Bill Clinton: “Thank you. First of all, as all of you know, we have runaway costs now, both in the system as a whole and for…”

“Thank you. First of all, as all of you know, we have runaway costs now, both in the system as a whole and for individuals who are paying into it. To keep down individual cost increases as well as systematic cost increases, we seek to do three things that we've factored in. There are a lot of things we are doing, I want to try to emphasize this; we think we'll get more cost containment than we have budgeted for, and I want to explain why. Number one, if you simplify the system so that essentially every patient, every doctor, every insurer is dealing with a single uniform form, one for each category of people in the system, you will drastically cut the administrative cost of this health care system. We were at the Children's Hospital in Washington the other day; one hospital in one city in America estimates that they spend $2 million a year and enough time for their doctors to see another 10,000 children a year on paperwork that has nothing to do with the care of the kids or keeping up with their records necessary to monitor the care of the kids. That's the first thing. Number two, if you cover everybody and require everybody to make some contribution to the system, that will stop a lot of the cost shifting. Keep in mind, a lot of your costs keep going up every year more and more and more because you are paying into the system, either through Medicare or through private insurance, and you pay for everybody else because the hospitals shift their uncompensated care bills to you or to insurance companies who turn around and raise the price or the Government who comes around and raises the price. So through simple administrative simplification and stopping cost shifting, you're going to have some savings. Number three, as a backup, we also propose a cap, a limit on how much the cost of the system can increase in any given year, moving down towards inflation plus population growth over a period of years. But still, I will tell you, that we still believe--this budget is very modest. We still project over the next 5--between now and the year 2000, the American health care system will go from spending 14.5 percent of our income on health care to about 18 percent, picking up the drugs and the long-term care. If we don't do anything, we'll have no drugs, no long-term care, and be spending over 19 percent of our income on health care. But those are very modest. Now, that means that we are calculating no savings from putting all the people in the country in these large buyer groups so that they can compete for lower prices. Look what happened to the California public employees plan. Look how little their inflation was this year. The Mayo Clinic managed care plan--most people believe Mayo Clinic provides pretty good health care--you know what their inflation was this year? 3.9 percent, and their prices before they started were lower than the national average. We don't calculate any of those savings in our budget, the things that will come from better organizing and delivering health care and giving consumer groups the right to bargain to keep their prices lower. We have an initiative to eliminate fraud and abuse, which is significant in this system. We calculate none of those savings into our budget. So we believe we will easily make the budget because a lot of the things we're going to do that will save money we don't even try to claim credit for to try to bend over backward to be realistic. So I think we'll get there. But you're right, you've got to have cost control. Let me just say one other thing. There's one other thing we need to help the AARP on. There are a lot of people in the Congress who say that limitations on the rate of increases amount to some sort of price controls, and we shouldn't have them. But look what we've had so far. If you have a third-party pay system, where the people who are working the system can get a check every time they send a bill, there are no normal market forces. You have to have some sort of discipline on the system. Now, I know the AARP favors that. And again, I want you to help us get that when this bill goes to the Congress. We believe we will more than meet the cap that we've set. We don't think we can ever necessarily even meet that cap, but we better have it in the law so people will have to know they're going to have to manage their business better, they can't keep breaking the bank. Ms. Brown. Well, Mr. President, the time has passed so quickly. I believe it's now time, if you have some closing remarks.”