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Melvin R. Laird, Moderator � � Melvin R. Laird, Moderator � CENTER for HEAL TH POLICY RESEARCH THE AMERICAN ENTERPRISE IN­ EXECUTIVE STITUTE FOR PUBLIC POLICY RE­ COMMITTEE SEARCH, established in 1943, is a Herman J. Schmidt publicly supported, nonpartisan re­ Chairman of the Board search and educational organization. Its purpose is to assist policy makers, William J. Baroody scholars, businessmen, the press and President the public by providing objective William G. McClintock analysis of national and international Treasurer issues. Views expressed in the insti­ Richard Farrell tute's publications are those of the Dean P. Fite auth ors and do not necessarily reflect Richard B. Madden the views of the staff, advisory panels, officers or trustees of AEI. SENIOR STAFF ADVISORY BOARD Anne Brunsdale Paul W. McCracken, Chairman, Ed­ Director of Publications mund Ezra Day University Professor Joseph G. Butts of Business Administration, Univer­ Director of Legislative sity of Michigan Analysis R. H. Coase, Professor of Economics, Robert B. Helms University of Chicago Director of Health Policy Studies Milton Friedman, Paul S. Russell Dis­ tinguished Service Professor of Eco­ Thomas F. Johnson nomics, University of Chicago Director of Research Gottfried Haberler, Resident Scholar, Gary L. Jones American Enterprise Institute for Assistant to the President Public Policy Research for Administation Richard M. Lee C. Lowell Harriss, Professor of Eco­ Director of Planning nomics, Columbia University and Development George Lenczowski, Pofessor of Po­ Edward J. Mitchell litical Science, University of Califor­ Director, National nia, Berkeley Energy Project Robert A. Nisbet, Albert Schweitzer W. S. Moore Professor of the Humanities, Colum­ Director of Legal Policy bia University Studies James A. Robinson, President, Uni­ Robert J. Pranger versity of West Florida Director of Foreign and Defense Policy Studies Louis M. Thompson, Jr. Assistant to the President for Communication HEALTH INSUPANCE= WI-IATSH OULD DE THE FEDEJWROLE? @ Melvin R. Laird, Moderator @ Bill Brock James C. Corman Al Ullman Caspar Weinberger A Round Table held on January 22, 1975 at the American Enterprise Institute for Public Policy Research in Washington, D.C. and sponsored by AEl's Center for Health Policy Research THIS PAMPHLET CONTAINS THE PROCEEDINGS OF ONE OF A SERIES OF AEI ROUND TABLE DISCUSSIONS. THE ROUND TABLE OFFERS A MEDIUM FOR INFORMAL EXCHANGES OF IDEAS ON CURRENT POLICY PROBLEMS OF NATIONAL AND INTERNATIONAL IMPORT. AS PART OF AEI'S PROGRAM OF PROVIDING OPPORTUNITIES FOR THE PRESENTATION OF COMPETING VIEWS, IT SERVES TO ENHANCE THE PROSPECT THAT DECISIONS WITHIN OUR DEMOCRACY WILL BE BASED ON A MORE INFORMED PUBLIC OPINION. AEI ROUND TABLES ARE ALSO AVAILABLE ON AUDIO AND COLOR-VIDEO CASSETTES. © 1975 BY AMERICAN ENTERPRISE INSTITUTE FOR PUBLIC POLICY RESEARCH, WASHINGTON, D.C. PERMISSION TO QUOTE FROM OR REPRODUCE MATERIALS IN THIS PUBLICATION IS GRANTED WHEN DUE ACKNOWLEDGMENT IS MADE. ISBN 0-84.4.7-2065-8 LIBRARY OF CONGRESS CATALOG CARD NUMBER 75-16068 PRINTED IN UNITED STATES OF AMERICA ELVIN R. LAIRD, Reader's Digest and the M AEI National Energy Project, and Round Table moderator: Tonight the American Enterprise Institute presents another of its public affairs forums dealing with an important question facing the United States, "Health Insurance: What Should Be the Federal Role?" To discuss this matter with us we have four outstand­ ing experts. I am going to call on each of them for a brief statement of his position on the question, and then we will have a general discussion. First, Secretary of Health, Education and Welfare Caspar Weinberger, who has formerly served as legislator from California, director of finance for the State of Cali­ fornia, chairman of the Federal Trade Commission, and then director of the Office of Management and Budget. Mr. Secretary, in view of the statements by the Presi­ dent of the United States regarding new programs, what can you say about what the federal role should be this year? CASPAR WEINBERGER, Department of Health, Education and Welfare: Thank you, Mel. I'm delighted to be here. There is no question that the American people need a program of national health insurance and no question that one will come into being. Some 60 million people in this country have little or no protection against the costs and the perils of poor health. I think the American people want national health insurance, and I think it is a necessary program. 1 But I also think no one should want it this year be­ cause no one should want to start any new spending pro­ grams at this time. We have heard from the President and from others about how large the deficit will be in fiscal years 1975 and 1976. We know the heavy impact that a sizeable deficit can have on the economy. And while ad­ mittedly spending begins earlier for some types of new programs than for others, it still is essential, I think, to have a moratorium on all new spending programs, as the President has proposed. If we start making some excep­ tions here and some there, the issue becomes fuzzy and pretty soon more and more new programs are adopted. So, I think a moratorium on all new spending pro­ grams is justified and should be understood and appre­ ciated by the American people-particularly after decades of turning to spending as the way to solve all problems. Yes, national health insurance is essential and when we do get it, it is also essential that it be a plan that pre­ serves and builds on the great strengths of the existing system of health care that we have. That system just happens to be about the best in the world. But it is not perfect. It has lots of room for improve­ ment and lots of problems. Some of those problems are that too many Americans have no health insurance at all, and others have spotty or unbalanced coverage that puts too much emphasis on hospitalization and too little on home health care, physician visits, prescription drugs, and things of that kind. We need to plug those gaps in health cover­ age. But that can be done very effectively without throwing out the whole system. Our system has given us the best doctors, the finest research, and the finest health institu­ tions in the world. It has kept the government from inter­ fering with the relationship between the patient and his doctor. And it has achieved a great deal. To mention just a few of those achievements: In the past twenty-five years, we've added five years on average to the lifespan of Americans. We've drastically reduced in­ fant mortality. Our scientists have developed many life­ saving cures. And we have made and are making very real progress in the battle against major diseases. 2 There are some, of course, who advocate that we adopt a whole new system-a system that would be ad­ ministered, run, and financed by the federal government, paid for by federal taxation. They would wipe out the whole private health insurance industry and have the gov­ ernment take over. I think this approach is fundamentally wrong for America because it would not bring us better health care. It would bring us more government and an extravagant health bill for the nation. It would satisfy only the doc­ trine of those who think that everything should be turned over to government. The scheme would be sold, or at­ tempted to be sold, on the basis that it would bring better health to the nation, whereas it would simply bring larger bureaucracies, larger problems, more delays, and a system in which all of the providers of health care draw all of their income from the government. That, of course, means com­ plete government control. Our present system has served us well. What we need to do now is unite on five basic principles-the principles that are embodied in the health insurance bill that the ad­ ministration proposed last year and that the President will propose in January 1976, after his moratorium on new spending programs expires. Those principles are: First, as I said, we must build on the strength of the existing system. Second, we must have a truly national program that offers full coverage to every American based on his ability to pay. Third, the benefits must be comprehensive and bal­ anced, so that the care people get is related to their med­ ical needs and not to the kind of insurance that they have. As it is now, frequently people are hospitalized not because they need to be but because their insurance covers hospi­ talization and not outpatient or home care. Fourth, patients must share, to some degree, in the costs, because the so-called "free care" that is a feature of the Scandinavian countries and some of the other Euro­ pean countries invites expensive and unnecessary over­ usage. That has been the experience there. 3 Finally, we need a true partnership, a program in which doctors, patients, government, and insurance com­ panies all have a stake, because nothing works unless the people involved want it to work. These five principles, I think, can bring us better health care. And now, if you will give me one more minute, then I'll yield. The fundamental point that I want to make is that while we should have a moratorium on new spending programs this year, and while any health insurance pro­ gram cannot actually start for three years, that morato­ rium will not interfere with the ultimate benefits that will come. The program the administration seeks is one that would serve the people well by building on the strengths of the existing system. It would not cause the tremendous increase in taxation necessary to finance the huge cost, roughly $90 billion, that would be entailed in some of the other proposals to be discussed here tonight.
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