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- <text id=93TT0317>
- <title>
- Oct. 04, 1993: Flies In The Ointment
- </title>
- <history>
- TIME--The Weekly Newsmagazine--1993
- Oct. 04, 1993 On The Trail Of Terror
- </history>
- <article>
- <source>Time Magazine</source>
- <hdr>
- THE PRESIDENCY, Page 30
- Flies In The Ointment
- </hdr>
- <body>
- <p>By DAN GOODGAME/WASHINGTON--With reporting by Dick Thompson/Washington
- </p>
- <p> Last September, economist Henry Aaron was preparing to meet
- Bill Clinton to talk about health care when he got a call from
- a Clinton aide who said abruptly, "Don't come." A scholar at
- the Brookings Institution in Washington, Aaron had been asked
- to advise the presidential candidate, then campaigning in Michigan,
- on ways to finance his expansive health-care goals. Aaron agreed
- to brief him, but declared in advance that he rejected the easy
- assumptions of Clinton's staff members that health insurance
- could be guaranteed to all merely by targeting "waste, fraud
- and abuse." Aaron stated that "the savings that some people
- think can be realized are baloney." Then he learned, Aaron says,
- why he had been disinvited: "Clinton didn't want to hear that."
- </p>
- <p> What Clinton desperately needed a year ago was not an economic
- quarrel but an attractive campaign issue: a proposal to expand
- health insurance to everyone without asking for any painful
- trade-offs from the vast majority of Americans. Now that he's
- President, however, Clinton is finding it difficult to deliver
- the four-course free lunch that he promised. The health-care
- initiative he unveiled to the nation last Wednesday, though
- widely praised for boldness and compassion, is drawing fire
- on precisely the point identified by Aaron and others: the rosy
- assumptions that undergird its financing. Senator Pat Moynihan
- of New York, chairman of the powerful Finance Committee, spoke
- for many fellow Democrats last week when he dismissed those
- assumptions as "fantasy" and warned that "we mustn't pretend
- that this is going to be free." And Republican lawmakers who
- attended the President's address wore lapel buttons that asked
- WHO PAYS?
- </p>
- <p> The White House claims that only about one-fifth of Americans
- would pay more for health care under the Clinton plan. Losers
- include small-business owners who don't currently provide health
- insurance to their workers and would be forced to do so; some
- low-wage workers who would lose their jobs as a result of that
- new burden; young adults who feel they need no insurance but
- would be forced to take--and pay for--it; upper-income families,
- who would pay more to keep the health coverage they have; and
- smokers, who would pay a new cigarette tax of about $1 a pack.
- Under the Clinton plan, according to White House calculations,
- most Americans would pay the same or less for health care comparable
- to what they now receive.
- </p>
- <p> Many citizens, however, will dispute the Administration's idea
- of "comparable" care. Most Americans with insurance currently
- receive treatment through a fee-for-service arrangement with
- a particular doctor, and they would have to pay more to keep
- that arrangement. The Clinton plan includes strong price incentives
- for patients to switch to more economical health maintenance
- organizations and preferred provider organizations, in which
- groups of doctors and hospitals provide care for a flat fee--and usually at a cost to the patient of longer waiting times
- and rationing of specialists' services. "Most people would be
- forced into HMOs because that's all they would be able to afford,"
- says Representative Jim McDermott, a Democrat from Washington
- State who has proposed a "single-payer" health-care system similar
- to the one in Canada. White House officials privately explain
- that pushing more Americans into HMOs and PPOs is crucial to
- cost control, but that is a point the President prefers not
- to discuss.
- </p>
- <p> Perhaps for that reason, early carping about the Clinton plan
- has been focused elsewhere, especially on its proposed cuts
- of $124 billion over five years from Medicare, the federal program
- that insures the elderly. Representative Henry Waxman, a California
- Democrat, warns that "there's a lot of concern on the Hill about
- the magnitude of savings this plan hopes to achieve, especially
- in Medicare." Moynihan says bluntly, "It's not going to happen."
- For its part, the White House contends that the elderly as a
- group would enjoy a net gain from the health plan, since the
- amount Clinton is planning to cut is less than the $152 billion
- he would spend on new benefits for senior citizens, including
- prescription drugs and long-term care. Probably the softest
- number in Clinton's proposal is the assumption that its reform
- will achieve savings that rise to nearly $200 billion a year--about one-sixth of the health-care spending covered by Clinton's
- plan--mainly by reducing fraud, health-care paperwork, "inappropriate"
- treatments and other inefficiencies. Economist Aaron estimates
- that even if reform "miraculously eliminated all useless, defensive
- medicine," slashed doctors' incomes 20%, cut drug prices enough
- to eliminate all pharmaceutical-company profits, doubled the
- number of Americans in the most-cost-saving HMOs and accomplished
- all plausible administrative efficiencies, it still "would have
- achieved barely half the savings called for in the President's
- plan."
- </p>
- <p> Several top officials who helped draft the plan agree that a
- more realistic estimate of savings would be about 10%, rather
- than 17%. "The assumptions are not dishonest," insists a key
- Clinton adviser, "but they are optimistic." Expert estimates
- of the savings available ranged widely, from about 10% to 30%.
- "We had to pick a number, and we picked a high one."
- </p>
- <p> If the Clinton plan is passed and fails to achieve the promised
- savings from waste, fraud and abuse, health-care experts fear
- that the result could be sharp pressure on doctors and other
- care providers to cut costs through rationing of medical treatment.
- That might hold down total health-care spending and help the
- rest of the economy. But unless Clinton prepares Americans for
- such a sacrifice, many will feel that reform is costing them
- much more than they were promised.
- </p>
-
- </body>
- </article>
- </text>
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