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Excerpts from Ourselves Growing Older


The Clinton administration and Congress are offering various proposals both to save government money and to provide basic health-care access for more people--hopefully everybody.

Special Interests

As we go to press, most legislation now being proposed by Congress and the Clinton administration puts profit and control by the major special-interest groups of the health-care industry, especially the insurance industry, ahead of consumer and patients' interests. (see PAC box)

  • Insurance.
    The role of the large, profit-making insurance companies and their increasing involvement in medical-care decision making seems guaranteed.
  • Doctors.
    While capping doctors' incomes is discussed, their need to make very high and ever-increasing incomes is not really questioned.
  • Pharmaceutical Industry.
    Drug companies' privilege to increase their charges to three times or more than the rate of inflation, far ahead of any country in Europe, without any price controls is criticized but not ended.35 This crisis impacts on women and seniors the most.36
  • Hospital Associations.
    Hospitals (whether non-profit or for-profit) are increasing their expansion, their accumulation of resources, and the development of their profit-making services to public expense.37


The Clintons are supporting reform with managed competition as its cornerstone. This concept was based originally on some of the ideas for the "Jackson Hole" group, a Wyoming-based organization of leaders in insurance, medicine, pharmaceuticals, hospitals, and other special interests.38 Though undergoing continual modification, the plan includes an employer-mandated system. Very large, regional health-insurance -purchasing cooperatives or alliances are proposed, at least one per state. These would be made up of large employers or nonprofit corporations or agencies of state government seeking health-insurance coverage for groups of employees or others. These regional alliances would negotiate with competing insurers for the benefits packages for enrollees and most offer a fee-for-service option. Those who do not fit into this system as employees could have their premiums supplemented by the government. States would charter and establish the alliances under federal rules and would monitor the management of the system. "Managed care" (prepaid plans) with fixed annual budgets would also become essential features. Other reform features such as taxes on health benefits are unlikely, and proposals of income caps on doctors or price controls on the drug industry wax and wane.

In sum, this version of the managed-competition plan essentially preserves the insurance industry and bypasses the employee and consumer as a force in shaping any further changes to the system. To a large extent it even by passes the providers. Government's role would be relatively weak. Medicaid would be folded into the alliance program. When people turn sixty-five, they would have the option to stay in the alliance or receive Medicare.39

Many critics, even within government, say managed competition cannot control costs, as single-payer plans could do. They also claim this system cannot work as proposed in more than one third of the United States, mainly rural areas where competition is not possible. As unemployment continues to rise, tying health care to employment seems increasingly problematic. For some small companies, such a requirement could spell disaster. For women, who work in or own small businesses, work part-time or seasonally, or are often put of the work force for long periods, this type of plan appears least helpful when compared with others.


The many and constantly changing bills in Congress include the National Health Service Act (Dellums), which would put government in charge of health-service delivery and build in consumer and citizen control; the Health Security Act of 1993, sponsored by Wellstone, McDermott, and Conyers, the ideal single-payer bill at this writing;40 and a variety of other proposals from moderates and conservatives.


Most bills assume some kind of reform of the existing insurance system, some mechanism to produce more primary-care doctors while shrinking the number of specialists, and comprehensive coverage for everyone, however minimal. Managed care will likely continue to grow as a feature of many plans simply because the administration and insurance companies are now interested in it for its reported cost-savings potential. As an alternative to the fee-for-service indemnity system of the past it would appear to slow cost rises and make then more predictable.

Medicare Reform

While Medicare will probably remain part of any mew government program, better-off elders will likely be taxed for benefits they could afford to pay themselves. This is fairer and cheaper than means-test programs that require people to prove their financial need. The trend to bring those on Medicare into HMOs or other managed-care plans will probably accelerate, and a slowdown in overall Medicare budget increases is part of deficit reduction in an overall economic plan.


Lobbying groups, creating PACs as their funding mechanisms for specific political agendas, make donations to candidates through the PAC because federal election laws make it illegal to do so directly. PAC contributions, not strictly illegal but a source of influence over many in Congress, have been a controversial feature of Washington politics for many years, distorting the political process. Because better mechanisms for campaign financing have yet to be devised, the practice will likely continue.

The health industry-- insurance, doctors' guilds, the pharmaceutical industry, and hospital associations-- has been contributing heavily through PACs to members of Congress, mostly to those powerful on health-care committees, to influence them on health-reform legislation. Not a new practice, PAC donations to the 1990 national election increased nearly 20 percent to a total close to $20 million.1 More than $2.6 million came from the American Medical Association alone. The insurance industry gave more than $10 million, ahead of almost all other congressional contributors, including banks, real-estate, defense contractors, and even the oil lobby.2

Lists of the top ten congresspersons receiving the most PAC money from the health industries in both the House and Senate, Democrats and Republicans, include some of the most prominent names in the health -reform debate.3 In the spring of 1993, when the question of PAC influence was again raised, HEALTHLINE (electronic information on health reform funded by the Robert Wood Johnson Foundation) reported that Congress, with flagrant disregard for its responsibility to protect the public's interest in health reform, voted itself the privilege of being able to continue to accept PAC money for as long as the health-care reform debate lasted, however long that would be.

The issue of PAC contributions and campaign reform aside, however, the sheer scale of the profits that have been made by these industries from the daily labor and savings of everyday Americans is mind-boggling, especially when we realize what a high proportion of women's meager earnings go toward these industries' profits. Huge sums are then available to influence the health-reform process against our needs and all peoples' needs. We may not be able to stop the health industry PAC contributions, but we can watch who accepts them, and we can make a campaign issue of how they behaved when the health-reform legislation was voted on.


   1. Robert Pear, "Whose New Health Plan Is This Anyway?" The New York Times, Nov. 15, 1992.

   2. Larry Makinson, "Political Contributions from the Health and Insurance Industries." Health Affairs, Winter 1992, pp. 119-34.

   3. "The Road to Health Care Reform." The Washington Post, Jan 26, 1993.


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