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These records pertain to health care reform.
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286185997
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Health Care Reform - 4/16/91 Kuttner, Porter Meeting on Status, Progress
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286185997
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Health Care Reform - 4/16/91 Kuttner, Porter Meeting on Status, Progress
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These records pertain to health care reform.
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08799-014
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Records of the White House Office of Policy Development (George H. W. Bush Administration)
Johannes Kuttner Subject Files
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Originally Processed With FOIA(s):
FOIA Number:
1999-0118-F
1999-0118-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin: Policy Development, White House Office of
Series:
Kuttner, Johannes, Files
Subseries:
OA/ID Number:
08799
Folder ID Number:
08799-014
Folder Title:
Health Care Reform - 4/16/91 Kuttner, Porter Meeting on Status, Progress
Stack:
Row:
Section:
Shelf:
Position:
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o
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Your meeting Monday with Bill Roper offers an opportunity
to frame your thinking about where to go with the issues that
follow from the President's State of the Union directive to the
Secretary of Health and Human Services to study the cost,
access, and quality issues of our health care system. At the
February Sununu/Darman/Sullivan/Boskin meeting, there was
agreement that those same senior advisers should enter the
study period with common expectations about the outcome. This
memorandum reviews the issues on which those senior advisers
should have common expectations.
1.
What are our long term goals?
By referring to the "health care studies underway," the
President implicitly accepted the agenda framed by those
studies. At the same time, the President's relative priorities
are markedly different. The President put cost first; the
studies put access first.
In that February principals meeting, Governor Sununu said
that universal insurance coverage was not beyond the pale as a
long term goal. The Rockefeller Commission, reflecting the
conventional wisdom among health policy analysts, said we
should march towards that goal through employer mandates. The
principal options that have surfaced in the debate on universal
access are:
Mandate employers. Build on the American tradition of
health insurance being employment based by requiring
employers to provide coverage (or, in some variants,
pay a payroll tax instead of providing coverage);
Mandate citizens. Follow the auto insurance model,
where there is a universal mandate on the citizen to
be insured;
Universal insurance availability. Expand Medicaid or
invent a new public program to provide insurance to
all on an income-related basis.
Universal access to services. Provide universal
access to services, not insurance, through public
clinics and contracts for services.
A wide range of options can be created involving various
proportions of each approach.
2.
What role does the tax code play in our long term goals?
To the extent the government has tools available to make
the system pay for increased access, they are found in the tax
code. The tax preference for employer provided insurance
deprived the treasury of $34 billion in 1989. This is the
fastest growing tax preference and also the only uncapped
employee fringe.
Last year, in the discussions that lead to the President's
FY 91 budget, the tax cap emerged. The range of options
includes imputing some or all of health insurance costs as
income to employees, limiting employer deductibility.
The other side of the coin is the tax code as a tool to
subsidize health insurance and health care costs for low income
Americans through a tax credit for these costs or enhanced
deductibility.
A bold access proposal requires more than a tax cap. It
requires fundamental change in the structure of subsidies for
health care. How far we are willing to change the tax code is
the single largest variable in framing the next question, the
role of the Sullivan state of the union study in advancing our
long term agenda.
3.
What do we seek to accomplish in the study directed in the
State of the Union?
The answer to this question falls out from how we see
1991:
a year in which the study continues;
a year in which we produce a study or policy
statement that defines the issues as we see them,
possibly putting forth some prescriptions, with big
access proposals tied to tax code change put off to
the 1992 campaign cycle or the second term; or
O
the year in which we put it all on the table.
The expectations created in the State of the Union and the
difficult situation that would result for Secretary Sullivan
seem to rule out the first option. The third option deprives
the President of an election year initiative, legitimizes
putting access first, and also means advancing in 1991 things
that could be read as violating the "no new taxes" pledge.
There are a number of other reasons why the second option
is attractive:
O
It provides a means for us to enter the debate by
saying that costs come first.
O
It is a way to fulfill the State of the Union
commitment for study without putting down all our
cards on access/tax code.
It challenges the conventional wisdom that 1991 is
the long awaited year to finally solve, once and for
all, how the US will achieve universal access. A
broccoli before desert requirement, cost before
access, lessens the chances the Congress will be able
to push ahead on its own.
Moving from strategic considerations to the concrete, HHS
needs guidance on what final work product is expected in
response to the President's directive for a "study." It has no
such guidance right now, and as a result, very little work is
being done. Some scenarios include:
Secretary Sullivan studies the issues through
meetings and discussions, with no written product
until a DPC paper is put together in the fall. No
document becomes public until there is a fact sheet
in conjunction with a Presidential announcement.
Secretary Sullivan's study becomes a tangible
document that looks like a Manhattan phone directory,
defines the issues, but stops short of being a
"Treasury I." It would be long on analysis, and has
chapters on many of the cost issues in the background
of the current debate. It can serve as the basis for
a set of "first steps" policy pronouncements that
respond to expectations that we will advance
something in 1991 but push the tax/access questions
into 1992 or later.
The Sullivan study follows the Treasury I model.
While presenting a range of options for Presidential
decisionmaking, the options are very bold.
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PROCESS
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CONTENT
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INTEREST GROUPS
Business
Very few business leaders see a role for government
Health Insurers
Now supportive of intervention in the insurance market to
make insurance more available.
Labor
Views costs as a problem to be solved by providers.
Strongly favor employer mandates.
Organized Medicine
Supports employer mandates as well as increased public
spending, even if it means raising taxes.
States
Health care is the fastest growing part of state budgets.
Gov. Gardner plans to make health the focus of his NGA
chairmanship.
Congressional Democrats
A majority support employer mandates (although a distinct
minority does not.) Always ready to outbid the
Administration.
Topics for Health Care Study
I.
Access
-
The problem of those without insurance
-
Issues of special population: pregnant women, rural
populations, trauma care in large cities
II. The cost and availability of health insurance
-
Problems of small business
III. Cost
-
Overall cost of health care
-
Cost of insurance
IV. Quality
-
Measures
-
Improving outcomes
V.
Malpractice
VI.
Long Term Care
Non-standard topics
1.
Market imperfections: information, consumer insulation
from prices, sources of aversion to price-based
competition
2.
Public sector investment: public health (preventing the
need for services) V. financing (buying services)
3.
Principles for prudent public investment
4.
Antitrust issues
5.
Physician supply
6.
Role of research in creating costs