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The Clinton health care proposal: reform squandered again!

Several key ingredients are necessary for legislative success of any health care reform proposal. The most important of these is a forceful presidential commitment to a policy that can be readily articulated to the American public. At the same time, I take it as a given that interest groups always will be heavily involved in the shaping of health care reform. Thus, the key ingredients are both substantive and political. For reasons that are still unclear to me, neither of these salient ingredients occurred during the recent debate on health care reform. President Clinton has been unable to execute such a task, despite the fact that he is certainly an avid reader of history and, at least at the beginning of his administration, tried to familiarize himself with the leadership style of Ronald Reagan, whom he called the most "effective" President in recent American history. Tragically, President Clinton, unlike President Reagan, has had difficulty distilling complex policies into a forceful yet clear message.

The Path to the Clinton Proposal

As governor of Arkansas, President Clinton did not have much cause to think about health care policy or politics. He presided over the Arkansas Medicaid program, which, during his tenure, was one of the least generous in the country. From the Arkansas Medicaid program to the health care politics of the Presidential campaign, two events stand out: the election of Harris Wofford (D-Pa.) to the Senate and the perceived ability of the California Personal Retirement System (CALPERS) to control costs.

Sen. Harris Wofford was elected in 1990 to fill the unexpired term of Sen. John Heinz (R-Pa.), who died in a helicopter crash. Wofford campaigned on the need for national health reform. He convincingly defeated Richard Thornburgh, who left his comfortable position as Attorney General in the Bush Administration, expecting an easy electoral victory against a liberal professor focusing on the unimportant issue of health reform. The unexpected election of Harris Wofford to the Senate propelled the health care reform issue into Presidential politics. Candidate Bill Clinton needed to respond to the popular rumblings that the election of Wofford unleashed.

The road to President Clinton's vision of "managed competition" began, as so many new policies do, in California, in the office of the State Insurance Commissioner, John Garamendi. Under CALPERS, a concerted effort was started to jawbone managed care companies into competition and stable, if not decreasing, health care premiums. The architects of the CALPERS approach believed that this could be translated to the national health care scene.

Walter Zelman, one of the key architects of the Clinton proposal, worked as Garamendi's key assistant. He faxed a July 1992 memo containing his recommendations surrounding health care politics in the Presidential campaign to Clinton aides in Little Rock. "Clinton should consider endorsing the notion of "managed competition. . . .A managed competition system could feature: direction by regionally based public-private purchasing corporations; consumer-friendly competition between health care plans/systems offering nearly identical benefits; payment of health care plans/systems on a capitated basis. . . .But advocacy of a specific reform path entails pitfalls. Most importantly, it forces one to deal with the question of who will pay or what tax will be raised. . . .A new health care system should be compatible with the American experience; i.e. government may need to guarantee access/security, but the delivery of health care should remain in private hands. Government may set some rules, but should not run the system. . . .Individuals should have a choice of physicians and health care systems. . . .Managed competition offers a specific policy approach that is not very controversial."

In this early proposal can be seen the seeds of eventual failure. With respect to the concept of universal coverage, Zelman and Garamendi may have been knowledgeable about the best program in the country that has forced down costs for a large segment of the population, but this segment of the population has characteristics that make it more easily amenable to significant cost control--its members are insured and employed in the area of the country with the most competition. Mercifully for the candidate, Clinton did not have to articulate the details of his plan. That could wait till after the election. In the meantime, candidate Clinton needed to remind voters that he was the candidate to most likely advance the cause of health care reform.

The Making of the Plan

Within days of the election, President Clinton began to put together the team that would formulate the administration's health care policy. Initially, the President announced that he would send a proposal to Congress within 90 days of his inauguration and expected passage of a health care reform bill by year's end.

While Zelman continued on as a key formulator of the Clinton plan, he was not the only leader of the health reform effort. The other significant players were Paul Starr, the Princeton academic and author of The Making of the American Health Care System; Ira Magaziner, who, according to virtually every newspaper account, consulted on numerous projects, many of which were inconclusive in terms of results; and, of course, the President's wife. On Jan. 25, 1993, a few days after the inauguration, Hillary Rodham Clinton was asked by the President to chair the health care reform task force.

With the selection of the leaders of the health reform effort, the work, under the management of Ira Magaziner, began in great earnest. An interagency health care task force, together with hundreds of outside consultants, was asked to develop comprehensive health care reform legislation in the first 100 days of the administration. The work plan states on the first page: "The model that President-elect Clinton has proposed for health care in the United States does not exist anywhere in practice. The campaign proposal, while sensible conceptually, needs significant definition." The author of the memo, likely either Magaziner or one of his aides, identified the following work modules, which eventually became the task groups or clusters charged with coming up with specific portions of the legislation:

* Benefits package.

* Budget and caps.

* Insurance reforms, organization of the Health Insurance Purchasing Cooperatives (HIPCs).

* Health care quality assurance.

* Administrative savings, reimbursement systems, and patient information systems.

* Malpractice reform.

* Drug price controls.

* Organization of employer mandates and subsidies to employers.

* Organization and mandate for the national board.

* Ethical guidelines for the system.

* Integration of VA and DOD health care workforce development.

Leaving aside for a moment the issue of whether the appropriate interest groups were involved, how can one best assess the organizational structure for developing this complex piece of legislation? James Ukockis sent a memorandum to Marina Weiss, Secretary Bentsen's principal representative on the health care task force, and made the following assessment:

"As structured, the enterprise is going to rely upon the intellectual capital brought to it by the people involved. There will simply not be enough time to build intellectual capital. Yet, if the process is essentially one of reviewing existing work on health reform and to select the options to be in the President's program, the size of the effort seems to be significantly larger and more cumbersome than needed. These coordination problems have the potential to prove troublesome at best, and to damage the quality of the final product at worst. I am very anxious about our ability to do a creditable job under the constraints being imposed."

In other words, the organization of the health care task force constituted the worst of all possible worlds. Neither time nor resources were available to flesh out a health care plan that "did not exist anywhere." One of the many results of this challenge was legislation that came to almost 1,500 pages. No President, even one with astounding leadership qualities, could present concisely and defend with clarity such a legislative behemoth.

Inadequate time and deficiency of resources led to the biggest obstacle to legislative success: options would be narrowed, with most decisions made a priori by the health care quartet. This would leave little room for political decision making. This problem is amply demonstrated in a memo detailing an interchange between a member of the task force and Magaziner: "[Magaziner] became impatient during my presentation on price controls. He was not interested in a balanced evaluation of the option. What he wanted was for someone to make the "best possible" case for a specific price control program. . .Mr. Magaziner then began an impassioned presentation of his own. . .It was his position that "the President must do something, there is no choice. In general, he wanted a "more constructive attitude" about the proposals, and urged a more creative effort to get around problems. After Mr. Magaziner left, David Cutler asked me to prepare to "sell" a specific price control proposal as best I could."

Another challenge, one that many others have already pointed out, is that the very notion of 500 academics and health policy wonks coming together to fashion a health care bill was simply ludicrous. Legislative consensus around the twin objectives of controlling costs and achieving universal coverage represents a political process. In one of the more laughable statements, but one that almost certainly reflected the Clinton perspective, the senior physician health policy advisor to Clinton, Arnold Epstein, stated after the health reform process died: "We tried to pay attention to developing the best policies and not pay attention to politics." Magaziner complained at the end of the ordeal that the political process destroyed the Clinton bill; he apparently does not realize that politics lies at the heart of the legislative process. "Politics" allowed opponents of health reform to define the health care bill before Clinton allies were able to define themselves. Almost immediately, the task force and its secret deliberative process led to political difficulty for Clinton. By Feb. 9, 1993, just two weeks after establishment of the task force, representatives of labor, large corporations, and the insurance industry came together to form the first of many groups to oppose the Clinton plan.

While there were difficulties on the cost side of the equation, the issue of the uninsured proved to be equally vexing. Four options were debated throughout the life of the task force: include the poor in the entities (HIPCs) that would manage competition at a state or regional level; delay including the poor by maintaining separate programs for them, such as Medicaid; separate the poor by maintaining a distinct public program for the poor; and provide an option whereby states would provide for the poor according to federal standards. The initial feeling within the work groups was that low-income individuals must be included in the ultimate structure of the HIPCs.

If low-income individuals were to be included, either immediately or eventually, within the HIPC structure, myriad questions needed to be addressed by the task force before final recommendations could be made. The sampling of questions/issues below provide a sense of the difficult issues that task force members grappled with:

* If low-income individuals are to be phased in, should they be phased in without regard to their current Medicaid status, which varies from state to state?

* Should certain categories of individuals be included first? For instance, should pregnant women and children be included first?

* Should newly entitled individuals be enrolled in HIPCs first and then existing Medicaid enrollees added? This would maintain Medicaid as a separate program?

* Should a policy be adopted that, once enrolled in a HIPC, always enrolled? Thus, if individuals lose their jobs or change to employers that do not offer coverage, should the Clinton plan include regulations that would ensure their continued enrollment?

* What entities should perform plan enrollment functions, such as income-testing and "eligibility?"

* What special rules should be established for subsidizing the HIPC plan selection process to ensure that the low-income population has a choice of plans and does not default into the cheapest plans?

It became apparent by May 1993 that the 90-day deadline would not be met. At the same time, congressional Democratic leadership was struggling with other legislation, notably the deficit reduction package. The leadership asked the President to delay introduction of the bill. By September, the administration's health reform initiative was ready, and President Clinton gave a nationally televised speech on Sept. 22, where he announced, holding a "Health Security Card" as a backdrop, "Let us agree on this. Whatever else we disagree on, before this Congress finishes its work next year, you will pass, and I will sign, legislation to guarantee security to every citizen."

The Sale and Foreclosure on Health Care Reform

The selling of the plan began almost immediately. The First Lady testified, with great success, before several key congressional committees with jurisdiction over portions of the bill. She held town meetings around the country that were similarly well received. Not so successful was the "health care university" that the administration held for educational purposes for members of Congress. The need to have such a two-day forum did not bode well for members of Congress attempting to explain to constituents a bill more than a thousand pages long.

Two other challenges, one significant and the other fatal, came to the fore as soon as the bill was submitted to Congress. A significant problem was the number of congressional committees fighting for a piece of the bill. Unlike today's Republican-controlled House of Representatives, the Democratically controlled House and Senate of 1993 consisted of a not-so-powerful Speaker of the House and a Senate Majority Leader accompanied by very powerful committee chairmen. Though a significant obstacle, this issue was resolved by Speaker Tom Foley's (D-Wash.) giving the entire bill to all three House committees that had significant jurisdictional authority over the bill.

The second problem that rapidly emerged was that the President took his eye off the health care bill and became rapidly engaged in other legislation perceived to be as important as the health reform initiative. Thus, for example, the President felt compelled to expend significant time and political capital on the NAFTA agreement. These and other legislative battles served to distract the country's attention away from the health care reform debate. The bill was extremely complex and very difficult to explain without the added difficulty of the President's ignoring his natural bully pul-pit.

Support for the Clinton bill went from 67 percent after it was announced to a minority of 44 percent by the end of February 1994. The length of the President's bill did not allow him or his allies to define the terms of the debate, a debate that would quickly go against him as he began to focus on other issues. Future presidential candidate Phil Gramm's (R-Tex.) cry that welfare recipients must "get out of the cart and help the rest of us push" found resonance at the time in a public official's claim that "you can't expect the hard-working people of suburban Chicago to go into the same health care alliance as the crackheads in Chicago." Although this harsh rhetoric contributed to the demise of the President's bill, through his unwillingness or inability to focus on one or two key pieces of legislation, the President ultimately laid the framework for its defeat.

No votes were taken on any health care legislation until the end of May 1994, fully eight months after the President's address to Congress. Although the first vote was already too late for any significant health reform legislation to be passed, a good faith effort was maintained, and it appeared at the time that a bill could still emerge that would command the President's signature. The President learned that a compromise bill would have to be acceptable, one that would not provide for universal coverage.

On largely party line votes, the House Subcommittee on Labor-Management Relations of the Education and Labor Committee on May 25 and the full Education and Labor Committee June 23 voted a support a Clinton-like health care plan. This patchwork piece of legislation, among other legislative accomplishments, would have established Medicare Part C to cover the poor. Not only did conservative Democrats join a united Republican opposition, but the leader of the single-payer forces also joined, thus dooming any change for success when and if the bill would come to the floor for a House vote.

Another ill omen came on June 28. Rep. John Dingell (D-Mich.), son of the congressman who had fought for national health insurance under Truman, announced that he was unable to have the House Energy and Commerce Committee pass any bill. Similar to his father, Rep. Dingell preffered no bill to one that compromised on the issue of universal coverage.

The 100 members of the House who favored the single-payer will were very committed to thei proposal. In fact, they were opposed to virtually every other bill on teh table. Similar to what occurred in the 1968 debacle over the proposed Nixon legislation (which in many ways was much more comprehensive than the Clinton proposal), the liberal wing of the Democratic party contributed as much as conservative forces to the defeat of health reform. While Sen. Edward Kennedy (D-Mass.) had learned his lesson from 1970 and actively supported a compromise, numerous diehard supporters of legislation that could never become law provided ample replacement for Kennedy's appreciation of the need to compromise.

In the Senate, the Labor and Human Resources Committee, chaired by Sen. Kennedy, voted a bill out of committee that maintained the essence of Clinton's support of universal coverage. Numerous changes were made in the Clinton bill in an unsuccessful effort to obtain some Republican support, such as that of Sen. Nancy Kassebaum (R-Kan.).

Very early on, moderate Senate Republicans outlined their bottom line: no mandate on employers, no mandate on states requiring them to set up HlPCs, and no standard benefits package. In fact, the Republican position was bolstered by an unlikely ally, Sen. Patrick Moynihan (D-N.Y.), who claimed that there was no health care crisis at all! Universal coverage was not in the cards as far as the Senate Republican leadership was concerned. At least initially, universal coverage was a Democratic mantra. By the time it changed, it was getting too close to the November election, and the Republicans smelled electoral success if they could succeed in painting Clinton as ineffective.

In contrast to the bill reported out of the Senate Labor and Human Resources Committee, the legislation produced by the Senate Finance Committee on July 2 was bipartisan and had a greater reliance on market forces. In lieu of universal coverage, the bill aimed for 95 percent coverage by the year 2002.

The Senate Minority Leader, Robert Dole (R-Kan.), offered the GOP proposal on June 29th. It did not even talk about universal coverage. Rather it spoke in terms of universal access. While subsidies were included in the GOP proposal, they were to be offered out of savings in the Medicare program.

Thus, by the beginning of July, the major committees had acted and most had not come up with Clinton's bottom line demand of universal coverage. The House and Senate leadership now stepped in to see whether a bill providing for universal coverage could obtain the necessary support for congressional passage. By July 21, Sen. George Mitchell (D-Maine) and Rep. Richard Gephardt (D-Mo.) told the President that a bill requiring universal coverage would not pass Congress. Despite his acceptance of this inevitable state of affairs, the President was still attacked by the left for his abandonment. This forced the President to reconsider his political position. "Our position is exactly what the president said his position was. . .that he will veto any bill that didn't deliver universal coverage." The Boston Globe summarized well the box that President Clinton had put himself into: "Clinton is stuck in a dangerous political double-bind. In large part because of his own exertions, the public continues to be fired up about the goal of universal coverage. But neither voters nor lawmakers can agree on how to pay for it."

Rep. Gephardt took the first crack at crafting legislation that Congress could approve. Universal coverage was promised by 1999. The vehicle would be employer mandates and the Medicare Part C program envisioned by Rep. Pete Stark (D-Calif.). Sen. Mitchell, who had passed up an opportunity to become the next Supreme Court justice in an effort to ensure passage of health reform, released his bill on Aug. 2. Rather than aiming for universal coverage, the Mitchell bill aimed for 95 percent coverage by the year 2000. Employers did not have to kick in at all until 2002. Such a plan might have passed both the House and Senate several months earlier. With midterm elections looming and Southern Democrats in particular not perceiving any benefit to supporting legislation that came even close to universal coverage, the Mitchell bill was doomed. At the same time, liberals from the north would not settle for anything less than universal coverage. Time simply ran out.

While time would have likely run out in any event, both the House and Senate were distracted for a crucial period at the end of August when the House defeated the omnibus crime bill. The House reversed itself and passed a revised crime bill. The Senate stopped the health care debate in mid-tracks and turned its attention to the crime bill for a rancorous four-day debate. The Senate passed the crime bill on Aug. 25. On Aug. 26, Sen. Mitchell acknowledged that significant health care reform was dead for 1994. When the House and Senate returned after the August recess, all eyes were focused on the upcoming election. During the August recess, elected representatives heard that, with the upturn in the economy, their constituents did not perceive health care to be a crisis anymore.

Ample Criticism for All

This article does not fault interest groups, all of which had a dramatic impact on the health care debate. Rather, President Clinton should have known that interest groups would be actively involved. This article places the blame for the lack of health care reform squarely on the President. It is the President who was unable to articulate a coherent policy. It was the President who cobbled together health care advisors who could not develop a coherent message.

The "intellectual advisors" to President Clinton on health reform did not serve him well. No member of the quartet of senior health care decision makers (Hillary Clinton, Zelman, Magaziner, and Starr) was ever elected to public office. Only individuals who have had to undergo the rigors of an election can appreciate the importance of an intimate understanding of public opinion and an appreciation of its volatility. As documented throughout this series, the public needs to be listened to and molded if significant health reform is to have any chance of success. This can only happen under the tutelage of a politically savvy President. The Clinton White House delegated the task of selling the proposal to politically inept surrogates until it was too late.

Both the vision and the implementation were flawed. The vision foresaw legislation that would combine significant government and private interaction--a vision that has never achieved practical reality in the United States. Until late December, the outlines of managed competition were not frozen in stone. Two broad options were still available: either concentrate on the uninsured, thus forcing a significant government role in coverage for this group, or concentrate on reform of the system, thus driving down costs and encouraging more private players to cover the uninsured. The Clinton proposal tried to do both at the same time--and failed miserably at both.

The Clinton Administration's implementation of its legislative battle plan was flawed on three fronts. Instead of focusing on the issue of universal coverage, a concept the public could readily understand and support, the selling of the President's plan initially focused on the cost control side--"managed competition." The development process of the legislation was just as ridiculous as assignment of the key function of articulating the principles of managed competition to four unelected friends/advisors. The net result of such a political decision was that key decision makers and interest groups were not intimately involved from day one in the drafting of the legislation. Not only were key interest groups not involved from the start of the drafting of the legislation, but potential allies on the Republican side of the aisle were not significantly involved until the very end of the health care debate, when virtually nothing of any consequence could pass both houses of Congress.

The Future

The future is tragically here. For the present, the uninsured are increasing at a rate of 100,000 per month, an unmitigated tragedy. My reading of the 1994 elections is that Americans are committed to policies based on individualism rather than any sense of community. Community responsibility lies at the heart of traditional health insurance, with its attendant community ratings. Despite the very rapid growth of managed care, health insurance based on individualism (aka medical savings accounts) is likely to become very popular--for the healthy, well-off. The Clinton health reform effort completely squandered the opportunity to significantly increase access to care.

Fee-for-service physicians are grasping at medical savings accounts as a last gasp effort to preserve their time-worn preeminence in the health care system. While this individualism has always been present, the cry has reached a crescendo. Analyses pertaining to government incompetence are shameless and almost always patently false. One needs to occasionally keep in mind that the Medicare program spends a fraction of its budget on administrative expenditures while keeping copayments at a minimum.

During the campaign for the Presidency, Clinton aides briefed the candidate on likely questions as he prepared for his debates with President Bush. The introduction to one of the briefing books of questions provides the reader with an understanding of when coverage for the uninsured may arrive:

"The Republicans talk about their idea of government, they have it easy. . . .this Republican philosophy reads: the role of government is to provide national defense. Other than that, it's every man, woman and child for his or her own self. . . .Only the strongest deserve to survive. We, the members of the Democratic party, take an entirely different view. . . .we take seriously the notion that government should not only be by the people and of the people, it should also be for the people. . . . Government, cooperation, agreement. These concepts only become oppressive when the air around these words, becomes fouled. It's like walking through the Arkansas hills on a fine spring day. . . .until all at once you start to smell a skunk."

While not quite an Arkansas skunk, the Clinton Presidency has been a failure on health reform. The reality is that it is extremely unlikely that any Republican White House will advocate significant expansion of coverage for the uninsured. Rockefeller and even Nixon would have been much too generous to the uninsured for the current breed of conservatives. New Democratic party leadership will need to emerge. This next Democratic presidency will not occur until voting patterns change. Such a President will need to have true leadership capabilities if he or she is to be elected. In the meantime, physician executives should think globally and act locally.

RELATED ARTICLE: A Health Care Reform Chronology(*)


Jan. 25: President Clinton appoints Hillary Rodham Clinton to head a task force to daft a comprehensive overhaul of the nation's health care system. The goals: to provide universal coverage and cut rising health care costs. March 3: Rep. Jim McDermott (D-Wash) introduces a bill (H.R. 1200) to set up a Canadian-style, single-payer system. May: Task Force is disbanded; Clinton works with Cabinet members and top advisors to flesh out the plan. Sept. 22: Clinton unveils his long-awaited proposal in a nationally televised speech to a joint session of Congress. His bottom line: universal coverage. Oct. 6: Reps. Jim Cooper (D-Tenn.) and Fred Grandy (R-Iowa) introduce a bill (H.R. 3222) to increase coverage by reorganizing the health insurance market. Nov. 20: Clinton's 1,342-page health care bill is introduced (H.R. 3600, S. 1757). House leaders refer entire bill to three committees; two Senate panels compete to take the lead. Nov. 22: Sen. John H. Chafee (R-R.I.) introduces a bill (S. 1770) requiring that all Americans have health insurance by 2005.


Jan. 25: In his State of the Union address, Clinton vows to veto any health bill that does not guarantee universal coverage. June 9: Senate Labor and Human Resources becomes the first full committee to complete work, voting 11-6 along mainly partisan lines to approve a bill modeled on Clinton's plan. June 23: House Education and Labor Committee votes 26-17 for an expanded version of Clinton's plan. To win the votes of the most liberal members, the committee also sends to the floor without recommendation a single-payer plan (H.R. 3690). June 28: House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.) notifies leadership that his panel, often seen as a bellwether of congressional opinion, cannot agree on a health care bill. June 30: House Ways and Means Committee approves a Clinton-style bill, 20-18. "No" votes include all 14 Republicans, joined by three conservative Democrats and one liberal. July 2: Senate Finance Committee approves the only bipartisan measure to emerge from a committee; the vote is 12-8. July 21: Democratic leaders tell Clinton his bill will have to be scaled back. July 29: Majority Leader Richard A. Gephardt (D-Mo.) unveils a House leadership bill. Aug. 2: Majority Leader George J. Mitchell (D-Maine) releases a Senate Leadership bill. Aug. 9: The Senate begins floor debate on the Mitchell bill. Aug. 19: A rump group of senators, led by Chafee and John B. Breaux (D-La.), and known as the Mainstream Group, offers a bipartisan compromise. Aug. 25: After a bitter debate on the crime bill, the Senate starts its August recess without finishing a health care bill. The next day, Mitchell scraps his bill, conceding that comprehensive health care reform will not come in 1994. Step. 26: Mitchell declares health care dead for the year, after a compromise bill that he negotiated with the Mainstream Group fails to attract enough votes. (*) "Health Care Reform." Congressional Quarterly Almanac, 103rd Congress, 2nd Session. 1994, Volume L. p. 321.

RELATED ARTICLE: Pressures for National Reform Will Remain

Dr. Goldfield's article is a well-informed and well-documented account of why the 1994 attempt to provide comprehensive health care reform with universal access failed. He has documented his analysis with a number of salient and poignant comments.

However, in focusing on the tactical errors that were made by the President and his task force, Dr. Goldfield has given insufficient credit to what Newsweek has documented as the $300 million spent by self-interested groups--including, prominently, the insurance industry and the tobacco companies--to convince the American people that there really is no health care crisis and no need for fundamental change. Nor does he comment on the $75 million that, according to Citizen Action, was spent by lobbyists in campaign contributions to selected members of Congress, also to defeat health care reform. Yet it is clear that outspending proponents of reform by well over 10 to 1 was an extremely significant factor in changing public opinion.

Nor does Dr. Goldfield sufficiently emphasize the importance of the lack of consensus on the part of those who wanted reform but who couldn't agree on a plan. He does mention the role of the single-payer movement, but there were prominent national organizations that said, "Yes BUT" and emphasized the "BUT."

In his well-documented review, Dr. Goldfield ends with a pessimistic prognosis, which I believe ignores the effect of the growing severity of lack of adequate health care protection for Americans, as more and more employers dump their insurance plans and Congress attempts to drastically reduce the numbers of citizens covered by Medicaid. For instance, the Children's Defense Fund estimates that 6 million children will be dumped from Medicaid coverage and left uninsured under the House version of "budget reform." For these reasons, the pressure for change will grow again.

Ideally, the President, if reelected, will learn from his experience and will look for a simpler step-by-step plan. And this time the American people will not allow themselves to be fooled by the defenders and beneficiaries of the status quo.

For those of us committed to bringing universal access to high-quality health care for every American--something that every major industrial nation on earth, except South Africa, has already provided--we believe a more optimistic prognosis is justified, and we will work hard to bring it about

RELATED ARTICLE: Reform Required Federal, State Roles

Colleen M. Grogan, PhD, Assistant Professor of Health Policy and Administration in the Department of Epidemiology and Public Health at Yale University, believes that, for health care reform to succeed, the states and the federal government could never do it alone," says Grogan. "Even plans that were talked about at the federal level had substantial state control, so that they would be similar to the Canadian system. The federal government would provide financial assistance to states, and they would set minimum regulatory requirements, such as universal coverage and a minimum benefits package. It would be completely up to the states as to how they wanted to structure their delivery."

States also rely on the involvement of the federal government, she says. "From a financial perspective, the states can't do it alone," explains Grogan. "Even Minnesota, which has been trying to do some of its programs alone, is trying to do it through Medicaid so it can get a federal matching rate. Hawaii has a waiver from the federal government, and that's how it was able to reduce its portion of uninsured. However, Hawaii has always had about 6 to 7 percent of its population uninsured."

Grogan says that, prior to the 1994 congressional and state elections, states were talking about expanding eligibility and doing something about access. "But now what you really hear from state governments is that they're trying to control costs under Medicaid. Some states are still applying for waivers, but a number of states, such as Connecticut, are no longer interested, because they don't think they can afford it."

Grogan also points out that, if the federal government had no policy regulations, such as a minimum benefits package or some kind of eligibility minimum, there would be "vast inequities across the states. If past policies tell us something, they tell us that states do come up with very different benefit levels." States also vary in their fiscal and administrative capacity and in the level of professionalism in their legislatures, which after their ability to handle major health care reform, she adds.

"Managed care Medicaid is much more of a challenge than states envisioned," Grogan says. "In Connecticut, there are major questions about how it will monitor quality of care under the Medicaid managed care system. The information systems it needs to create are very daunting."

As for managed care Medicare, Grogan thinks pushing the elderly into these plans doesn't solve any problems. "The evidence for cost containment under Medicare risk-contracting or Medicare HMOs has not been convincing. They have not been able to save very much money."

Grogan's bottom line: "I think it's an artificial debate to talk about which should be in control--the states or the federal government. Neither can do without the other.

Norbert Goldfield, MD, is Medical Director, 3M/HIS, Wallingford, Conn. This article continues a series on national health care reform begun in the March-April 1992 issue of Physician Executive. Dr. Goldfield may be reached at 100 Barnes Rd., Wallingford, Conn. 06492. 203/949-6330.
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Author:Goldfield, Norbert
Publication:Physician Executive
Date:Jan 1, 1996
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