                         THE NEED FOR REFORM
 
      The United States is a world leader in developing new medical 
 technologies and probing the mysteries of disease through basic and 
 clinical research.  People from all over the world come to the United 
 States for specialized training and treatment.
 
      ...As we undertake this journey of change, we clearly must 
      preserve what's right with our health care system -- the close 
      patient-doctor relationship, the best doctors and nurses, the 
      best academic research, the best advanced technology in the 
      world.
                     --President Clinton, September 20th, 1993
 
      But the health care system, as a whole, is in deep crisis.  
 Health care spending now consumes 14% of GDP, up from 9.1% in 1980.  
 If nothing is done, by the year 2000, nearly 19% of America's GDP will 
 go towards health care alone.
 
      Some say that is acceptable, because that's what it costs to keep 
 our population healthy.  But this means accepting that rising health 
 care costs should consume over 100% of the projected increase in 
 wages, produce 60% of the projected growth in the federal budget, and 
 eat away two-thirds of our projected economic growth for the rest of 
 the decade.
 
      But in fact, we would be spending that money without getting the 
 security, simplicity, and value that would help bring health and 
 expanded opportunity to all Americans.
 
      Because we cannot control health care costs and become further 
      and further behind in our efforts to do so, we find our economy, 
      and particularly the federal budget, under increasing pressure.  
      Just as it would be irresponsible, therefore, to change what is 
      working in the health care system, it is equally irresponsible 
      for us not to fix what we know is no longer working.
 
                     --Hillary Rodham Clinton, June 13, 1993
 
 
 
      ...The ethical imperative is perhaps the most important thing.  
      We have to decide that the costs, not just the financial costs, 
      but the human costs, the social costs of all of us continuing to 
      conduct ourselves within the framework in which we are now 
      operating is far higher than risk of responsible change.
 
                     --President Clinton, September 20th, 1993
 
 
      In short, today's American health care system falls short of 
 providing high quality care and choices for all Americans.
 
      Some things, like universal access, are not negotiable.  And 
      that's exactly the way it should be.
 
                          --C. Everett Koop, 20 September 1993
 
 
 
 A LACK OF SECURITY
 
 
      *  Every month, 2 million Americans lose their insurance.  One 
         out of four -- 63 million -- Americans will lose their health 
         insurance coverage for some period during the next two years.
 
      *  37 million Americans have no insurance and another 22 
         million have inadequate coverage.
 
      *  Losing or changing a job often means losing insurance.  
         Becoming ill or living with a chronic medical condition can 
         mean losing insurance coverage or not being able to obtain it.
 
      *  Long-term care coverage is inadequate.  Many elderly and 
         disabled Americans enter nursing homes and other institutions 
         when they would prefer to remain at home.  Families exhaust 
         their savings trying to provide for disabled relatives.
 
      *  Many Americans in inner cities and rural areas do not have 
         access to quality care, due to poor distribution of doctors, 
         nurses, hospitals, clinics and support services.  
 
      *  Public health services are not well integrated and 
         coordinated with the personal care delivery system.  Many 
         serious health problems -- such as lead poisoning and drug-
         resistant tuberculosis -- are handled inefficiently or not at 
         all, and thus potentially threaten the health of the entire 
         population.
 
 
 
 
 RISING COSTS
 
      *  Rising health costs mean lower wages, higher prices for 
         goods and services, and higher taxes.  The average worker today 
         would be earning at least $1,000 more a year if health 
         insurance costs had not risen faster than wages over the 
         previous 15 years.
 
      *  If the cost of health care continues at the current pace, 
         wages will be held down by an additional $650 by the year 2000.  
         (OMB)
 
      *  More and more Americans have had to give up insurance 
         altogether because the premiums have become prohibitively 
         expensive.
 
      *  Many small firms either cannot afford insurance at all in 
         the current system, or have had to cut benefits or profits in 
         order to provide insurance to their employees.
 
      *  Only one other industrialized country (Canada) spends more 
         than 10% of their GDP on health care.  Japan, France and 
         Germany spend 9% of GDP or less, and their costs have not risen 
         nearly as rapidly as ours.
 
 QUALITY THREATENED
 
      *  No one is accountable for the performance of the health 
         care system -- not hospitals, physicians, other providers, or 
         health insurers.
 
      *  Quality care means promoting good health.  Yet, our system 
         waits until people are sick before it starts to work.  It is 
         biased towards specialty care and gives inadequate attention to 
         cost-effective primary and preventive care.
 
      *  Consumers cannot compare doctors and hospitals because 
         reliable quality information is not available to them.
 
      *  Health care providers often don't have enough information 
         on which treatments work best and are most cost-effective. 
 
      *  Health care treatment patterns vary widely without 
         detectable effects on health status.
 
      *  Some insurers now compete to insure the healthy and avoid 
         the sick by determining "insurability profiles".  They should 
         compete on quality, value, and service.
 
      *  The average doctor's office spends 80 hours a month pushing 
         paper.  Nurses often have to fill out as many as 19 forms to 
         account for one person's hospital stay.  This is time that 
         could be better spent caring for patients.
 
      *  Insurance company red tape has created a nightmare for 
         providers -- with mountains of forms and numerous levels of 
         review that wastes money and does nothing to improve the 
         quality of care.
 
      *  We have the best doctors who can provide the most advanced 
         treatments in the world.  Yet people often can't get treated 
         when they need care.
 
      *  Our medical malpractice system does little to promote 
         quality.  Fear of litigation forces providers to practice 
         defensive medicine -- ordering inappropriate tests and 
         procedures to protect against lawsuits.  Truly negligent 
         providers often are not disciplined, and many victims of real 
         malpractice are not compensated for their injuries.
 
 
 GROWING COMPLEXITY
 
      *  Purchasing insurance can be overwhelming for consumers.  
         With different levels of benefits, co-payments, deductibles and 
         a variety of limitations, trying to compare policies is 
         confusing and objective information on quality and service is 
         hard for consumers to find.  As a result, consumers are 
         vulnerable to unfair and abusive practices.
 
      *  Insurers have responded to rising health costs by imposing 
         restriction on what doctors and hospitals do.  A system that 
         was complicated to begin with has become incomprehensible, even 
         to experts.  Each health insurance plan includes different 
         exclusions and limitations.  Even the terms used in health 
         policies do not have standard definitions.  
 
      *  Small business owners -- who cannot afford big benefits 
         departments -- have to spend time and money working through the 
         insurance maze.  For firms with fewer than five workers, 40 
         percent of health care premiums go to pay administrative 
         expenses.  
 
      *  Administrative costs add to the cost of each hospital stay 
         with the number of health care administrators increasing four 
         times faster than the number of doctors.
 
      *  Health claim forms and the related paperwork are confusing 
         for consumers, and time-consuming to fill out.
 
 
 DECLINING CHOICES
 
      *  Insurance coverage for most Americans is not a matter of 
         choice at all. In most cases, they are limited to whatever 
         policy their employer offers.  Only 29% of companies with fewer 
         than 500 employees offer any choice of plans.  
 
      *  With a growing number of insurers using exclusions for pre-
         existing conditions, arbitrary cancellations and hidden benefit 
         limitations, consumers have few choices for affordable policies 
         that provide real protection.
 
 
