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TALKING POINTS FOR MEETING WITH CHILDREN'S HOSPITALS January 28, 1999 Thank you all for coming. It is good to see SO many of you again. As you all know, I am great admirer of children's hospitals. Your institutions provide vital health services to so many children - including the poorest, sickest and most vulnerable. I know what a struggle it is for your institutions to remain financially viable given the costs you incur doing cutting edge research, training pediatricians and specialists to care for our children, and treating the sickest young patients. This struggle has become more intense in recent years in an increasingly competitive health care market dominated by managed care. And while all teaching hospitals contend with higher costs, they at least receive greater support from Medicare. You have been remarkably successful in raising private funds to cover costs that are not paid for through either private insurance or government support, but I know -- from my experience on the board of Arkansas Children's Hospital -- what that takes. It is time to remedy the inequity in funding for graduate medical education that children's hospitals have long faced. I announced this morning that the President's fiscal year 2000 budget will include a new $40 million grant program to provide federal financing for graduate medical education for freestanding children's hospitals. [This proposal will provide funding on a per resident basis with your hospitals receiving approximately $9,380 per resident, for a total average payment of $689,000 per hospital.] Secretary Shalala will talk more about the proposal in a few minutes. We will need to continue to work closely with Senators Kennedy, Kerrey, Dodd and others who have championed this issue in Congress in order to make this program a reality. I also look forward to continuing to work with you to reach out to families with children who are eligible for but unenrolled in Medicaid or CHIP. As you know, we are about to launch an intensive outreach campaign, which you will be an important part of, and the Administration's FY 2000 budget includes $1 billion over five years to fund state initiatives to expand enrollment by simplifying enrollment systems, educating community volunteers, stationing eligibility workers in places like schools and child care centers, and conducting advertising campaigns. Turn to Secretary Shalala for brief remarks. Open for discussion. ###