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                  Office of the Press Secretary
                       (New York, New York)
For Immediate Release                            May 9, 1994     
                     REMARKS BY THE PRESIDENT
                         New York Hilton
                        New York, New York 

1:35 P.M. EDT

Q Mr. President, I'm the Comptroller of the State of New York, and as the chief fiscal officer of this state, I want to point out something and ask a question. The burden that we face in New York is that we spend in this state $3.8 billion for the Medicaid program. That represents 34.6 percent of all local revenues. Here in New York City the budget for Medicaid is $2.6 billion. It represents 31.1 percent of the city's budget.

This is a crushing burden that our localities can't bear. What will your program do to relieve us of this burden?

THE PRESIDENT: Well, they will do one thing for sure and another thing maybe. And let me try to be explicit about that. There are -- in New York, as nearly as I can tell -- I've studied these figures over the last several years for your state -- this year I think the Medicaid budget went up something like 15 percent. If our plan passes and Medicaid is folded in to the health care system generally -- that is, people on Medicaid will go into large purchasing groups, along with folks from small businesses and medium-sized businesses and others. And the working poor, many of whom get Medicaid supplements in this state and others -- that's quite a large part of your burden -- will be paid for in a completely different way -- that is, employers, employees in a federal discount. Then the rate of increase in Medicaid costs will be dramatically less than it is now. So over the next four or five years you will save quite a lot of money.

In addition to that, the hospitals here who have large Medicaid burdens will be better off because the Medicaid population will be in with the whole population, and the reimbursement rate will be the same for everybody. So that will take a significant burden off the hospitals with high Medicaid costs here.

Now, the other big issue in New York has been, is it fair for New York to have a 50-50 match when Mississippi gets an 80-20 match, maybe New York should pay more than Mississippi because there are more wealthy people here, but there is also a huge poor population here. In other words, is it fair to have this match rate based overwhelmingly on the, essentially, the average income of a state, the per capita income.

We have a commission that is meeting on that, which is supposed to make a report to us in, I think, 1995, next year, about how to change it. There's no question that the formula should be changed, and that states like New York with high per capita incomes but huge numbers of poor people are not treated quite fairly under a formula that only deals with per capita income. And that's going to happen next year.

But we reasoned, and I think properly so, that in order to pass a change in a formula like that, we needed to have an adequate study, we needed to have an alternative, and we needed not to mix it up in the whole question of providing health care coverage for all Americans, which we're having a hard enough time passing as it is.

So we put in this system to review it, come back in '95 and deal with it. So I think that that will also happen. I think you will get some relief there. But just passing the bill will save you a ton of money on Medicaid over the next five years.

Q Mr. President, I'm a City Councilman and I'm chair of the health committee of the City Council. New York City, like Los Angeles and a few other cities, have a large number of undocumented aliens. What provisions can be made under your plan to help our cities deal with the health care needs of that population?

THE PRESIDENT: Well, as you know, presently, basically undocumented aliens often just become -- their health care bills -- often become the burden for the states of the localities. What we propose to do is not to give undocumented aliens health care security cards, because if we did that we would basically be further rewarding people who get around our immigration laws, but to continue to handle them through the public health units that now do it, while providing a direct funding strain for the public health units to deal with the alien health care costs.

There will be a big debate in the Congress, and one of the things Senator Moynihan and the others who have jurisdiction over this in the committees will have to hash through is exactly how much money should be in the fund for undocumented aliens to go to public health units in New York, in Florida, in California, New Jersey, the states with big burdens.

But under our plan, at least, there is a special fund which recognizes that we are not doing enough to help the states deal with the burden of health care for undocumented aliens.

Q Mr. President, my name is Joe Califano. Delighted to have you here, Mr. President.

THE PRESIDENT: Also, I should say for Joe, we also have comprehensive drug treatment as part of the package of benefits.

Q That's what I was about to ask you. (Laughter.) New York City has one of the toughest substance abuse problems in the country, and what does your bill do for substance abuse?

THE PRESIDENT: I think, Joe, I should make two points. One is that our bill, as it's presently written -- and this is, again, a big problem for the Congress to deal with --but we thought that one of the reasons our bill is somewhat longer than some of the other bills is that we deal with a lot of other things other folks don't.

What's going to happen to the academic health care centers, what's going to happen to the undocumented aliens -- all of those things that have been -- we believe that there should be a package of benefits which includes primary and preventive benefits, and which includes comprehensive alcohol and drug abuse treatment in the benefits. And we believe it will save this society a fortune over the long run. And one of the real hard decisions that Congress will have to make and that we will have to deal with is whether we should continue to be a nation that closes the barn door after the cow's out.

You should know -- and I didn't get into all this in my speech with you -- but our bill is heavily weighted toward primary and preventive health care. Mammographies for women whenever the doctor thinks it's appropriate, and free from age 50 on -- and just things like that. (Applause) And comprehensive alcohol and drug abuse treatment benefits, and any number of other primary preventive care treatment. So that's covered in the basic benefit package.

In addition to that, in this year's budget, there is a 12 percent increase in funds for drug education and treatment, even though we're cutting overall spending, and in the crime bill there is a huge increase for drug and alcohol abuse treatment for people who are incarcerated or who can avoid incarceration if one of the conditions of avoidance is being in a treatment program. (Applause.)

Q For those that don't know, Joe Califano was former Secretary of HEW a few years ago. Joe, thank you.

THE PRESIDENT: He's also the head of the Partnership for a Drug-Free America, which is why I knew the answer to the question before he asked it. (Laughter.)

Q We applaud your initiative, which has created a tremendous momentum for health care reform. One of the ironies of this momentum is that with the growth of managed care, the whole thrust has been to go to the cheapest provider without -- and I think the judgment in any of my colleagues, out of concern for quality. That's very threatening, of course, to the academic health centers, as you recognize, and I wondered how you think we can deal with this problem.

THE PRESIDENT: This is a rather complex issue, but I'd like to talk about it in a little bit of detail, because it's so terribly important to New York, if I might. The academic health centers today are mostly by accident of history, located in large cities. They treat, as part of their ongoing teaching functions, huge numbers of poor people. They also, historically, have treated huge numbers of professionals and others who have wanted to come to them because of the high quality of their care.

They are now getting it coming and going, for the following reasons: The more poverty concentrates in areas where academic health care centers are, the more people they have to treat who basically have no compensation for their care, so that hurts them financially.

And then, as you just heard, the more people -- more employers put their employees in managed care networks, the more likely those networks are than the people making those choices, to choose the lowest cost health care option available, which may steer income, again, and opportunity away from the academic health care centers, ultimately undermining quality, ultimately undermining the ability of the United States to train, educate and provide the finest doctors in the world, as well as ongoing medical research.

This is a huge deal, much bigger than it would appear at the moment. It goes way beyond the number of patients who stream in and out of Sloane Kettering every year because it has implications for the entire United States and the whole quality and fabric of our health care system.

We seek to do two things in our bill which I think would help. One is, while I strongly support the whole concept of managed competition and managed care, I believe that we should leave more choices, and I think economically we can leave more choices with the employees or the patients, if you will.

So under our plan, each health alliance would have to offer each employee at least three choices, although we think

that employees -- people will be offered more choices. Under the federal employee health insurance plan, for example, which is a pretty good model, we have probably more than 20 choices. But you would have a range of choices so that it wouldn't be the employer's decision alone. The employer's contribution would be constant, no matter what. The employer wouldn't have to pay more.

But the employer would have the option, at least, to enroll in a fee-for-service medicine, or enroll in a Sloane Kettering plan, for example, even if it were a little more expensive because you could get a wider range of doctors or a higher quality or whatever. So we'd have more choices there.

The second thing that we do is to try to provide for a direct fund to the academic health centers in recognition of the fact that you won't get the -- there won't be a Medicare disproportion of share payment anymore, because everybody will be covered. There's going to have a direct fund. And it's sort of like the question this gentlemen asked about undocumented aliens.

There will be a big argument about how much money should be in the fund, but plainly the United States has been supporting academic health care centers directly through medical education subsidies, but indirectly through this undocumented -- this Medicaid disproportion of share payment. And the time has come for us as a people, I think, to directly support the academic health care centers.

And what I would just say to you, sir, I met with all your counterparts in the Boston area not very long ago, and I told them the same thing. We need to go into the Congress, work this out, figure out what the financial requirements are and do it.

The American people pay 40 percent more of their income for health care than any other people on Earth. A lot of it is due to the inefficiencies of the system. A part, a small part, is due to the excellence with which we educate doctors. And I think every American is willing to pay it, and we ought to pay it directly. And so I think if we do it right, this health care bill will make your existence more secure in the years ahead.

And the one thing I think you would agree with, if we don't do anything, your condition will grow more perilous. So we have to do something, and the right thing to do is to have a direct support mechanism to the academic health care centers. (Applause.)

Q A lot of people fear that if your health plan is passed that they'll lose their old doctors and have to be issued a doctor by the insurance company. So what do you feel on that issue.

Q Mr. President, I just want to tell you that his father and his grandfather come from Texarkana. (Laughter.)

THE PRESIDENT: Is that right? No wonder you asked such a good question. (Laughter.) That's a good question. Give him a hand. He asked a good question -- (applause).

If the health care plan is not passed, more and more people will give up their doctor. And let me explain why. More and more -- most people who have health insurance, as I said, are insured through their place of work. The employers normally choose what health care plan covers the employees. More and more employers are choosing so-called managed care plans, where you make -- basically you agree to pay a group of doctors and other medical professionals a flat rate, and they provide all the care they agree to provide during the course of a year.

If you switch from a plan where all the employees just pick their doctor and their hospital to a managed care plan, and if that managed care plan only permits the doctors, the hospitals and the other medical providers to provide care who are enrolled in the plan, then obviously a lot of employees will have to forced to change. That is happening today.

Today, a little more than half of the American people who are insured at work are insured by plans that give them no choice. We're already at a little more than half. Now, the plan -- so that's where we are now. And that trend is growing rapidly as employers try to control health care costs.

Under our plan, at least every person would have access to three different types of plans. Let's say a managed care plan, like the one we described, where you might have to give up your doctor, but it would be lower cost; a plan -- a professional organization where a few hundred doctors get together and offer health care; or continuing a fee for service medicine -- continuing the old plan you've got, where you'd have to pay a little more, but at least your employer would still make the same contribution and you could pick your own doctor.

So we're trying to do our best to get the benefits of managed care and the cost controls inherent in it, the market controls, and still give people some choices of their doctors. And as I said, the law requires three different types of plans, but if you look at, not only the federal health plan --California just had a small business buyers co-op that's a lot like what we're trying to set up, where they had 2,300 small businesses with 40,000 employees go in and buy insurance together. And everybody says this is a government plan -- we're just trying to do this for everybody. The state of California hired 13 people to run this plan. And they were able to lower the cost of all the businesses and employees involved and to offer them 15 different choices by simply pooling them together. That's what I want to do.

I want to try to get the benefits of competition but to leave the choice of physician up to the people themselves. And I think that this is the best way to do it. If we do it, it will encourage all these plans to let all doctors provide services who will do it at the right price. That's what I want to do.

The fair thing to do is to say, okay, we'll provide these services -- we'll manage this plan; we'll provide these services if you'll pay this amount -- then any doctor who's willing to do it for that price, in my judgment, ought to be able to do it.

Q I represent school administrators and supervisors. A group of youngsters have not been mentioned, that is the children in our public schools, especially our urban schools. And, sir, may I please request that whatever plan goes forward that provision be made for every child to enter school with the proper medical care. And as he or she goes through school, that he's provided with the proper care throughout his life in school. Thank you. (Applause.)

THE PRESIDENT: Thank you. You raise an issue which I think is important to emphasize here, because it will be an issue in New York and in a different way it's an issue where I come from.

There are two different questions here. One is, have you covered people for the services they need at the time they need it. The second is, even if people have coverage, do they have access. For example, you've got a lot of people living in this city whose first language is not English who are citizens. If we pass this health care plan, how are they to know

what their benefits are and how they access them? And how are we going to do that? That's a significant educational problem.

In rural America, one of the things our bill does that I'm very proud of is provide significant incentives for National Health Service Corps doctors. We're going to increase by fivefold the number of those doctors going into rural areas and underserved inner-city areas to get health care out there to people where it exists.

But I am convinced that a lot of our children who come from such difficult family circumstances are going to have to continue to get health care information and some basic health care services in the schools. That's why I've always been a strong supporter of the school-based health clinics. I know that they've become emotionally charged around the whole issue of teen pregnancy, but quite apart from that -- you know, when I was a kid, we got our ear tests, we got our shots, we got a lot of things in the schools that don't happen very often any more. So a lot of these services, if you want access to be there, in my judgment, are going to have to be provided either in or quite near schools if we're going to reach these children as we should.

Thank you very much. (Applause.)

(Gifts are presented.)

THE PRESIDENT: I want to say one thing: As an ardent basketball fan, Lou made one minor error when he compared the victory of Schumer with the assault weapons with the victory of the Knicks over the Bulls. And it's very important for health care, so I'm going to leave you with this:

The Knicks overcame a 15-point deficit and beat the bulls with fabulous defense. Schumer passed the assault weapons ban by playing offense. We cannot pass health care unless we play offense, and that means people like you have to tell the members of Congress it's okay for them to play offense and solve this problem.

Thank you very much.

END1:57 P.M. EDT