[Congressional Record Volume 141, Number 148 (Thursday, September 21, 1995)]
[Extensions of Remarks]
[Pages E1821-E1822]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



[[Page E 1821]]


                  HOW MEDICAID CUTS WILL HURT CHILDREN

                                 ______


                          HON. NORMAN D. DICKS

                             of washington

                    in the house of representatives

                      Thursday, September 21, 1995

  Mr. DICKS. Mr. Speaker, last week, Congressman John McDermott, 
Democratic leader Dick Gephardt, and I had the opportunity to listen to 
remarks delivered by Dr. John Neff, medical director of Children's 
Hospital and Medical Center in Seattle. In those remarks, Dr. Neff 
attempted to dispel many of the myths about Medicaid, and he issued a 
strong warning against the dangers of converting Medicaid funds into 
block-grant formulas. For the Record, Mr. Speaker, I would like to 
submit a copy of Dr. Neff's brief remarks, in addition to a news story 
published the next day in the Seattle Post Intelligencer entitled 
``Medicaid cuts may threaten children.'' I believe this perspective 
from the director of one of the Nation's most respected children's 
hospitals is a valuable one, and one that can add greater depth to the 
debate here in Congress on these proposed changes.

Community Assessment of Federal Budget Cuts to Our Communities--Support 
                      for Children and the Elderly


how federal program cuts will hurt children--by dr. john neff, medical 
       director, children's hospital and medical center, seattle

       My name is John Neff and I'm medical director at the 
     Children's Hospital & Medical Center. I have been taking care 
     of children as a pediatrician now for over 35 years. The 
     first six years of my career were before Medicaid was 
     implemented and the next 29 years were under the Medicaid 
     legislation. I can tell you from personal experience that not 
     only was the medical care system prior to Medicaid terrible 
     but the institutions that cared for the poor and the elderly 
     are either no longer with us or have been significantly 
     transformed. The old municipality run hospitals and 
     institutions are no longer part of our medical care system 
     and they were grossly inadequate at that time to meet the 
     needs of children. I would consider it a great failure to 
     have to return to those days even in part.
       We need to retain national standards for the health care of 
     children. We must not go back in time and place arbitrary 
     limits on the services that children need especially those 
     who are unfortunate to have special health care needs.
       Now let me dispel a series of myths concerning Medicaid.
       1. The currently proposed reductions in Medicaid are not 
     cuts but are caps on Medicaid growth at a rate of 4% by 1998. 
     It is cited that Medicaid's annual growth rate now is 
     approximately 10%:
       In order to dispel this myth let us look at what this 10% 
     Medicaid annual growth rate means. This growth represents new 
     enrollees among children and the elderly, an expansion of 
     Medicaid eligibility and services, and medical inflation. The 
     actual real medical inflation of Medicaid is probably not 
     more than 5%. Given the level of poverty and the aging of our 
     population, the need for Medicaid services will continue to 
     increase, thus to cap the annual rate of growth at 4% by 1998 
     will represent real cuts and will result in certain actions: 
     A decrease in the number of new enrollees or an expenditure 
     cap on enrollees; elimination of current enrollees; actual 
     cuts in benefits or services.
       Fifteen percent of children covered by Medicaid are 
     ``medically needy'' because their health care expenses could 
     reduce their families to poverty. Private insurance is often 
     unavailable or unaffordable. Medicaid is literally their 
     insurer of last resort.
       To cap Medicaid at a growth rate of only 4% per year will 
     result in real elimination of services or cutting individuals 
     out of the Medicaid program.
       2. Block grants give more control to states:
       What block grants will really do will be to eliminate 
     federal standards and eliminate federal obligation. Children 
     covered by Medicaid should be guaranteed they will have 
     medically necessary care regardless of the state in which 
     they live. Children also need to be assured they will have 
     access to pediatric trained providers to meet their 
     specialized health care needs regardless of the state in 
     which they live.
       What block grants will do initiate a huge battle among 
     states on who receives what portion of Medicaid funds. 
     Currently, there are significant differences in the amount of 
     funding that states receive. As an example, in New York each 
     enrollee receives $7,909; in Washington it is $4,279; in 
     Texas it is $3,838 (HCFA, 1994). Block grants will politicize 
     and perpetuate these unequal distributions to states. States 
     will develop different standards for benefits and eligibility 
     requirements for Medicaid programs. Under the worst scenario, 
     block grants would create unfair or uneven distribution of 
     funds to states and there is the potential to create massive 
     migrations of individuals from one state to another as they 
     move to obtain maximum benefits. If this occurs, some 
     children in some states will receive better benefits than in 
     others.
       This will be particularly difficult for children as the 
     pediatric expertise is often concentrated in regional 
     tertiary care centers, such as Children's. We see children 
     from a 4-state region including Washington, Alaska, Idaho and 
     Montana.
       3. Medicaid Reductions can be Reached by Improved 
     Efficiencies:
       This state and many other states already put in significant 
     efforts to improve efficiency. Currently, in the state of 
     Washington, nearly 60% of all Medicaid clients are in managed 
     care and this state also covers children up to 200% of the 
     federal level of poverty.
       There are not significant savings in improved efficiencies 
     and further savings will cause reductions in services and 
     decrease in those covered.
       4. Medicaid is the same as Welfare:
       Currently, in the United States, 25% of all children 
     receive their health care through Medicaid but more 
     important, 40% of all children in the United States are 
     either covered by Medicaid or have no insurance at all. Forty 
     percent of our children are not ``dead beats''. The fact that 
     40% of the children in the United States have no health 
     insurance or are covered by Medicaid reflects a failure in 
     our private health care system to adequately cover children. 
     This is one of the reasons that there is a real need for 
     health care reform, not arbitrary reduction in services or 
     coverage. In fact, a decrease in Medicaid coverage will 
     increase the number of uninsured, indirectly increase family 
     poverty and, in the long run, will decrease family employment 
     and individual productivity.
       Well over half of children assisted by Medicaid (57.5%) 
     live in working families. In the 1980's, Congress delinked 
     Medicaid from welfare, which is based on unemployment, so as 
     to not penalize poor but working families with loss of health 
     coverage for their children. Parents should not have to 
     choose between being able to hold a job or having to 
     sacrifice employment in order to qualify for Medicaid 
     coverage for their children.
       5. Children are a Burden on our Federally Sponsored Health 
     Care System:
       While it is true that 53% of all Medicaid beneficiaries are 
     children, it is also true that children consume less than 20% 
     of Medicaid expenditures and in the state of Washington 
     children consume only 13% of Medicaid funds. To put it in 
     proper context, one must consider all of the health care 
     funds that are federally sponsored for adult care. This 
     includes the VA system, Medicare and 80% of the federal 
     portion of Medicaid. In this context the total amount of 
     public funds that are utilized for health care for 
     children in this country is indeed very small.
       In reality, if Medicaid funds are developed into block 
     grant formulas and allocated to the states, there is a danger 
     of unleashing a terrible political battle which will pit 
     children against the elderly and disabled and within the 
     children's health care system, primary care providers against 
     those who care for those with special needs. Such a battle 
     would be destructive to both families and providers.
       6. medicaid is different than Medicare and Private 
     Insurance because Medicaid Recipients do not Contribute to 
     their own Health Care as do individuals who receive Private 
     Insurance Benefits or Medicare Benefits.
       It is true that Medicaid funding come almost entirely from 
     tax dollars and not from earned employment benefits. 
     (Medicaid spending accounts for 6% of the federal budget and 
     may run as high as 18% of state spending). To use this, 
     however, as a reason why Medicaid funds should be cut to a 
     disproportionately greater degree than those funds supported 
     by employment benefits is grossly discriminatory against 
     children. Children do not pay taxes, do not work and do not 
     develop employment benefits. It is our public obligation to 
     support the uninsured portion of health care benefits for 
     children. If we do not, we will not only cause untold misery 
     on families but the long term effects of an unhealthy 
     childhood population will be felt for years.
                                                                    ____


         [From the Seattle Post Intelligencer, Sept. 14, 1995]

                  Medicaid Cuts May Threaten Children

                           (By Joel Connelly)

       Congress will set off ``a terrible battle'' that pits 
     children against the elderly and the infirm if it sharply 
     curtails growth of the federal Mediciad program, three House 
     members were told yesterday.
       Dr. John Neff, medical director at Children's Hospital, 
     warned that congressional 

[[Page E 1822]]
     Republicans' proposed 4 percent cap in growth will put extreme pressure 
     on Medicaid, which not only supports long-term nursing-home 
     care for many elderly and disabled, but also furnishes health 
     care for about 25 percent of American children.
       ``We must not go back in time to a set of arbitrary limits 
     on the services children need,'' said Neff, who has spent 
     more than 35 years as a pediatrician.
       He said public institutions that provided medicine to 
     children were often terrible before Medicaid was established 
     30 years ago.
       House Democrat Leader Dick Gephardt of Missouri, in Seattle 
     for a candidate recruiting and fund-raising visit, joined 
     Reps. Jim McDermott and Norm Dicks, both D-Wash., for a 
     meeting with hospital administrators.
       Responding to Neff's point, Gephardt warned that children 
     will be the losers if they must compete with elderly people 
     and nursing homes for scarce Medicaid resources.
       ``Elderly folks vote,'' he said. ``Children do not. 
     Children are not heard in the political system.''
       The Democrats heard from hospital officials as Republicans 
     in Washington, D.C., prepared to unveil details of their 
     proposed cost controls in Medicaid and Medicare, which 
     provides medical care for senior citizens.
       ``By the year 2000, my hospital would be underfunded 
     annually by $125 million,'' said Nancy Giunto, administrator 
     of Providence Seattle Medical Center. The hospital receives 
     62 percent of its income from Medicare and Medicaid.
       Rogelio Riojas, chief executive of Sea Mar Community Health 
     Centers, warned that cuts will deny regular medical services 
     to low-income families.
       ``The poor will simply wait until they are more and more 
     ill, and then they will go to the emergency wards of 
     hospitals,'' said Riojas, who added that emergency care is 
     far more costly than preventive care.
       The Democratic congressmen were able to offer little 
     reassurance to those who met with them at Harborview 
     Hospital.
       Republicans want to save $270 billion by 2002 by scaling 
     back the growth rate of Medicare to between 6 percent and 7 
     percent. They're aiming to realize $180 billion more by 
     slashing Medicaid's growth rate to 4 percent.
       The two federal health care programs have been growing at 
     an annual rate of about 10 percent. Half the growth has come 
     from rising medical costs. The other half is because of sharp 
     increases in enrollment.
       Neff said the cuts will leave Medicare and Medicaid with 
     three options: decrease the number of new enrollees; 
     eliminate some people already enrolled, particularly in 
     Medicaid; or cut services.
       He predicted the country will see ``a low-grade, continuous 
     erosion of services'' if the funding is held to levels in the 
     GOP's budget plans.
       Larry Zakn of Harborview Hospital said the effects of the 
     GOP budget proposals would be felt in such places as his 
     hospital's renowned trauma care program.
       ``There's no way I can see that we would ever maintain 
     these levels of service if we had these levels of funding,'' 
     he said.
       Harborview stands to lose as much as $185 million in 
     Medicaid and Medicare funding over the next seven years under 
     the GOP proposals. Medicaid pays 48 percent of its patients' 
     bills, one of the highest figures for any hospital in the 
     country. Harborview has a tradition of caring for all people 
     regardless of their ability to pay.
       Republicans are holding off releasing details on their 
     proposal until week's end. Already, however, a partisan 
     battle over numbers has broken out on Capitol Hill. House 
     Speaker Newt Gingrich, R-Ga., said last weekend that seniors 
     with income above $125,000 would pay more for Medicare, but 
     most people would face increases of only about $7 a month.
       But Democrats calculated that the elderly will wind up 
     paying almost $20 a month extra by 2002 and more than $1,300 
     each over the next seven years.
       Republicans challenged their opponents' math and accused 
     them of ignoring the $270 billion in savings the GOP is 
     seeking.
       But they also conceded that the Medicare Part B premium may 
     be as much as $10 a month higher in 2002 under their plan 
     than under President Clinton's budget--not $7, as Gingrich 
     said Sunday. Before Congress' August recess, Republican 
     leaders armed GOP House members with scripted ``talking 
     points,'' charts and instructions on how to defuse public 
     anxiety over Medicare and Medicaid.
       Opinion polls have shown, however, that the public's 
     worries have not gone away. Democrats have vowed to fiercely 
     defend programs seen as cornerstones of John F. Kennedy's New 
     Frontier and Lyndon Johnson's Great Society. ``People's 
     quality of life has gone up. It has gone up because of 
     Medicare and Medicaid,'' Gephardt said yesterday. ``We must 
     not take large steps back into history where we don't want to 
     go.''
       He noted that there are four major teaching hospitals in 
     the Seattle area, responsible for medical education over a 
     four-state area. ``The federal government is providing a 
     research service that the private sector cannot and will not 
     afford,'' he added.
       The issue gets personal for Gephardt. At age 18 months, his 
     son was diagnosed at a St. Louis hospital with a cancerous 
     tumor and given no chance to live.
       ``A young resident approached us the next morning,'' he 
     recalled. ``He had been running the case through the 
     computer, and noted that a program of triple-drug 
     chemotherapy and radiation had been developed in Houston. He 
     encouraged us to try it.
       ``Matt is now 24 years old. I left him off yesterday at 
     Northwestern University in Chicago to continue his education. 
     I rest my case.''

                          ____________________