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<text id=93TT1770>
<title>
May 24, 1993: Are You Ready for the Cure?
</title>
<history>
TIME--The Weekly Newsmagazine--1993
May 24, 1993 Kids, Sex & Values
</history>
<article>
<source>Time Magazine</source>
<hdr>
HEALTH CARE, Page 30
Are You Ready for the Cure?
</hdr>
<body>
<p>The Clinton health-care plan will soon be unveiled. Here is
an inside look at what it contains so far.
</p>
<p>By GEORGE J. CHURCH--With reporting by Janice Castro/New
York, Michael Duffy and Dick Thompson/Washington, with other
bureaus
</p>
<p> Health-care reform, the domestic program supposed to change
Americans' lives more than any other legislation since the Social
Security Act of 1935, will be unveiled by Bill Clinton with
a flourish of trumpets and roll of drums around May 1. Hold
it: about 10 days later. On third thought, let's say the week
of May 17. Er...would you believe mid-June?
</p>
<p> It will cost somewhere between $30 billion and $90 billion a
year. Well, make that $100 billion. Or maybe $150 billion, tops.
</p>
<p> It might be financed partly by taxing workers on generous medical
benefits paid by their employers. Oh no, it won't. Well, probably
a payroll levy split between workers and their employers--only please don't call it a tax. Say "wage-based premium."
</p>
<p> Anyway, there will be price controls to hold down the cost.
Or will there? Some kind, maybe. And Medicare won't be touched.
Yes, it will; in fact, eventually it might be swallowed whole
by a new system.
</p>
<p> Confused? So are the doctors, nurses, hospital managers, insurance
officials and company executives, whose incomes or profits will
be drastically affected by the plan, and members of Congress,
who will have to vote on it. Not to mention the patients, whose
health may be at stake, and the taxpayers, who will have to
pick up the bills. All have been subjected to months of wildly
confusing and contradictory reports. Some apparently were Administration
trial balloons, launched to test the reaction of the public
and special-interest groups. Many more, or so White House insiders
insist, were leaks from some of the 500-plus members of the
Administration's health-care task force, who greatly exaggerated--probably even to themselves--how seriously their bosses
were taking their ideas.
</p>
<p> But now the confusion is at last starting to clear. Within the
past few days, a six-page briefing paper marked PRIVILEGED AND
CONFIDENTIAL has emerged from the White House and has begun
to circulate among legislators. It lays out the basic structure
of a radical overhaul of health care and provides talking points
for pitching the plan to skeptics. All Americans will be "guaranteed"
the right to health insurance, even if they are among the 37
million not now covered. The Federal Government will define
a standard package of benefits that must be made available to
everybody; states will have the job of setting up "alliances"
of consumers and employers that will negotiate with pools of
insurers to make certain the package is actually delivered.
</p>
<p> Clinton is determined to build tremendous flexibility into the
plan, so that states can develop their own systems and patients
can have a reasonably wide choice of doctors and hospitals,
said Ira Magaziner, the White House health-care adviser, in
an interview with TIME. "It's just too diverse a country. If
you try to put one template on the country, it will be too bureaucratic,"
said Magaziner. "We also think that it helps, when you're trying
something new like this, having different states do it somewhat
differently without pushing the whole country in some direction.
As much as we've planned, we're not going to get it all right.
You try to allow for a lot of self-correction as you find that
some of your initial concepts are not working out."
</p>
<p> The Administration is also seriously considering price controls,
at least in the short run, on insurers, health-care providers,
and prescriptions. Over the long term, it is leaning toward
a kind of indirect price control on doctors called a "budgeted
fee for service." The reformers envision a health-care system
in which almost every physician in the country will become part
of a network, practicing under caps and within a preset budget.
Even if not part of a formal health-maintenance organization,
groups of doctors will join together to offer their services
through a health alliance. In return, the doctors will be paid
on a "capitated" basis, a fixed amount for each person served
in a given time period, regardless of how much service is actually
used. Doctors will not be allowed to charge patients more than
the fee in their contract, a practice known in Medicare today
as "balance billing." Says Magaziner: "They need to live within
that budget."
</p>
<p> The remaining questions go well beyond pesky details, though
there is no end of those, to basics that can be decided only
in the Oval Office. Among them: Just what should the basic benefit
package include? The answer will go far to clear up another
puzzler: How much is the whole plan likely to cost? Whatever
the figure, how will that cost be paid--whose taxes should
be raised how much? "These are all tough ones, and there are
trade-offs with each, none of which are easy," says Magaziner.
</p>
<p> As these questions loom, Clinton has begun once more to participate
personally in the planning. Since April, he had pretty much
let the Administration task force, which is headed by his wife
Hillary Rodham Clinton, operate on its own. But the President
began meeting with key members of the task force again over
the weekend--and not a minute too soon. He will have to preside
over something of a split between the forces of the left, led
by Health and Human Services Secretary Donna Shalala, and those
of the right, led by Treasury Secretary Lloyd Bentsen. "Given
their druthers," said an official, "the HHS crowd would rather
have a [government-run] single-payer system with extreme regulation
and cost controls. The economic types are worried about the
economy, and so they want no cost controls and no regulation.
I'm not going to deny there are tensions in the room. But we're
going to end up somewhere in the middle."
</p>
<p> Those and many other issues must be resolved soon if the Administration
is to meet its current mid-June deadline for presenting a plan
to Congress. It had better, if it is to preserve any hope of
getting something passed this year. Chances are not high in
any case, given the complexity of the plan and the fury of the
political fight its presentation is certain to touch off. But
White House strategists want to try. The sooner the plan is
set up, they reason, the more quickly it will start to generate
eventual savings.
</p>
<p> Passage sometime is central to Clinton's hopes of salvaging
a successful presidency from a somewhat stumbling start. His
deficit-cutting plan is again beginning to make some progress;
his proposed tax increases have just passed the House Ways and
Means Committee. Nonetheless, much of the public still views
him as disappointingly ineffectual. In a TIME/CNN poll last
week, 47% of those in the survey approved of the job Clinton
is doing as President, down sharply from 56% the day after he
announced his economic program. An apparent reason: 57% of the
respondents thought that Clinton "has good ideas but can't seem
to get them passed."
</p>
<p> The public, however, is overwhelmingly in favor of the general
idea of health-care reform, and it was one of the biggest vote
getters among Clinton's campaign promises. Besides, it may well
touch the everyday lives of more Americans more intimately than
anything else on the President's agenda. So, many analysts within
and outside the Administration view it as a make-or-break issue,
one that conceivably could decide whether Clinton is re-elected
in 1996.
</p>
<p> Some of the confusion and opposition that occurred in developing
the plan probably was unavoidable. The present health-care system
is not really a system at all but a hydra-headed monster that
grew by accretion over decades without any direction. Imposing
any kind of plan on it is inevitably an immensely complicated
undertaking, made more difficult because some people and organizations
that have prospered under the inefficient nonsystem see any
change as a threat.
</p>
<p> But the Administration made the task harder by the procedure
it adopted. Elementary prudence--not to mention Clinton's
usual habit of seeking to accommodate everybody--would seem
to have dictated trying to bring the major interest groups aboard
from the start, at least to the extent of listening to their
views and thus giving them a stake in a plan they could feel
they had helped shape. Instead, the White House turned the job
over to a 511-member task force whose very names were kept secret.
When the Administration grudgingly issued a list, the task-force
members turned out to be mostly congressional assistants, academics
and think-tankers little known even inside the Washington Beltway.
Typically, Daniel Callahan, the nation's best-known expert on
medical ethics, said, "I know the top 10 minds in the country
on this issue. I've talked to them." Not only were none of them
on the task force; they knew none of the people who were.
</p>
<p> Worse still, say critics, the task force was divided into working
groups whose members concentrated on tiny parts of the plan--and frequently solved one problem while unknowingly creating
two more in other areas. When the Administration did finally
begin to invite the opinions of about 50 outside experts, it
did so under conditions of continuing secrecy. They were shown,
one by one, into a room in the Old Executive Office Building
and given a glimpse of the portion of the plan relating to their
particular areas of expertise. But none were allowed to make
copies or take notes, and few were permitted to see the whole
plan, although several protested they could not judge the proposals
in their area unless they could see how they related to the
rest. Said Dr. John Lewin, health commissioner of Hawaii: "It's
like visiting the Dead Sea Scrolls." The procedures supposedly
were designed to insulate the task force from special-interest
pleading. But the effect was to add to the practical and philosophical
objections that were sure to come the resentment of experts
who felt they could have made important contributions but were
ignored.
</p>
<p> Administration officials now contend that the 511 were never
as important as either their critics or they themselves thought.
Magaziner insists the huge group was needed but admits that
the magnitude of the process may have unnecessarily inflated
expectations. The task force did develop a wide range of ideas
for Magaziner to consider--at meetings, called tollgates,
which dragged on for hours--and pass along to Hillary Clinton.
But, say insiders, many of those ideas were never even read;
a core group of roughly 30 Cabinet members and their aides,
and most of all Magaziner and Hillary, did the real planning.
That is not altogether reassuring. Hillary Clinton continues
to draw admiring comments about her intelligence, courtesy and
sense of direction even from bitter critics of the plan. Not
so Magaziner, a policy wonk's policy wonk who tends to be obsessed
with process and speak in a mystifying jargon. "He costs us
two or three votes every time he goes up to Capitol Hill," says
one Administration official, not entirely in jest.
</p>
<p> More important, the Administration has been bedeviled from the
beginning by a conflict between two contradictory aims: extending
coverage to everybody and holding down costs. Hillary Clinton
and the task force have regularly favored covering everybody,
and generously at that: psychiatric care, nursing-home care,
payments for prescription drugs and other expensive propositions
were steadily added to the menu. By April, some of the Administration's
economic officials, notably Bentsen and Budget Director Leon
Panetta, were concerned enough about the prospective costs to
urge more work and a postponement in recommending the plan.
Bill Clinton agreed (even though he had set the early May deadline
by promising a plan within roughly 100 days of Inauguration),
and a series of delays ensued.
</p>
<p> The postponements do not seem to have brought the Administration
much closer to its goals. Eager to hold down costs, Hillary,
Magaziner and allies have been talking about broadening the
plan still further, to encompass health payments for auto-accident
and workplace injuries and to have people stay enrolled in the
program rather than switch to Medicare as they turn 65. The
aim would be to reduce costs by avoiding duplication. But even
if that happened, the government would have to find a way of
capturing from patients and insurance companies the money saved,
so that it could finance extension of coverage to the uninsured
and underinsured. A simple way of holding down costs would be
to slow down the extension of benefits and coverage of the uninsured;
certainly the whole plan cannot immediately be put into effect.
How rapidly or slowly to phase it in is another of the decisions
only President Clinton can make, and that he must do soon.
</p>
<p> Nobody has to theorize about how organized interest groups are
likely to respond. Only two are backing the plan, and of them,
only the American Association of Retired Persons has summoned
any enthusiasm. That is a bit of a role reversal, since the
32 million-member AARP did much to kill a law enacted under
the Reagan Administration that would have insured people against
catastrophic illness. AARP helped persuade Congress to repeal
the law on the ground that it imposed on oldsters too high a
cost in extra premiums. This time around, AARP is pleased that
the Administration intends to insure the aged against the often
ruinous costs of long-term care and spread the extra costs among
the population at large. The organization is noncommittal, so
far, on the idea of folding Medicare into a wider health scheme.
</p>
<p> The American Medical Association, which in the past has pronounced
anathemas on anything sounding like medical price control, is
also giving support to the Administration's plan. Pro forma
support, anyway; the doctors are pleased the Administration
has been listening to them and figure they have put themselves
in a position to exert influence in further dickering over what
finally emerges from Congress. Privately, confides one high-ranking
AMA official, many members would be happy to see the plan defeated
"so that we can start all over again and do it right. We want
reform," he asserts, but experts estimate that the Clinton plan
as it is developing will cost Americans $3,500 a year each on
average, and "if costs spin out of control, the health-care
system will suffer. We think the plan is reckless." The AMA
will not say any such thing publicly, however, for fear of losing
its bargaining leverage.
</p>
<p> Otherwise, interest-group reaction ranges from skeptical to
horrified. The AFL-CIO is afraid that union members who accepted
smaller wage increases as the price of negotiating health benefits
more generous than the Administration's basic package will have
those scaled down too, or be forced to pay extra for them; the
White House so far has failed to reassure the unionists. Small
businesses that provide scanty or no coverage for their workers
are terrified that they will be forced to pay huge sums--as
much as $60 billion a year, by one estimate--to bring benefits
up to the federally enforced minimum, and some fear they might
be bankrupted. Magaziner insisted in a speech last week that
if a small business was required to pony up, say, 8% of its
payroll, that requirement would be phased in slowly enough to
give the firm time to adjust. But like the unions, the little
businesses will probably be hard to convince.
</p>
<p> Big companies supposedly will fare well: if they have contracted
to provide their workers benefits more generous than the federally
guaranteed basic package, they can in effect opt out of the
broader system and carry on as before. But some fear Clinton
and Magaziner want to make them pay handsomely for that privilege,
in the form of a tax or premium that would be used to cover
the uninsured or skimpily insured. Says a medical executive:
"Magaziner's philosophy seems to be that every place somebody
is saving money is a place that he can get money."
</p>
<p> The most surprising opposition has come from some of the intellectual
parents of managed competition: the idea of grouping consumers
and doctors into huge pools that would bargain with insurers
over premiums and coverage. It was a foregone conclusion that
small insurance companies would object, fearing they might be
driven out of business, and they do. The odd thing is that the
handful of large companies--Aetna, CIGNA, MetLife, Prudential
and Travelers--that broke away from an organization called
the Health Insurance Industry of America to form the Alliance
for Managed Competition are also gearing up to oppose what is
supposed to be their handiwork. Their argument: Instead of trying
to institute a true managed-competition system, the Administration
is opting for an unworkable combination of that and a system
known as single-payer. Under a genuine single-payer system,
like the one that operates in Canada, the government is the
only insurer and pays all doctor and hospital bills, negotiating
with the caregivers as to what is an appropriate charge.
</p>
<p> While the nascent Administration plan is not at all that, critics
say it seems likely to include some features that are incompatible
with a real managed-competition system, which would rely on
rivalry among networks of buyers and insurance sellers to hold
down costs. Says John Moynahan Jr., executive vice president
of MetLife: "There seems to be an almost inexorable drive toward
regulation and price controls coming from people whose mind-set
has historically been toward a federally run, single-payer national
health-insurance system." Critics in particular single out Shalala,
who supposedly salted the Administration's task force with allies
eager to push the plan as far toward a single-payer system as
they could. But a senior White House official ridiculed the
criticism by the managed-competition purists and said, "Look,
this is not going to be managed competition or single-payer.
It's going to be something completely new and different."
</p>
<p> Despite the flak from interest groups, the Administration has
some powerful political levers it can pull. Congressional Democrats
are eager to help their President, though apprehensive about
the costs of the reform the Administration is contemplating.
Says a conservative Southern Senator: "Everyone knows that health
care will be the issue that the President cashes in all his
chips for. Democrats won't stray unless they have great reason
to. But we still don't know how health-care reform will be paid
for, and we're not just going to rubber-stamp the deal." Republicans,
like the Democrats, are getting an earful from their constituents
about the high costs, insecurity and gaps in coverage of the
present jerry-built nonsystem. Some will try to find reasons
to vote for reform, and even those who are inclined to oppose
it are leery about unleashing their ultimate weapon, the Senate
filibuster. Says an aide to Senate Republican leader Robert
Dole: "It's not even on the radar screen at this point. A filibuster
might be viewed as an endorsement of the status quo on health
care, and a lot of Republicans don't favor that."
</p>
<p> Even so, Administration officials know they will have a tough
selling job with the public. Much as they approve of reform
in general, the 220 million Americans who now have medical insurance
are really looking for lower bills and better-quality care,
or both. Republicans are likely to tell these people that they
will be asked to pay more for less or no better care, for the
sake of covering the 37 million uninsured. Administration officials
concede that contention may be troublesome--especially since
polls show as many as 70% of those questioned think that Clinton
is "too willing" to raise taxes, even before he addresses paying
for health care. Says an official: "We don't have too far to
go before we've gone too far."
</p>
<p> Clinton lieutenants are preparing counterarguments. The briefing
paper hints at the main line: yes, you might pay more, but we
are offering security. You could not be turned down for insurance,
dropped or forced to pay a higher premium even if you have AIDS,
cancer or some other "pre-existing condition," in the insurance
jargon. You could not lose your insurance or have it reduced
because you are fired or laid off, or because your company goes
bankrupt or because you quit to look for a better job; your
benefits will be portable. "The health-security button is the
one we're pushing," says a White House official involved in
the planning. "People will pay more for security."
</p>
<p> Maybe. But there are other aspects of the plan that might antagonize
the great middle class. More than half those polled told the
Yankelovich pulse takers that their support would go down if
the plan interfered with their choice of a doctor, or "allowed
you to see a doctor less frequently," or made the doctor get
permission from an insurer before performing a medical procedure.
The White House briefing paper stoutly insists that the developing
plan "allows all Americans to choose their doctors as they can
today."
</p>
<p> Simultaneously, though, the briefing paper speaks of "gatekeepers"
who "will discourage unnecessary consumer usage" of medical
care, in part by asking patients to pay more of the cost. In
addition, some health plans will limit the pool of doctors from
which consumers can choose. All of which sounds exactly like
the kind of regimentation the people in the TIME/CNN survey
object to.
</p>
<p> About the only certainties are that presentation of the plan,
whenever that occurs, will ignite one of Washington's epic fights
and that, as Administration officials freely concede, if anything
is finally enacted, it will be a heavily amended version of
what Clinton winds up proposing. The big question is whether
the final plan will actually improve the nation's health at
a reasonable cost or turn into a mishmash as bad as the one
it is intended to replace.
</p>
</body>
</article>
</text>