Greenberg, Daniel S. The New England Journal of Medicine; Boston Vol. 303, Iss. 26, (Dec 25, 1980): 1542-1544.
Given President-elect Reagan's commitment to cut taxes and increase military spending while reducing the total budget, federal health programs -- now running at about 10 per cent of all federal spending -- may seem to rank high as sacrificial prospects. But as the incoming administration goes through a stock taking, its health-related deliberations are focusing more on deregulating, rather than dedollaring, the government role in the national health enterprise.
The reason, quite simply, is that, although it is attractive to pound on alleged fraud waste, costly staffing, and other standard targets of tax-revolt politics, most federal health spending is politically sacrosanct. In fact, over 90 per cent of the approximately $55 billion budgeted under "health-care services" this year is dished out as "entitlements" -- which means that any citizen matching a statutory definition of eligibility qualifies as a recipient. Thus, $36 billion is budgeted for Medicare, $14.5 billion for Medicaid, and a few billion more for other programs, including end-stage renal treatment, for which the federal government's open-ended statutory commitment now costs nearly $1 billion a year. The remaining big item in the health budget is research, currently at the $4-billion-a-year mark. This is a so-called discretionary, rather than mandatory, item in federal spending, and therefore ranks among the vulnerables when budget trimmers look for cuttable categories. But during the campaign, Mr. Reagan accused the Carter administration of shortchanging research. This might be dismissed as mere election fluff, except that the businessmen and high-tech industrialists in the President-elect's inner circle place a lot of value on this country's scientific brawn.
Although it is widely said that the sharply rightward election returns portend profound changes in the way the country is run, neither the campaign nor the transition suggest that any upheavals are on the way in health-related matters. Health policy, in fact, was barely touched on in the campaign, mainly because the two major candidates had few differences on the subject. (Carter said he was for national health insurance and Reagan said he was against it, but since the subject has long been dormant in Congress and Carter never worked hard to stir it up, national health insurance figured not at all as an election issue.) To the extent, however, that the Reagan camp did address itself to health issues, its pronouncements consisted mainly of middle-of-the-road, managerial-style proposals of no pronounced ideological flavor. And its statements and actions during the transition period, as well as the nomination of Senator Richard S. Schweiker as Secretary of Health and Human Services, again do not suggest a major remaking of the federal role in health.
Late in the campaign, the Reagan-Bush Committee announced the creation of a 16-member health policy advisory group, chaired by William B. Walsh, M.D., founder and president of Project HOPE, a private foundation that provides medical training and assistance to developing countries. Walsh, who was summoned to the task through a slight acquaintanceship with Mr. Reagan and a long-standing friendship with one of his senior associates, William J. Casey (nominated to head the CIA), says that he was instructed to disregard party affiliations in selecting members of the group. The outcome was a collection of mainstream senior thinkers and doers in health affairs, including two former assistant secretaries for health in the old Department of Health, Education, and Welfare -- Theodore Cooper, M.D., and Charles C. Edwards, M.D., both of whom served Republican administrations -- and Alain C. Enthoven, of the Stanford University Graduate School of Business, long ago a so-called whiz kid under Defense Secretary McNamara.
The advisory group met only once, in mid-October, to prepare a set of recommendations for the small, and separate, transition group that was later established to prepare the way for the arrival of the Reagan administration. The recommendations have not been made public, but enough word about them has circulated around Washington so that they appear to be pretty much out in the open. The main points call for competition rather than regulation for trying to restrain health-care costs. To achieve this, employers would be given incentives to provide their workers with various options in health-insurance coverage. Walsh, emphasizing that he was expressing his own views rather than laying out what the advisory group told the transition team, acknowledged that the multiple-choice concept has been around the health-policy circuit for some time and doesn't represent any grand ideological departures from present practice. He offered the view that "the major [insurance] carriers can be better policemen" than the Department of Health and Human Services, "since they're in business to make a profit."
The advisory group is also understood to have recommended elimination of price ceilings on drugs purchased by the federal government. In this case, it may well have been following antiregulatory ideology out the window, since the ceilings were put in place by Caspar W. Weinberger when he was Secretary of Health, Education, and Welfare under Richard Nixon. The object, of course, was to hold down federal spending. Also in regard to drugs, the advisory group wants to speed up the review process at the Food and Drug Administration, and it recommended extending the length of patent protection for pharmaceutical drugs to compensate for the increasing interval between the award of a patent and the commencement of marketing.
Finally, it urged support for the National Institutes of Health and the National Science Foundation, suggesting that Mr. Reagan might go out of his way to say some kind words about the two organizations, and it called for examining the worthiness of professional standards review organizations (PSRO's) and the nationwide network of health systems planning agencies. In regard to both, the attitude was critical, and the thrust of the advisory group's thinking was that PSRO's and systems planning represent too much national government in the nation's medical affairs.
Since it is an old Washington reality that advisory groups that meet, recommend, and disperse cannot be influential -- you've got to stay and fight to get anything done in the Capital -- the Reagan health group is mainly noteworthy for the mildness of its recommendations. The subject of the federal presence in health stirs, as we all know, strong passions in many physicians and others associated with the provision of health care. But a careful examination of pre-election and post-election statements by Mr. Reagan and his official family reveals no fire and brimstone in the health field -- not even one reference to the horrid specter of socialized medicine.
In one of its few campaign statements on health, the Reagan-Bush Committee touted the virtue of "innovative private programs at the local level rather than the imposition of a single federal system," but the specific problems that it raised, and some of the solutions that it suggested, could have been lifted from a Lyndon Johnson great-society tract of 15 years ago. Thus, here's the Reagan campaign lamenting that "today's older Americans are forced into premature institutional care because financing for alternative in-home or neighborhood-based options is not available." Another problem: "Americans living in rural or outlying communities find themselves without access to basic health care."
Candidate Reagan's solutions included "better use of physician extenders to improve the availability of primary-care services in communities with poor access to physicians," plus a variety of incentives for at-home dependent care, including "tax deductions for at-home improvements for dependent care," plus "consideration of tax incentives to expand coverage for catastrophic health insurance."
Given President-elect Reagan's commitment to cut taxes and increase military spending while reducing the total budget, federal health programs -- now running at about 10 per cent of all federal spending -- may seem to rank high as sacrificial prospects. But as the incoming administration goes through a stock taking, its health-related deliberations are focusing more on deregulating, rather than dedollaring, the government role in the national health enterprise.
The reason, quite simply, is that, although it is attractive to pound on alleged fraud waste, costly staffing, and other standard targets of tax-revolt politics, most federal health spending is politically sacrosanct. In fact, over 90 per cent of the approximately $55 billion budgeted under "health-care services" this year is dished out as "entitlements" -- which means that any citizen matching a statutory definition of eligibility qualifies as a recipient. Thus, $36 billion is budgeted for Medicare, $14.5 billion for Medicaid, and a few billion more for other programs, including end-stage renal treatment, for which the federal government's open-ended statutory commitment now costs nearly $1 billion a year. The remaining big item in the health budget is research, currently at the $4-billion-a-year mark. This is a so-called discretionary, rather than mandatory, item in federal spending, and therefore ranks among the vulnerables when budget trimmers look for cuttable categories. But during the campaign, Mr. Reagan accused the Carter administration of shortchanging research. This might be dismissed as mere election fluff, except that the businessmen and high-tech industrialists in the President-elect's inner circle place a lot of value on this country's scientific brawn.
Although it is widely said that the sharply rightward election returns portend profound changes in the way the country is run, neither the campaign nor the transition suggest that any upheavals are on the way in health-related matters. Health policy, in fact, was barely touched on in the campaign, mainly because the two major candidates had few differences on the subject. (Carter said he was for national health insurance and Reagan said he was against it, but since the subject has long been dormant in Congress and Carter never worked hard to stir it up, national health insurance figured not at all as an election issue.) To the extent, however, that the Reagan camp did address itself to health issues, its pronouncements consisted mainly of middle-of-the-road, managerial-style proposals of no pronounced ideological flavor. And its statements and actions during the transition period, as well as the nomination of Senator Richard S. Schweiker as Secretary of Health and Human Services, again do not suggest a major remaking of the federal role in health.
Late in the campaign, the Reagan-Bush Committee announced the creation of a 16-member health policy advisory group, chaired by William B. Walsh, M.D., founder and president of Project HOPE, a private foundation that provides medical training and assistance to developing countries. Walsh, who was summoned to the task through a slight acquaintanceship with Mr. Reagan and a long-standing friendship with one of his senior associates, William J. Casey (nominated to head the CIA), says that he was instructed to disregard party affiliations in selecting members of the group. The outcome was a collection of mainstream senior thinkers and doers in health affairs, including two former assistant secretaries for health in the old Department of Health, Education, and Welfare -- Theodore Cooper, M.D., and Charles C. Edwards, M.D., both of whom served Republican administrations -- and Alain C. Enthoven, of the Stanford University Graduate School of Business, long ago a so-called whiz kid under Defense Secretary McNamara.
The advisory group met only once, in mid-October, to prepare a set of recommendations for the small, and separate, transition group that was later established to prepare the way for the arrival of the Reagan administration. The recommendations have not been made public, but enough word about them has circulated around Washington so that they appear to be pretty much out in the open. The main points call for competition rather than regulation for trying to restrain health-care costs. To achieve this, employers would be given incentives to provide their workers with various options in health-insurance coverage. Walsh, emphasizing that he was expressing his own views rather than laying out what the advisory group told the transition team, acknowledged that the multiple-choice concept has been around the health-policy circuit for some time and doesn't represent any grand ideological departures from present practice. He offered the view that "the major [insurance] carriers can be better policemen" than the Department of Health and Human Services, "since they're in business to make a profit."
The advisory group is also understood to have recommended elimination of price ceilings on drugs purchased by the federal government. In this case, it may well have been following antiregulatory ideology out the window, since the ceilings were put in place by Caspar W. Weinberger when he was Secretary of Health, Education, and Welfare under Richard Nixon. The object, of course, was to hold down federal spending. Also in regard to drugs, the advisory group wants to speed up the review process at the Food and Drug Administration, and it recommended extending the length of patent protection for pharmaceutical drugs to compensate for the increasing interval between the award of a patent and the commencement of marketing.
Finally, it urged support for the National Institutes of Health and the National Science Foundation, suggesting that Mr. Reagan might go out of his way to say some kind words about the two organizations, and it called for examining the worthiness of professional standards review organizations (PSRO's) and the nationwide network of health systems planning agencies. In regard to both, the attitude was critical, and the thrust of the advisory group's thinking was that PSRO's and systems planning represent too much national government in the nation's medical affairs.
Since it is an old Washington reality that advisory groups that meet, recommend, and disperse cannot be influential -- you've got to stay and fight to get anything done in the Capital -- the Reagan health group is mainly noteworthy for the mildness of its recommendations. The subject of the federal presence in health stirs, as we all know, strong passions in many physicians and others associated with the provision of health care. But a careful examination of pre-election and post-election statements by Mr. Reagan and his official family reveals no fire and brimstone in the health field -- not even one reference to the horrid specter of socialized medicine.
In one of its few campaign statements on health, the Reagan-Bush Committee touted the virtue of "innovative private programs at the local level rather than the imposition of a single federal system," but the specific problems that it raised, and some of the solutions that it suggested, could have been lifted from a Lyndon Johnson great-society tract of 15 years ago. Thus, here's the Reagan campaign lamenting that "today's older Americans are forced into premature institutional care because financing for alternative in-home or neighborhood-based options is not available." Another problem: "Americans living in rural or outlying communities find themselves without access to basic health care."
Candidate Reagan's solutions included "better use of physician extenders to improve the availability of primary-care services in communities with poor access to physicians," plus a variety of incentives for at-home dependent care, including "tax deductions for at-home improvements for dependent care," plus "consideration of tax incentives to expand coverage for catastrophic health insurance."
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