e
p r o v i d e r s i n a l o c a l e , as t h e p a r t i c i p a t i n g p r o v i d e r s ; o r
(2)
l i m i t t h e a b i l i t y oF a m a n a g e d c a r e e n t i t y t o
n e g o t i a t e , e n t e r i n t o c o n t r a c t s or e s t a b l i s h a l t e r n a t i v e
r a t e s o r F o r m s oF p a y m e n t F o r p a r t i c i p a t i n g p r o v i d e r s , o r
r e q u i r e o r p r o v i d e i n c e n t i v e s t h a t p r o m o t e t h e use
oF
participating providers.
(b)
U t i l i z a t i o n R e v i e w S e r v i c e s . -- N o t w i t h s t a n d i n g
S t a t e l a w , an i n s u r e r o r o t h e r p e r s o n o r e n t i t y may
oFFer
u t i l i z a t i o n r e v i e w s e r v i c e s i n any S t a t s i F s u c h i n s u r e r ,
o r e n t i t y h a s e s t a b l i s h e d --
to
any
person
(1)
a procedure that adequately
evaluates
the
n e c e s s i t y and a p p r o p r i a t e n e s s
oF t h e p r o p o s e d o r d e l i v e r e d
h e a l t h care s e r v i c e s ;
( 2 ) a p r o c e d u r e t h a t p e r m i t s p a t i e n t s and p r o v i d e r s t o
a p p e a l any a d v e r s e d e c i s i o n s by t h e p e r s o n o r e n t i t y p e r F o r m ing the u t i l i z a t i o n review s e r v i c e s . . . ;
...
(4)
a procedure t h a t ensures t h a t a l l a p p l i c a b l e
F e d e r a l and S t a t e l a w s t h a t a r e d e s i g n e d t o p r o t e c t t h e
c o n F i d e n t i a 1 i t y oF i n d i v i d u a l m e d i c a l r e c o r d s a r e
Followed.
Under
or
ignore
paragraph
[a)(l)
above,
a s t a t e s t a t u t e which
Missouri
prohibits
would
have
to
repeal
restrictions
on
an
278
individual's
choice
requirements
similar
resulted
oF
to
provider.
those
in a devastating
Paragraph
in existence
c h a n g e i n one
-89-
(b)
imposes
in CaliFornia
person's
state
oF
which
�279
health.
s . 1 2 2 7 §2791 ( ^ 4 )
h a v e no
effect
is a pacifying
g i v e n the mandates
of other
clause which
provisions
in
will
this
bill.
Given
the fact
a co-author
the
Pepper
advocate
which
of
patient
Rockefeller's
writer
would
have
rights.
expected
been
With
name
that
lineup
of health
David
Security
on
he
says,
of
regulating
of
1991
that
(hereafter,
"S.700 p e r m i t s s t a t e s
market
t h e Chairman
and
a
of
stronger
t h e e x c e p t i o n o f a few
assures
r i g h t s to regulate
this
as
ideas
beginning i n the
reform proposals.
Durenberger
Act
the s t a t e s '
care
is listed
pro-consumer
p o t e n t i a l , S.1227 i s a d i s a p p o i n t i n g
Senator
Health
Senator
o f S.1227, t h i s
Commission
have
current
that
the
S.700),
does
the
not
American
impinge
insurance industry.
to maintain
i f they
his b i l l ,
enact
Rather,
their traditional
state
laws
that
role
accomplish
230
the
same d e g r e e
thought
by
explaining
protections,
the
federal
other
way
of consumer
that
protection."
i f "any
intrude
Lastly,
upon
continues the
s t a t e . . . f a i l e d to enact
i n s u r a n c e companies. . .would
23 1
rules.
He
be
required
to abide
S.700 d o e s n o t o v e r r i d e
the states'
traditional
role
such
or
of
by
i n any
regulating
f i n a n c i a l s o l v e n c y and r e l a t e d s t a n d a r d s f o r i n s u r a n c e
companies.""
A d d i t i o n a l l y , t h e S e c r e t a r y o f H e a l t h a n d Human S e r v i c e s h a s
discretion
to
permit
to enter
state
laws
into
s e p a r a t e agreements
to p r e v a i l
over
federal
with
states
standards.
i n order
These
a g r e e m m e n t s w o u l d o n l y be a v a i l a b l e t o t h o s e s t a t e s w h i c h e n a c t
standards which are s u f f i c i e n t t o carry out the purposes of the
'233
American
Health Security
U n d e r S.700,
benefit
laws.
Act
of
1991.
"MedPlans" would
Senator
Durenberger
-90-
be
exempt
from
state-mandated
estimates that
state-mandated
8 2
�beneFits
increase
Surprisingly,
business
t h eSenator
employers
STATE AND LOCAL
In
by a s much
claims
signficantly
a s 2 0 t o 30 p e r c e n t .
that
less
MedPlans w i l l
than
other
cost
small
insurance
products
HEALTH CARE REFORM PLANS.
t h e Face
legislators
answers
premiums
oF B u s h
and governors
A d m i n i s t r a t i o n ambivalence,
are experiencing
to exhorbitant health
care
pressure
costs.
State
t o provide
Kosterlitz"
reports:
To a l a r g e d e g r e e , ( s t a t e s ) a r e b e i n g d r i v e n
by c o n c e r n a b o u t h e a l t h c a r e ' s g r o w i n g i m p a c t on t h e
b o t t o m l i n e . . . a s c o s t s a n d demand F o r h e a l t h c a r e
c o n t i n u e t o o u t s t r i p t h ^ i a t i o n ' s w i l l i n g n e s s t o pay
For i t , s t a t e s have i n c r e a s i n g l y F e l t t h e p r e s s u r e
t o be t h e p a y e r oF l a s t r e s o r t , g e t t i n g s t u c k w i t h
c o s t s t h e Fedecal government and p r i v a t e i n s u r e r s
reFuse t o p a y .
The r e s u l t , s t a t e o F F i c i a l s s a y , i s n o t o n l y
chaos For s t a t e b u d g e t s , b u t a l s o a s t e a d i l y
d e t e r i o r a t i n g s t a t e h e a l t h n e t w a r k - - e s p e c i a 11y i n
i n n e r c i t i e s and r u r a l areas--and l o u d e r
complaints
From h e a l t h c a r e p r o v i d e r s , l a r g e and s m a l l
b u s i n e s s e s , and a d v o c a t e s F o r consumers a n d l o w income Americans."286
2 8 5
M a s s a c h u s e t t s was o n e oF t h e F i r s t
a health
plan,
recession
a n d was u n s u c c e s s F u l
which
began
CaliFornia,
Michigan,
Washington,
Oregon,
widespread
insurance
Maine,
Colorado,
and H a w a i i
t o attempt
oF t h e d e e p
a t that
Connecticut,
a r e a Few e x a m p l e s
attempts
time.
at health
Missouri,
oF t h e
care/health
reForm.
points
and o t h e r
negotiating
reaching
because
t o h i tt h enortheast
state-initiated
Kosterlitz
hospitals
states
outthat
groups
compromises,
s o l u t i o n s than
within
they
such
when e m p l o y e r s ,
a single state
may p r o v e
a group
-9 1 -
more
would
doctors,
start
successFul i n
achieve i F
�negotiating
on a F e d e r a l
level.
state
level
will
a precedent
easier
to
Follow.
provide
Too, e a c h
success
which
others
at the
will
Find
2S7
Q Q
Shaheen"
relations
oF
has r e c e i v e d
Federal/state
many
in
points
respects,
these
poocess
which
a t the-Federal
Missouri
would
The
plan
all
Universal
have
Canadian
government
Yet,i n
play
key r o l e s
a f t h e same
i d e n t i F i e d as a F F e c t i n g
provided
program
been
and
departure
From
a l l Missourians
with
a basic
t o be p o r t a b l e ,
was m o d e l l e d
have r e p l a c e d ,
insurance
because
plan.
on t h e
Although
conglomeration,
oF w h a t
health
programs.
i t was b e l i e v e d
as an e x a m p l e
which
a t the basic
or deductibles.
the current
here
level,
There
would
the
proposal
t o be -1oo r a d i c a 1 a
i t i s a good
individual
plan
states are
t o accomplish.
Missouri
Funded
(H.B.1127J
private health
enacted
appear
Plan
and w o u l d
was n e v e r
trying
also
the policy
Assurance
no c o p a y m e n t s
recount
level
Health
was m e a n t
public
have
would
by more
For
health
1.
Money
have
t h e areas
relationships.
services...(M)any
have been
oF s t a t e / l o c a l
attention...than
t w o u n i t s oF
oF human
area
t o be r e F l e c t e d i n
28 9
p o l i c y p r o c e s s a t t h e s t a t e and l o c a l
level."
I n 1990 t h e M i s s o u r i l e g i s l a t u r e c o n s i d e r e d t h e
290
the
to
Far less
"(T)he
or F e d e r a l / l o c a l
the delivery
dynamics
out that
eFFicient
care.
spent
had t h e i r
spending
health
assurance
oF money
already
program
allocated
For example:
by e m p l o y e r s
been r e d i r e c t e d
employers.
have
on e m p l o y e e
t o a $.75 p e r h o u r
The p a y r o l l
t a x would
-92-
health
payroll
have r a i s e d
beneFits
t a x on
$3.5
would
those
billion.
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
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<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Identifier
An unambiguous reference to the resource within a given context
2006-0885-F
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
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Paper
Dublin Core
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Title
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[Political Power Structures Affecting Any National Health Care Reform Plan: Health care reform concepts versus Social and Economic Values] [binder] [1]
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Health Care Task Force
Jason Solomon
Identifier
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2006-0885-F Segment 3
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 37
<a href="http://clinton.presidentiallibraries.us/items/show/36148" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12092971" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Medium
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Reproduction-Reference
Date Created
Date of creation of the resource.
3/16/2015
Source
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42-t-12092971-20060885F-Seg3-037-017-2015
12092971