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SEP-27-1993 09:00
P.002/006
JACKSON HOLE GROUP
Paul M. Ellwood, M.D.
President
September 27, 1993
Ms. Hillary Rodham Clinton
Health Care Reform Task Force
The White House
1600 Pennsylvania Ave.
Washington, D.C. 20500
Dear Ms. Rodham Clinton,
Since our September 15 meeting, I have spoken with a number of people to see whether we
might accelerate the health reform negotiating process by developing a set of consensus
principles. I now believe it will be more productive to bypass the preparation of general
principles and focus instead on specific barriers to prompt passage and successful
implementation of your health reforms.
Each of the crucial participants in the negotiations share the President's objectives of
mandatory, universal, comprehensive health insurance, with the costs of such coverage
increasing no more rapidly than the general economy by a specified date. All agree that such
cost containment must occur without jeopardizing the health of the public -- indeed, while
making gains in important public health indices. Most of those I deal with would prefer to
allow the health care market an opportunity to achieve these objectives through vigorous,
carefully structured price and quality competition among organized delivery systems.
I have one overriding concern: time. Though we chronic reformers have never had the
level of attention and support that you and President Clinton have generated. my experience
in trying to change the health system suggests that more time and stronger incentives will be
needed to achieve your goals. Five areas of the proposal could be modified in order to enlist
the support of other managed competition advocates and to speed the rate at which competing
health plans will contain costs:
(1)
Extend the timetable for achieving universal coverage and full cost
containment to the year 2000
(2)
Enhance consumers', providers', and payers' responsibility in containing costs
(3)
Clarify the definition of an accountable health plan
(4)
Defer a decision on the method of budget enforcement
(5)
Consider combining individual and employer mandates.
Mailing Address: P.O. Box 350 Teton Village, WY. 83025
Fed-Ex/UPS: 6700 North Ellen Creek Road Jackson, WY 83001
307-739-1176 Fax: 307-739-1177
SEP-27-1993 09:01
P.003/006
-2-
In addressing these five areas. I will outline the central policy problem in each and suggest
the broad outlines of a politically plausible negotiation. Our common challenge is to identify
a framework in which compromise is possible between the Administration and managed
competition advocates, particularly among conservative moderate Democrats and Senate
Republicans. My suggestions here are not offered as "best policy" but as reasonable
accommodations among people of differing views.
Implementation schedule
Health Alliances can perhaps be formed and operating within two years following passage.
This will be an instrumental step in reform, and will have no direct, measurable impact upon
cost or quality without the participation of experienced accountable health plans. The
managed competition model requires structural reform of the delivery and finance systems.
Such structural change will require time, but will be durable, dynamic and could exceed your
goals if done properly. The process of organizing providers into new structures, altering
their compensation and motivation, simplifying administrative systems, measuring and
feeding back results, and shifting their emphasis to primary care and prevention will take
several years. Even with these structures in place, health plans -- and consumers -- will
certainly need two or three competitive cycles to find their place in the market and show
significant cost reductions.
In some parts of the United States -- perhaps California, Portland, the Twin Cities, or Boston
we will see very rapid results. These communities have had large organized, competing
delivery systems for twenty to fifty years. Elsewhere, we know that fewer than 15% of
consumers now enroll in efficient managed care organizations, and much more time will be
required before dramatic savings are evident.
The schedule for universal coverage and attainment of budget goals may have to be extended
to the year 2000, rather than attempting to enforce budgets in 1996.
Consumer, provider and payer responsibility
Moderate and conservative advocates of managed competition will advocate greater reliance
on individual responsibility and less on government controls. To address their orientation,
the policy should employ every conceivable tool that will encourage consumers, providers,
and payers to assume more responsibility for the cost of care. It is particularly important to
strengthen four elements of the current proposal:
(1)
Include labor-management health care contracts under reform requirements:
All Americans should experience similar pressures to seek out less costly
sources of care as soon as possible. Any exceptions will be regarded as
inherently unfair and will slow cost containment. The length of time for
SEP-27-1993 09:01
004/006
-3-
which existing contractual exceptions to the overall policy are maintained
should be as brief as politically feasible;
(2)
Specify a limit on tax deductability of health benefits: The tax cap both
reduces net Federal tax losses and motivates consumers to make prudent
purchasing decisions. Conservative Democrats and moderate Republicans
continue to favor its use. The health policy will need some device to further
heighten consumer sensitivity to premium prices, and any such tool should also
give preference to the most cost-effective health plans;
(3)
Encourage Medicare beneficiaries to make cost-conscious health decisions:
Medicare beneficiaries include the largest single payer bloc and a pool of
disproportionately high health care users. Overall system reform will be more
quickly realized if Medicare eligibles are responding to similar incentives as
the rest of the population. Increasing pharmacy and long-term care benefits
for Medicare without subjecting beneficiaries to similar incentives as the
under-65 population will perpetuate excesses in both consumer and provider
behavior.
(4)
Maintain a pluralistic purchaser environment: Payers representing over 100
employees have been the driving force for health care reform since 1970.
Many of them have convinced their employees to select the most cost-effective
plans, have organized themselves into effective buyer coalitions, have benefits
managers who understand the health system, and can skillfully work with labor
to achieve cost savings. These larger employers must remain active,
independent purchasers. They should be kept out of the Alliances under all
circumstances, and encouraged -- in fact rewarded -- when they help their
employees receive the most cost-effective care.
Accountable Health Plans
AHPs will need further definition -- not antitrust exemptions -- if we are to accelerate the
formation of strong provider-based health plans. Federal standards should stipulate that the
plans be capitated, that they have contracts or arrangements with the necessary providers in
order to provide the uniform benefits, that they adhere to insurance reforms, and that they be
held accountable for their impact on their enrollees' health status.
Provider choice can best be assured through point-of-service options such as that advocated
by the Mayo Clinic Foundation and the American Society of Internal Medicine. The "all
willing provider" arrangements proposed by the AMA, and the mandatory offering of pure
fee-for-service indemnity insurance, will necessitate immediate government price controls and
SEP-27-1993 09:02
P.005/006
-4-
will keep factor prices high. Such mandated indemnity plans will carry an increased
likelihood of financial collapse and risk leaving both providers and consumers feeling
betrayed.
While choice of provider is a strongly held value, it can also be used by some providers to
defend the status quo. We should be attentive to the risk of sending regressive signals to
those health providers already moving rapidly towards integration and efficiency and
potentially reversing the progress already made in many communities.
Enforcement of budgets
While I recognize that government controls will be called for if market forces fail to curtail
costs, premature specification of those controls, and the development of a regulatory
superstructure to implement them, will sabotage the chances of private sector success. For
this reason, the policy should not spell out the form of intervention that might ultimately be
employed in the event these reforms should fail. If a government-sponsored Health Alliance
is very large, and designed to execute premium control authority, it may well be regarded by
health plans as their principal customer, and in fact become less effective in stimulating
competition and consumer responsibility.
Calculation of weighted average premiums will offer a convenient means of monitoring the
progress of cost containment efforts, but will prove to be an unwieldy tool for budget
enforcement by politicians and government staff. Such measures will punish good plans with
low initial premium prices, and induce regulators to attempt to impose restrictions on
consumers' free choice among qualified plans.
The Employers' role in financing
I think we will find wide support for a comprehensive benefit package which emphasizes
prevention and primary care, financed through a combination of employer and individual
mandates -- much as is advocated in the President's plan. I do not believe it wise, however,
to place ceilings on the employer contribution, since such limits will reduce their interest in
containing costs and impose further risk on the Federal Treasury.
Though we have not completed our analysis, a reasonable line of compromise might cover
employees of small firms (e.g., under 50 or 100 employees) with an individual mandate
supplemented by tax credits or premium subsidies, and require them to purchase coverage
through the Alliance. Firms of more than 100 would be kept out of the Alliance, be
mandated to finance employee coverage, be permitted to exert some influence over where
their employees receive care, and retain some financial benefit if their employees seek out
the least costly providers.
SEP-27-1993 09:03
P.006/006
-5-
Whether or not this framework proves acceptable, both parties will need to acknowledge that
the eventual financing scheme may involve increases in taxes or open-ended mandates, and
they should enter into negotiations intending to reach agreement. No meaningful
consideration of alternative financing strategies can occur without access to a common data
base, assumptions, and computer models all of which are controlled by the Executive branch.
Next steps
My review of these issues and suggestions for compromise reflect my knowledge of the
views of conservative and moderate Democrats, and the key Senate Republicans. I have
been keeping out of the public debate in the media since our last discussion. I intend to
quietly pursue these ideas with the various groups that need to come together on a common
plan, unless you regard this framework as patently unacceptable. If there is some basis for
proceeding, it would be helpful to understand which elements within my outline are most
problematic.
I regard this as a confidential communication, and I will not share it with others except
David Gergen. I am involved in many discussions with legislators, the health sector, and
payers, however. If I am persuasive, some of these suggestions may well resurface in one
form or another during the coming hearings and in other settings.
I thank you again for allowing me to participate in these discussions, and look forward to
assisting you and the President in any way I can.
Sincerely,
Paul M. Ellwood, M.D.
TOTAL P.006
2
tmc
Truman Medical Center
2301 Holmes Street
Kansas City, MO 64108
A.C. 816/556-3153
October 29, 1993
First Lady Hillary Rodham Clinton
The White House
Washington, D.C.
UMKC
Dear Mrs. Clinton:
University of Missouri-
Kansas City
Thank you for your visit to our hospital. We are honored.
School of Medicine
2411 Holmes Street
Kansas City, MO 64108
I wanted to take this opportunity to share the most important lesson I learned
A.C. 816/276-1808
handling the health insurance issue for President Carter 14 years ago.
As you know very well, there is one moral test of success or failure at the end
of this debate - and that is, did we achieve Universal Coverage? That is also
the test history will judge your efforts by. You and the President have been
rock-solid on this point - and have indicated it is not negotiable. I applaud you
for that.
James J. Mongan, M.D.
Executive Director, TMC
But, the lesson I learned 14 years ago is that Universal Coverage is not an on/off
Dean, UMKC
switch. In fact, by its nature, it becomes a highly negotiable and dangerous gradient.
School of Medicine
The attached chart describes my view of that gradient.
The key lesson in my mind, is that some delay is probably oK -- some dilution
is probably OK - - but, making Universal Coverage contingent upon other economic
circumstances - such as inflation or unemployment rates, or achievement of
health spending targets is deadly --contingencies strike at the heart of achieving
Universal Coverage.
And, of course, the Republicans are claiming they are for Universal Coverage,
but clearly subordinate that goal to the goal of avoiding taxes and mandates
which moves you even farther down the gradient away from Universal Coverage.
I hope you will continue working on building the political and substantive case
necessary to serve as a bulwark to protect against sliding away from Universality.
If I can help in any way as you work with this, please give me a call.
Sincerely,
Jun hong
James J. Mongan, M.D.
Executive Director, TMC
Dean, UMKC School of Medicine
TMC IS the primary hospital
for the University of
Missouri-Kansas City
Schools of Modicine. Dentistry,
Nursing and Pharmacy
equal opportunity institutions
SLIPPERY SLOPE FROM UNIVERSALITY
Begin With Universal Coverage Through
Employer Mandate and Expanded Public Program
Universal Coverage
Full Employer Mandate
Limit benefits
Covered by Mandate
Exclude certain employers and employees
From Mandate
Extend phase - in over 6-8 years
Make phase - in conditional on economy and budget
(Final Carter compromise)
Abandon Employer Mandate
Individual Mandate with Adequate
Subsidy (Requires Large Tax Increase)
Contingent Individual Mandate - Subsidize Purchase
Contingent on Savings in Government Health Costs
(No New Taxes, No Real Mandate, No Universality)
(Senate Republican Position)
Facilitate, but do not subsidize
Small group and individual coverage
(No New Taxes, No Mandate, No Universality)
Establish Empty Goal for Coverage with
No Financing
Prepared By:
Dr. James J. Mongan
- Executive Director, Truman Medical Center
- Dean, University of Missouri-Kansas City, School of Medicine
PAGE. 002
MRS NOV 15 '93
11/16/93
Amo H.
Notes from Labor/Management Health Care Seminar
November 13, 1993
Jamestown Community College, Olean Campus
Most important points:
Universal coverage is most important to this group.
Cost containment is second, government should provide
incentives for cost containment
Mandates vs. incentives for individuals and businesses,
Should we tell businesses what plan to use, or let them
choose what's best for them?
Simplicity, efficiency -- insurance costs are far too
high for the confusion and redundancy caused by insurance
companies.
Wellness programs and reflections on insurance premiums,
people who smoke, drink excessively, or who are grossly
overweight should have to pay more of the burden for
those who take care of themselves. They will be the ones
who jack up costs and abuse the health care system more.
Wellness programs are needed.
Individual VS. corporate responsibility for insurance,
plus the issue of deductibility
Role of government - should government play a huge role,
of should they stay out as much as possible? Most agreed
that they don't want to create a new bureaucracy.
General practitioners vs. specialists -- Too many
specialists in the U.S. now, not enough general
practitioners or family doctors in the rural areas of the
Southern Tier.
Malpractice suits are way out of control. Doctors must
now take every possible test on a patient so he can cover
himself in the court room if anything goes wrong. Can we
limit the amount an individual can sue for.
Are we keeping people alive too long, sinking more money
into machines, when there's absolutely no hope for
recovery? The last 2 weeks of life are the most
expensive. Is there an alternative?
People want the right to choose their own doctor.
What about temporary employees and young kids? Do
businesses have to provide benefits to them as well?
BUB VAN Wicklin - RECREDER
Americans Are Calling
For Health Care Reform.
Each day thousands of
A Better Way To Reform
Americans call our 800 num-
ber looking for a better way
We are committed to the health care
to reform the health care
reform America wants. Call toll free for infor-
system. They are getting a
mation on the visionary proposal developed by
sweeping proposal developed by America's best
the Health Insurance Association of America
insurance companies.
(HIAA) and endorsed by thousands of farmers,
It will provide cradle to grave coverage
seniors, businesses and individual consumers.
for all Americans. Coverage you are sure to get
Read the plan that will help make the
even if you have an existing illness. Coverage
President's plan better.
you can afford and coverage you can keep even
if you change jobs or lose your job. Best of all,
you can choose to keep your present plan. This
For A Better Way To Reform
is the reform America wants.
1-800-285-HEALTH
Coalition for Health
Insurance Choices
Sponsored by a coalition of thousands of businesses. individuals. consumers. farmers. veniors and insurers. Major funding by Health Insurance Assoc. of America.
PHOTOCOPY
PRESERVATION
Page 8 ROLL CALL Thursday, October 28, 1993
Political Surveyor
By Charles E. Cook
Campaign Finance
campaign reform bill next week and bring
at $200,000 each; limit a candidate's per-
"registration fee," with amounts ranging
it to the floor soon thereafter. Republicans
sonal contributions to $50,000; codify low-
from $5,000 to $30.000; and a tax on all
Reform Plans Seek
unveiled their proposal last week.
est-unit rates for non-preemptable broad-
campaign receipts at a rate of 5 percent or
The plan promoted by House Republi-
cast advertising: and make adjacent broad-
less.
Common Ground
cans and developed by a task force headed
cast time available free to targets of inde-
The GOP proposal reflects the feeling
upby Rep. Bob Livingston (R-La) bansa
pendent expenditure campaigns.
among many Republicans that there's
Perhaps the most frustrating aspect of the
PACs. soft money, and bundling by PACs
Candidates who agree to abide by these
nothing to lose by throwing out the status
campaign finance reform debate has been
and lobbyists: requires that a majority of a
limitations would receive voter communi-
quo completely. but its provisions virtually
the extent to which zealots and partisans
campaign's contributions come from indi-
cations vouchers redeemable for up to one-
eliminate the possibility of support from
have been driving the process.
viduals residing inside the district: increas-
fourth the spending limit for use in purchas-
Democrats. In fact, it almost seems tailored
Common Cause and the editorial pages
es the contribution limit from individuals to
ing TV, radio, and print advertising or post-
to do that.
of national newspapers have appointed
state parties to $20,000: and curtails the use
age. Opponents of candidates who decline
Conversely. even though the outlines
themselves the judges of what constitutes
of union dues for political purposes.
to participate in this system will have their
currently being discussed by Democrats
reform. and any Member advocating any-
Democrats are focusing on a much more
own spending limits lifted but will remain
are far short of the total public financing
thing less than a total overhaul of the sys-
complicated plan designed by Rep. Sam
eligible for the benefits.
plan advocated by many Democrats carli-
tem is branded a threat to the democratic
Gejdenson (D-Conn) that would create a
Under discussion for the public financ-
er, the new plan retains some public fi-
process.
voluntary spending limit of $600.000; cap
ing component of this bill are a $5 check-
nancing.
House Democrats will mark up their
PAC and high-dollar (over $200) receipts
off on federal income tax returns; a PAC
Two compromise plans have emerged,
however - one from Rep. Glen Browder
(D-Ala) and the other a bipartisan effort
headed by Reps. Fred Upton (R-Mich)
and Mike Synar (D-Okla). Both feature
the "minimalist" approach, seeking com-
LOOK WHAT
mon ground while avoiding the pitfalls of
public financing. which is anathema to
most Republicans and many moderate-to-
WE PULLED OUT
conservative Democrats. They also avoid
the PAC-abolition approach that is unac-
OF THE HAT.
ceptable to many senior Members as well as
members of the Black Caucus.
Browder's Fair Campaign Finance Re-
Government Employees Hospital Association
form Act would cut in half existing PAC
and individual contribution limits and tax
has a fifty year tradition of providing value in
all contributions at 35 percent. But it would
health care to federal workers and retirees.
But this year's benefits package offers more
Both plans feature the
value than ever before
'minimalist' approach
Lower Premiums
Lower Copayments For
and avoid the pitfalls
Prescription Drugs
of public financing.
New Non-FEHB Dental Plan
No Membership Fee
allow those candidates who agree to volun-
tary spending limits ($600,000. with no
There's never been a better time to join the
more than $300,000 from PACs and no
GEHA family. For complete details. includ-
more than $300,000 in maximum-level in-
ing I complimentary copy of our 1994 Plan
dividual contributions) to have a tax ex-
brochure. call us at 800/262-GEHA.
emption on all contributions and to raise
money under the current limits ($5,000 for
PACs: $1,000 for individuals).
GEHA
Those participating would also be eligi-
ble for reduced rates for television and
radio advertising and postage costs.
Working For People. Not For Profit."
As an even simpler fallback position.
Government Employees Hospital Association
Browder is offering a "Big Spenders Sin
P.O. Box 10304. Kansas City, MO 64111
Tax Act," which would remove the current
exemption in the tax code for all House
campaign receipts over $600,000 and all
PAC receipts over $300,000. And it would
give third-class mailing and lowest-unit
broadcast rates to campaigns staying with-
in those two limits.
The second middle-ground approach, the
Congressional Campaign and Election Re-
form Act offered by Synar and Upton, is a
far tougher approach.
It would drup the PAC contribution limit
from $5,000 per election to $1,000: cut the
limits for individuals in half: ban bundling
by PACs. lobbyists, foreign agents. and
limited partners: cut back drastically on
soft money: give targets of independent-
expenditure campaigns free adjacent air
time for response: ban leadership PACs:
and force connected PACs to use PAC
funds to cover administrative costs.
While Browder's attack focuses most-
ly on spending and overdependence on
PAC and large-donor contributions, Sy-
nar and Upion attack PACs more direct-
ly. Neither is outrageously partisan or
unduly complicated, and neither uses
public financing or is overly intrusive of
the political process.
Both represent honest attempts to pass
some meaningful legislation rather than the
posturing and stalemates that have so dom-
inated the process up to now.
PHOTOCOPY
PRESERVATION
JOHN D. ROCKEFELLER IV
WEST VIRGINIA
Hnited States Senate
WASHINGTON, DC 20510
October 22, 1993
Dear Jerry,
We are writing to express our deep disappointment in your
remarks at the NAM press conference held Wednesday morning.
We are incredulous that you presented such a dim assessment of
the President's proposal for health care reform, especially
considering what is at stake for the manufacturing industry.
We never thought that being too ambitious was a fatal flaw, or
even undesirable.
We would have thought you would have welcomed the
President's plan -- not to mention his total commitment to
health care reform -- as the best thing that could happen to
this country. Your member companies know full well how much
of their resources are being squandered on a plainly broken
health care system. Health care reform will have a major
impact on the bottom lines of your member companies -- more
than most other legislation in recent years. We would have
thought you would want to build a climate of support for
health reform and the pillars of the President's plan, rather
than doing nothing but magnifying what you see as the plan's
shortfalls.
The NAM's resolution on health care reform and the
President's plan are only inches -- not miles -- apart on what
are probably two of the most fundamental issues: access and
cost containment. You mentioned, almost in passing, the NAM's
"openness to mandates," and you also said that the door was
not closed on premium controls.
We would have hoped that you would have chosen to focus on
these important similarities, which are fundamental to
actually achieving the crucial goals of universal coverage and
cost containment, rather then dwelling exclusively on a few
differences.
We would have thought that because 98 percent of large
firms and 87 percent of small firms provide prescription drug
coverage, and because almost 100 percent of large firms and 82
percent of small firms currently provide mental health
coverage, NAM would have concluded that the President was
recommending a level of benefits consistent with what a
majority of private sector companies have already determined
to be essential for adequate coverage. Instead, your remarks
implied that the Clinton plan is over-reaching in trying to
extend the same basic level of health security to all
Americans that your companies already recognize as being so
fundamental.
Mr. Jerry J. Jasinowski
October 22, 1993
Page 2
Frankly, we are puzzled why the same NAM that supported an
entitlement cap proposal earlier this year -- a cap that would
have reduced Medicare and Medicaid spending by the same amount
as the Clinton plan, but with all the savings applied to
deficit reduction --- now questions the integrity and ambition
of those savings goals.
And we certainly would have thought that the NAM would
have appreciated the savings and streamlining that would
result from having a regional alliance manage, negotiate
prices, and monitor the quality of health benefits on behalf
of thousands of small- and medium-size employers. Right now,
as you know, each and every one of these companies has to
devote time, employees, and other scarce resources to
wrangling with insurance companies. Depending on their size,
as much as 20 to 40 percent of the dollars they spend on
health care is going to administrative costs alone.
The President and the First Lady are close to concluding
one of the most impressive and unprecedented chapters in
American history when they submit a health reform bill to
Congress next week.
The day after the President's inauguration, he immediately
turned to health care, and set in motion a process that was
more rigorous in sum and substance that anything we have ever
witnessed. The NAM was part of that process. Certainly the
NAM was not so naive to think it would not disagree with some
elements of the President's plan, especially considering the
complexity of health care reform and the tensions that exist
in trying to produce a plan that meets the moral test of
making sure all Americans have health coverage, and meets the
fiscal test of affordability.
Many of your own member companies have already come
forward individually and proclaimed their belief that we need
strong leadership -- and strong medicine -- to reform our
nation's health care system. Our country is now fortunate
enough to have both. We have a President who has staked his
reputation on health care reform. And we have a plan that is
comprehensive and, at long last, ambitious enough to hold real
promise in getting our country back on a strong economic
footing. Until health care costs are reined in, as NAM
recently testified before Congress, you and your members can
be assured that less will continue to be spent on "upgrading
plants and facilities, R&D, training/retraining and other
critical business investments."
Mr. Jerry J. Jasinowski
October 22, 1993
Page 3
We are just beginning the legislative process. Each and
every one of the issues you raised will be hotly debated --
and ultimately resolved. We had hoped that you would have
decided to begin that legislative process with an open mind
and with good will.
We must reiterate our profound disappointment. We hope
that you and your members reconsider, and reach the conclusion
that the President's plan and commitment provide an
opportunity for the manufacturing sector that may not return.
We are anxious to learn of the next steps that NAM plans, and
restate our own commitment to ensuring the enactment of a
health reform plan that is in America's best interest.
Sincerely,
Tion Daschle
John Day D. Rockefeller IV
Mr. Jerry J. Jasinowski
President
National Association of Manufacturers
1331 Pennsylvania Avenue, NW
Suite 1500 N
Washington, DC 20004-1703
Welcome to Think!
Fall 1991 Volume 1; Number
1
- Steve Freedman
Director, Institute for Child Health Policy
What are the Barriers to a
Comprehensive Child Health
- John Reiss
Policy in the United States?
Director, National Center for Policy Coordination
in Maternal and Child Health
Julianne Beckett
W
elcome to the premiere issue of Think! A Forum for Ideas on Child
Page
Health Policy. Think! is a new, pilot publication from the Institute
for Child Health Policy (ICHP). ICHP's mission is to help coordinate
Lawton Chiles
and generate ideas and resources within the maternal and child health commu-
Page 10
nity; in order 10 help meet these goals we developed the idea for this new type
of newsletter.
Antoinette Eaton
What's new about
Page 4
Think Think!is an opinion
letter. The ideas, opinions
Eli Ginzberg
and solutions expressed in
Page 8
this publication will come
directly from you, our read-
Robert Haggerty
ers' Each issue will feature a
Page 12
new panel of contributors
who will express their per-
Joseph Liu
spective on a specific topic
Page 15
related 10 child health poli-
cy. Readers will also con-
Margaret McManus
tribute reactions to those
Page 3
perspectives in subsequent
issues. We envision that this
Robert Moffit
open forum format will
Page 14
stimulate our readers to
think in new ways about the
Uwe Reinhardt
issues in child health policy
Page 6
and will challenge them to
1983
Larsons
formulate new and innova-
'Whoa!
That CAN'T be right!"
John (Jay) Rockefeller
tive solutions to children's
The Fur Sub: by Givy tarson is reported
Page 9.
health care problems.
hypermassion of Chronicle Features. Siti Francisco CA.
For our first issue we decided to ask a broad question, "What are the barriers
Face The Facts
to a comprehensive child health policy in the United States?" In subsequent issues
Page 18
we plan 10 address different questions relating to aspects of health care financing,
See Welcome, Page 16
Clinton Presidential Records
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From : AAO-HNS/Office State Affairs
PHONE No. : 3145273277
Nov. 08 1993 3:26PM P01
Post-It™ brand
Fax Transmittal Memo 7672
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No. of Pages
To Company I'm Sued, MD
From Janu Lucas
Today'c Date 11/8 Time
Company
AAO-CAN 8
Location
I location
Dept. Charge
Fax # 501-68-8029 Telephone
#
Fax #
Comments Here's our Reform Poschion
Telephone # 34527 3277
Original
Destroy
Return
Call for plckup
I Cept a message WHO 107 Disposition
regarding your irset with the Clemfons
Please Oct me know of I can do complimg else
HEALTH
POLICY
AAO-HNS Position Statement on Health Care Reform
The Academy is developing un evolving position statement on health care reform. During the Academy's 97th annual
meeting last month in Minneapolis, the Board of Directors endorsed 12 health care reform positions.
1. Support universal access
2. Support climinating pre existing condition clauses
3. Support ear, nose and throat physicians as a point of entry into the health care system; and support history or symptom
patient self-referral
4. Support tort reform for professional liability including the use of practice guidelines within such reform
5. Support increased taxes on tobacco and alcohol
6. Support infant hearing screening for high risk newborns
7. Support coverage of hearing aids for children including cochlear implants and auditory rehabilitation
8. Support the potential distribution of health care based upon clinical indicators and cost/benefit studies
9. Support legislation that would allow physicians to Join any managed care entity for which they meet the credentials
(any willing provider laws)
10. Support legal protection under the law for physicians to bargain collectively
11. Support administrative simplification through use of electronic billing, a universal billing form and a universal
explanation of benefits form
12. Oppose global budgets including premium caps
This beginning framework is the direct result of a member survey distributed at the annual meeting. The survey and
responses follow on the next page. For more information please contact Christopher Gallagher at (703)519-1536.
PHOTOCOPY
PRESERVATION
A PROPOSAL FOR :
I. MAJOR COST CONTAINMENT OF MEDICAL CARE
II. ENHANCING QUALITY OF MEDICAL CARE
Charles W. Cummings, MD
Mansfield F. W. Smith, MD
James Y. Suen, MD
A PROPOSAL FOR:
I. MAJOR COST CONTAINMENT OF MEDICAL CARE
II. ENHANCED QUALITY OF MEDICAL CARE
Essential Elements
1) A partnership agreement with the major national scientific
medical societies to develop medical practice opinions
using a standard process and format.
2) Mandates for government program administrators and
incentives for private pay insurers to conform to
published opinions of accepted medical practice.
3) Establishment of Scientific Councils within each of the
national medical professional societies to adjudicate
questions of what is and isn't acceptable practice.
4) Legislation to grant limited immunity from anti-trust
litigation for medical opinion programs which meet federal
standards.
MEDICAL DECISION MAKING:
HOW TO ENHANCE QUALITY AND REDUCE COST
*Billions of health care dollars are wasted on inappropriate, outmoded,
and/or unproven procedures. Money also is wasted when cost effective
procedures are denied, resulting in worsening problems. There are
enormous potential cost savings--both long and short term--to be gained
from eliminating the unwarranted.
*Medical reimbursement decisions are not always made rationally.
Doctors, insurance companies and government agencies all are driven by
different assumptions and frequently arrive at different conclusions.
Patient expectations, legal liability fears, and cost containment
imperatives are some of the factors.
*There are medical opinion programs which have produced outstanding
reports. The Consensus Development Conferences of the NIH, the AMA's
Diagnostic and Therapeutic Technology Assessment Program, and the
Medical Practice Opinion Program of the California Medical Association
are examples. There are two problems with such reports: 1) They are
developed so cautiously to avoid lawsuits that they are time-consuming to
produce and thus limited in number; and 2) there is no enforcement
component once the opinions are issued.
*Once the medical opinion programs have been developed, program
guidelines could be entered on computer. Floppy disks of those guidelines
could be provided to all physicians so that the guidelines could be
accessed immediately for recommendations regarding acceptable
evaluations, treatment, and follow-up visits. Deviations from the
guidelines would not be reimburseable unless justified and approved by
the national Scientific Council.
The above method should eliminate unnecessary tests and unproven
treatments with the potential for billions of dollars in savings and
enhancement of quality of medical care.
page 2
The Council would review the question, gather background from the
medical literature and from interested parties both pro and con, and issue
an opinion. Ideally, the review process would take no more than 60 days.
Timeliness is important when an inquirer needs to make a reimbursement
decision. Questions which involve multiple specialties, such as heart-lung
transplantation or breast cancer screening, would go the the Scientific
Councils of all the related specialty organizations. The organization to
receive the question would coordinate the multi-specialty response.
Legal Issues
Due process would guide the reviews. Affected parties would have the
opportunity to comment, potential conflicts of interest would be
disclosed, and there would be a mechanism for appeal or rereview. The
biggest obstacle at present to an effective review system is fear of
liability. To free the scientific review process from the constraints of
legal intimidation, it will be necessary to enact a protective statute for
properly constituted scientific review. Without tort reform in this area, a
single abberent individual could stalemate the scientific review process.
Cost
Cost of the process is minimal if the existing national scientific
specialty societies are used. Most reviews are done by mail for maximum
objectivity. Computers, FAX and modems all make rapid and low cost
reviews possible. Members of each Scientific Board would serve without
compensation and the national scientific societies would contribute staff.
Precedent
There is precedent for this concept in the AMA's Diagnostic & Therapeutic
Technology Assessment Program. This program has produced over 1500
well researched opinions since its inception. An example is attached.
Benefit
Medical reimbursement decisions now are made in a chaotic environment
of conflicting interests. Insurers and the government differ over the
legitimacy of various treatments. There is no agreement on what
constitutes basic or essential medical care. We need a mechanism to
which groups can turn for definitive and unbiased scientific information.
The public needs the protection which a Scientific Council can provide.
REFERENCES
1) LUNG TRANSPLANTATION. From Questions and Answers: Diagnostic and
Therapeutic Technology Assessment (DATTA). JAMA 269:7 Feb 17, 1993
2) THE PERILS OF PROVIDING MEDICAL OPINION: A State Medical
Association's Experience. Williams HE, Ramsey LL: WEST J MED 155:183-
199, Aug 1991
3) ACOUSTIC NEUROMA. Consensus Statement. NIH Consensus Development
Conference 9:4, Dec 11-13, 1991
RESULTS OF AARP HEALTH CARE REFORM SURVEY
(National Adult Sample, Age 18+, N = 1,208, Oct. 28 - Nov. 8, 1993)
There is thus far little understanding of the Clinton plan (38% say they
understand it "fairly well" or "very well"), and little knowledge of key health-care
reform terms (except HMO).
There is a substantial edge in those favoring the Clinton plan over those opposing
it (51% to 36% with 13% "Don't Know"). Support for the Clinton plan is higher
among those age 65 and older (53%) and those age 18-34 (54%)
Most respondents think they will not be better off under the Clinton plan in terms
of benefits (15% say they would be better off) and quality of care (13% say they
would be better off), and a majority (55%) think they will pay more in the way
of insurance premiums and out-of-pocket costs under the Clinton plan.
A majority (56%) say they would be willing to pay more to choose any doctor than
to select a doctor from a list and pay less. When offered a choice among three
types of plans (HMO, PPO, fee-for-service -- although these terms were not used
in the question)-- a majority (51%) picked the PPO plan over HMO (23%) and
fee-for-service (23%) plans.
When offered a choice among three basic types of health-care reform plans (single-
payer system like Canada's, comprehensive reform like the Clinton plan, and
incremental reform), 40% chose Clinton-style comprehensive reform, 27% chose
single-payer, and 26% opted for incremental reform.
Most respondents are either "strongly satisfied" (47%) or "somewhat satisfied"
(30%) with their present health insurance coverage. Most are either very
confident" (37%) or "somewhat confident" (40%) that they would be able to
maintain their present level of coverage at an acceptable cost to them over the next
two years, even if nothing is done about health-care reform. A majority (52%) of
those who are employed think they will have to pay more for their company plan
over the next two years, but only 26% expect their employers to reduce their
benefits over that time period.
Most (68%) respondents who are employed either full-time or part-time are in
favor of the employer mandate and 78% are not concerned that they would lose
their jobs if this were imposed. Slightly more than a quarter (27%) said they
would be more likely to change jobs under the guaranteed coverage provision.
Nearly three in ten (28%) of those age 50-64 who are presently employed full or
part-time age 50-64 said they would be more likely to consider retiring early under
the provision that the federal government would pay 80% of their health insurance
premium; and more than a third (35%) are either "very concerned" (9%) or
"somewhat concerned" (26%) that their employer would use this provision to
force employees to retire early.
There is strong sentiment for imposing budget limits and caps -- on both public and
private health care systems (54%).
Likewise, there is substantial support (at the 61%-66% level) for Clinton's health-
care reform financing means (cigarette tax of 75 cents a pack; requiring employers
to pay most of the cost of health insurance premiums for their employees;
imposing a one percent tax on large corporations that choose to offer their own
health plans; and restraining increases in Medicare costs by imposing limits on
payments to doctors and hospitals).
Long-Term Care. The respondents do not know how long-term care is treated in
the Clinton plan. They divide roughly into thirds as to whether the Clinton plan
includes any kind of long-term care coverage (30%), does not include it (37%), or
do not know whether it does or not (37%). Two-fifths (38%) do not know what
kind of long-term care coverage is included, and most of the rest (48%) think it
includes both home and community-based care and nursing-home care. Nearly
three-fifths (57%) say that coverage of home and community-based long-term care
would make them more supportive of the Clinton plan. When offered a choice,
more than three-fifths (62%) chose home and community-based care over nursing-
home care with a six-month deductible (30%). The largest number (42%) say that
the 5-8 year phase-in of long-term care coverage would make no difference in their
support of the Clinton plan. Nearly a third (31%) think it is either "certain" or
"very likely" that they or a member of their extended family will need long-term
care within the next five years.
Future of Medicare (asked of those 50 and older). Nearly four in ten (38%)
think that Medicare benefits will not be as good as those of people under the age
of 65 and only 15% think Medicare benefits will be better. Three-fifths of those
who think Medicare benefits will be worse say that the addition of prescription
drug and home and community-based long-term care coverage would make them
more supportive of the Clinton plan. Three-fifths would be willing to pay at least
$12 a month in additional Medicare premium for drug coverage; one-third would
be willing to pay $20 a month. Among those age 50-64, 72% say they would
choose to stay in their present health plan rather than enter the Medicare system as
it exists today; although a plurality (43%) oppose the idea of states folding
Medicare into their health plans, two-thirds (64%) of those who do not strongly
favor this idea would favor it if they would get substantially better benefits under
the state plan.
Views of AARP's Role in Health-Care Reform. Two-fifths of the respondents
said they were familiar with AARP's role in health-care reform, and they generally
(77%) approve of AARP's role thus far. They divide about evenly over whether
AARP should do the same (41%) or more (46%) to promote health-care reform.
NOV 3 '93 17:04 FROM METLIFE / WASH. D.C.
PAGE. 002
11-03-1993 03:47PM FROM RIDLEY GROUP
TO
6591026 P.02
THE ALLIANCE FOR MANAGED COMPETITION
News Release
For Immediate Release:
Contact:
John Gibbons
November 3, 1993
202/ 835-0538
Washington, D.C.- The Alliance for Managed Competition today retruffed critics who have
recently charged that managed competition would narrow consumer choice of health care
providers.
We feel that charge is way off the mark.
Under the model of managed competition we support, Americans will have a choice of many
health plans, be able to switch plans, and be able to change providers within their plan.
Under the model of managed competition we support, Americans will no longer have to shop
for health care out of a phone book. Under managed competition they will have up-to-date
information about costs, the success of medical treatments and patient satisfaction.
The current firestorm of controversy concerning consumer choice under managed competition
has been initiated by those who either fear change or are genuinely opposed to managed
competition.
On the issue of choice: case closed. Let's move on in a bipartisan effort to achieve health
care reform.
The Alliance for Managed Competition is composed of five major managed health care
companies who provide coverage for over 60 million Americans. They are: Aetna, CIGNA,
MetLife, The Prodential, and The Travelers.
(Attached is a copy of an ad that will be placed in major publications starting tomorrow.)
###
AKTNA
CIGNA
METLIFE
THE PRUDENTIAL
THE YRAYELERS
ARR Sivisonth Street Arms Cuite 111-.6"
- - -
3 '93 17:05
FROM
METLIFE
/
WASH.
D.C.
PAGE. 003
NOV
11-03-1993 03:47PM FROM RIDLEY GROUP
TO
6591026 P.03
TOP 10 REASONS
WHY AMERICANS WILL HAVE
MORE CHOICE OF HEALTH CARE PROVIDERS
UNDER MARKET BASED MANAGED COMPETITION
10.
Americans will be able to change providers within their plan.
9.
Americans will be able to switch plans.
3.
Americans will be able to seek providers outside their plan.
7.
Americans will be able to choose from a menn of plans.
6.
Americans will be able to have a "primary care physician" who will
advise them about the selection of other providers within their plan.
5.
Americans will have real information a report card - about "patient
satisfaction" concerning providers within their plan.
4.
Americans will have card information - a report card - about costs
when they choose a plan.
3.
Americans will have real information a report card about the
success of medical treatments when they choose a plan.
2.
Americans will BO longer have to choose health care providers out of a
phone book.
1.
The essence of managed competition is informed consumer choice.
CASE CLOSED. LET'S MOVE ON.
Let's move on in a bipartisan effort to achieve health care reform.
THE ALLIANCE FOR MANAGED COMPETITION
Providing Health Coverage for 60 Million Americans
AETNA CIGNA METLIFE THE PRUDENTIAL THE TRAVELERS
** TOTAL PAGE. 003 **
October 23, 1993
MEMORANDUM TO THE FIRST LADY
From: Gene Sperling
Subject: Economist Outreach
I. OVERALL STRATEGY: We should have an inclusion project to reach out to major
economists who have expressed reservations about our plan, but are generally supportive of
universal health care. It is critical that this not seem just like a one time outreach, or just a
call for support. This must be a serious two-way dialogue, in which we recognize their
reservations, give these people a context to contribute substantively, and ask them to consider
what is necessary to move toward universal health care.
Some of the ways that we can establish ongoing relationships are:
1) To make it clear that we want to hear their substantive views directly, and make it
clear that their memos will go directly to Mrs. Clinton, Ira and other top members of
the health and economic teams. Many people are well aware that there will be
compromises before this is over, and are anxious to contribute to that discussion.
2) We should look for opportunities to get drafts, ideas and comments when we are
doing speeches, op-eds and testimony.
3) We should look for advice on how to handle specific problems -- how to explain
the alliances etc. Many people who criticize us may still be with us on key elements
of our plan;
4) We can invite experts to come to brief economic principals who will be speaking
on health care, such as Rubin, Altman
2. ACTION PLAN:
1. Mrs. Clinton will call eight to ten experts between Sunday and Tuesday. Calls will
be more efficient than meetings and will be just as effective in opening the dialogue.
Each call should ensure that there is a context for further contact.
2. Over 12 key economists will be briefed in the 24 hours before the plan is released.
Most of the briefings will be by Cutler and Thorpe over the phone, though some
others like Blinder may also do these briefings. (Henry Aaron is coming over to the
White House Tuesday morning for a briefing with Cutler, Thorpe and myself).
3. Group Briefings: We are still considering have a group briefing to go through the
details of the plan. They key is that this group briefing should not be our main or first
contact with many of these economists. We need to establish a personal contact first.
Other briefings include think-tanks. We will be doing a special Friday briefing on the
29th for Brookings Institution that Henry Aaron will host. We will also do perhaps an
Urban Institute and AEI briefing.
4. Budget Briefings: I have asked Alice Rivlin to help me in trying to brief some of
the major budget experts who are often asked to comment. Examples are people like
John White, Susan Tanaka, Rudy Penner, and Martha Phillips (Exec. Director at
Concord Coalition). The Brookings Briefings will certainly reach some of the general
budget validators, such as Charlie Schultze and Barry Bosworth.
5. Letters From Mrs. Clinton: We will draft letters from Mrs. Clinton to those who
have written positive op-eds for us -- whether or not they have been published. It is
critical in general that we
CALLS FOR MRS. CLINTON: (With all of these calls tell them that someone will be
calling them in the next few days to go over the numbers with them.)
1 MARILYN MOON: She is critical that we need to be careful about not over-promising.
10/25
She was involved in the transition, and may feel that she
has not been included
enough sense then.
lytmeisage
She is friends with Judy Feder.
Action: Mrs. Clinton should call. She should say that she
understands her concerns and would like to be able to show her drafts of some
speeches in the future to get her thoughts. Understand your concern about shooting
straight and that is what we want to do. On other hand, we need to have a constructive
dialogue and not let our internal disagreements become ammunition for those who
oppose health care reform.
Phone #
(w) (202)857-8691
(h) (202)951-4385
10/26 toughest thing to Cuticize + not be used my meder
x Call to brief
2
PHOTOCOPY
HRC HANDWRITING
will be here in D.C. answer
M paper 1 w Princetor
2. STUART ALTMAN: He was highly involved with the transition, and may feel that he
was not given the proper role or thanks. He was brought over to the White House on the
speech night and appreciated it. He was supportive on McNeil-Lehr. Rosty may be asking
him to be an advisor
Action: Mrs. Clinton should call him. She should say that she feels we are not doing a
good enough job discussing the premium caps, and that as she knows that he was one
10/25
of the key people who first called for this, she wanted to know if he could think of
writing something for us that would be helpful in talking about this as well as
lift meninge
substantive discussions.
tough uncept + lasy to distort
Phone #
(w) (617)736-3803
Will he at Princeton on brand 90%
(h)
? growth rate
? savings rebate from the well-insured
3. UWE REINHARDT: Ira has done a good job with him lately, as seen by his New York
Times Op-ed. He may not appreciate all the attention Paul Starr has gotten. He also helped
us by describing to the Wall Street Journal that one of the reasons for lower health care
inflation was the "Hilary Factor" companies embarrassed to raise costs too much right
now.
Action: Even though you have spoken with him a couple of weeks ago it would still
be good to call him and
1) thank him for the New York Times op-ed.
2) thank him for being willing to include us so much in his conference (Alice
Rivlin and others will open and Ira will speak at the end) and;
3) say that you want him to feel free to write us with ideas and comments as
the process goes on.
4) Anything positive things he can say about how people who had doubts
should feel better about this plan right now would be helpful.
Phone: #
(w) (609)258-4781
(h) (609)924-5394
4. HENRY AARON: His main problem with the Clinton plan is that he does not believe
savings can get as low as we assume and that costs are often technology driven not all
due to waste and perverse incentives. While he has been quoted often against our plan, he
has also given us some of our most positive quotes and very much believes in universal
health care, and that our plan is essentially correct.
3
PHOTOCOPY
HRC HANDWRITING
He was publicly supportive of Putting People First when it was put out, which was a
major boost in light of criticism from others at Brookings. Gene Sperling consulted with him
often during the campaign and putting together the budget, and he co-authored an excellent
New York Times op-ed in the final days of the budget urging Congress to pass the plan. So
while he has been critical he has been a friend as well. He is a big fan of David Cutler.
Action: Mrs. Clinton should call and say thanks for all the help she has given Gene
Sperling and others during the campaign and on the overall economic plan. Tell him
that you know that he has had some differences on health care and that she
understands he must speak his mind, but that she wants to be able to consult with him
and for him to feel free to write to her directly. Tell him that he should feel free to
give materials to Gene or David Cutler and have them get things to her. Also he is
one person if you are interested that it might be worth suggesting a meeting
with at some point.
You might mention that you know a team is going over to Brookings next Friday for a
briefing.
& usned Who to be as much help possible-
10/25 Phone #: (w) 797-6128
need to work for real reform
(h)
(202) 829-7149 now that plan is setted, No plan will command
a majority-
5. TED MARMOR: Seems to want to help. Feels that he has the credibility to broker
support with the single payer groups. He doesn't like all the articles on the degree of cost
savings, as he feels it distracts from the real health care issues.
10/25 left must- Action: Mrs. Clinton should call and thank for the op-ed he wrote with Yale Law
Professor Jerry Mashaw. Let him know that we are interested in hearing his views on
where he thought there could be common ground with single payers, and that you
would like to be able to consult with him as time goes by.
Phone:
#
(w) (203)432-8988/3238
(h) (203)777-8931
6. JOE NEWHOUSE: He does not give a lot of political comments and tends to think
technically, but is well respected economist/medical expert at Harvard. He is writing for the
Princeton Conference on risk adjustment and why it is inherently difficult to do. His
concerns are largely similar to Baumol in that our growth estimates must be stressed as
reflecting one-time savings, and like Aaron, thinks that much of the cost increases are
technology driven, not due to waste and inefficiency. Cutler has spoken with him about how
we are responding to the Baumol concerns, and he is feeling better about things -- especially
if we have the National Board review the longterm growth rates. We feel he is coming along,
and that you might want to ask him for advice on how best to do risk-adjustment. notion
Phone:
#
(617)432-1325
4
PHOTOCOPY
HRC HANDWRITING
7. RASHI FEIN: Economist at Harvard Medical School. Has some concerns on the
structure and speed of cost containment. Ken Thorpe should call to brief on numbers, and
Gene Sperling will call and invite him to the White House to talk to Bob Rubin and others on
health care economics.
Phone:
#
(w) (617) 732-2112
8. JACK HADLEY: He wrote a good op-ed with Steve Zuckerman. We should send a
personalized letter from Mrs. Clinton and Ira should call and thank and let him know that we
want to brief him on the numbers.
Phone:
#
(w) (202)342-0107
(h) (202)362-0731
9. STEVE ZUCKERMAN: Urban Institute (same as above)
Phone:
#
(w) (202)857-8679
Additional Phone Calls to Come: We will get you information on Monday about calls to
Victor Fuchs, Alan Enthoven, Paul Ellwood, Joshua Weiner, and another call to Baumol.
5
Gephanlt:
-
Mount my chairs
-
labor
Southerness good in
unecurtanding unwersal coverage
Warman?
Stark?
-
PHOTOCOPY
HRC HANDWRITING
PERSONAL AND CONFIDENTIAL MEMORANDUM
TO: Hillary Rodham Clinton
October 24, 1993
FR: Chris Jennings
D
RE: House Cosponsorship Update and Requested Call List
cc: Maggie, Melanne, Steve, Jack, Ira, Distribution
Since our conversation today, Steve R. has talked with you, George,
Howard and myself on the subject of House cosponsorships. George advised
us NOT to call up Congressman Gephardt tonight, but rather to arrange a
conference call with his Chief of Staff, George and Steve tomorrow morning.
At that time, they will discuss House cosponsorship status and strategy for the
upcoming days. (We also have a meeting scheduled tomorrow with Senator
Daschle and Congressman Gephardt's office to finalize plans for the
Wednesday event.)
During our Hill discussions tomorrow, we will -- once again --
adamantly stress the importance of a large number of cosponsors. We will
discuss the concern about the public not being able to distinguish between the
bill transmittal and the bill introduction. We will also state our
disappointment about the lack of visible movement on the House
cosponsorship front.
In response, Congressman Gephardt, his staff, and other Leadership
Members may raise their concern that the lack of time (and insufficient
amount of information about the bill) has made it extremely difficult to get the
minimally acceptable 100 cosponsors on the bill by the scheduled Wednesday
transmittal date. They can be expected to also raise their fear about the
riskiness of a very ambitious and widely reported (but unsuccessful) attempt to
attract cosponsors. In addition, the Leadership may suggest that we not
underestimate the newsworthiness of a health reform initiative cosponsored by
virtually every Member of the Congressional Leadership and every Committee
Chairman (of primary jurisdiction). They will say that the unprecedented
nature of that outcome would be a very attractive story in and of itself.
(Although we would much prefer numerous cosponsors, both Steve and I
believe that the White House -- if need be -- could spin this outcome fairly
well.) Lastly, they will also stress that they still remain confident that, by
introduction day, we will have well over 100 cosponsors.
DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INITIALS: Ry DATE: 8/27/2013
2013-0359-5
In the interim, we all agree with you that we should not let valuable time
slip by without doing all we can to attract cosponsors. We will strongly
emphasize this point in our meetings with the House Leadership and staff. In
that vein, we will again offer any and all available Administration
representatives to immediately pitch in to sign up cosponsors. (E.G., we will
suggest the option of arranging for Cabinet Secretaries, their Legislation
Undersecretaries and staff, and White House officials to use their contacts with
the House to help out with cosponsors.)
And finally and most importantly, a number of very influential House
Chairmen and other key Members are worth your calling to seek their
cosponsorship. Most of these Members are people with whom you have
worked and developed relationships with during the past several months.
Some will ask to see more specifics, but most of these Members understand
the politics of needing Democrats to stand with the President on this important
initiative and know we aren't expecting them to endorse every line. During
your conversations, (besides always asking for their advice) you should also
seriously consider asking them if they would be willing to try to sign up their
Committee Members (or bill sponsors, in the case of McDermott). The list:
Chairman Rostenkowski:
If we do not have Chairman Rostenkowski on as
an original sponsor of the bill, the press will
read more into his absence than there really is.
Unfortunately, that is just the point. By all
reports (from his staff), he is not going to go on
the bill without a request from you or the
President. In the conversation, you may want to
will still issue statement
offer an Economic Team (Ira, Bentsen, Rivlin,
etc.) briefing on the financing components of the
bill. We would like to do this for him late
afternoon on Tuesday. (His staff will be briefed
in the morning of that day.)
Congressman McDermott:
Congressman Gephardt has asked that you call
McDermott to see if he would be willing to
Gephault call lid
cosponsor. Again, there is no way he will do it
without a call from you (or the President). Like
think about it + hasn't
all the calls, you can and should of course
made up his mind;
say that a cosponsorship does not convey with it
total agreement, etc. You may want to tell him,
doesn't want to conjuse
however, that it could signal support of the
citizen groups who dont
attached stronger single-payer state opt out
provisions. (I will have faxed it over to Barbara
understand Politics; will
Smith by time of your call).
work happen w/wo to make something
PHOTOCOPY
HRC HANDWRITING
will meet w/oingle payer sponsors
Chairman Dingell:
We believe that Chairman Dingell will be happy
to add his name as an original cosponsor, but
yes
he would appreciate (and we would recommend)
a call from you.
Chairman Ford:
Next to Chairman Dingell, we believe that
Chairman Ford will your strongest House
Chairman ally. As far as we know, his staff
remains fairly happy with everything they know
yes
about our bill to date. To the extent possible,
we have tried to treat the Ed and Labor
Committee on equal terms with the other two
Committees. He would love to have a call from
you requesting cosponsorship.
Chairman Moakley (Rules):
No bill will make it to the floor without a rule
- your going in right direction
from Chairman Moakley. Although he is a
- wwricd about abortion
single payer advocate, your visit with him earlier
this year seems to have assured his desire to be
-
yes as long as we don't
helpful. I doubt any policy will need to be
expect hum to do any work
raised, but if so you may want to discuss the
new single-payer opt out language.
Chairman Jack Brooks,
225-6565
Judiciary:
We have worked hard with his staff over the last
several months to draft some language that we
believe achieves the appropriate balance on the
malpractice and anti trust issues. You may
want to thank him and his General Counsel,
A Brady Bull: have to give reason
Jonathan Yarowski, for his help. (Although they
may not like everything in the bill, you can say
M notgoring tipell gun; correct
we will continue to appreciate and significantly
identification; instant check who
defer to their counsel.)
"sichos Broaks'
Chairman Sonny Montgomery,
Wo
Veterans Affairs:
Chairman Montgomery has been saying some
very positive things about the President's health
- already on the Cooper bill
care plan. Most recently, he published an
positive about Veterans
article in Roll Call, the Capitol Hill paper that
was very favorable. You may want to mention it
will not he original dpensor
and say you appreciated it. Ask him how the
veterans organizations are doing and seek his
but unit be roadblock
original cosponsorship, and his help with the
rest of the Committee.
PHOTOCOPY
HRC HANDWRITING
In budget decusions
yes
Pete Stark: mahe tingh decisions t get traded away away
to senators, need period of time for no deals
225-2406
Chairman Bill Clay,
Post Office & Civil Service:
Chairman Clay just wrote an angry letter about
the FEHB issue; he had heard that we were
going to allow the FEHB employees to be
integrated on a state by state basis into the new
system, rather than wait until everyone was in
(at the end of 1997). He felt Ira had turned his
back on a commitment he thought Ira had made
to the Chairman. You can say the policy will be
as he wishes, i.e., to wait until everyone is in.
You should extract a high price for this, i.e., his
cosponsorship and his strong push for
Committee Member cosponsorships. (By the
way, we should also -- out of courtesy on this
issue tell the Senate Chairman counterpart
about this decision -- John Glenn, as well as
his Subcommittee Chairman, David Pryor).
Chairman Martin Sabo,
225.4755
Budget:
Despite all the problems, Congressman Sabo is
yes
still pleased with your event with him in
Minnesota. The cosponsorship of the House
Budget Committee could give us some needed
numbers credibility and is worth strongly
agree w/ busic objectives
pursuing. He also could be very helpful with his
Members.
Chairman John LeFalce,
Small Business:
Since dinner yesterday evening, John LeFalce
feels like he has made it to heaven. It was a
great event and he was most pleased with his
role in it. He has also been very happy with the
attention you have given him and his Committee
and has indicated his willingness to do all he
can for us on health reform. He can start with
Rochester- Rechesta-ovablem overblam
cosponsoring the bill and getting as many as his
Members as possible. (Every Small Business
6.1070
Committee Member helps us out just a little bit
more on one of the thorniest issues of all.)
used to have caps
Company tren
NFIB clips
& VIS.tto Buffalo
prished puple into
PHOTOCOPY
HMO,
HRC HANDWRITING
Public event: and fundraiser
1/22-23,29
215-6, 12, 13, 19. 20 , 26, 27
Chairman Dave Obey,
315-612,151920,26.27
Jt. Economic Committee:
Chairman Obey held the first health care reform
hearing after the August recess. In it, he asked
- states should have option
for and got Paul Starr. He was very pleased
with his testimony. Despite his past gruff
reaction to the long term care and workers
X 1 haven't changed statelegis
comp. provisions, he has recently been one of
our staunchest defenders. (He wants nursing
action required?
home coverage offered on a voluntary basis and
he doesn't want us to touch workers comp
changes So long as no
provisions because he thinks his state is doing
just fine with their program). You may want to
thank him for his very protective behavior
toward Paul Starr during the Health Care
University, (when he scolded the Members for
not being so rude to Paul). Bottom line: he is a
- will rute Ior any tax
flerce advocate, someone you would like to have
on your side, and a Member Chairs a Committee
to Cova whybody
that can be critical to helping build up
credibility on our numbers/economic
assumptions/etc.
Chairman Ron Dellums, 225-2661
Armed Services:
Chairman Dellums does not have much
jurisdiction beyond that of DoD. So far, we
believe the DoD folks are happy with us; he
should largely mirror their feelings. At any rate,
a call seems worthwhile.
Chairman Kweisi Mfume,
225-4741
Cngrsnl. Black Caucus:
Chairman Mfume has not always been the
easiest Member to deal with, but he is a dealer.
- I want to be very
He may be looking for an issue, however, that
-- from the beginning he is more closely and
positively associated with the Administration.
supportive - party needs
Let's hope that health care is one of them. He
may well say he can't commit without seeing the
to be unifical -
language, but I still think it is worth pursuing
him from the beginning.
- will try to move
Causeus to position
of support
PHOTOCOPY
Cardiso Collins 225-5006
HRC HANDWRITING
Congressman Lou Stokes:
Congressman Stokes is probably the key to the
Congressional Black Caucus on health care
issues. We need to talk to him and even invite
him in after the bill is transmitted to make him
yes
feel more invested. His staff, Leslie Atkinson,
has been extremely helpful and he may
appreciate your recognizing his help through
her. In addition, he still should be somewhat
pleased with your appearance at his
Congressional Black Caucus Health "Brain
Trust" meeting.
Chairman Pat Schroeder,
Congressional Caucus for
Women's Issues:
Congresswoman Schroeder wants to be as
helpful as possible and we believe she can if she
cosponsors and asks her colleagues to do same.
You know the issues she cares about
Chairman Jose Serrano
Congressional Hispanic
225-4361
Caucus:
Chairman Serrano may not be open to
cosponsoring the President's plan before he sees
the exact undocumented alien, the privacy
protection, and other provisions of the
legislation. However, out of Congressional
courtesy, I believe it is worth extending a hand.
Chairwoman Jill Long, -22574436
Cngrsnl. Rural Caucus:
She and Charlie Stenholm are most closely
associated with the Rural Caucus. Both would
be advisable to call, make the rural pitch, in
particular, and ask them to be cosponsors
(particularly Jill Long, because she has
indicated she would probably be willing to do so
even though I believe she also went on the
Cooper bill) and also ask them to pitch it to their
rural caucus colleagues.
I have some more in mind, but this is quite a list already. These
Members have great potential to help us out a great deal in attracting
credibility and cosponsors. We will keep you informed of our Leadership
meetings and progress on our end.
PHOTOCOPY
HRC HANDWRITING
ching needs copy
Single-Payer Opt-out Agreement
Any state may implement a single-payer system, under which:
All individuals and employers in the state could be required to
participate in the system pursuant to rules of the state,
except for Medicare.
O
Medicare will participate if state is granted waiver
assuring no reduction in benefits.
A single-payer State may use any equitable financing source, so long
as it does not allow employers in the state to avoid paying the same
payroll assessments as apply in other states.
Federal funds that would have been available to the state under the
President's plan will be available to the state to implement the
single-payer program.
To implement a single-payer system, state must provide benefits at
least as good as otherwise required under the Health Security Act.
If (1 not the means used but The intent of the heart-
(marphine example from enthanasia statement)
4 gradual
Questions for First Lady - AAMC - 11/7/93
1. In reference to the funding of academic health centers,
there were to be two pools of 6 B dollars, one for indirect costs
of med. education and one for grad. med. education.
Now the total pool seems to be reduced by 25%, the greater
reduction in the IME.
Many academics were concerned originally that the 12 B would not
cover the costs without sacrificing quality and more.
How would you respond to their concerns?
2. One of the great things academic med centers have to offer
is quality. Quality really has to be assured by a continuous
process. Money aside, the GME pool is to be managed and
distributed by a consortium, not by med schools. If the money
goes to a consortium rather than directly to med schools, it does
not assure the continuity of process.
Do you have some concern about this?
3.
Under the plan sent to congress the average pay for
residents in training will be less because of the reduction in
overhead which ordinarily covered administration of programs and
malpractice premiums. This is going to be viewed as a
considerable hardship on these young people in training.
Do you have any suggestions how this might be adjusted?
4. There was to be a third pool of 3 B dollars designated for
support of health care policy and basic and applied biomedical
research. This seems to have been eliminated. Many scientists
who are concerned about such research feel that the absence of
such funding will be detrimental to outcomes research and
prevention which are key points in the presidents plan.
Do you have any comment.
PHOTOCOPY
HRC HANDWRITING
- Nate Cancer Institute fam Broder
- LATAS artyicial lines estab'd by consent decree: e.g. Amentan
L,
Wiscomsin - SE Wis can't transment directly to Malison
VPGore said then to FCC designate
- you have choice hit if you'd 1.16 to limit choice - descount &
- medical lane as moht # lituation [ health = reght]
Dave money
1993
Panel Reports Genetic Screening
Has Cost Some Their Health Plans
By PHILIP J. HILTS
Special to The New York Times
WASHINGTON, Nov. 4
Some
maintain genetic information or sam-
American workers have already lost
ples should have procedures in place to
their jobs and others their health insur-
protect confidentiality.'
ance on the basis of, information ob-
The report said, "As genetic screen-
tained through genetic screening, a
ing becomes more widespread, these
panel of the National Academy of Sci-
issues threaten to outrun current ethi-
ences said today.
cal and regulatory standards, as well
If laws are not passed soon to curb
as the training of health profession-
the problem, the panel warned, thou-
als." It added, "There will be a need for
sands more Americans will face such
centralized oversight to insure that
discrimination.
new genetic tests are accurate, and
Tests can now detect genes for more
effective, that they are performed and
than a dozen diseases, and for factors
interpreted with close to zero error'
that contribute to dozens more. Tests
tolerance, and that the results of genet-
are under development for detecting
ic testing are not used to discriminate
the gene for Huntington's disease and
against individuals."
cystic fibrosis, and researchers say
The panel also urged that testing be
tests identifying those at high risk of
accompanied by extensive information
heart disease and mental disorders
about the disease being tested for and
will soon be available.
the options a person would face if found
The number of such tests will sky-
to carry the gene. For example, finding
rocket in the future, said Dr. Arno
that a fetus has a "neural tube defect,'
Motulsky, chairman of the panel at the
a defect of the nervous system that
Institute of Medicine at the National
indicates severe brain damage, could
Academy of Sciences in Washington.
lead to a decision to abort the fetus. But
Eventually, the Government's Human
it could also lead to disputes between
Genome Project should be able to iden-
tify most or all of the important genes
that cause or contribute to disease.
Making Results Confidential
Urging Federal
Noting that there will be commercial
pressure to adopt such tests as soon as
oversight of
they become available, the panel said
the tests should first be proved to be
both safe and effective by the Food and
genetic tests.
Drug Administration. There are cur-
rently no such standards. In addition,
laboratories that carry out the tests
the family and doctors over whether to
should be carefully monitored by the
abort, and if the fetus is carried to
Department of Health and Human
term, about how to treat a newborn
Services for their accuracy.
who has brain tissue missing and for
The panel added that people should
how long.
not necessarily be tested for many of
Workers must be aware that if a
these ailments, even when tests be-
genetic test shows that they carry a
come available, unless treatments also
gene for cystic fibrosis, which could
become available. And if testing is
mean they would have a child with the
done, the information must be consid-
disease, an employer seeking to avoid
S
ered confidential and protected from
health care costs and absenteeism
employers and insurance companies.
might seek to dismiss them, whether
"We recommend laws that forbid
they have an ill child or not.,
employers from collecting genetic in-
Health insurers already prevent
formation on prospective and current
more than 160,000 people a year from
employees unless it is very clear that
getting insurance because of medical
that genetic trait will directly affect
conditions they have, the report said,
job performance," said Dr. Motulsky, a
and this number could increase greatly
professor of genetics at the University
if insurance companies are able to ob-
of Washington at Seattle. "We recom-
tain information on the future health of
mend the adoption of legislation that
not only workers but their families as
prohibits the consideration of genetic
well.
risk when making decisions on whether
Under President Clinton's health
to issue or how to price health insur-
plan, insurers would be forbidden from
ance.'
discriminating against people with pre-
The panel issued broad guidelines
existing conditions. But the plan is not
for handling information about genes,
specific on whether insurers could put
based on the principle that the person
limits on coverage for certain diseases,
PHOTOCOPY
tested should have control over who
like AIDS.
PRESERVATION
gets the results.
The report referred to the "debacle
Calling for Oversight
of the 1970's with respect to sickle cell
screening," After some states adopted
"All forms of genetic information
laws requiring screening for sickle cell,
should be considered confidential and
the report said, trait carriers of the
should not be disclosed without the
gene "were denied jobs and charged
individual's consent, Dr. Motulsky
higher insurance rates without, evi-
said at a news conference in Washing-
dence that the trait placed a person at
ton. "All organizations that generate or
a higher risk of illness or death
The Mother
of All Toll Gates
CBO
PLAZA
HEALTH REFORM EXPRESSWAY
STOP
DEPOSIT ALL
HEALTH PLANS
FORM
Hi, Ira!
HERE WITH
SINGLE LANE
COST ESTIMATES
Princeton University
Woodrow Wilson School
of Public and International Affairs
Robertson Hall
Princeton, New Jersey 08544-1013
Tel: (609) 258-4781 (Office) (609) 924-7625 (Home)
Fax: (609) 258-2809 (Office) (609) 924-6083 (Home)
Uwe E. Reinhardt
James Madison Professor
of Political Economy
November 1, 1993
First Lady
Hillary Rodham Clinton
The White House
Washington, D.C.
Dear Mrs. Clinton:
Thanks so much for sending me a copy of that historical map now standing in the
Map Room. You are right, the sight of that map was quite a moment for me. It brought to
mind the war years, during which my mother, a veritable tigress, had to cope alone with
her brood of unruly five. I shall carry the map over to her on my next visit to Germany. I
am sure she will be deeply touched by your kind gesture.
By all accounts, the health economists' workshop we held at Princeton University
last weekend went well, thanks in no small part to the representatives from the White
House. It was good of Ira and some of his staff to join us and to share with us the
reasoning that begot the design parameters of the President's plan. Alice Rivlin, Len
Nichols of her staff and David Cutler of the CEA made a first-rate and quite convincing
presentation on the underpinnings of the cost estimates underlying the plan. I have served
for years on the mortgage committee of a large pension fund and wish we had such
careful cost and revenue estimates when we dispose of hundreds of millions of dollars of
other peoples' money.
The effort of the White House representatives, and their sincerity, were much
appreciated by the economists and by the staffers from the Hill. You can be proud of your
people.
My wife, May, had prepared for Ira a colored hard-copy of a slide I had used in my
presentation at Princeton. A copy of that display is enclosed herewith. You and the
President may get a chuckle out of it. We hope Ira liked it.
With many thanks, again, for your kindness, and with my best personal regards
and good wishes,
Sincerely yours,
Depicted below is an American mother who seeks to raise for this nation three
American youngsters, presumably on the low income she can earn as a secretary. The
picture was featured on the front page of The New York Times (October 5, 1992). In every
industrialized society, save the United States, the last thing such a lady would have to worry
about is obtaining access to health care or steep medical bills. She and her children would
have comprehensive health insurance and, thereby, access to her nation's mainstream health
care. Alas, in the United States this family probably represents the prototype of the
uninsured. Journalists could play a major role re-focusing the debate about health policy on
the probable fate of such families under the various proposals before us.
There's a a
third Little
one here
Although I usually act just like an egg-head,
I did draw the media's all ention (ast October
the the unbelievably skimpy benefits in the
Bush plan (pb see the attached letter). This is the
picture I still use for mytalks.
Terry Clark for The New York Times
Sunday 6 P.M.: Paula Brightbill, a divorced 36-year-old secretary, with her children, James, left, 12 years
old, Michael, 6, and Dana, 14, as they prepare dinner in their home in Harrisburg, Pa.
Although I am not sure whether as not she is insured,
she and her family are a symbol of are unin sured family,
Princeton University
Woodrow Wilson School
of Public and International Affairs
Robertson Hall
Princeton, New Jersey 08544-1013
Tel: (609) 258-4781 (Office) (609) 924-7625 (Home)
Fax: (609) 258-2809 (Office) (609) 924-6083 (Home)
Uwe E. Reinhardt
James Madison Professor
of Political Economy
October 14, 1992
Dear Friend and Fellow Communicator:
Enclosed herewith is a set of notes I recently used at a health-reporters' breakfast
in Washington. I send them to you to bring to your attention to a peculiar and rather sad
phenomenon: the political process has somehow managed to style the debate on the issue
simply as a set of financial flows and abstracted almost entirely from the human stories
alternative health-reform proposals would beget. The media have gone along with that strategy.
I am puzzled, for example, why so few, if any, of you have picked up on how quickly
the tax-credits President Bush would offer American families would melt away with rising
incomes. The general sense seems to be that the typical low-income family would receive
around $ 3,750. But a family of 4 with an income of $ 23,000 would receive only the higher
of $ 375 in tax credits or $ 562 in tax-savings by tax-deducting $ 3,750 in premiums. (These
are CBO and CRS analyses). Under the President's proposal such a family, with a
chronically ill member, could easily face an insurance premium of $ 6,000 per year. (Even
large companies now pay close to $ 4,000 per family for group policies. Under the
President's proposal, premiums in an area could vary by up to 50% per family because of
health status.)
It seems to me that the public should be well aware of these fundamental parameters
in evaluating alternative health proposals.
With my best wishes,
They
Sincerely,
INTRO TO THE PAPER
Imagine the following scenario: You and a group of colleagues are
invited to a dinner at which the spirits-bourbon, gin, and char-
donnay-flow like water. Eventually all of you are too impaired to
drive home. Instead, you play a game called "Building America's
Health Insurance System."
Would you, even in the most inebriated state, ever hit upon
the idea to construct for our fine land a health insurance system
that
Ties the health insurance coverage of an entire American
family to one particular job in one particular company in
a way that causes the family to lose that coverage should
the family's breadwinner lose that job
Grants high-income families a higher tax subsidy toward
the purchase of health insurance than it grants low-
income families¹
Leads Americans to hold on to jobs they loathe, merely to
have health insurance
Tells families without employer-provided health insurance
that their premiums will be sky high, should one or sever-
al members of the family be stricken with chronic illness
Sometimes simply denies families or small business firms
with chronically ill members any health insurance
coverage
Leaves some 35 million Americans completely without
health insurance, among them many hard-working adults
and some 10 million children
Tells a family stricken with illness and without health in-
surance first to pauperize itself thoroughly before society
will stretch out a helping hand in the form of Medicaid²
Has members of uninsured families die at a much higher
rate from given illnesses than similarly situated families
that do have insurance coverage
Allows private insurance carriers that cover individuals or
small business firms to eat up over one-third of the pre-
miums they collect in the form of commissions, admin-
istrative overhead, and profits
Saddles doctors, hospitals, patients, and business firms
with a claims process whose sheer waste of paper and
time is unmatched anywhere in the world
Costs some 40 percent more per capita than does Cana-
da's health system, the second most expensive health sys-
tem in the world
Has the executives of even large American business firms
now humble themselves in testimony before the U.S.
Congress with their lament that they simply cannot con-
trol the cost of providing their employees with health in-
6
Frontiers of Health Services Management 9:1
surance and that they therefore cannot compete effec-
tively anymore in the international marketplace.
If this is the system you prefer, then you have your wish,
for the preceding does describe well-known features of our nation's
health insurance system. The system was cobbled together over
the years by a partnership among America's business executives,
labor leaders, and government officials who never thought very
deeply about the long-term consequences of their design. Alas, the
proverbial eggs they laid in the process now have become the pro-
verbial chickens coming home to roost. The system is crumbling
all around us.
Table 1 presents information taken from a ten-country sur-
vey on public attitudes toward health care undertaken in 1990
(Blendon et al. 1990) suggests that only Italy now matches the
United States in the degree of popular dissatisfaction with the na-
tion's health system. Respondents elsewhere in Europe and in
Canada generally rated their health systems much more favorably
than did Americans, who traditionally regarded their health sys-
tem as the "best in the world."
Table 1.
The Public's View of Their Health Care System
in Ten Nations, 1990
Minor
Fundamental
Completely
Per Capita
Changes
Changes
Rebuild
Health
Needed
Needed
System
Expenditure
(percent)*
(percent)+
(percent)
(U.S. Dollars)
Canada
56
38
5
$1,483
Netherlands
47
46
5
1,041
West Germany
41
35
13
1,093
France
41
42
10
1,105
Australia
34
43
17
939
Sweden
32
58
6
1,233
Japan
29
47
6
915
United Kingdom
27
52
17
758
Italy
12
46
40
841
United States
10
60
29
2,051
*On the survey, the question was worded as follows: "On the whole, the health care system
works pretty well, and only minor changes are necessary to make it work better."
"There are some good things in our health care system, but fundamental changes are
needed to make it work better."
"Our health care system has so much wrong with it that we need to completely rebuild it."
Source: Harvard-Harris-ITF, 1990 Ten-Nation Survey.
Reprinted with permission from Robert 1. Blendon, Robert Leitman, lan Morrison, and Karen
Donelan, "Satisfaction with Health Systems in Ten Nations," Health Affairs (Summer
1990).
Uwe E. Reinhardt
7
REPLY
The commentators each add valuable additional
and not even economically efficient. There are
perspectives to my remarks. We are not really at
still many of those defenders. We must debate
odds on any major points.
them vigorously, and we must ultimately defeat
Carl Schramm and Marianne Miller ex-
them.
tract from my article the impression that I por-
Richard Davidson calls for an end to the
tray "health insurers as the lone villains in the
destructive non-price competition among hospi-
health care arena." To the extent that my article
tals that has saddled us with SO much waste in
triggers this impression even in observers who
the delivery of health care, and that is beginning
are more detached and less besieged than are
to give the hospital industry a bad image in the
these two spokespersons of the Health Insur-
media. Amen! Alas, he is not specific enough
ance Association of America, my article is
on just how this powerful industry is to be
flawed. A passage in an essay I recently penned
guided from mindless non-price competition to
for Roll Call may convey a more accurate por-
community-oriented cooperation, an exercise
trayal of my views. In it I stated: "The problem
somewhat akin to making eagles fly in forma-
with our current health insurance system, of
tion. Can we imagine the Board of, say, Holy
course, is not that the people working within it
Mercy unilaterally to withdraw from, say, car-
are either malicious or slovenly; they work hard
diac surgery or other high-margin or high-
and mean well. Rather, the system is SO poorly
prestige "product lines" just for the sake of the
configured that it literally brings out the worst
larger community, leaving the spoils to Method-
in a basically decent group of citizens. A pro-
ist Hospital down the street? I wonder if a vol-
ductive reform of the system must be one that
untary effort toward that end stands more of a
channels the efforts of these hard-working peo-
chance than did the industry's "voluntary ef-
ple toward socially more desirable ends."
fort" at cost containment in the late 1970s. To
Our health insurance system did not
my mind, the industry must be guided-goaded
create itself, against the popular will. Its devel-
is the better word-by tough forces from the
opment was passively abetted by all of us, and
outside. These forces might be regulatory. My
very actively by the providers of health care, by
hunch is that they will come primarily in the
the business community and by the U.S. Con-
form of harsh financial incentives.
gress. Thus, I fully agree with Schramm and
William Dowling describes a vision of
Miller's opening paragraph.
such a set of financial incentives. "All roads
Furthermore, there is little point in point-
lead to Rome," the ancient Romans used to say.
ing accusing fingers at the creators of our cur-
Nowadays, in health care, all roads seem to lead
rent insurance system. Let us reserve that ex-
to one end point: capitation for comprehensive
ercise only for those who still defend this
services coupled with the placing of doctors and
unseemly approach to financing American
hospitals into statistical fishbowls and ulti-
health care, even in the face of mounting evi-
mately, with global, top-down budgeting for all
dence that the system is now morally bankrupt
but a thin, upper-income-class elite. Arnold
46
Frontiers of Health Services Management 9:1
UWE E. REINHARDT
Whither Private Health Insurance?
Self-Destruction or Rebirth?
Summary
The American public increasingly finds itself disenchanted with
the system for health care financing in this country. Three forms
of reform proposal are examined: those that place the locus of pri-
mary responsibility for health insurance coverage on the individu-
al, those that would rely on employer mandates with patients and
government bearing the residual responsibility, and those that
lodge chief financial responsibility with the government, and act as
primary agent for cost control. The second approach, government-
mandated employer-provided health insurance, appears to be the
most politically viable at this time. However, that option is likely
to be acceptable to the business community only if the mandate is
coupled with additional regulation of private health insurance.
Specifically, private health insurance in such a system likely would
be based on mandatory open enrollment, community-rated pre-
miums, and all-payer reimbursement, under which every payer
pays a given provider the same fee for the same service.
UWE E. REINHARDT is James Madison Professor of Political
Economy, Princeton University, New Jersey.
Uwe E. Reinhardt
5
FRONTIERS
OF HEALTH SERVICES MANAGEMENT
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