[Weekly Compilation of Presidential Documents Volume 30, Number 12 (Monday, March 28, 1994)]
[Pages 611-621]
[Online from the Government Publishing Office, www.gpo.gov]
<R04>
Teleconference With the California Medical Association
March 23, 1994
The President. Thank you very much. Thank you, Dr. Holley for that
kind introduction and for your good work and the good work of all the
physicians whom you represent now in dealing with these very difficult
and complex and profoundly important issues. I regret not being able to
join you in person today, but I am glad that Ira Magaziner is able to be
there with you. I'm glad I had a chance to visit with you, Dr. Holley,
and your past president, Dr. Richard Corlin, in Washington recently,
following another health care forum. And I'm grateful for many reasons
for your continued good counsel and for this invitation to address you.
Each of you has, in the most personal way, been part of the
excellence in American medicine simply by caring for the families in
your communities. And I'm grateful that you understand that our health
care system needs dramatic reform. You know costs are rising too fast,
that paperwork is mounting too much, that every day more constraints are
placed on your patients and your ability to practice medicine the way
you know it should be practiced.
But unlike so many others in the debate who will only tell us what
they don't want to change, long ago you left the sidelines and became
advocates for responsible, comprehensive reforms. I appreciate the early
and continued support you have shown for the objectives we are trying to
achieve: providing Americans guaranteed private insurance, preserving
the right of everyone to choose his or her own doctor and their own
health care plans, outlawing unfair insurance practices, protecting and
strengthening Medicare, and linking these health benefits to the
workplace, where most people get their insurance today.
These reforms are entirely consistent with many of the things that
you have tried to do in California. Your health care providers have been
innovators in improving quality and controlling costs and, judging from
today's headlines, the new California purchasing pool is certainly a
step in the right direction, offering consumers a wide choice of plans,
a comprehensive benefit package, and lower rates. That kind of
competition between insurers, combined with more choices for consumers,
is what my plan is all about.
At a national level, I think the first step we must take is clear.
The best way to preserve what's right about our health care system is to
guarantee private insurance to every American. That's the foundation of
our health reform plan. We'll provide every American with a health
security card that will guarantee them a comprehensive package of
benefits that can never be taken away. The benefits will include for the
first time for many Americans prescription drugs and preventive care.
All of you know that the best
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way to keep people healthy is to promote wellness in addition to
treating sickness. Retaining choice of doctors and health plans is also
critically important to Americans and to American medicine. And this,
too, is central to our approach.
Today, only about half of American employers offer their employees
more than two choices of insurance plans; 90 percent of the businesses
that have 25 workers or less offer no choice at all. And even for those
who have some choice today, there's no guarantee they'll have it
tomorrow if they change jobs or lose their job or if their employer has
difficulty meeting the costs. This is a tremendous restraint on most
Americans.
My proposal will guarantee the great majority of Americans far more
choice of both doctors and insurance plans than they have now. Under
this approach, people will be able to join a traditional fee-for-service
plan, a network plan, or a plan sponsored by a health maintenance
organization. But in all cases it will be families, not employers or
insurance companies, that make the health care choices.
The people who are telling you we don't offer enough choice, which
is clearly not so on its face, are the same who for decades have been
pushing you out of the way and limiting your choices. You don't believe
their arguments and neither do we.
That's why, among other things, we're going to insist upon different
insurance practices: no more preexisting conditions, no more lifetime
limits, no more higher rates for those who have had someone in their
family sick or those who are older, no more overcharging of small
employers or dropping them because one person in the workplace has a
medical problem, no more avoiding people that might cost some money.
The fact is, increasingly insurance companies set your fees. They
second-guess your clinical decisions. More and more they make you get
prior approval from someone who's thousands of miles away who's never
seen your patient and doesn't have a clue about what really ought to be
done. They all pay according to their own fee schedules, requiring
different forms for different people under different circumstances. The
forms are drowning the health care system in paper.
I have a doctor friend who calls me about every 3 months to tell me
another horror story. Recently he told me, ``We've got all these people
doing paperwork. Now we've hired somebody who doesn't even fill out
forms, just spends all day on the telephone beating up on the insurance
companies about the forms we've already sent in.'' He's told me, he
said, ``I went to medical school to practice medicine, but I'm getting
lost in the fun house instead.'' Well, he's right, and I know a lot of
you agree with him and identify with that story. But this year we can
escape that fun house.
The fourth element of our approach is to preserve and protect
Medicare. Older Americans will continue to choose their doctor and their
plan. And in addition, we want to cover prescription drugs under
Medicare and provide new options for long-term care in the home and
community, which most people prefer and which will become increasingly
important as our population continues to age rapidly.
Finally, let me say again, we should guarantee these health benefits
at work; that's how most people are insured now. And 8 of 10 uninsured
Americans have a family member who works. This is the fairest and most
efficient approach to covering everyone. And so no one gets hurt by the
needed reforms, we'll provide discounts for small businesses and breaks
for self-employed people and their families.
This is the proposal; it's pretty straightforward. All Americans
will get a card that guarantees with it the security of private
insurance and comprehensive benefits, then they can pick the doctor they
want. They'll know that they're always covered by what is said to be
covered, and it won't be subject to change by anyone.
Before taking your questions now, let me again just express my deep
thanks for your continued support and encouragement. After 60 years, I
think this is the year we're going to provide every American health
security that can't be taken away. I'm optimistic because of what's
already been done. This Congress has been willing to act and to work
with me to pass an economic plan that's helped
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to produce low interest rates and high [low]\1\ inflation and more than
2 million new jobs. After 7 years, this Congress passed and I signed the
Brady bill and the family and medical leave bill, things that people had
given up on getting done.
\1\White House correction.
The point is not that we have been able to do so much but that is
evidence that we can still do what we have to do. The American people
have demanded that we make a great deal happen. They want their dreams
back, and they want this problem fixed. A big part of the American dream
has always been knowing that you can care for your children or your
family if they become sick; that's what you do. You're a part of every
American family's dream. I've seen the magic you perform all over the
country. You care, and the American people know it. And our challenge
now is to do everything possible to keep and protect the bond that
you've worked a lifetime to establish. Our challenge is to provide every
American health care that's always there. With your help, we can do that
and we can make history.
I thank you for the leadership you've already shown. And if you have
questions, I'll be glad to try to answer them. Thank you very much.
Q. Thank you, Mr. President. I wonder if you have a contract with
Coca-Cola. [Laughter]
The President. I forgot to put it in a cup. There goes my Pepsi
voters. [Laughter]
Q. Well, Mr. President, as you acknowledged, the California Medical
Association has been deeply involved working for health system reform.
You know, I think you have to realize that we had Harry and Louise
opposing us when they were only engaged. [Laughter]
The members of this house, representing 40,000 practicing California
physicians, are vitally concerned about what is contained in any
proposal for health system reform. We will, after all, be caring for our
patients within whatever structure is created by those changes. We want
to be as certain as possible that it's going to work. We have some
questions for you that will address some of those physician concerns.
And I'm going to take the opportunity to ask the first one.
Mr. President, in your State of the Union Address, you said that you
would sign a health reform bill if it met the test of universal
coverage. In addition to universal coverage, what other elements do you
believe critical to a reform package, and what must be included to
secure your signature?
The President. Well, I want to be very careful about how I answer
that because I don't want to be throwing down gauntlets that may mean
more than I wish to say. But let me say, to have a system that works,
you not only have to have universal coverage, but it seems to me that
the benefits ought to include primary and preventive care. There ought
to be a comprehensive set of benefits.
Then there ought to be a clear outlawing of insurance practices
which have caused so much misery and caused so many Americans to fall
between the cracks. I think there should be an end to lifetime limits. I
think there should be an end to preexisting conditions. I think there
ought to be an end to discriminatory rate-setting based on age.
In order to do this, I think we have to find some way of not only
legislating community rating but actually having community rating. And
we need a device that guarantees that small businesses and self-employed
people will have access to insurance at competitive rates with people
who are insured through big business and Government. I think that's
very, very important. So these are the things that I think are critical.
Now, if you're going to cover everybody, you have to either do it
through a tax or through some device by which people pay into an
insurance pool. I think the employer mandate, so-called, is the best way
to do it by providing guaranteed private insurance at the workplace
because that's the way most Americans get their insurance today.
I know there are some small businesses for whom this would create
difficulties, so we developed a system of small business discounts paid
for from tax proceeds. And the taxpayers would pay to cover those who
are unemployed and uninsured. That's basically the way I think the
system would have to work.
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There are lots of other things I think ought to be in it, but I
think it's very important for the President, in the middle of a
congressional process that is just not getting its sea legs and getting
underway, not to be too specific in talking about vetoes.
If we can begin with a good comprehensive system of universal
coverage, we can go a long way to dealing with a lot of the other
problems. As you know, my plan does deal with a number of your concerns,
and I know you have more questions on that, so maybe we should get to
the other questions.
Q. Well, thank you very much, Mr. President. You're now going to
have an opportunity to field questions from a group of pretty nervous
California physicians.
Q. Thank you. Good morning, Mr. President. I'm a family physician in
San Bernardino. I have a unique opportunity here to ask you a question,
particularly because I was a graduate from the University of Arkansas
for medical sciences.
The President. Good for you.
Q. Thank you very much. And I had an opportunity to campaign for you
in 1982 when you made your comeback election for the Governorship. So
what I would like to ask you, Mr. President, is that physicians are
concerned that in the current marketplace and under your proposed model,
insurers and businesses are encouraged to collectively purchase health
care services. However, antitrust laws prohibit physicians from
collectively selling their services. It's like requiring individual
autoworkers to negotiate their salaries separately with General Motors.
In light of the strong opposition of the Federal Trade Commission to
any changes in antitrust laws, what would you propose to provide a more
balanced and fair environment in which these negotiations can occur
between physicians and insurers?
The President. I think we have to change the antitrust laws to allow
you to organize to provide your services and more comprehensive
professional groups. And let me say that one of the things that has
concerned me most about this is that there is a development in American
health care which I like, which has a consequence that I don't like.
What I like: the fact that people are getting together in competitive
buying groups and trying to get a better deal and trying to squeeze some
of the excess cost out of our system. I think we all agree there are
some there. I don't like the fact that an inevitable consequence of that
has been that so many Americans have lost the right to choose their own
doctor. We try to address this in two ways, one of which directly
addresses your question. But let me try to put the two ways together so
they'll fit.
Under our plan, each American consumer, once a year, would have the
right to choose from at least three plans, including a fee-for-service
plan, an HMO, and hopefully some sort of provider plan that will be
provided by providers who get together and who may allow all doctors in
a State, for example, to participate if they agree to observe the fee
schedule that the plan bargains for. So, I think you ought to be able to
do that. We also think that the HMO's should have to have a fee-for-
service option that would allow people who are covered under the HMO the
option to choose another doctor if it seemed appropriate. And if the
fee-for-service option were elected at the beginning of the year, the
HMO would have to contribute to that.
So I think that this will help. But I agree that there must be some
changes in the antitrust laws so that you can clearly get together
without fear of legal repercussions. Otherwise, you are consigned to
dealing with a middleman that will only add to the cost of your
providing your services and undermine the choice that the consumer gets.
Q. Thank you, Mr. President.
Q. Good morning, Mr. President. I'm an oncologist practicing in
Redwood City in northern California. My question is about budgets and
living within our means for health care. We recognize the need for
controlling health care costs, there's no debate about that. However, we
are concerned that your proposal and others may limit the rise of the
health care budget to the cost of living or other artificial indexes
that may have little to do with actual health care costs. Rising health
care costs may be more related to human factors such as our aging
population, tobacco consumption, new technologies, new diseases such as
AIDS. How can these factors be taken into account when arriving at or
when developing a health care budget?
[[Page 615]]
The President. Well, first let me say that I basically agree with
you on that. I have tried not without complete success--or not with
complete success--but I've really tried hard since I started thinking
about this issue seriously 4 or 5 years ago, when I was still a
Governor, to identify the elements of disparity between, let's say, the
14.5 percent of their GDP that Americans spend on health care, the 10
percent that Canadians spend, the 9 percent or less that the Germans and
the Japanese spend. There's no question that a lot of it is due to good
factors like we invest more in medical research and technology, and
that's good. And there's no question that some of it is due to bad
factors that you can't do anything about, at least in your role as a
doctor, which is higher AIDS rates, higher rates of violence which lead
to enormous medical costs.
What we believe is that in the beginning, at least, there are many,
many savings which can accrue from a rational system, far, far lower
administrative and bureaucratic paperwork costs, significant reductions
in unnecessary costs that are in the system and that after that, in the
years ahead, when we measure how much costs can increase, we're not
only--consider population growth and inflation, we will also have to
consider the burdens of the American system if the rate of AIDS, for
example, continues to go up instead of going down, if the rate of
violence goes up instead of going down, if the aging population imposes
greater burdens rather than fewer because we don't succeed in doing a
lot of the preventive things that we're going to do.
Those things will all have to be calculated in the rate at which
medical costs go up. We can't ignore real-world factors that make the
CPI and health care different from the overall rate of inflation. And I
think those things should be taken into account.
Q. Thank you, Mr. President.
Q. Good morning, Mr. President.
The President. Good morning, sir.
Q. I'm a pediatrician from San Luis Obispo. My question to you this
morning relates to the power of insurance companies. Yourself, Mrs.
Clinton, and Mr. Magaziner have repeatedly stated that one of your goals
is to return the control of medical practice back to physicians and
hospitals. We obviously agree with that. Unfortunately, however, many of
the current managed care plans in California are moving away from that
goal. Mr. President, does your plan contain features which would achieve
that goal?
The President. It does. I think there are some that would help
indirectly and one or two that would help directly. Let me just mention
them.
First, giving every consumer three choices will make a big
difference, saying that every consumer has to have at least three
choices and that one of those choices must always be fee-for-service.
We'll put all these plans in competition with one another, and that will
make a difference.
Secondly, making it easier for physicians to provide these services
directly will dramatically minimize the ability of the insurance
companies to add to the cost and delay and undermine the quality of
health care by second-guessing everything the doctors want to do in the
HMO's that they're promoting--[inaudible]--in our plan that the
insurance companies disclose what's in their utilization review protocol
in advance so people can evaluate that and know what's going on and
argue against it. And competing plans, including competing physicians
groups can say, here's why this is a bad deal for you and why you
shouldn't take it and why it is going to add to the cost and undermine
the quality of health care.
Now, all these are things, I think, that will really make a
difference. Most doctors I know recognize that from time to time, there
are certain things that ought to be subject to some kind of review. But
basically, it's gone crazy now. It's become an instrument of denying
service when it's needed. So what we've tried to do is strike the right
balance here, and I hope we have.
Q. Thank you, Mr. President.
The President. I must say that Bravo is a wonderful name for a
pediatrician to have. A lot of times you can just say that to your kids
and they'll get better. [Laughter]
Q. Mr. President, I think the medical profession really believes
that that issue is so important that if we win everything else but lose
on that one, none of the other matters.
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The President. It's absolutely clear to me that the whole HMO
movement has taken the utilization review to an extreme and that it has
to be backed off of. Forget about the HMO, just the whole insurance--
it's the insurance companies that are driving this. And I think the more
we can put doctors into the management decisions of the HMO and the more
choice we can give to the people who themselves will be patients, who
have personal contact with their doctors--keep in mind, this is a huge
deal, letting the employees themselves make this choice instead of their
employers, means that somebody will be choosing, every plan will be
chosen by someone who has had a personal relationship with a physician
who has doubtless discussed this with him or her. I mean, that's going
to make a big difference in this. And I agree with you, it's a very
important issue.
Q. Good morning, Mr. President. I am a trauma surgeon in San
Bernardino, California. Medical malpractice concerns and the practice of
defensive medicine are serious issues associated with the--[inaudible]--
of care to the trauma patient. Mr. President, we are very pleased that
you believe that the tort reform should be an essential part of the
health care reform and have adopted some of--[inaudible]--provisions in
your plan. But sir, would you be willing to add to your plan the most
essential part of the--[inaudible]--that is, a $250,000 cap on
noneconomic damages? And sir, if you just say yes, I would be happy.
The President. As you might imagine, we debated that thing for a
long time before we presented our plan to the Congress, because we
didn't want the whole health care plan to come a cropper on a debate
over tort reform. We thought there had to be some. We knew that the
States were taking up this issue to some extent, but we thought we ought
to do something nationally, even though tort law historically has been
completely within the purview of State government, not the National
Government. So we agreed that there ought to be a limitation on lawyer
fees, contingency fees. And we did some other things that were
recommended by you and were in the model work that was done in
California.
Something else we did that I think has been insufficiently noticed
is we agreed to include medical practice guidelines developed by
professional groups as raising a presumption that there was no
negligence on the part of doctors. This offers an enormous opportunity
to dramatically reduce the number of medical malpractice suits, the
number of recoveries, and therefore the malpractice rates.
My own view is that based on the research I've seen in a couple of
places where this has been tried on a limited basis, is it may offer the
best hope of all of protecting doctors from frivolous lawsuits by simply
raising a presumption that the doctor was not negligent if the practice
guidelines developed by the professional groups themselves were in fact
followed. So I think that that has been not sufficiently noticed. That
is a very, very big step, in addition to the other things I mentioned.
My own judgment is that we will not include the national cap because
there will be so much difference among the various congressional
delegations from different States about what the caps should be and
whether it should change with inflation over time. And in fact you might
wind up in California with a situation different from the one you have
now if it were to be done. For example, if there were a debate on the
national cap, then the immediate thing would be, what should the cap be,
and if States have a lower one, should it be required to be raised?
Because all those things were involved, we decided that we would leave
the cap issue itself to State law and deal with these other matters.
I urge you to look at what we have done, because I think we've taken
a long step toward trying to relieve doctors of the burden of frivolous
lawsuits and trying to control the cost of malpractice insurance.
Q. Thank you, sir.
Q. Good morning, Mr. President. I'm a practicing family physician in
Modesto, California. I'm also the current California Academy of Family
Physicians president and past president of the Stanislaus County Medical
Society.
Mr. President, when I entered medical school, I was led to believe
that I would spend my career practicing health care. I find that an
enormous part of my day is spent
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battling with health insurance clerks to get authorization for my
patients to have some of the even most basic of health care. Obviously,
it would be better for me to spend that time seeing patients. What will
your plan do to prevent or to limit the use of these managed health care
organizations from providing these, or throwing up these artificial
barriers in the name of managed care, but in reality these things
prevent us from providing that care?
The President. Let me try to restate what I said before. I believe
that the micromanagement of medicine by insurance companies has reached
an excessive point. And what we have tried to do to reduce it, since we
can't--you don't want the Federal Government exactly passing laws saying
what decisions can or cannot be made by physicians and others working
with them. What we've tried to do is to change the whole system so that
it would be much less likely.
And I will mention two things again. Number one, we make it easier
for people like you to join with like-minded physicians in providing
services directly or to join together and to tell people if you're going
to work with them, you don't want those kinds of utilization reviews.
And we require the insurance companies to disclose their utilization
review protocols in advance. And they will be under much more pressure
than they are now because now they won't have the same shot at business
XYZ's employees because the employees themselves will be deciding
whether they want an HMO, do they want a PPO, do they want some other
kind of organization, or do they want to have fee-for-service medicine.
Under each case the employer's liability is the same--responsibility is
the same. So I think that we are changing the environment in ways that
will really permit you, working with your fellow physicians and your
patients, to cut down dramatically on the number of these abuses.
I also want to point out that if there is a single card which we
envision which entitles a person to health care and which enables them
to hook into a computer which says that they are covered and all of
that, and if there is a single form related to the comprehensive benefit
package which can be filled out in every doctor's office and hospital in
the country and then processed by every insurance company in the
country, then that is going to dramatically reduce the paperwork burden,
too. I have many, many doctors complain to me that the time they have to
spend and the money they have to spend in their clinics on post facto
paperwork has exploded in recent years. And I think that is also very
important, cutting down on that burden, not only the time, but the money
is critically important. So I believe that we will make it better.
If you have further suggestions, I'd be glad to hear them. But this
is an area in which it is difficult to legislate directly and in which
many physicians are reluctant to have us legislate directly. It seems to
me if you change the economics and change the distribution of the power
of decisionmaking in this whole process, giving more to the doctors and
to patients through the workplace and less to the insurance companies,
that the practices will inevitably change because the shift of
decisionmaking has occurred.
Q. Thank you very much. Mr. President, we know that your time is
very tight. If you could spare us a few minutes, we have some other
questions that we would hope to be able to put before you.
The President. Please do, because I know we've got one or two other
issues that I think should be dealt with.
Q. Thank you, sir.
Q. Mr. President, I practice anesthesiology in San Diego. And I want
to thank you for the opportunity to ask you a question today. Two years
ago, right here in California, in this State, with the support of this
organization, we passed a law that created voluntary health insurance
purchasing cooperatives. In fact, you just alluded to them a few moments
ago. And as you said, they so far have been enormously successful, both
in extending access and in eliminating costs.
My concern is that there are some reform proposals that would cause
these purchasing pools or alliances to become so large and thus so
inflexible that they would in fact limit rather than enhance the
competition that you yourself state, and I agree with you, that we want
to see in the marketplace. So to make these entities work the way I
think we both wish them to, the alliances and the purchas-
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ing pools, I believe that we need to limit their size. So my question
for you this morning is what would you propose to control the size of
the purchasing pools and alliances so that they would fulfill their
primary purpose of providing affordable, accessible care and not become
a large, inflexible bureaucracy?
The President. Well, let me first say that I agree that we shouldn't
have them become large, inflexible bureaucracies. Under our plan, the
alliances would be much larger and the membership would be mandatory.
But that's because we're trying to achieve something with our plan that
is beyond what the alliances do. I think it will all be debated in the
Congress, and I'm certainly flexible on it.
But let me explain why we recommended larger alliances and offer
you, not just you individually, sir, but your group there the
opportunity to suggest to me--either to Ira Magaziner who's there or to
us through a letter later--how we could achieve the same objective.
Because I know a lot of people say, ``Well these alliances are too big
or the work units--you don't--people with several thousand employees in
them.'' And at one level, I think that's right, but at another level,
I'm not sure, and let me explain why.
The purchasing co-op that you have in California, which has worked
real well, is designed primarily to give small businesses bargaining
power so that they can, in effect, have the same access to health care
at the same cost that people in large units like big corporations and
Government do. You can do that with smaller alliances, let's say with
people with a few hundred employees or 100 or whatever it is in
California, 50 and down, you can do that. The same thing is now
happening in Florida where they're seeing these results.
What we wanted to do with the alliances were three other things that
it still seems have to be done somehow under the plan. First of all,
through the alliances, we were going to distribute the small business
discounts. We can find another way to do that, but that was going to be
done.
Secondly, we were going to provide certain handling services
basically to bring together and reduce the paperwork burdens of the
physicians, the employers, and the insurance companies. We were going to
do a lot of the paperwork there. That can probably be done some other
place.
The other thing, though, which I think is very important, and which
all of you clapped when I mentioned earlier, is the alliances as large
units were going to be used to make it financially possible for the
insurance companies to observe community ratings. And I'd like to talk
about that a minute.
There are two issues here on discriminatory rates. One is, how do
you get small businesses and self-employed people access to the same
rate structure presently available to big business and Government? The
other is, how do you, as a practical matter, eliminate unfair billing
practices without bankrupting the insurance companies that are still in
the market? That is, how do you eliminate preexisting conditions? How
can you afford to do away with lifetime limits? How can you eliminate
rate discrimination against people with preexisting conditions in their
families or against workers who are older at a time when older workers
are having to change jobs a lot in their life, too?
Now, you can pass a law and say, we'll have community rating. But
New York did that, and yet they still don't have it. And the reason is,
they don't have any mechanism within which community rating can be
practically made to work in a State where you have a lot of different
insurance companies. And the insurance companies simply cannot
solvently--can't stay solvent and do that unless people are insured in
very large pools where insurance companies can make money the way
grocery stores do, a little bit of money on a lot of people.
So the fundamental difference in what California has done, which is
very good, and what we are seeking to achieve is that I'm not sure that,
unless we have everybody below a certain substantial size in one of
these alliances, we can achieve community rating. We can get better
breaks within the present system for small businesses, but I am not sure
we can get community rating. That's the rub. If we can solve that, I'm
very flexible on the rest of this. I mean, I'm just trying to achieve an
objective that we all agree is necessary.
[[Page 619]]
Q. Mr. President, I practice emergency medicine in inner-city Los
Angeles. Every day I see the impact of undocumented immigrants on our
health care system. Mr. President, I'm grateful to you for making health
system reform a top national priority. Your proposal provides health
security for all citizens and $1 billion to cover noncitizens.
However, in some of California's largest counties, up to 25 percent
of the population are noncitizens, both legal and undocumented.
Currently, Federal law and our own ethics as physicians require that we
provide care. But the reality is that these costs are putting an
enormous strain on our State's health care delivery system and the
entire California economy. We are spending close to $1 billion in Los
Angeles County alone to deliver health care to undocumented immigrants.
How do you feel we can better address this problem?
The President. It's a difficult one, as you know. Let me make a
couple of observations, and then say where I think we are practically.
Obviously, no State or local government should be required to
shoulder the cost of immigration or the lack of an immigration policy or
the inability to enforce the policy we have now at the national levels.
But as a practical matter, as we all know, it happens all the time. Now,
in my last two budgets, I have tried to provide more funds to
California, especially in the areas of health and education, for dealing
with the extra costs of immigration because I think it's not your fault.
Now, in this health care plan, we provide a billion dollars in extra
money. Is it enough? Of course it's not but it's a good step in the
right direction. Let me say that if you look at the States with the big
immigrant health care burden, California, Florida, Texas, New York,
although there are five or six others with substantial burdens as well,
our plan will save the States enormous amounts of money that they would
have paid otherwise in out-of-pocket Medicaid match costs, long-term
care costs, and other health-related costs related to running public
health facilities, for example. In other words, our plan--we estimate
that California will save, if our plan goes into effect in 1996 or we
begin to put it into effect in 1996, phasing it in, we estimate
California will save about $6 billion or more between that year and the
end of the decade, new money that would not have been there otherwise in
this budget. That will also allow the State to divert some of those
resources to health care as well as to dealing with some of your long-
deferred education and other problems out there.
So I believe that, between the savings that will occur from the
State of California and the funds that we can put into immigrant health
care--migrant health care--directly, I think that will make a big
difference. Now, let me say, this fund will start at a billion dollars,
but obviously, based on the evidence and based on our ability to secure
savings in other aspects of the system, Congress will be free to
supplement this fund every year from now on. That's where we're going to
start.
I realize it doesn't solve the whole problem. I think it's frankly
all we can afford to do at the moment. And I think the savings which
will flow to the State from passing this plan will be so great that they
in turn will be able to do more and still have money left over to
address other needs of Californians. So I hope they'll stick with it,
because I think it's the best we can do right now.
Q. Mr. President, you really need to know that over half the
hospitals in California are currently operating in the red. It is an
urgent problem, and I hope that the solution to the problem would not be
tied to the whole health system reform.
Thank you.
The President. I certainly agree with that. Let me just say one
other thing. I agree that we cannot hold this problem hostage to health
care. We're just trying to use the health care reform which will free up
billions of dollars to put more into medical research, more into
undocumented alien health care, and other things. But I agree that we
have to deal with it.
Q. Thank you, Mr. President. Do you have time for one last question?
The President. Sure.
Q. Thank you very much, Mr. President. I practice internal medicine
in Los Angeles. I also drink Diet Coke. And I'm delighted to be here
this morning as president of the California Hispanic-American Medical
Association. Mr. President, in California, our
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managed care system has evolved from what started as a not-for-profit
market into one which today is dominated by large for-profit publicly
traded HMO's. This evolution has also caused the profits and
administrative costs of these HMO's to soar, while health care services
to patients has plummeted. While the CEO's of these corporations make
millions, I have to argue with these same companies who insure my
patients to approve immunizations, pap smears, and mammograms. The CMA
is sponsoring legislation in California to limit the administrative
costs and profits of these companies. How do you feel about this
situation, and how would your plan protect other States from this trend?
The President. In two or three ways. First of all, under our plan
those plans will have to offer pap smears, mammograms, and other
preventive and primary services. They won't be able to cut them out.
Secondly, these companies will be under much more pressure to provide
quality service and to siphon less money off to bureaucracy and profits
than they are now because they won't be able to make a deal with
employers which can then be enforced on employees. Every employee--that
is, every patient you see will be able to make a new choice of plan
every year. So if they get abused in year one, then in year two, the
next year, they'll be able to make the same choice they made last year
all over again and choose a different plan or fee-for-service medicine
or a group of physicians who are providing health care.
So this will fundamentally change the whole incentives of the
system. They simply will not be able to use the fact that they have a
preexisting relationship with an employer to undermine the delivery of
quality of care between the doctor and the patient, because the patient
will be making a decision and every year can make another decision. And
that will have a profound impact on it. And they will not be able to
eliminate primary and preventive services from their package. That has
to be involved. So that's going to change it.
Then we will make--when we make some of the changes in the antitrust
laws, which will make it even easier for physicians to get together and
deliver health care directly. So these HMO's are going to be under a
whole different kind of competition. It won't be competition from
somebody else providing less service at lower costs, it will be
competition from somebody else providing more services and higher
quality with more choices for the same costs or sometimes less.
So I think this will really change things and put you and your
patients much more in the driver's seat than you are now. That's perhaps
the most critical element of my plan that has not been really noted. We
are not restricting choice, we're expanding it. And we're putting the
decision--we're moving the decision from the employer to the employee
about who makes the choice, which means you're moving it to the patient.
And that should be, I think, something that will make a profound
difference, particularly after you all get through talking to all of
them.
Q. Mr. President, everyone in this room and all the people we
represent would like to thank you for taking the time from your busy
schedule to meet with us today. We want you to know that we're with you
in this fight and we'll join with you in working with Congress in a
joint effort to guarantee all Americans private health insurance that
can never be taken away.
The President. Thank you. And let me just say in closing, if I could
ask you one thing, it would be to impress upon the Congress the
importance of acting and acting this year. This is a very complex issue.
No one has all the answers. We'll be improving on what we do from now
until kingdom come. But you know, more uniquely than most people do,
what the consequences of not doing anything are, and that's more
restricted managed care, more people without any insurance at all, more
of the headaches that you have already complained about today. So you
are in a unique position to embrace the fundamental principles here,
work with me on the details, and impress upon your very large
congressional delegation that the time to act is now, not next year, not
5 years from now, but now.
Thank you very much.
Note: The teleconference began at 11:47 a.m. The President spoke from
Room 459 of the Old Executive Office Building. In his remarks, he
referred to Dr. David Holley, president, California
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Medical Association. A tape was not available for verification of the
content of these remarks.