- The Washington Times - Friday, October 13, 2000

Despite the Clinton administration's criticism today of health maintenance organizations (HMOs) and managed care, it fails to acknowledge its own role and that of liberal lawmakers in promoting HMOs in the first place. Congressional proposals to subsidize HMOs led to legislation actually requiring major employers to set them up.

The lead sponsor of 1973 legislation providing federal subsidies for HMOs was none other than Sen. Edward Kennedy, with cosponsors including such liberal luminaries as Walter Mondale and Hubert Humphrey. On May 14, 1973, Mr. Kennedy proposed legislation to "provide a federal subsidy for those health maintenance organizations which have a proven track record and which have demonstrated the ability, over the years, to provide health care services to their enrollees, in an efficient, effective, and economical manner." Mr. Kennedy found an ally in the Nixon administration which almost two years earlier had implemented wage and price controls and was looking for help controlling prices.

Mr. Kennedy then went on to argue that the "existing 'nonsystem' of health care delivery, which tends to encourage the inappropriate use of very high cost services, will be restructured in HMOs." Mr. Kennedy argued for HMOs because, he said, "The health care industry, now overwhelmingly cast in the fee-for-service solo practice model, provides no real alternatives to the consumer. At the present time, only about 5 million Americans are able to receive services through health maintenance organizations similar to those which will be eligible for assistance under the provisions" of the Kennedy bill.

In other words, the liberal Democrats were advocating federal subsidies to spread HMOs. This vision has certainly changed the practice and delivery of medical services in the United States, as every American knows, but liberals today never seem to mention their previous role in making this vision a reality.

Clinton-Gore policies advancing HMOs and managed care are also easy to document.

• In a major campaign speech on health care reform in New Jersey Sept. 24, 1992, then-Gov. Clinton praised the ability of managed care networks to control costs and said his plan for health care reform would not interfere with managed care "practices" for controlling costs.

• In "Putting People First," the 1992 campaign book of Gov. Clinton and Sen. Gore, the candidates wrote that under their health reform plan, "health networks" were going to be given "the necessary incentive to control costs."

• Because of the enthusiasm of Messrs. Clinton and Gore for managed care, the stock market was bullish on HMO stocks in 1992 and 1993. It is ironic today that HMO stocks became part of what investment analysts then called "Clinton stocks" in the "Clinton portfolios" of companies and industries that would benefit from the policies of the new administration.

• In February 1994, Hillary Clinton actually told leaders from the HMO industry that they and the administration were in a common health care reform fight and asked for their help in selling the administration's health care reform plan. "There should be," Mrs. Clinton said, "advertisements running that show the high level of satisfaction with HMOs." She added, "We need your help and we want your help."

• The same month the first lady was asking the HMO industry to help her pass the administration's health care reform plan, the "Economic Report of the President" argued the plan would produce savings. According to the report, "There are also likely to be savings from consumers switching to lower cost plans… The most comprehensive forms of managed care group and staff model HMOs save an estimated 15 percent on health spending by, for example, finding alternatives to hospitalization."

• The last point on avoiding hospitalization highlights a major problem with the administration's plan. The advisers to the president and first lady thought keeping some people out of the hospital would be more efficient because it would save money. However, Americans rejected this approach since they rightly concluded that this type of managed care would reduce health care costs by reducing their health care. They didn't want to be denied then or now access to needed medical care and procedures by managed care gatekeepers. While administration talking points often paid lip service to health care access, its serious economists and policy makers recognized that managed care would require "alternatives to hospitalization" and other restrictive measures.

What a difference a few years can make. The president, first lady and vice president are now criticizing HMOs. Apparently they do not recall their earlier statements regarding HMOs and managed care. Or perhaps they are hoping that many have forgotten that managed care was the cornerstone of the Clinton-Gore administration's health care plan of 1993 and 1994. Only an outnumbered Republican minority in Congress, backed by the public, managed to slow down and finally stop the administration's rush towards a managed care cartel.

After the failure of its managed health care initiative, the administration attempted to obscure its advocacy of one of the most extreme and dangerous managed care plans ever proposed. However, the public controversy over this managed care plan and the voluminous historical record make it unlikely that the administration will succeed.

Jim Saxton is a Republican congressman from New Jersey.

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