    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book II)]
    [November 13, 1995]
    [Pages 1749-1753]
    [From the U.S. Government Publishing Office www.gpo.gov]

    [[Page 1749]]

    Teleconference Remarks to the New England Regional Health Care
    Conference
    November 13, 1995

        The President. I want to thank you for joining me on the conference
    call to talk about the proposed Medicare and Medicaid cuts in the
    congressional budget. And I want to apologize for not coming to Lawrence
    Memorial today, but I know you understand why I couldn't come.
        Let me just begin by emphasizing again, the answer is not--excuse
    me, the question here in Washington we're debating is not whether we
    will balance the budget but how. I've been working for 3 years to
    eliminate this deficit, and we've gone from having one of the largest
    deficits in the world to the point now where our budget deficit today is
    the smallest of any industrialized nation in the world as a percentage
    of our income, except for Norway. Every other country has a higher
    deficit.
        So I want to finish the job. But it seems to me clear that if you
    look at how the American economy is doing and if you look at how we're
    beginning to come to grips with some of our most serious social problems
    under the system we're now operating under, it would be a great mistake
    to have a dramatic departure that would eliminate the deficit by
    undermining our values and our interests, including our obligations to
    our parents and our children in the area of health care.
        So I want to balance the budget. I want to strengthen the Medicare
    Trust Fund. But I don't want to destroy Medicare or Medicaid. And that's
    what I want to emphasize today. I believe that the proposed
    congressional budget, with $440 billion in reductions in Medicare and
    Medicaid over the next 7 years, would have quite harmful consequences.
    Eight million Americans could lose their Medicaid coverage. People on
    Medicare will be forced to pay more, whether they can afford it or not.
    And the people who choose to stay in the Medicare program may have a
    program that doesn't meet their fundamental needs.
        And of course, I'm very worried about what's going to happen to
    hospitals and nursing homes, teaching hospitals, children's hospitals.
    These are the concerns that I have. And what I wanted to do today in
    person with you we'll now have to do over the telephone, but I want to
    just give all of you the chance to just specifically talk about, from
    your personal experience, what do you think is likely to happen here?
    And we'll start with our host, Charles Johnson. And let me again
    apologize for not being there with you. But I appreciate you taking this
    call, and I'd like for you to go first and comment.
        Charles Johnson. Well, thank you very much, Mr. President. I
    appreciate that. And needless to say, we were very disappointed that you
    weren't coming, but we certainly understand.
        The President. Give me a raincheck.

    [At this point, Mr. Johnson, president, Lawrence Memorial Hospital of
    Medford, thanked the President for his leadership on health care issues
    and explained how proposed Medicare and Medicaid cuts would affect the
    hospital and its patients.]

        The President. Well, thank you, sir. I just wanted to emphasize a
    couple of things, since you said what you did, that the medical
    community, the health care community in America has recognized that we
    can't go on for another 10 years with the costs of Medicare and Medicaid
    going up as much as they have in the previous 10 years.
        On the other hand, as you know better than anyone, there are changes
    now occurring every day which are bringing the inflation rate down. Last
    year, for the first time in a decade, private insurance premiums went up
    less than the rate of inflation. And if together we can continue to
    manage these changes in a responsible way, then the inflation in health
    care costs will come down, but they will come down as people in the
    health care sector of our economy learn to cope and to find other
    options for dealing with these problems so that we won't say, ``Well,
    we're going to cut an arbitrary amount of money, and we don't care about
    the consequences.''
        That's what our plan is focused on. It's focused on giving people
    more choices, more options, including giving hospitals and doctors the
    options to do some more participation in managed care options. But I
    also think we have to leave these seniors with a good, vital, vibrant

    [[Page 1750]]

    Medicare program that operates in the way the present one does. After
    all, it has lower administrative costs than any private insurance plan,
    and the inflation per Medicare recipient has not gone up more than the
    general rate of inflation in health care.
        So I think we need to give you the chance to keep dealing with and
    implementing the changes that we've got. We need to give you some more
    options. But I think you've made it clear that just to pick an arbitrary
    number like this without any knowledge that it can be reached is a
    hazardous undertaking.
        Mr. Hall?
        Philo Hall. Yes, Mr. President.
        The President. Perhaps you'd like to comment. I know that you live
    in a State like my home State that has an awful lot of people in small
    towns and rural areas. And I can tell you from 15 years of experience, I
    know what a hard time real hospitals had just staying open in the
    eighties and meeting all of the needs of their people, and I know what
    kinds of changes you must have already undertaken. But perhaps you could
    talk a little about the impact of Medicare and Medicaid on your
    hospital.

    [Mr. Hall, president, Central Vermont Medical Center, Berlin, VT,
    explained that Medicare and Medicaid paid about 75 percent of the
    hospital's costs and the proposed cuts would force the hospital to make
    drastic changes, including increased cost-shifting, to avoid closing.]

        The President. Thank you very much. You've made a very important
    point that I want to emphasize because I think it's been lost in this
    debate a little bit over the understandable concentration of what's in
    the Federal budget, and that is that if we move too far too fast and we
    put a lot of these hospitals at risk, one of two things is going to
    happen. Since there are plainly limits to how much more money can be
    taken out of the Medicare and Medicaid population, either the hospitals
    won't have the money they need to stay open and they'll close, which
    will cause a lot of disruption and a cost to our society far greater
    than any benefit to these cuts, or you will have to cost-shift onto
    people with private insurance, which will aggravate a problem that
    already exists where a lot of private employers and their employees are
    paying more than they should today.
        And if that happens, in the end that's a defeating strategy, too,
    because as I'm sure you know, we have a million Americans a year in
    working families who are losing their health insurance because their
    employers can't afford to maintain it. Now that we have inflation coming
    down in private health insurance premiums and we've got--we're trying to
    steer more and more of the smaller employees into big buying pools so
    they can buy competitive insurance at competitive rates, it would be a
    terrible mistake to do something that we know will accelerate the number
    of Americans losing their health insurance.
        This is the only advanced country in the world where more people are
    losing their health insurance every year and there are a smaller
    percentage of people who are non-seniors--that is, who don't have
    Medicare--smaller percentage of people with health insurance today than
    there were 10 years ago. And I really appreciate your saying that
    because that's an important thing, that we've lost too much. This is not
    just something that will affect the senior population or the poor. It
    will affect the middle class who have health insurance for the very
    reason you said. And I appreciate that.
        I'd like to go on now to Barbara Corey, who is a senior activist
    with the Quabbin Community Coalition in Petersham, Massachusetts. And
    Barbara, you're on the line----
        Barbara Corey. Yes, I am, Mr. President.
        The President. ----and I wish you would talk to us about what you
    think the impact of these cuts will be on the people you represent.

    [Ms. Corey said that most Medicare and Medicaid recipients were hard-
    working people in need of a helping hand and that tax breaks for the
    wealthy and cuts in these services would be detrimental to hospitals and
    patients.]

        The President. Thank you very much. I'd like to just sort of
    emphasize one of the things you said there, and that is that I don't
    think many Americans yet, unless they have parents who relied on
    Medicare and Medicaid, have really grasped the fact that there are an
    enormous percentage of these seniors out here who have a decent life----
        Ms. Corey. That's right.
        The President. ----on a low income, only because of Social Security
    and Medicare----
        Ms. Corey. That's right.
        The President. ----and that we have to make sure that as we lower
    the rate of increase in Medicare that we're doing it in a fair way. And

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    $400 a month is not a lot to live on, but there are--there are not just
    a few, there are millions and millions of seniors out there living on
    that.
        Ms. Corey. That's right. That's right. Good people. And real people.
        The President. And their children.
        Ms. Corey. Absolutely. And you're right when you talk about the fact
    that it's all the generations. It's the elderly population's children
    that are going to be devastated by this as well. It's a tough time.
        The President. It is a tough time. But the other thing I'd like to
    emphasize on this is that we don't have to do this. That's another thing
    I'd like to say.
        Ms. Corey. That's right.
        The President. We are succeeding in slowing the rate of medical
    inflation.
        Ms. Corey. Exactly.
        The President. Creative people, not the Government, but all these
    creative people out here working together, in the hospitals, in the
    nursing homes, are finding ways to lower costs. We can do this. But if
    we go too far too fast, we're going to hurt not just the elderly, but
    we're going to hurt their children and their children's children. You
    think about all the middle class children of these folks in the nursing
    homes, just for example, or the--[inaudible]--premiums double. All the
    money they then have to give to their parents is money they won't be
    able to invest in their children's education.
        So this is not just an elderly issue. This is an issue for all
    Americans, and it's not just a poor person's issue, it's a middle class
    issue.
        Ms. Corey. Exactly, exactly. And I'm grateful to you for the
    concerns that you're showing.
        The President. Thank you so much.
        I'd like to ask Alan Solomont, whom I've known for some years now
    and who does a very good job in running a significant number of nursing
    homes, to talk a little bit about the impact of these cuts on his
    employees and perhaps on the quality of service that the patients get.
        What do you think is going to happen with the Medicaid cuts? We've
    heard a lot about Medicare and not so much about Medicaid, perhaps
    because the program's not as familiar to the American people, so maybe
    you could talk a little about that, Alan.

    [Mr. Solomont, president, ADS Group, Andover, MA, explained that
    proposed cuts would adversely affect middle class families who depended
    on Medicaid to help them take care of their elderly parents, as well as
    causing the quality of care in nursing homes to decline and many
    employees to lose their jobs.]

        The President. Thank you very much. And I want to thank you and your
    employees, through you, for the quality of care you are providing. You
    know, I'm old enough to remember now--and I've been involved in public
    life for about 20 years now--I remember what nursing homes were like
    when there was no Medicaid investment and no standards. And we've seen a
    combination of appropriate standards and better investment over the last
    20 years and a dramatic increase in the professionalization of the care
    in nursing homes. And that's something, I think--I'd just like to ask
    all of our country men and women who are old enough to remember this, to
    remember what it was like before this sort of thing happened.
        And we now have--we're a fortunate nation. We're getting older.
    We're living longer. We can look forward to longer lives. But the
    fastest growing group of Americans are people over 80. And there is no
    quick or easy way to avoid the fact that we need to be providing
    adequate, appropriate levels of care. And as you well know, a lot of
    people in nursing homes have done all kinds of things to be more
    efficient, forming partnerships with hospitals, having boarding homes,
    doing more--sometimes doing more home health care. But in the end, there
    are people who need to be in the homes, and they need to be properly
    cared for.
        I also appreciate what you said about the people you're hiring. The
    Republican Congress and I, we both say we want to move more people from
    welfare to work. If you look at the realistic options for moving people
    from welfare to work, among those are in the caring profession,
    particularly moving into nursing homes or, on the other end of the age
    spectrum, into child care, into helping our young children.
        When I was Governor, I sponsored a whole program to try to create
    more child care training slots and put child care centers in our
    training schools so that--our technical schools--so that welfare mothers
    could begin to get jobs there, and then the nursing homes were hiring
    them when they got out of the training program.
        These are the kinds of things that we have to do. So if we expect to
    have welfare reform,

    [[Page 1752]]

    we have to have jobs for these people when they get out. And we need
    these jobs in the caring professions. And we will need more of them, not
    fewer of them, as time goes on.
        There again, I would say, that's why you don't want to cut too much
    too fast before you know what the consequences will be, because we do
    not know--these budget numbers were basically plucked out of thin air
    once they decided that they were going to have a 7 year balanced budget
    with unrealistic economic assumptions and a $250 billion tax cut. We
    ought to put health first and say, how are we going to lower the rate of
    inflation? That's what I tried to do in the budget that I presented.
        So I thank you for what you said, because I think it's important
    that people focus on these employees as well as on the fact that, you
    know, this budget will not repeal demographic trends in the United
    States.
        Mr. Solomont. That's right.
        The President. People over 80 continue to be the fastest growing
    group of our population.
        Mr. Solomont. Absolutely.
        The President. Mr. McDowell?

    [Donald McDowell, president, Maine Medical Center, Portland, ME,
    explained that cuts in Medicare and Medicaid would jeopardize community
    access to health care. He then stated that the health care industry must
    be given the freedom to restructure the health care system and that the
    State of Maine must receive financial assistance to attract medical
    students who would later practice in the State.]

        The President. Thank you. I'd just like to make two comments, one
    hopeful and one sort of on the lines we're talking about here. The
    hopeful comment is that I do believe this is one area where we can reach
    agreement with the Congress. I have long advocated changes in the
    present law which would permit doctors and hospitals to have the
    flexibility they need to establish their managed care networks and to
    provide the most cost-effective direct way to provide these kinds of
    services to patients. So I think that in the end, we might be able to
    get some very good legislation on that, and I am encouraged by that. I
    do think that we'll have broad agreement on that.
        But again, I go back to the point you made about doctors staying
    where they're trained. It's not just that. You know, in my rural State,
    when I worked for years and years to get doctors out all across the
    State and we had all kinds of regional educational programs and outreach
    programs and rural training programs, we also found that doctors simply
    would not stay where they did not have adequate support.
        So if there is no hospital, if they don't have that clinical
    support, if they don't have the things that make it possible for them to
    know they can succeed in family practice, you may wind up with a serious
    doctor shortage no matter where you train them. And so, that's another
    argument for making sure that before we just kind of jump off a cliff
    here, we know exactly what we're doing and that we're going to have the
    necessary physician network out there in rural America.
        Mr. McDowell. I think those that say that we have too many doctors
    in America need to visit Aroostook County, Maine.
        The President. You've got it. No rural resident of the United States
    believes that we have too many family practitioners in this country and
    out there serving people, and I appreciate you saying that.
        Mr. MacLeod?

    [Leslie MacLeod, president, Huggins Hospital, Wolfeboro, NH, explained
    that proposed Medicare and Medicaid cuts would have a great impact on
    New Hampshire hospitals and the surrounding communities. He then stated
    that senior citizens who had worked hard to build the Nation should not
    bear the major burden of cutting costs.]

        The President. Thank you for making that point. You know, I just
    have two observations about what you just said. First of all, I have
    been impressed by the extent to which seniors all over the country are
    willing to do their part to try to help this country slow the rate of
    medical inflation and make sure that we have money to invest in
    education and technology and the future of the country. But they just
    don't want to be asked to jump off a cliff, to go into a forest with no
    path to the other side. And that's what I think we're all concerned
    about.
        When I went to Florida a few weeks ago, I was so impressed by the
    willingness of the seniors there to try to, based on their own personal
    experience, to suggest ways that we might reduce costs. But no one, no
    serious student of this subject believes that cuts of this magnitude can
    be absorbed without serious adverse

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    consequences, both to the seniors and the health care system. And I
    think that's--you have articulately said why that's not fair.
        The other point I want to emphasize, because there will be people
    all across America who will read about this, is that these comments are
    coming in part from people who come from the three northeasternmost
    States in our country, Maine, Vermont, and New Hampshire, where Yankee
    frugality is still alive and well, where people don't want a big Federal
    Government, where they want the budget balanced, where they expect us to
    stop wasting money. But it's important that we recognize that Yankee
    frugality is something that is consistent with living by basic values.
        And I want to say again, we've reduced the size of this Federal
    Government by 200,000 people since I've been President. And as a
    percentage of the civilian work force, your Federal Government is now
    the smallest it's been since 1933, as a percentage of the work force. We
    are bringing down the Government. But we're doing it in a disciplined
    way that has--frankly, almost no one in America has noticed that we've
    downsized it this much because we've done it in a way that enabled us to
    maintain services with higher productivity and to treat the Federal
    employees who left our Federal service with dignity and honor.
        That's the way we ought to approach the health care issue. We ought
    to be able to slow the rate of inflation in ways that people won't
    notice because we will do it at a pace and in a way that will continue
    to enhance the quality of health care and meet the challenges that we
    face. And I think that's what you're all telling me. You think you could
    do it if people don't throw an arbitrary number at you that no serious
    student of health care believes can be absorbed.
        There's one serious issue we really haven't talked about yet, and I
    want Dr. Rabkin to wrap up this conversation by dealing with that, the
    whole issue of medical education and how these programs have worked to
    further that.

    [Mitchell Rabkin, M.D., president, Beth Israel Hospital, Boston, MA,
    stated that many Boston academic medical centers which had already
    reduced operating expenses and employment were concerned that future
    cuts would affect education, training, and research.]

        The President. Thank you very much. Let me say that I believe that
    this is the one aspect of this debate that most Americans don't know
    about, that the Medicare and Medicaid programs over time have been used
    by the Congress to funnel some extra money to our teaching hospitals,
    our children's hospitals in the form of the disproportionate share
    payments, among others, to support medical education and to make sure
    that the patients are there for the young doctors to treat. And I think
    that it would be fair to say that not more than 5 or 10 percent of the
    people in the United States would be aware of that; there's no reason
    they should be.
        But when Congress decided to support medical education in this way,
    it served as a vital lifeline to keep our medical schools going and
    doing well and also meeting an important community need. And again, just
    to cut at this level in this way will really be a blow to the medical
    schools.
        As you well know, we've tightened up on those payments in the last
    several years anyway. We've tried to practice certain economies. But to
    put what is clearly the world's finest system of medical education at
    risk I think would be a grave error. And that's another reason that I
    don't want to see cuts of this magnitude, because every, every American,
    even Americans who may never spend a dollar of the Government's money
    through the Medicare program and certainly may never be eligible for
    Medicaid, every American has a clear interest in having the best trained
    doctors in the world. And Medicare and Medicaid have contributed to that
    and need to be able to continue to contribute to that in an appropriate
    way. And I thank you.
        Dr. Rabkin. Well, thank you, Mr. President.
        The President. I thank all of you. I've enjoyed this conversation
    very much. I wish it had happened face-to-face. And I thank you for your
    concern and your interest. Just keep speaking up, keep going forward,
    and we'll keep working here to make sure that we do the right thing.

    Note: The President spoke at 12:50 p.m. from the Oval Office at the
    White House to the conference at Lawrence Memorial Hospital of Medford,
    MA.