FOIA Number: 2006-0885-F. FOIA MARKER This is not a textual record. This is used as an administrative marker by the William J. Clinton Presidential Library Staff.
Collection/Record Group: Clinton Presidential Records
Subgroup/Office of Origin: Health Care Task Force
Series/Staff Member: Richard Veloz
Subseries:
OA/ID Number: 3882 FolderlD:
Folder Title: [Health Care] [Folder 3]: Economic Team [1]
Stack: Row: Section: Shelf: Position: S 56 4 8 3 r
OVERVIEW OF BUSINESS OUTREACH STRATEGY October 15, 1993
BUILDING AND NURTURING CORE BUSINESS SUPPORT (staff: Marilyn Yager, Amy Zisook, & Marilyn DiGiacobbe)
I. Identify and target key businesses who are beneficiaries of the Act. A. Big businesses who have: 1. Large retiree populations (attached). 2. Struggled to control the growth in their own health care costs and voiced their commitment to health reform (attached). 3. Strong international competition (need list from Commerce or Treasury).
B. Mid to small size businesses who have been: 1. The target of redlining practices (list attached). 2. Currently providing health coverage at costs of 7% or greater (list developed from SBA, DNC, and White House outreach). II. Continue small group meetings with Washington representatives (or CFOs). The key briefers at these meetings are Ira Magaziner, Roger Altman, and Bob Rubin. They will be staffed by Glenn Hutchins, Christine Hennen, and Marilyn Yager. A. The purpose is to: 1. Shore up their understanding and comfort level with the details of the Act. 2. Provide ongoing opportunities to hear their concerns and suggestions. 3. Ask for their support and their assistance in recruiting support. Where outright support is not a possibility, efforts will be made to neutralize their public response. 4. Discuss the need for visible signs of support, i.e., White House events, counterpunch activities, and op eds. 5. Provide feedback where changes and concessions have been made in the plan to their benefit. Use as another opportunity to enroll their support proactively. B. Continue the Washington Rep/CFOs briefings. Conduct 3 to 4 meetings per week targeting specific industries: 1. Week of 10/11 we had auto, steel, rubber, plastics, and metals. 2. Week of 10/18 we have scheduled food manufacturers, alcoholic beverage, retailers, and energy. 3. Future meetings will include defense/aerospace, food retailers, clothing retailers, biotech, and so on.
III. Strategy for targeting CEOs (*this is part of our ongoing business liaison) A. Target 25-30 CEOs for active support and ongoing nurturing through: 1. Luncheon meetings with the President. 2. Discussion meetings with Mrs. Clinton. 3. Ongoing phone call relationships with senior White House officials (McLarty, Altman, Rubin, and Cutter). \X^^"4. Coordination with the agency business liaisons at Commerce, J5BA, EQergy^, and ^ Transportation. B. Track phone calls and private meetings with CEOs through a tracking form to be used by all senior administration officials. BUILDING RELATIONSHIPS WITH HIGH PROFILE SUPPORTERS (staff: Marilyn Yager)
1. Target several high profile supporters from: A. Businesses which are not generally from beneficiary industries or weaker areas of support, i.e., McDonalds, The Gap, Home Depot, SuperValue. B. Small business markets whereby a whole range of specific small business would be supportive, i.e., florists, construction. 2. Respond and react to concerns and comments which may be highlighted in private phone calls and meetings from individual members of the business team.
DEVELOPING SMALL BUSINESS SUPPORT (staff: Amy Zisook, Katie Broeren & Caren Wilcox)
1. One on one small business support recruitment by the DNC/Health Project 2. Ongoing survey of real life case studies by SBA. 3. Education efforts through the distribution of the brochure, the SBA 1-800 phone line, SBA town meetings, surrogate appearances. 4. OPL meetings with the associations representing redlining victims, i.e. florist, hair salons, auto dealers, etc. 5. Target a broader range of small business associations for one on one briefings/meetings with Erskine Bowles. SURROGATE OPPORTUNITIES (staff: Marilyn Yager & Charlotte Hayes) I. Track Business Surrogate Speaking Opportunities, i.e., annual meetings, conferences, media. II. Key Surrogates: Secretary Ron Brown Administrator Erskine Bowles Deputy Secretary Roger Altman CONTACT WITH
DATE: TIME:
TYPE: LOCATION:
REQUEST STATUS: REQUEST:
ADMINISTRATION PARTICIPANTS:
SUBJECT:
COMMENTS: o o iu uurmg a speeai ai a cainpaign Los Angeies, Oct 11, 1993 ^ icome, and reduce the Don't Lay the Burden of Health Care Reform on Small Business ion deficits already in ild require unthinkable To the Editor; . v,.-. ian'% plan, we believe he deserves s. These would be diffi- We are a "small" company in busi-. great credit for his bold effort finally Luckier With H.I.P. ;i city outlays are man- ness for 40 years employing 80 peo to bring health care refonn to the To the Editor: ton, and more difficult ple. We have listened to President United States. Additionally, we be As an H.I.P. subscriber during my., employment with New York City, and^ •rograms have already Clinton's health care reformproposa l lieve there is much in the plan that is and agree that a plan covering aD good for American competitiveness. having belonged to four differenty administration, H.I.P. groups during lhat lime from nproved, not curtailed, Americans is overdue. However, the For example, providing universal President is misguided if he plans to coverage will stop the cost-shifting 1950 to the present, I feel Vince Pas-: bridges need repair; have small business pay the cost. saro's unfortunate experience iso ; and smaller classes, that has hurt the private sector. Hav hardly typical of H.I.P. ("Better Try- We and others like us are planning ing a standardized benefiu package— is less spending. His to reduce our work force by at least Not to Get Sick." Op-Ed, Oct. 11). Mr.; and a single insurance form could Passart) reports that when he called- m't say how he'd clear 10 percent to offset the projected ad dramatically lower business costs. ts, union contracts or H.I.P.'s emergency line during the-' ditional cost More layoffs will follow And taking the responsibility for a Labor Day weekend, he didn't get a if these cuts do not cover the mandat more equitable distribution of retiree ould eliminate 35,000 call back from a doctor until two.' ed costs. We are opposed to Govern health care costs will help American hours later. '•• yrrol! is now 211,000. It ment-mandated cost to us, which we business to be more competitive. My own experience in similar situ-i ent, back to where it believe is anti-free-enterprise. Many business people are enthusi i go-go spending was No amount of reassuring rhetoric aliens has almost always been lhat a<. astic about the prospect of compre physician has returned my telephone- / where he would cut, can change the facts. We hope the hensive health reform. We wil) con President will rethink his strategy for call in 30 minutes or less, sometimes n > spare programs that tinue to work constructively with tbe tn 15 minutes or less. And when I or a., s. More realistically, payment of his proposed health insur President, Congress and other busi ance plan to assess fairly the cost to family member has had to go for:: ning 8,000 jobs in the ness leaders to make sure true health emergency treatmeni late ai night oO. o 15,000 he has cut so all participants. GENE BARANOF reform that meets the President's Presideni, Decor Home Fashions or weekends, our experience hatu •ly on attrition, which principles passes during this Con ranged from satisfactory to outstand New York, Oct. 12,1993 gress. HAROLD A. POUNC ing. 'f> • can get savings that Chairman. Ford Motor Company So while 100 percent perfect too b jble to get from in- Good for Big Business Dearborn. Mich., Oct U, 1993 does not exist in any health maime- _ employees. But how To the Editor: The letter was also signed by the nance organization or other medical'' ?st strong unions that Re "Business Leaders Voice Skep chief executive officers of Archer coverage plan, it's not fair to con-ii ikes or slowdowns is ticism on Health Plan" (news article, Daniels Midland. Bethlehem Steel demn H.I.P. based on one incident Li Oct. 8): Although all of us don't agree Chrysler, Drummond, General Mo alone. RICHARD RJEGELHAUPT tors. LTV, Sara Ue, TRW and USX. ore privatization, too with every detail in President Clin- Rego Park, Queens, Oct. 12,1993 " even hospitals, over
\0 Mr. Edward J. Glueckler Mr. Michael Baly Airline Supplier Association President 1331-A Pennsylvania Avenue American Gas Association Suite 528 1515 Wilson Boulevard Washington, DC 20004 Arlington, VA 22209 Phone(o):301-469-4732 Phone(o):703-841-8612
Mr. David Maher Ms. Martha Thornton Senior Executive Vice President Senior Vice President, Human American Stores Company Resources P.O. Box 27447 Ameritech Salt Lake City, UT 84127 30 South Wacker Drive Phone(o):801/539-0112 Suite 3400 Chicago, IL 60606 Phone(o):312-750-5211 Mr. W. Graham Claytor, Jr. Mr. Dwayne Andreas President and Chairman of the Board Chairman & CEO Amtrak Archer Daniels Midland Company 60 Massachusetts Avenue, NE P.O. Box 1470 Washington, DC 20002 Decatur, IL 62525 Phone(o):202-906-3960 Phone(o):217-424-5515
Mr. Kevin Harper Mr. Roberto del Rosal CEO President and CEO Autumn Harp Bacardi Corporation P.O. Box 267 P.O. Box 363549 Bristol, VT 05443 San Juan, PR 00936 Phone(o):802-453-4807 Phone(o):809/788-1500
Mr. Juan Grau Mr. Curtis H. Barnette President and CEO Chairman & CEO Bacardi Imports, Inc. Bethlehem Steel Corporation 2100 Biscayne Blvd. 117 0 Eighth Avenue Miami, FL 33137 Bethlehem, PA 18016-7699 Phone(o):305/573-8511 Phone(o):215-694-6137
Mr. Earl Graves Mr. John F. Hayden Publisher Vice President Black Enterprise Boeing Company 130 5th Avenue 17 00 North Moore Street New York, NY 10011 Arlington, VA 22209 Phone(o):212-242-8000 Phone(o):703-558-9600
Mr. Owsley Brown II Mr. Robert J. Eaton President and CEO Chairman & CEO Brown-Farman Corporation Chrysler Corporation P.O. Box 1080 12000 Chrysler Drive Louisville, KY 40201 Highland Park, MI 48288 Phone(o):502/774-7302 Phone(o):313-956-6728 Mr. Alan L. Wurtzel Mr. Harvey Rosenthal Chairman of the Board President & CEO Circuit City Stores, Inc. CVS and People's Drug 9950 Mayland Drive One CVS Drive Richmond, VA 2 3233 Woonsocket, RI 02895 Phone(o):202-265-3232 Phone(o):401/765-1500
Mr. Fred A. Meister Mr. Garry Drummond Distilled Spirits Council of the Chairman and CEO U.S. Drummond Company 1250 Eye Street, NW 53 0 Beacon Parkway Suite 900 Suite 900 Washington, DC 20005 Birmingham, AL 35209-3196 Phone(o):202/628-3544 Phone(o):205-387-0501
Ms. Ernesta Procope Mr. Stewart Turley President and CEO Chairman and CEO E.G. Bowman Company Inc. Eckerd Corporation 97 Wall Street P.O. Box 4689 New York, NY 10005 Clearwater, FL 34618 Phone(o):212-425-8150 Phone(o):813-399-6333
Mr. Tom Kuhn Ms. Alice Lusk President Corporate Vice President Edison Electric Institute Electronic Data Systems 701 Pennsylvania Avenue 5400 Legacy Drive Washington, DC 20004-2696 A3-1A-07 Phone(o):202-508-5555 Piano, TX 75024 Phone(o):214-604-6608
Mr. Kenneth Lay Mr. Richard Hernandez Chairman and Chief Executive Vice President Officer Evanson, Dodge Incorporated ENRON Corporation 701 Brazos 1400 Smith Street Suite 500 P.O. Box 1188 Austin, TX 78701 Houston, TX 77002 Phone(o): Phone(o):713-853-6161 Mr. Henry A. Panasci Mr. Albert Chambers Chairman of the Board Director, Corporate Relations Fay's Incorporated Ford Motor Company 7245 Henry Clay Boulevard The American Road Liverpool, NY 13088 Room 925 WHX Phone(o):315-451-8000 Dearborn, MI 48121-1899 Phone(o):313-322-9545
Mr. Harold "Red" Poling Ms. Karen Caplan Chairman & CEO President and CEO Ford Motor Company Frieda's Inc. The American Road P.O. Box 58488 Dearborn, MI 48121 Los Angeles, CA 90058 Phone(o):313-322-7800 Phone(o):213-627-2981 Mr. John F. Smith, Jr. Ms. Michelle Giguere President & CEO Government Relations Consultant General Motors Corporation Greenbrier Companies General Motors Building Ball, Janik and Novak 3044 West Grand Boulevard 1101 Pennsylvania Ave.,N.W. Detroit, MI 48202 Washington, D.C. 20009 Phone(o):313-556-5000 Phone(o):202-638-3307
Mr. William A. Furnman Mr. Dan O'Neal President and CEO President Greenbrier Companies Greenbrier Development Corp. One Center Pointe Drive 200 W. Thomas Street Suite 200 Suite 500 Lake Oswego, OR 97035 Seattle, WA 98119 Phone(o):303-684-7000 Phone(o):206-282-0099
Mr. James Harrison Mr. John W. Hechinger, Sr. President and CEO Chairman of the Board Harco, Inc. Hechinger Company 3925 Rice Mine Road, NE 3500 Pennsy Drive Tuscaloosa, AL 35406 Landover, MD 20785 Phone(o):205-345-2400 Phone(o):301-341-1000
Mr. George McCarthy Mr. Philip E. Beekman Hiram Walker Group Chairman and CEO P.O. Box 33006 Hook-SupeRx Inc. Detroit, MI 48232 2800 Enterprise Street Phone(o):313/965-6611 Indianapolis, IN 46219 Phone(o):317-353-1458
Mr. Louis Gerstner Mr. A. Malachi Mixon Chairman and CEO Chairman of the Board, President & IBM Corporation CEO Old Orchard Road Invacare Armonk, NY 10504 899 Cleveland Street Phone(o):914-765-4761 P.O. Box 4028 Elyria, OH 44036-2125 Phone(o):216-329-6201 Mr. William Mauk Mr. Fred Julander CEO President John Alden Insurance Company Julander Energy Company 7600 Corporate Center Drive 1700 Lincoln Street Miami, FL 33126 Suite 4706 Phone(o):305-715-4381 Denver, CO 80203 Phone(o) .-303-860-7510
Mr. Donald Kirson Mr. James Kelly President and CEO President Kirson Medical Equipment Lincare Inc. 8801 Kelso Drive 19337 U.S. 19 North Baltimore, MD 21221 Clearwater, FL 34624 Phone(o):410-391-1811 Phone(o):813-530-7700 Mr. Clinton A. Clark Mr. David H. Hoag President & CEO Chairman & CEO Long John Silver's, Inc. LTV Corporation 101 Jerrico Drive 2 5 West Prospect Avenue Lexington, KY 40509 Cleveland, OH 44115 Phone(o):606-263-6000 Phone(o):216-622-5300
Mr. Gerald Heller Mr. Gary Stewart President Melange and Associates May's Drugstores Inc. 821 17TH Street 6705 E. 81st Street Suite 600 Suite 155 Denver, CO 80202 Tulsa, OK 74133 Phone(o):303-298-9415 Phone(o):918-496-9646
Mr. Wayne Sinclair Mr. Fredrick Becker MMI Companies Inc. President & CEO 54 0 Lake Cook Road MMI Companies, Inc. Deerfield, IL 60015-5290 54 0 Lake Cook Road Phone(o):708-374-2200 Deerfield, IL 60015-5290 Phone(o):703-374-1286
Mr. Charles Simpson Mr. Ronald Ziegler Vice President President & CEO Morrison Knudsen Corporation National Association of Chain Drug 555 13th Street, NW Stores Suite 410 413 N. Lee Street Washington, DC 20004-1109 P.O. Box 1417-D49 Phone(o):202-638-6355 Alexandria, VA 22313-1417 Phone(o):703-549-3001 Mr. Charles West Mr. Peter Dea Executive Vice President Presdient National Association of Retail Nautilus Oil and Gas Company Druggists 600 17th Street 205 Daingerfield Road Suite 410 Alexandria, VA 22314 Denver, CO 80201 Phone(o):703-683-8200 Phone(o):303-534-5202
Ms. Sharlea Leatherwood Mr. Martin Davis Vice President Chairman & CEO North Oak Pharmacy Paramount Communications Inc. 4260 North Oak Trafficway 15 Columbus Circle Kansas City, MO 64116 New York, NY 10023 Phone(o):816-453-1050 Phone(o):212-373-8393
Mr. Tim McAlear Mr. Jack A. Robinson President and CEO Chairman of the Board and President Payless Drugstores Perry Drugstores Inc. Corporate Offices P.O. Box 436021 9275 S.W. Peyton Lane 54 00 Perry Drive Wilsonville, OR 97070 Pontiac, MI 48343 Phone(o):503-682-4100 Phone(o):313-334-1300 Mr. Bruce Llewelyn Mr. D. Dwayne Hoven President and CEO President and CEO Philadelphia Coca-Cola Bottling Revco D.S. Inc. Company 1925 Enterprise Parkway 30 Rockefeller Plaza Twinsburg, OH 44087 29th Floor Phone(o):216-425-9811 New York, NY 10112 Phone(o):212-698-7867 Mr. Alexander Grass Mr. James Krahulec Chairman and CEO Vice President Rite Aid Corporation Rite Aid Corporation 30 Hunter Lane 3 0 Hunter Lane Camp Hill, PA 17011 Camp Hill, PA 17011 Phone(o):717-975-5710 Phone(o):717-975-5710
Mr. John H. Bryan, Jr. Mr. Albert Hernandez Chairman President Sara Lee Corporation Sky Net 3 First National Plaza 4 4 05 NW 7 3rd Avenue Chicago, IL 60602-4260 Miami, FL 33166 Phone(o):312-726-2600 Phone(o):305-477-0996
Ms. Helen Mills Mr. Henry A. Beattie III Partner-Owner CEO Soapbox Trading Company and The Super D Drug Mills Group 4895 Outland Center Drive 10600 Arrowhead Drive Suite 101 Suite 190 Memphis, TN 38118 Fairfax, VA 22030 Phone(o):901-366-1144 Phone(o):703-352-8248 Ms. Susan Wolfbein Morris Ms. Sandra Kurtzig SW Morris and Co. Chairman 7910 Woodmont Ave. The ASK Group Suite 400 2440 W. El Camino Real Bethesda, MD 20814-3015 P.O. Box 7640 Phone(o):301-656-3100 Mountainview, CA 94043 Phone(o):415-335-5466
Mr. Robert W. Hannan Mr. Daniel A. Seigel President and CEO President and CEO Thrifty Drug Inc. Thrifty Corporation 615 ALpha Drive 3424 Wilshire Boulevard Pittsburgh, PA 15238 Los Angeles, CA 90010 Phone(o):412-967-8804 Phone(o):213-251-2222
Mr. Charles A. Corry Mr. L. Daniel Jarndt Chairman & CEO Walgreen Company USX Corporation 200 Wilmot Road 600 Grant Street Deerfield, IL 60015 Pittsburgh, PA 15219-4776 Phone(o):708/940-3002 Phone(o):412-433-1121 Mr. Paul Allaire Chairman & CEO Xerox Corporation 800 Long Ridge Road P.O. Box 1600 Stamford, CT 06904 Phone(o):203-968-4515 BROWN BKOTHKKS HARKIMAN & uu
The S&P SOO's Exposure To FASB 106
(Supplement to Watch Out: FASB 106 Is Now With Us)
Investment Strategy Group January 6, 1993
Ronald J. Hill, CFA (212) 493-6888 Nicole K. Grcsham (212) 493-8260 Tha SfcP SOO's Bxposuie lo KASb iub
Oul- FASB106 Madlan Ongoing Eat Future Eat Future Estfrnated •landing Calendar Estimated Aftertax M%of Expense as Expense Eat Actual FASB Shares YMT of Inlbal UaMiltyffrnll) Book %oM991 Increasa Fulura Pxpanaes(Vnll) Madlan Symbol Company (mil) Adoption Low Median High Vipliif ftLLncoma QffltJWI* imnM 1991 1990 IBM &«gf
t ABT Abbott Labs 848.4 1991 128 5% 1% NA up 12.0 2 AMD Advanced Micro Devices 87.2 1993 NMF NA NA NA 3 AET Aetna Lite 110.1 1993 385 5% NA NA up 40.0 295.0 4 AHM Ahmanson 116.0 1993 15 1% NA NA X 5 APD Air Products & Chem. 113.3 1993 32 42 52 2% NA 11% 2.0 1.8 1.8 1.8 23.0 6 ACV Alberto-Culver 28.3 1993 not provi led NA NA NA 7 ABS Albertson's Inc. 132.2 1993 not mat* iai NA 1% NA up 4.0 8 AL AJcan 223.6 1993 200 4% 10% NA "P 10.0 9 ASN Alco Standard 46.2 1993 NMF NA NA NA 10 AA Alcoa 85.7 1993 1,200 23% 19% 111% 150.0 71.1 61.0 53.5 11 AAL Alexander & Alex. 40.8 1993 NMF NA NA NA 12 AGN AUergan 67.5 1993 NMF NA 3 NA NA X 13 ALD AUted-Signai 141.1 1993 1,200 1,300 1.400 38% 7% NA UP 40.0 14 AZA Alza Corp. 74.1 1993 none NA NA NA X 15 AMX Amax Inc. 87.2 1993 250 313 375 14% 13% 67% 25.0 15.0 10.0 11.0 16 AMH Amdahl Corp. 112.0 1993 NMF NA NA NA 17 AHC^ Amerada Hess 91.1 1993 NMF NA 1% NA up 1.0 18 AMBJ Amencan Brands 204.3 1993 200 5% 1% 133% 21.0 9.0 K 19 ACY American Cyanamid 91.4 1993 462 528 594 21% 8% NA upj 45.0 X 20 AEP American Elec. Power 184.5 1993 481 490 499 12% 33 NA 297% 50.0 12.6 13.4 10.7 21 AXP American Express 475.0 1992 191 3% NA NA 216.. i 22 AGC American General 108.5 1993 50 1% NA NA X 123 AGREA American Greetings 36.0 1993 25 30 35 5% NA NA 0.0 0.0 24 AHP American Home Products 314.6 1993 223j 8% NA NA
25 AIG American Intl. Group 212.0 1993 75 1% NA H NA 26 ASC American Stores 69 4 1991 20 2% NA NA 27 AIT Ameritech 267.5 1992 1,700 21% 7% NA 150.0 140.9 124.7 105.1 28 AMGN1 Amgen 133.3 1993 none NA NA NA K 29 AN Amoco 496.1 1993 __?op .._1.pop 1,200 7% 6% 166% 125.0 47.0 45.0 44.0 30 AMP AMP inc. 105.9 1993 notslgnif cant NA NA NA K 31 AMR AMR Corp. 75.1 1993 _?op 1,000 1,100 27% NA NA 32 ANDW Andrew Corp. 8.1 1993 notprovi led NA NA NA 33 BUD Anheuser-Busch 285.6 1992 320 8% 3% NA Uf 55.0 242 34 AAPL Apple Computer 120.3 1993 NA NA NA 35 ADM Archer Daniets-MkNand 329.1 1993 NMF NA NA NA 36 ALG Arkla Inc. 122.3 1993 120 12% NA 90% 18.0 84 68 4.9 X 37 AS Armco 102.8 1993 500 700 900 83% 220% 103% 88.8 43.8 42.5 43.8 X 38 ACK Armstrong World 37.1 1993 250 300 350 46% 16% 109% 26.5 12.7 11.2 10.0 39 AR Asarco Inc. 41.3 1993 50 ""3% 14% 76% 9.0 5.1 4.7 5.8 ASH Ashland Oil 599 1993 NMF NA 4% 20% 11.0 9.2 8.1 6.0 41 lARC Atlantic RichfteW 157.8 1993 339 5% 1% NA up 18.0 X 42 T AT&T 1,329 9 1993 .5.500. 6,500 _L500 41% 5% 36% 284.2 209.2 281.6 206.6 43 ACAD Autodesk 23.9 1993 NMF _ NA NA NA 44 AUD Automatic Data Proc. 140.0 1993 notprovi lad NA NA
Brown Brothers HarrIman Investment Strategy Group pag The SkV SOU'S Kxpoouiw lo fAL.B IUO
Out FASB 106 NMIan Ongoing Est. Future Est. Future Estimated standing Calendar Esttmatod Aflartax as % of Itodian Expense as Expense Est Actusl ft 1 Sbaras Yaar of Initial Llablllty(6mll) Book Charga %of 1W1 Increase Fulura ExpMMas(|mH)_ Madlan Symbol Company (mil) Adoptton Low Itedlan High Valua Op, Inepmf ©W WIA Expense 1991 1990 1660
X 45 AVY Avery Dennison r 62.i 1993 r 26"r 23 25 1 3% 2% NA up 3.5 46j AVP Avon Products 71.8 1993 95 25% NA NA 8.9 9.5 6.7 474 BHI Baker Hughes Inc. 138.0 1993 141 10% 4% 23% 11.0 48 BLL Ball Corp. 259 1993 not mate iai NA NA NA 49 BLY Bally Mfg. 37.7 1993 NMF NA NA NA 50 BGE Baltimore Gas & Elec. 142.0 1993 185 9% 15 NA 40% 19.7 14.1 11.5 51 ONE Banc One 200.7 1993 NMF NA NA 25% 3.0 2.4 2.2 2.0 52 BKB Bank of Boston 84.2 1993 NMF NA • NA NA 53 BAC Bankametica 342.6 1993 NMF NA NA 10% 22.0 20.0 20.0 16.0 54 BT Bankers Trust 82.9 1993 83 3% NA 54% 20.0 13.0 27.0 13.0 55 BCR Bard (CR) 53.0 1993 5 1% 1% 67% 0.5 0.3 0.3 0.3 56 BBI Barnett Banks 76.1 1993 17 1% NA NA 57 BSET Bassett Furniture 11.5 1993 led NA NA NA 58 BOL Bausch & Lomb 59.3 1991 58 7% 7% 213% 16.9 5.4 4.3 4.2 59 BAX Baxter Intl. 279.8 1993 250 7% 3% 600% 28.0 4.0 3.0 3.0 X 60 ' BOX Becton Dickinson 37.9 1993 80 too 120 BY. 2% 20% 6.0 5.0 4.0 3.0 61 BEL Bell Atlantic 431.6 1991 1,544 20% 10% 10% 284.0 258.9 183.4 231.0 X 62 BLS Ball South 488.9 1993 910 1,105 1,300 8% 10% 75% 290.0 165.3 153.2 84.8 63 BMS Bsmis 51.2 1993 13 4% 1% NA 1.0 64 BNL Beneficial Corp. 25.8 1993 30 3% 1% NA up 6.0 x 65 BS Bethlehem Steel 886 1993 700 L WO 1.100 76% NMF NA 22 5 66 BEV Beverly Enterprises 73.7 1993 NMF NA NA NA 67 BMET Biomet Inc. 113.5 1993 NMF NA NA NA X 68 BDK Black & Decker 63.4 1993 57 67 76 7% 4% 95% 17.5 9.0 6.6 3.2 69 HRB Block (H4R) 106.6 1993 notprovi tod NA NA NA BV Blockbuster Ent. 172.5 1993 NMF NA NA NA 71 riOAT Boatmen's Bancshares 40.4 1993 45 NA' NA NA up 7.5 72 BA Boeing 339.2 1992 1,000 14% NA NA 200.0 105.0 75.0 61.0 X 73 BCC Boise Cascade 37.9 1993 80 90 100 7% NMF NA up 3.0 X i 74 BN Borden 147.61 1993 134 151 168 8% NA NA X 75 BGQ Briggs & Slratton 14.6 1993 36 45 . 64 17% 8% 26% 6.0 4.8 76 BMY Bristoi-Myers Squibb 616.6 1993 NMF NA 1% 32% 28.0 19.0 77 BG Brown Group 17.3 1992 11 3% NA NA 78 BF.B Brown-Forman 27.6 1993 .25 4% 2% 74% 3.6 2.1 1.8 1.6 79 BFI Browning-Ferns 167.7 1993 not mate »al NA NA NA 80 BRNO Bruno's Inc. 81.9 1993 not signif leant NA 1% NA up 0.8 81 BC Brunswick Corp. 95.1 1993 50 6% NMF 50% 3.0 2.0 2.7 2.4 82 1 BNI Burlington Northern 87.9 1993 16 1% 1% NA _up 3.0 X 83 CPB Campbell Soup 251 0 1993 225 263 300 16% 2% 31% 20.0 ~1^3 12.0 11.0 84 CCB Capital Cities/ABC 16.7 1993 NMF NA NA NA 85 CPH Capital Holding 46.9 1989 56 4% NA NA 86 CPL > Carolina Power & Light 80.4 1993 39 2% NA 583% 20.5 3.0 2.7 3.0 X 87 CAT Caterpillar 100.9 1993 2,000 2.400 44% 244% 98% 200.0 101.0 86.0 88 CBS CBS Inc. 13.4 1992 76 3% NMF NA up 2.1
Brown Brothers HarrIman Invest it Strategy Group pag The SfcP 500'a Exposure To FASB 10b
Out FASB 106 Mtdlftn OnQoinQ Est. Future Est Fulura EsNmatsd standing Calendar Estimated Aftertax as%of Madlan Expense ss Expense Est Actual FASB 100 Shares Yew of InIM LlabtHtydmll) Book Charga % of 1001 Increasa Fulura _ExpMwas(|iniQ Madlan 9yinM Company (mil) Adoption Low Value ppyrt) pp. Income Qy«10014 Exptnv* 1001 1000 1 Qratfit
• w ... • 89 _CTX Centex _ 30.5 1993 NMF _N4 NA NA _ .. 90 CSR Central & Southwest J88.3 J993 _230 _8% NA 338% 35.0 8.0 9.0 0.0 91 CEN Cehdtan _42.5 J992 42 9% NA NA 92 CHA Champion InB. 92.9 1992 213 _7% 4% NA up 8.0 (242. 93 _CHRS. Ch arrrtnq Shoppes _5y> J??3 notprovi led NAl NA NA 94 _CMB_ Chase Manhattan J42.7 J993 330 -J1^ NA 200% 30.0 10.0 8.0 7.0 95 CHL Chemical Banking J45.2 1993 not provided NA NA NA 150.0 60.0 96 CHV Chevron 341.3 J993 Jt100 J^OD JJOO 9% 8% 150% 97 Chrysler .292.4 1993 3,656 J.500 4.000 J1% NMF NA up 200.0 CB Chut* 870 1993 95 _3% NA NA , 98 Pflna _7i8 J993 _425 _8% NA NA up 30.0 425 One. Milacron _2L4 j993 90 105 120 43% 54% 98% 10.1 6.1 3.6 4.6 100 CC Circuit City Stores 47.1 1993 NMF _N^ NA NA 101 CCI Citicorp .350.8 1993 290 25 NA 168% 45.5 17.0 14.0 11.0 102 CKL Qark Equip. 17.3 J45 42% NMF 10% 23.0 21.0 20.0 16.0 103 _C!-X_ Clorox 54 5 _1W2 _1? _-2% 1% NA up 3.0 104 _CNA_ CNA Financial _61.8 JW2 80 __2% NA 469% 18.2 3.2 3.4 3.1 105 CGP Coastal Corp. 103.8 1993 NMF NA 1% NA up 7.5 106 KO Coca-Cola JJM3.9 J992 220 5% 1% NA "P 26.0 (250. 107 CL Colgate Pal motve 159.5 1993 NMF Wi NA NA 108 CG Columbia Gas _50.6 1991 224 13% NA 13% 12.0 10.6 10.2 109 CMCSA Comcast Corp. 135.0 J993 NMF_ NA N/^ NA 110 JCWE Commonwealth Edison _ 212.7 J993 NMF_ NA NA 22% 81.0 66.5 42.2 42.4 111 Comm. Psychiatric 451 1993 notproyi^ed_ NA NA NA 112 CPQ Compaq Computer 83 341 J993 NMF_ NA NA 113 CA Computer Assoc. Intl. 178.1 J993 NMF NA NA NA 114 _csc Computer Sciences 16.4 J993 31 _6% 7% 1291% 9.4 0.7 0.6 0.3 115 Conagra ^^O 1993 J25 _6% 4% 40% 34.9 24.9 5.2 116 _CRR_ Conrad __ei.4 J993 _25 30 _35 NA NA NA 30. 117 Consolidated Edison_ _233.5 1993 310 355 400 9% 27 NA 77% 77.5 43.7 40.3 32.6 118 CNF Consolidated Freight. _35.2 J993 J45 _42% NMF 769% 22.6 2.6 1.6 1.4 Hi _CNG_ Cons. Natural Gas _9i.7 J993 _236 J2% NA 78% 30.0 16.9 13.5 11.2 120 CIC Continental Corp. _54.7 1992 196 _?% NA NA 185 -7 -X 'ZL _CBE_ Cooperjnds. 113.3 1993 250 325 400 11% 2% NA up 15.0 122 _CTB Cooper Tire & Rubber 635 1993 70 19% 3% NA _yp 4.0 123 ACCOB Coors (AdolphJ ^ 37.5 1993 90 8% 39% 150% 20.0 8.0 8.0 124 _CSFN Coreslates Fj_nanaaL_ _57.8 1993 NMF _ NA| 5 NA NA 12.5 125 _GLW Corning Inc. 192.1 1991 200 250 300 14% 6% NA up 25.0 126 CPC CPCIntt." ~_ J51 5 1993 160 J3% —. 4% NA up 32.5 127 _CR Crane _30.8 1991 22 _ 7% 5% NA up 4.2 128 _CYR " Cray Research _26.4 1993 nwir _ NA| NA NA 129 _cck Crown Cork & Seal_ J993 234 25% 10% NA up 28.2 130 CSX CSX _1P2.9 1991 312 1% NA 6.0 96 XllSf 19% "P CUM Cummins Engine 17.2 1993 300 388 475 70% 157%J 10% 15.0 ._13« 11.6 0.1 136
Brown Brothers Harri i Investment Strategy Group pag* Tit* SfcP SOO's Bxpoaure To FASB 106
Oul- FASB 106 Ongoing Est. Fulura Est Fulura Estimated • landing Calendar Esttmaled Aftertax a.Nol Median Expense as Expense Est Actual FASB 1 Shares Year of Initial Llabillty(fmll) Book Charge % o f 1901 Increasa Future Expanaas($mU) Madlan Symbol Company (mil) Adoptfon Low Median High Valua (20yrf) Qpjncoma Expffwa 1601 1090 16
132 CYM Cyprus Minerals 39.1 1993 95 155 215 NA 32% 292% 20.0 5.1 X 133 DCN Dana Corp. 45.8 1993 375 450 36% 42% 81% 75.0 41.5 35.6 28.0 134 DGN Data General 33.3 1993 NMF.__ NA 10% NA up 8.5 135 OH Dayton-Hudson 71.3 1993 not provi led NA NA NA 136 DE Deere 76.2 1993 1,260 1,458 1.760 48% 44% 167% 208.0 78.0 66 0 61.0 137 DAL Delta Air Lines 49.7 1993 IJOO 1,156 1,200 55% NMF NA 187.5 138 DLX (Deluxe Corp. 84.0 1993 NMF NA NA NA 139 DTE Detroit Edison 147.0 1993 414 16% 32 NA 175% 62.5 22.7 19.1 15.7 140 DL Dial Corp. 41.3 1993 not deter] nned NA 2% 100% 4.3 2.2 1.6 1.4 141 DEC Digital Equipment 124.8 1993 NMF NA NMFl 25% 8.0 6.4 3.0 1.6 142^ DDS CMard Dept. Stores 111.7 1993 NMF NA NA NA 143 DIS Disney (Walt) 522.4 1993 NMF NA NA NA 144 D Dominion Resources 160.1 1993 161 4% 12 NA 264% 44.0 12.1 9.0 10.6 145 ONY Donnelley & Sons 155.5 1993 140 9% NA NA 146 DOV Dover Corp. 58.8 1993 NMF NA 1% 40% 1.0 0.7 0.6 0.5 X 1471 DOW Dow Chemical 270.7 1993 650 BOO 950 9% 7% 149% 132.0 53.0 47.0 49.0 148 DJ Dow Jones & Co. 101.3 1993 38 3% 2% NA Uf 6.0 23( 149 DI Dresser Inds. 134.8 1992 374 21% 13% 4% 25.6 24.0 _210 ~?0J 150 DIGI DSC Communications 42.1 1993 not mate iai NA NA NA 151 DUK Duke Power 204.9 1992 160 4% 13 NA 236% 40.0 11.9 10.2 _~6.8 152 DNB Dun & Bradstreet 178.4 1993 112 5% NA NA 153 DD Dupont 672.8 1992 3,800 23% 14% 82% 450.0 247.0 216.0 184.0 (1.000 154 EFU Eastern Enterprises 22.6 1991 66 13% 7% NA 5.0 4.5 32 X 155 EK Eastman Kodak 325.0 1993 1,500 1,875 2,250 28% 10% 76% 232.0 132.0 112.0 X 156 ETN Ealon Corp. 34.5 1993 263 307 350 27% 20% NA up 34.0 157 ECH EchUn 57.5 1993 notprovi led NA NA NA 158 ECO Echo Bay Mines 105.2 1993 no effect NA NA NA 159 ECL Ecolab Inc. 31.2 1991 27 8% 12% 106% 13.6 6.6 1.8 19 160 EGG EG4G Inc. 56.2 1993 not matei iai NA 1% 0% 1.2 1.2 1.0 161 EMR Emerson Electric 224.4 1993 100 3% NA NA X 162 EC Engelhard Corp. 67.5 1993 45 68 90 NA 9% 75% 11.8 6.7 5.2 3.9 163 ENE Enron Corp. 110.1 1993 94 6% 4% 29% 18.0 14.0 164 ENS Enserch Corp. 65.8 1993 78 11% 4 NA 100% 12.0 6.0 5J» 165 ETR Entergy Corp. 176.1 1993 170 4% 13 NA 67% 82.5 49.5 42.5 41.1 X 166 ESY E-Systems 32.5 1992 """175 188 200 28% 8% NA up 13.0 ?§r EY Ethyl Corp. 118.3 1993 32 35 38 3% 5 8% 30% 300 23.0 2.8 2.8 27 168 XON ^ Exxon 1,241.5 1993 800 900 1,000 3% NA NA Jl?_9 169 FJQIJ FeddersCorp. 18.5 1993 NMF NA NA NA X 170 FDX Federal Express k 54 1 1993 ~17b 200 "235 12% ~ 78% 34% 217.0 162.0 127.0 104.0 171 FRE Federal Home Loan 180 1 1993 NMF NA NA NA 172 FNM Federal Natl. Mortgage 273.0 1993 55 1% NA NA 173 FBO Federal Paper Board 41.7 1993 20 2% NA NA 174 FNB First Chicago 77.8 1993 NMF NA NA 67% 1.0 0.6 0.7 1.8 X 175 FFB First Fidelity Bancorp 70.8 1993 —60 80 100 6% NA 47% 7.5 5.1
Brown Brothers Harrlman Investment Strategy Group pag The SfcP 500'a Exposure To FASB 106
Out FASB 106 Median Ongoing Est. Future Est Future Estimated standing Calendar Estlmsled Aftertax as%ol Expense as Expense Est. Actual FASB 100 Sharas Yaarol Initial Llabllltyffmll) Book Charga % of 1991 Increasa Future _Expanaas($inll) Median Symbol Company (mil) Adoption Low Median High Value POyrs) pp. Incoma Exptfee 1001 1900 1 CTStfl
176 i Firsl Inlerslale 69 1993 NMF_ _ NA ~' NA UP 0.0 i?Z FRM First Miss. Corp. _i9 j993 not provided NA NAj NA First Union J993 40 NA NA 178 FTU J31 FLT Fleet Financial Group 122 1993 NMF NA _NAk 3% 4.0 3.9 2.5 2.9 180 _fLE_ Fleetwood _-22 J993 not jxoyi led _NA _17% 7.0 6.0 5.0 i81_ FLM Fleming Cos. Inc. _35 1991 1% _NA o% 1.0 1.0 1.0 1.0 ,182 Fluor Corp. _81 1993 not mate iai "NA __NA _ NA Xl83 FMC FMCCorp^ 35 1993 150 200 250 J34% _6% 10% 19.0 17.2 _18^ 13.5 Ford Motor Co. _485 J992 7,500 30% _16% 87% 946.0 506.0 460.0 416.0 Xl85 Foster Wheeler 35 J993 60 _70 80 14% _9% 28% 5.0 3.9 3.5 2.8 186 FPL Group" J86. J993 173 5% 13 _NA NA GCI Gannett Co. j J993 150 _7% NA _NA 188 Gap Inc. 143 J993 NMF _M _N^ NA 189 _GCN General Cinema 1993 65 _4% _NMF NA 8.0 .X190 GD General Dynamics _2? J993 420 _560 700 _37% .28% 236% 111.0 33.0 280 24.0 191 GE Gsnsrsj Electric 854 J991 _§% 2% 0% 279.0 279.0 249.0 283.0 192 JGIS General Mis 165 J989 116 JQ% NA 0% 4.0 4.0 20.0 Xi93 General Motors _689 J993 16,000 20,000 24,000 J7% 1.500 _ NA NAl GRN General Re -_86 J993 8 NA _NA 80% J? 0.2 2.4 195 GSX General Signal _J9 J993 84 J9% 67% 15.0 9.0 196 GCO Genesco _22 J[993 17 _12% J2% NA 0.6 197 _GPC_ Genuine Parts jj< J993 not material NAl _NAl -NA 198 _GP I G«<>rfli":Pacific_ _88 1991 19? _6% _5% NA _Uf _23.0 Xi?? GEB Gerber Products .Ji J993 120 130 140 _33% 6% 400% 13.5 2.7 2.8 200 _GFS.A Giant Food J993 npbnpiac: NAj _NA GIDL Giddings and Lewis _§? 1991 30 NA _16% NA 5.0 201 _30 GiUette 1993 125 _76% 1% 20% 12.0 10.0 8.0 6.0 202 219 203 GDW Golden West Financial §3 J993 NMF NAl __NA| NA ,204 Goodrich 25 1993 _ 340 36% _?6^ 114% 60.0 _28.0 _25.3 24.0 ,205 Goodyear 71 1992 1,000 JJOO UOO 52% _6% NA| _119.9 J03.0 93.0 '20Q66 J3RGRAA Grace (WR) _ 89 1993 130 _ 150 170 _ 8% j6% _444% 44.6 _82 7? _60 207 .GWW Grainger (WW) _52 1991 7 _-.6% NA 3.6 3.1 1.9 208 -GAP Great A4P 38 1993 not matepaJ _,NA NA NA 209 GIK Great Lakes Chemical 71 1993 NMF NA NA NA .210 GWF Great Western Ftnandai 130 1993 NMF " NA NA '__ NA X.21; 1 _GQ Grumman _ 33 1993 400 500 600 58% 46% NA 74.5 212 _GTE GTE Corp. 923 1993 _ 2,077 20% 0% NA 111.0 93.0 77.0 X.21 3 _HAL HaDtbunon 107 1993 ".40 45 50 2% _ NA _NA 214 JHDL Handleman _ 33 J993 not provi led NAj NA NA ,215 _JH _ Harjand (JohnHJ_ _35 1991 2 _ 1* " NA _400% 0.3 0.1 Xlii _HPH Harnischfeger Ind. 29 1993 65 _ .97 129 17% NA NA 217 _HRS Harris Corp. 39 1993 no) provi led NA NA NA 218 _HMX Hartmarx Corp. 25 1993 not malepai NA, NA NA 219 HAS Hasbro Inc. 86 1993 NMF NA NA NA
Brown Brothers Itartiman Investment Strategy Croup page TIIB i.fct' Sou a t-z^^uaM.
Out FASB106 Ongoing Est Future Est Future EetfmMsd standing Calandar Estfmalsd Aftertax as%of Median Expanse as Expanse Est Actual FASB Sharoa Yaar of JnMal LlabJIItytfmll) Book Charga %of 1001 Increase Fulura ExpanaaattmW Madlan Symbol Company Low Madlan High BOyrrt QSM1901A Expansf 1001 1000 loot cndit
220 UNZ HsIiuibJ) _254.1 1993 132 165 198 3% NA UF --?3.„0 . . — 221 HP_ Heimerich & Payna _24.5 J993 NMF NAl NA NA 222 Herculas J993 _2pg 250 300 _13% 11% 49% 30.3 20.3 21 6 17.2 223 _HSY Her»hay Foods _90.2 1993 15 17 18 _1y» 5% NA up 20.0 224 _HWP. Hewlett-Packard _252.9 J993 notI 1mat e iai NA 1% 20% 12.0 10.0 8.0 6.0 225 _HLT_ Hilton _47.7 1993 NA NA NA 226 HD Home Depot _332P J993 not provided NA NA NA 227 HM Homestake Mining J36.8 1991 29 _** NMF 61% 4.5 2.8 1.1 1.0 228 HON HoneyweB 69.8 _L992 J48 9% 2% NA Uf 10.0 X229 _JiL_ Household Inti. 40.1 J993 40 66 82 _5% 1% 19% 18.5 15.5 129 5 230 HOU Houston Ind. J993 136 _4^ NA 375% 38.0 8.0 23L HUM Humana 158.5 J?93 noeHect NA| NA NA IBM _57q7 J991 2.263 9% 2% 400.0 394.0 96.0 303.0 X233 rrw Illinois Tool Works _55.Z 1993 .79 87 -?5 8% 3% 22% 10.0 8.2 6.6 4.9 _76 0 IMA tmcera Qroup 1 J9?3 60 68 75 _J% 14% 600% 30.6 4.4 5.0 6.3 5.0 Km235 N Inco Ltd. joej J993 500 _30% 32% 229% 62.5 19.0 18 0 18.0 236 J1_ IngersoB-Rand 103.7 1993 300 19% 8% 55% 20.0 12.9 11.5 10.2 237 IAD inland Steel 34.9 1992 600 J7% NMF 167% 100.0 37.5 33.8 28.6 238 JNTC Intel Corp; J06.4 1993 NMF NA NA NA 239 JNQR inlergraph 1993 not proyt led NA NA NA 240 IK Interiake _20.5 J?93 10 NA 3% 33% 2.0 1.6 1.2 1.2 241 IFF, Ind. Flavors & Frag. _38.5 J993 not deter lined NA| NA NA 242 IP Intl. Paper J22.0 1991 215 7% 60% 67.0 42.0 12.0 12.0 243 JTT_ ITfCorp. 114.6 J993 J50 475 J00 2% NA up 40.0 244 _JR_ James River Corp. _81.5 J993 260 280 300 13% 9% 35% 23.0 17.0 9.0J 12.0 245 JP Jefferson-Pilot 51.3 1993 30 2% NA NA up 8.5 46 JCI Johnson Controls __39.8 1993 150 163 175 J9% NA NA 247 JNJ Johnson & Johnson _t6&.3 J993 _5QP j6% 1% 0% 15.0 15.0 14.0 12.0 248 _JOS_ Jostenslnc^ _45 3 1993 I mate iai NA T ; not 1 _JNA NA 249 JWP_ JWP Inc^ _40.8 1993 NMF NA NA NA 250 KM KMart 402.7 1993 NMF NA NA NA 251 J
Brown Brothers Harri 1 Invest it Strategy Group page The SfcP SOO's Exposure To FASB JUb
Out FASB 106 Madlan Ongoing Eat Fulura Eat Fulura standing Calandar Estimated Aftartax as % of Madlan Expansa aa Eipanaa Eat Actual FASB Sharaa Yaar of Inltfal Llabllltydmll) Book Charga %of 1991 Incraaaa Fulura Eipsnaas(fmll) Madlan Syfnbol Company (mfl) Adoption Low Madlan High Valua (20 yn) Qp,|rcPfn« ftW 1W1A Evpanaa loot 1000 IMO cradlt
Brown Brothers Harrlman Investment Strategy Group Tha SfcP 500's exposure To FASB 106
Out- FASB 106 Madlan Ongoing Est Future Eat Future Eetfmatod standing Calandar Estimated Aftertax aa%of Median Expansa aa Expansa Eat. Actual FASB 100 Shares Yaarol .. Initfal Liability tfmll) Book Charga % of 1001 Increese Fulura ExpsnsesdmiQ Madlan Symbol Company (mil) Adoption Low Median High Valua (aorn) Qp. Income Oyer 1991A §>panif 1001 1900 1060 Crtdt!
308 NB NationsBank ~-244 0 1993 NMF 1 NA 8 NA NA 24;p 309 NEC Natl. Education 30.0 1993 nqplan NA NA 310 Nil Natl. Intergroup 20.6 1991 16, 4% 9% 9% 3.6 3.3 2.4 311 NME Natl. Medical Ent. 167.0 1993 no plan NA NA NA 312 NSM Natl. Semiconductor 105.8 1993 not mate iai NA NA NA 313 NAV Navistar Ind. 250.4 1993 1,500 2,000 2,500 351% NMF NA up 137.5 314 NBO NBD Bancorp 130.3 1993 54 3% NA NA up 4.2 315 NYT.A New York Times 78.5 1993 35 3% • 6% 250% 7.0 2.0 316 NWL NeweV Co. 77.9 1993 28 35 41 7% 4% 20% 7.6 6.3 52 3.6 X 317 NEM Newmont Mining 67.9 1992 9 12 14 10% W\ NA 318 NMK^ Niagra Mohawk 136.8 1993 260 13% 25 NA 433% 80.0 15.0 14.9H 11.8 319 GAS NICOR 28.0 1993 70 10% NA 38% 12.0 8.7 8.6 7.8 320 NKE, Nike 75.5 1993 notprovi led NA NA NA X 321 NL NL Industries 50.9 1993 59 63 86 162% 10% 14% 8.0 7.0 4.0 6.0 72.0 322 NOBEJ Nordstrom 81.9 1993 not mate iai NA NA N^ X 323 NSCI Norfolk Southern 141.9 1993 170 190 220 6% 2% 8% 20.0 18.5 16.8 14.5 1 .0 324 NSP Northern States Power 62.6 1993 421 28% NA 871% 100.0 10.3 7.2 7.4 325 NT Northern Telecom 246.8 1993 undedde i M\ NA NA 326 NOC Northrop Corp. 47.2 1991 145 14% 13% NA 46.9 28.7 31.3 327 NOB Norwest 139.6 1993 NMF NA 4 NA NA 12.0 528 NOVL Novell 294.0 1993 noi provi led NA NA NA 329 NUE Nucor Corp. 43.3 1993 notprovi led NA NA NA >< 330 NYN Nynex 204.5 1993 1.924 2,442 2.960 26% 213 25% 160% 400.0 153.9 133.8 117.5 331 OXY Occidental Pet 301.9 1993 600 15% 22% 11% 190.5 171.0 174.0 149.0 332 OG Ogden Corp. 43.0 1993 NMF NA NA NA 533 OEC Ohio Edison 152.6 1993 NMF NA NA NA 40.0 7.3 5.0 334 OKE Oneok 26.6 1993 NMF NA 3 NA NA 335 ORCL Grade Systems 139.0 1993 notprovi led NA NA NA X 336 ORX Oryx Energy 94.7 1993 55 80 65 NA 6% NA up 5.0 337 GOSHA Oshkosh B'gosh 14.6 1993 cant NA 4% NA up 1.7 338 OM Outboard Marine 19.6 1993 not deter n»nad_ NA NMF 17% 7.0 6.0 6.0 4.9 339 OCF Owens Coming 41.7 1991 227 NA 23% 14% 40 0 ..240 21.0 340 PCAR PACCAR 33.8 1993 11 1% NA NA 341 PET Pacific Enterprises 74.8 1993 260 18% 18 NA NA 16.0 14.0 14.0 342 H-PCG Pacific Gas & Electric 421.7 1993 672 9% 60 NA 833% 180.0 19.3 18.2 17.8 543 ^"PAC Pacific Telesis 401.8 1993 1,600 20% 125 9% 82% 200.0 110.0 105.0 102.0 344 1 PPW Pacificorp 264.2 1993 240 7% NA 140% 24.0 10.0 9.0 7.0 345 PLL Pall Corp. 88.0 1993 NMF NA NA NA X 346 PEL Panhandle Eastern 108.2 1993 85 105 125 9% 5 3% 15% 14.0 12.2 347 PCI Paramount Comm. 118.3 1993 120 3% 10% NA _up 15.0 348 PH Parker-Hannifin 48.4 1991 6i 6% 4% 140% 7.2 3.0 3.0 349 JCP Penney (JC) 116.8 1991 18 NA 3% 6% 33.0 31.0 350 PZL Penruoil 406 1991 49 4% 7% NA 7.7 6.0 6.0 351 PGL Peoples Energy 34.7 1993 NMF NA, .... NA 183% 15.0 53 4.3 4.4
Brown Brothers Harrlman Investment Strategy Croup The SfcP 5001s Exposure To FASB 10b
Out FASB106 Median Ongoing Eat. Future Eat. Future Estimated standing Calandar Estlmsled Aftertax as%of Median Expansa as Expansa Eat Actual FASB Shares Yaar of Initial Llabilltyffmll) Book Charga % of 1001 Increase Fulura ExpsnsaadmH) tyfnbol Company (mil) Adoption Low MMMMI Hipti Valua (20yrf) Op. Incoma QyfrlttIA Expwfa 1001 1090 1
352 -PiY PfP_Boy|^ _60.1 1993 NMF NA| NA 353 PEP_ Peps ico _792.i J992 _357 1% _NA _up 32.0 (4760) .354 >KN PefKin-Elmer 33 8 J993 _80 27% NA >655 PT Pel Inc. J07.5 J993 _35 38 30 J% NAj 1.2 356 _PFE_ Pfizer J993 _312 1_5% __3^. J132% _33.5 6.3 _J7 58 30.0 .329 3 1 X357 PD Phelps Dodge _7b.O 1993 "Too J ^ 125 _7% 4% 266% 15.0 4.1 _§i 4.8 358 Philadelphia Electric _226.1 J993 _371 10% INA 93.0 J>€0 54.0 42.0 359 MO Philip Morris 914.6 J99i _?21 8% I% 107% 89.0 43.0 Phillips PetroL _25?7 J9?1 53 2% 3% NA _UE 8.0 8.0 PHM Corp. _ 27.3 1993 NMF NA| NA Pitney-Bowes _ 158.3 J993 150 200 250 _13% _3^ 100% _23.8 J1^ _87 JJ Pinston __37i J991 133 _28% _31% 80% 20.7 13.0 10.7 5.0 Placer Dome _236.9 1993 noi signif "HL NA| NH NA PNC Financial JOSS 1993 40 60 80 _2% NA NA Polaroid _48.8 j993 J1Q J49% J§% .311% 37.0 9.0 Potiatch J993 65 90 95 10% _NA| "NA| Praxair J28.3 1993 J12 NA -4% J5% 16.0 too 0.0 PMI PremarK Intt. _J'-Z 1993 125 150 175 NA _5% _?5% 11.1 ~ 6.7 pae Price Co, _467 1993 NMF NA NAj NAj 371 PA Primerica JIO.S 1993 not material __NA 3% _?0 _8.5 X372 PG Proctor & Gamble J79:0 J993 1,000 1.100 lj5% _i% 242% 106.6 31.0 24.0 ~19.0 373 PRI PromusJ2os. _33.9 1993 not detertnined NAl NAJ X3_74j PIPINN _ PSI Resources _54? 1993 JJ?" 143 170 _ 22% _NA| 443% _25.p 4.6 _3.8 2.9 7% 3Z5 _PEG_ Pubiic Service Enl. _23i.9 J993 _29i NA 500% 138.0 -23jp _226 22,0 X3Z6 _PPG^ P.P.G.lnds. _Lp6.i 1993 400 566 600 -_20% _NA NA| 39.0 34.6 33.6 377 _PAT_ Quaker Oats _73.6 1993 100 _6% NAj 8.0 378 _CUE_ Quantum Chemical _J9.8 1993 __175 —NA _26% 159% 22.8 8.8 7.4 6.8 379 RAL Ralston Purina JP4J 1994 not provided NA| _NAj NAj 380 _RYC Raychem _39.3 J993 3 NA 1% NAj 0.5 38L _RTN^ Raytheon _ J33.4 J993 350 _12% 2% 1% 20.0 19.9 11.1 382 _R8k_ Reebok intt. 1993 not material _ NA| NAj NAj X383 _RLM Reynolds Metals _69.5 J993 850 .1,025 J,2Q0 35% -43% 250% 140.0 40.0 35!6 32.0 384 jRAQl Rite Aid _87.6 J993 not provided NA| NA NA 3«5 ROAD Roadway Services _39.1 1993 ^49 6% NA _43% 1.0 _P,7 386 Rockwe«jnd._ _221.3 1993 _ 1,500 _36% _2j% 28% 205.0 jeo.p 142.6 116.0 387 Rohm & Haas 64.2 1992 .._J.7». 16% _0% NA 52.0 388 Rollins Environmental __66.3 1993 not provided NA NA NA 389 _RDC_ Rowan Cos. 72.9 1993 NMF NA NA NA X~390 Royal Dutch _536.1 1993 560 696 832 2% NA -MP 75.0 391 _RBD_ Rubbermaid 160 2 J993 not proyjjjed NA NAj NA 392 RusselCorp._ j«0.7 1993 NMF_ NA NA -NA 0.3 0.1 393 _RYAN Ryan's Family Steakhous _53.0 J993 NMF _ NA NA NA 394 R Ryder System _74.6 1993 65 5% NA NA 395 SAFC Safeco 62 8 1993 20 1% NA NA
Brown Brothers Harrlman Invest it Strategy Group The S&P SOO's Exposure To FASB 106
Out FASBIM Median Ongoing Eat Future Est Future Estimated standing Calandar Estimated Aftertax as%ol Expansa as Expansa Est. Actual Fi IM Shares Yaar of Initial Llablllty(lmll) Book Charga %of 1M1 Incraaaa Fulura gxpansasfrmB) Madlan Symbpi Cpmpgny (mil) Adoptfon Low Median High Valua poyrt) Op, Incoma QytfJMIA Expana* 1M1 1990 19M Crmdti 396 SK Safety Kleen 57.4 1993 NMF NA NAr NA 397 SB Salomon Inc. 114.8 1993 75 3% 1% 24% 51.0 41.0 31.0 26.0 SFR Santa Fe Energy Res. 89.0 1993 not mate iai NA 2% NA 1.0 1.0 0.1 399 SFX Santa Fe Pacific 180.8 1992 165, 18% 5% NA up 15.0 400 SLE Sara Lee 238.1 1993 NMF NA NA 25% 5.0 4.0 6.0 401 SCE SCECorp 222.7 1993 600 11% 35 NA 201%" 100.0 33.2 24.3 21 2 4Q2 SGP Schering-Plough 201.4 1993 75 85 95 4% NA NA 403 SLB Schlumberger 240.0 1993 NMF NA NA NA 404 SFA Scientific Atlanta 23.0 1993 24 9% 28% 384% 4.8 1.0 405 SPP Scott Paper 73.8 1992 NA 17 10% NA "P 33.0 406 VO Seagram 376.9 1992 "" 125 2% 2% 86% 13.0 7.0 6.0 6.0 (76.0 407 S Sears Roebuck 345.0 1992 2,000 16% 2% NA up 100.0 408 SRV Sen/ice Corp. Intl. 76.3 1993 noi provii led NA NA NA 409 SMEO Shared Medicai Systems 22.5 1993 not provi< led NA NA NA 410 SNC Shawmut Natl. 91.3 1993 75 106 137 9% NA NA up 18.0 411 SHW Sherwin-Wiam 88.1 1993 NMF NA 0% NA 37.0 34.0 29.0 412 SHN Shoney's 41.3 1993 notprovi led NA NA NA 413 SKY Skyline 11.2 1993 notprovi led NA NA NA 414 SNA Snapon-Tools 42.3 1991 39 6% 6% NA up 7.0 415 SNT Sonat 42.9 1993 113 10% 10% 285% 20.0 52 4.9 3.1 416 SO Southern Co. 315.7 1993 3411 5% 28 NA 178% 100.0 36.0 32.0 30.0 417 SBC Southwestern Bd 300.2 1993 1,794 1.932 2.070 21% 11% 150% 243.0 97.2 69.6 73.2 418 SMI Springs Inds. 17.6 1993 40 60 80 11% 12% 154% 9.9 3.9 419 FON Sprint Corp. 219.3 1993 NMF NA iifc1 0% 15.6" 15.0 117.0 105.0 X 420 SPW SPX Corp. 13.8 1993 13 18, 35 8% 11% 100% 1.9 1.0 0.9 6.9 421 SWK Stanley Works 45.9 1991 13 2% i% 36% 3.0 2.2 3.7 X 422 STO Stone Container 71.0 1993 64 96 128 7% NA NA 423 SRR Stride Rite 51.3 1993 not provi led NA NA NA 424 SUM St. Jude Medical 47.6 1993 NMF NA NA NA 425 SPC St. Paul Companies 42.7 1993 50 2% 10 NA 33% 4.0 3.0 426 SUN Sun Co. 106.2 1993 300 _. -3?5 350 10% 21lC 82% 40.0 22.0 427 SUNW Sun Microsystems 99.7 1993 notprovi led NA NA NA X 428 STI Suntrust Banks 126.9 1993 50 1 55 60 2% NA NA 429 F SVU Super VaJu Stores 71.1 1991 13 1% 1% NA up 2.7 430 SYN Syntex Corp. 225.7 1993 not provi led NA NA NA 431 SYY Sysco 186.5 1993 NMF NA NA NA 432 TDM Tandem Computers 109 6 1993 NMF NA NA NA 433 TAN Tandy 64.1 1991 0 NA NA NA 0.0 434 TEK Tektronix 29.6 1993 35 8% 9% 100% 80 3.0 435 TCOMA Tele-Comm. 425.5 1993 notprovi ied NA NA NA 436 TOY Teledyne 55.4 1993 not provi led NA NA NA 437 TIN Temple-Inland 55.1 1993 100 NA NA NA X 438 TGT Tenneoo 125.2 1993 7l4?5 550 625 16% 34% NA up 45.0 439 TX Texaco 258.5 1992 522 6% 7% 49% 64.0 43.0 42.0 36.0 20
Brown Brothers Harri n Invest t Strategy Group The S&P 5001 a Bxpoaure To FASB 106
Out FASB 108 Ongoing Est Future EsL Future Esttmaled standing Calandar Estimated Aftertax as* of Madlan Expanse aa Expansa Eat Actud FASB Sheres Year of Initial Llabilltyffml!) Book Ctiarga % of 1001 Incraaaa Fulura ExpansesQnU) Madlan Symbol Company (mil) Adgptlon Low Median Valua (?Q yn) Pp.lnspma fiorloeiA 1001 1000 1060
440 _TXN Texas [nstrumants _82.3 J993 _230 _285 J40 J6% NMF 143% 61.0 21.0 10.0 12.0 TXU Texas Utiitias J14.0 J993 260 J85 310 _4% 14 NA 245% 50.0 14.6 13 2 ii.4 442 JTXL Textron __86.5 _1993 650 25% 2% NA up 23.0 443 TNB Thomas & Bella _18 7 1993 not provi led NA NA TWX Time Warner _376.7 _1993 NMF NA NA TMC Times Mirror J28.6 1993 114 _6% NA NA 446 jrKR_ Tirmken _36j J993 275 26% 108% 137% 43.2 18.2 14.6 12.1 447 TJX TJX Cos. _69.9 J993 not mate iai NA NA 448 TMK Torchmark _74.2 J993 NMF NA NA 449 JOY Toys "R" Us 289.6 1993 notprovi led • NA NA ,456 TA Transameiica 77.8 J991 49 2% 1% NA up 7.9 ><45!_ Transco Energy 30.7 1993 245 330 298% 379% 45.0 9.4 452 TIC Travelers .1044 1992 J58 6% 12 NA NA 428.0 X453 TRB Tribune Co. 64.4 1993 40 60 80 NA NA NA X 454 JTNV Trinova 28.2 j993 100 138 175 _23% 0% NA 5.0 3.8 3.3 X^SS TRW TRW Inc. 62.6 1993 700 725 750 38% 14% 159% 57.0 22.0 10.0 15.0 456 Tyco Labs J7.0 J993 NMF NA NA X457 UAL UAL Corp. 24.2 J993 600 J50 900 51% NMF NA up 85.0 458 UL Unilever J??3 J*7 _6% 1% NA Uf 15.0 459 UCC Union Camp 69.6 J992 96 5% 4% NA up 11.0 100.0 460 UK Union Carbide 128.3 J993 300 J3% 26% 144% 66.0 27.0 26.0 23.0 X461 JJEP. Union Electric J993 _30Q 350 J00 17% NA 244% 63.0 27.0 26.0 23.0 JJNP_ Union Pacific -2031 J992 225 _ 2 88 350 NA NA 100.0 463 UIS Unisys 161.7 J993 _872 J5% 49% 126% 116.4 51.4 51.9 50.7 400.C X464 LfTX United Technologies 123.0 J993 _45p _5P0 .550 11% 134% 17% 553.0 473.0 485.0 430.0 Xi65 UCL Unocal 240,2 J993 200 _225 250 9% 3% 16% 16.3 14.0 11.0 11.0 466 UPJ Upjohn J75M 1992 _237 _16% NA NA 13( X467 USW US West _!]2.p _1993 _L4Zi 1.845 2.214 J9% NA NA 468 U USA* Group _46.6 1993 713 _56% 41 NMF 1838% 139.5 7.2 4.0 1.6 469 USH USLJeCofR,, _14.9 1993 34 _4% NA 25% 2.0 1.6 1.6 1.5 470 JJST_ UST Inc. 209.6 1993 20 _4% 1% 340% 4.4 1.0 471 _MRO_ USX-MarathonGrouR_ ^84.6 j993 64 NA NA 472 X USX-U.S. Steel _59.2 1992 _J.iog _50% NMF 33% 160.0 120.0 473 JJSBC U S Bancorp _98.8 1993 100_ 8% NA NA up 22.5 474 USS U.S. Surgical _54.3 J993 not provi led NA NA 1475 FG U.S.F. & G. 1993 _35 40 45 _4% NA 133% 7.0 3.0 400 ( XX47 6 Varity^Corp^ _25P 1993 ISO 213 275 43% 13% NA _UP 13.5 477 Y-F-CMR^ 58.6 J993 not provi led NA NA X 478 _yyAG_ Walflreen _123.1 I _1993 60 _ _75 90 8% 1% 47% 3.0 2.0 1.6 1.3 479 _WMT Wal-Mart Stores, 1r14?"2 1993 not provi led NA NA 480 WANB Wang Labs no longer ip S&P 500 481 WLA Warner-Lambert J34.6 _1991 106 10% 2% NA up 14.0 40.( 482 WMX Waste Management J?5.5 1993 37 1% NA NA X483 WFC w*.E§n» 52.6 1993 135 185 235 6% NA 42% 76.5 64.0 47.0 46.0 25
Brown Brothers Harrlman Investment Strategy Group page The SiP SOO's Expoaute lu l-ASB 1U6
Out FASB 106 Median Ongoing Est Future Eat. Future EsNmatsd standing Calandar Estimated Aflartax as%of Median Expanse aa Expense Est. Actual FASB Shares Yaar of Initial Liabllllyffmij) Book Charga % of 1001 Incraaaa Future ExpansaslfmUl Madlan Syfnbol Company imll) Low Median High VtfU* (?0yrf) Op. Inepmf fiVff1091A Expense 1001 1000 10M cr«ii
484 WEN Wendy's Intl. 97.8 1993 not provi led NA NA NA 485 ~ WX Westinghouse Electric 341.4 1992 742 19% 6% 1194% 110.0 8.5 404.0 ^486 WCX Westmoreland Coal . 7.0 1993 72 85 98 53% 7 NMF 55% 11.9 7.7 6.9 4.0 487 W Westvaco 65.8 1993 NMF NA NA NA 488 WETT Wetterau 21.3 1993 NMF NA NA NA 73.0 489 WY Weyerhaeuser 203.5 1991 208 5% 3% 0% 21.0 20.9 <490 vyHRj Whiripool 69.8 1993 180 190 200 13% 6% 167% 32.0 12.0 10.0 7.0 491 WH-1 Whitman Corp. 107.1 1993 45 13% 1% NA 3.0 492 WMB Williams Cos. 45.6 1993 NMF NA 5% 50% 12.0 8.0 5.0 SO 493 WIN Winn-Dixie 76.8 1993 notprovi led NA NA NA 494 Z ^ Wootworth 130.3 1991 1761 8% 4% NA up 17.0 495 WTHG Worthington Inds. 59.5 1993 NMF NA NA NA 496 WWY Wrigley 117.1 1993 NMF NA NA NA <497 XRX Xerox 94.4 1993 460 570 660 13% 7% 247% 66.0 19.0 22.0 25.0 498 YELT] YeBow Freight 28.1 1993 NMF NA 0% NA 106.0 98.0 90.0 499 ZE Zenith Electronics 29.3 1993 NMF NA NA NA 500 ZRN Zurn Industries 12.6 1991 16 6% 74% 17% 18.0 16.1 13.4
Brown Brothers Harrlman Investment Strategy Group page RHOWN RKOTIIKHS HAKKIMAN & Co
DEFINITIONS OF DATA ITEMS
Column Definition Source
Outstanding Shares Number of common shares Standard & Poor's outstanding as of9/30/92.
Range of after-tax initial BBH & Co. Analysts Est. FASB 106 Liability transition obligation. Annual Reports Company Data
Most recently available data from FactSet DaU Systems Book Value December 31,1991to present .
Ongoing Median Charge Midpoint of the estimated range if BBH & Co. Analysts 20-year amortization method used. Annual Reports Company Data
Operating Income Latestfiscal yea r operating income. FactSet Data Systems
Est. Future Eipense Under newly-implemented BBH SL Co. Analysts accrual method. Annual Reports Company Data
Actual Eipenses Under former cash basis method. As above
Est. FASB 109 Credit Midpoint of estimated after-tax As above credit range. COMPANIES WITH A COMMITMENT TO HEALTH CARE REFORM* * These have been drawn from the Washington Business Group on Health, the National Leadership Coalition for Health Care Refonn, and the Health Project.
Acme Steel Corp. Allied Signal Ameritech AT&T Atlantic Richfield Co. Bank of America Bethlehem Steel Corp Blue Diamond Growers Brown and Cole Stores Bull Information Systems, Inc. Burlington Coat Factory Caterpillar Inc. Ceridian Corp Chrysler Corp CoreStates Financial Corp Cox Enterprises Inc. Crown American Corporation Dayton-Hudson Corp Del Monte Foods Digital Equipment Corp Dupont Co. Federal Express Filter Materials Ford Motor Company General Motors Georgia-Pacific Corp Giant Foods Great Atlantic & Pacific Tea Company, Inc. Gross Electric Inc. The Heights Group H.J. Heinz Co. Home Depot Honeywell Inc. Hormel & Company Hunt-Wesson Inc. IBM Inland Steel International Multifoods James River Corp Johnstown Corp. Keebler Corp Keller Glass Company Lincoln Telephone and Telegraph Lockheed Corp LTV Steel Corp Lukens, Inc. Mars, Inc. Mead Corp. National Steel Norwest Corp Olympia West Plaza, Inc. Pacific Gas & Electric PEPSICO Preferred Benefits Quaker Oats Company R.R. Donnelley & Sons Ralphs Grocery Company Regis Corporation Rohm and Haas Co. Safeway Inc. Sara Lee Corp. Scott Paper Co. Southern California Edison Co. Time Warner United Airlines U.S. Bancorp The Vons Companies, Inc. Westinghouse Electric Corp. Wheat, First Securities, Inc. Wheeling-Pittsburgh Steel The Whitman Group Xerox Corp. OCCUPATIONAL REDLINING Types of Industries Excluded From Health Insurance
Amusement Parks Insurance Agencies Asbestos Related Industries Interior Decorators Auto Dealers Janitorial Services Aviation Junk and Scrap Metal Barbers and Beauty Shops Law Firms Bars and Taverns Limousine Services Car Washes Liquor Stores Commercial Fishing Logging and Lumber Mills Construction Meat/Fish Packers n Convenience Stores Mining Operations Domestic Help Moving Operations Entertainment/Athletic Groups Oil Field Operations Exterminators Parking Lots Federally Funded Organizations Physicians Practices Florists Restaurants Foundries Roofing Companies Grocery Stores Security Guard Firms Health Clubs and Spas State Funded Organizations Hospitals and Nursing Homes Taxicabs Hotels and Motels Trucking Firms
Source: Alpha Center/AHA/QAO THE HEALTH SECURITY ACT OF 1993 A BRIEF DESCRIPTION FOR BUSINESS
1. Puts the health care system on sound business footing and gets costs under control. The plan brings growth in health care costs in line with inflation by increasing competition in health care, increasing consumer awareness of the cost and quality of their health care, reducing administrative costs and limiting increases in insurance premiums. • Most employers and employees will join together in alliances, which are large purchasing pools that will increase buying power and lower costs. Health plans and providers will compete to do business with these alliances on the basis of quality, service and price. • Companies with more than 5,000 employees will be able to form their own health alliance as long as they adhere to national standards for benefits, choice, quality, and comprehensive, affordable care. • Administrative burdens of both employers and providers will be significantly reduced. This is accomplished through: 1. One comprehensive benefits package. 2. A single standard form for insurance reimbursement, claims submission and clinical records. 3. Economies of scale for businesses pooled in the regional alliances. 4. Changes to the worker's compensation and automobile insurance systems. 5. Malpractice reform. Consumers pay less for low-cost plans and aore for high-cost plans, creating incentives for cost- conscious choice. A single, comprehensive package of health benefits and reliable information about the price and performance of health plans vill give the consumers the infonnation necessary to make these choices. Health plans receive fixed premiums based on the risk characteristics of their patients. They will have incentives to reduce costs by focusing on preventive and primary care. If savings attained through effective competition and reductions in administrative costs don't achieve the spending goals, there will be, as a backstop, a limit on the rate of increase in premiums. This brings to health care spending the kind of cost discipline which is commonplace in business. Like the private sector, the growth in major government programs, including Medicare and Medicaid, will be restrained.
2. Preserves the tax deductibility of health insurance; treats self-employed people fairly. Employers' premium payments will continue to be tax deductible for employers and will not be included in employees taxable incomes. • Employers are free to continue for ten years to offer whatever additional benefits they are offering today, and to deduct these payments from taxes. In ten years, when the benefits package is fully phased-in, it will offer as much as the best plans today. • Currently, the self-employed can only deduct 25 percent of the cost of their health insurance. This increases to 100 percent. 3. Finances the system responsibly. Payments for health coverage vill come from three sources: contributions by individuals and families, contributions by employers, and savings from public programs. There vill be discounts available for small firms, low-wage firms and for low-income individuals. This vorks as follows: Employers • All employers contribute to the purchase of health coverage for all of their employees, paying 80 percent of the weighted average premium. The required contribution (for employers in regional alliances) is capped at 7.9 percent of payroll. Firms with less than 50 employees are capped at a lower level — 3.5 to 7.9 percent — based on the average wage of their firm. If the individual premium vas $1,800 and the family premium was $4,200, the maximum cost per employee before discounts vould average. o Approximately $1,440 (80 percent of $1,800) for a single vorker. o Approximately $2,240 for a vorker vith a family (80 percent of $4,200 divided by 1.5 which is the average number of workers in a family). Individuals • Individuals pay 20 percent of the premium for am average cost health plan chosen through an alliance. Individuals or families who choose a less expensive plan pay less, and those who choose a more expensive plan pay more. Low-income families participating in regional alliances with income below 150 percent of the poverty line receive discounts based on family income and the average premium in their alliance. 4. Offers consumer security, choice and quality. Consumers will have more choice than today about doctors, plans and treatments. They will be guaranteed a comprehensive benefits package which meets the full range of health needs, including primary, preventative and specialized care. Each alliance will offer consumers a choice of plans which must include a fee-for-service plan. Consumers will be able to choose their own doctors. Consumers' out-of-pocket costs for health services are (a) limited to ensure financial protection and (b) standardized to ensure simplicity in choosing among health plans. Health coverage continues without interruption if people lose or change jobs, start a small business, move from one area to another, or become ill.
5. Lifts the burden of early retirees from all companies. Retired people not yet eligible for Medicare (between the ages of 55 and 65) who have worked for at least 10 years will be subsidized for the employer's share of their premium. If employers are contractually obligated (or choose) to pay retiree health benefits, the companies will pay only the 20 percent family share. This will relieve all of the nation's companies, including many of our most important manufacturing companies, of the burden of early retiree health care costs and allow them to have globally competitive cost structures. It will also allow all early retirees, who find their health care costs to be prohibitively expensive, to enjoy high quality health care at affordable prices. The ramifications of this provision are under review as part of the consultation process.
6. Emphasizes quality. The plan improves the quality of health care by creating standards and guidelines for practitioners, reorienting quality assurance to measuring outcomes rather than the regulatory process. THE HEALTH SECURITY ACT OF 1993 SOLVES THE PROBLEMS OF SMALL BUSINESSES
1. Reduces the costs of insurance for employers and their families.
2. Makes health care affordable to employers.
3. Allows the self-employed to deduct the full cost of their health insurance.
4. Gives small business market clout as a purchaser of health care.
5. Increases jobs by improving workers' health, security, and mobility.
6. Reduces the administrative burden on small business.
7. Preserves a local health care system.
8. Provides an economic foundation for small business to prosper in the future.
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1. Reduces the costs of insurance for employers. • Cost of health insurance for businesses' are rising at an annual rate of almost 15 percent. Small businesses have suffered the most because they have been discriminated against by insurance companies. Consequently, they have the most to gain from reform. Under refonn, small businesses' costs will be brought under control by increasing competition in health care, increasing consumer awareness of the cost and quality of their health care, reducing administrative cost and limiting increases in premiums. As the rate of cost growth slows, the business sector as a whole will gain savings. • Today, employers that insure their employees bear a large "cost shift" (amounting to $25B) from the uninsured. Under reform, that burden is lifted from them. • Today, in many cases, employers pay the entire insurance bill for a family, while the employees of a worker's spouse pays nothing at all. Under reform, the costs of families are spread over all firms. • Today, many employers are paying over 10 percent of payroll for health insurance. Under reform, all employers in the health alliances will pay no more than 7.9 percent of payroll. Businesses with fewer than 50 employees will pay at most between 3.5 percent and 7.9 percent of payroll. • Small businesses owners who insure their families and employees will enjoy significant reductions in the cost of health insurance. For example, a family policy for a small business owner today costs approximately $5,000 to $7,000. A firm with an average wage of $20,000 (i.e., high for a firm not offering insurance) would be capped at 5.5 percent or $1,100 per employee. It could insure five to seven families for what the one family that owns the business is paying for itself today.
2. Makes health care affordable to employers. All small businesses will pay a maximum of 7.9 percent of payroll. • According to National Small Business United, the average wage for small business not offering health insurance in 1988 was $7,400. Those employers will face a maximum annual premium per employee of $259.00, or less than a dollar a day. The Health Security Act ends insurance abuse: no more occupational redlining, no more restrictions on pre-existing conditions, and no more job lock. o The smallest businesses (with less than 50 employees) could pay even less (3.5 percent to 7.5 percent) depending on their average payroll. o Additionally, low wage workers of these small businesses will also receive discounts for the employee contribution. These discounts are not available today and represent a tremendous benefit to small business. 3. Allows the self-employed to deduct the full cost of their health insurance. Today, the many small business people who are self-employed can deduct only 25 percent of the cost of their insurance from taxable income while companies can deduct 100 percent. In the future, self-employed people will be treated fairly and will be able to deduct the full cost of their health insurance from their taxable income.
4. Gives small business market clout as a purchaser of health care. Today, individual small businesses face enormous disadvantages as purchasers of health insurance and health care. By pooling their resources in large purchasing groups, small businesses will obtain the purchasing power of large corporations. They will benefit enormously from the economies of scale, purchasing power, and administrative burdens born by the alliances.
5. Increases jobs by improving workers' health, security, and mobility. Small businesses will enjoy numerous benefits from having an insured work force in the form of reduced costs of absenteeism, turnover, training and errors. Additionally, the plan makes health insurance "portable". Plans will be prevented from excluding individuals with pre-existing conditions, and all employees will be insured against potential catastrophe. This increases the mobility of workers, the flexibility of employers, and contributes to increases in employment nationally. 6. Reduces the administrative burden on small business. Today, small businesses face a blizzard of paperwork which severely taxes their limited administrative resources. Under reform, a single streamlined system will reduce the burden of paperwork on small businesses. Small businesses now pay 40% in administrative costs versus 5% for large companies. Unlike the current system, there will be (1) a single, comprehensive benefit package, (2) one standard form for reimbursement and claims submission, (3) changes in worker's compensation and automobile insurance as a part of the new health system and (4) malpractice reform.
7. Preserves a local health care system. The plan promotes localized health care through the regional alliance. Small business owners will have first-hand knowledge of how their premium contributions are spent and will have an opportunity to have a meaningful voice in the design and operation of their health care system.
8. Provides an economic foundation for small business to prosper in the future. Today, health care costs are growing largely out of control. Left unchecked, rising health care costs will consume: o 12 0 percent of the projected increase in wages. o 60 percent of the growth in the federal budget. o Almost two-thirds of the increase in GDP for the rest of the decade. Health care costs will grow from 14 percent of GDP today to 19 percent without even an expansion of coverage. This will significantly increase the burden of health care on business and will increasingly make the U.S. economy uncompetitive internationally. By getting health care costs under control, this reform will reduce future deficits, freeing resources to be invested in our economy in ways that will promote economic growth and job creation. THE HEALTH SECURITY ACT OF 1993 HELPS THE PROBLEMS OF LARGE BUSINESSES
1. Reduces the costs of insurance for employers 2. Increases jobs by improving workers' health, security, and mobility 3. Gives businesses market clout as purchasers of health care 4. Preserves the tax deductibility of health insurance 5. Gives businesses access to high quality health care 6. Reduces the administrative burden on business 7. Provides discounts to many businesses 8. Subsidizes the high cost of early retirees and makes U.S. manufacturing companies cost-competitive 9. Preserves a local health care system 10. Provides an economic foundation for businesses to prosper in the future
*************************
1. Reduces the costs of insurance for employers. • The cost of insurance for businesses' health costs have risen at an annual rate of almost 15 percent. Under reform, these costs will be brought under control by increasing competition in health care, increasing consumer awareness of the cost and quality of their health care, reducing administrative cost and limiting increases in premiums. The business sector as a whole will gain savings as the rate of cost growth slows. • Today, many employers are paying over 10 percent of payroll for health insurance. Under reform, all employers in the regional health alliances will pay no more than 7.9 percent of payroll. Today, employers that insure their employees bear a large "cost shift" (amounting to $25B) from the uninsured. Under reform, that burden is lifted. • Today, in many cases, employers pay the entire insurance bill for a family, while the employees of a worker's spouse pays nothing at all. Under reform, the costs of families are spread over all firms.
2. Increases jobs by improving workers' health, security, and mobility. Businesses will enjoy numerous benefits from having an insured work force in the form of reduced costs of absenteeism, turnover, training and errors. Additionally, the plan makes health insurance "portable." Plans will be prevented from excluding individuals with pre-existing conditions and all employees will be insured against potential catastrophe. This increases the mobility of workers, the flexibility of employers, and contributes to increases in employment nationally.
3. Gives businesses market clout as purchasers of health care. Today, many businesses are disadvantaged as purchasers of health insurance. By pooling their resources in large purchasing groups, businesses will benefit enormously from the economies of scale, purchasing power, administrative simplification and sophistication of the alliances.
4. Preserves the tax deductibility of health insurance. Employer premium payments will continue to be tax-deductible for employers and will not be included in employee's taxable income. Employers are free to continue for 10 years to offer whatever benefits they are offering today and to deduct these payments from their taxes. In ten years, when the benefits package is fully phased-in, it will offer as much as the best plans today.
5. Gives businesses access to high quality health care. Given the cost of health care for businesses today, many can afford to offer only bare-bones insurance, if any, to their employees. In the future, all businesses and their employees will have access to a comprehensive benefit package equivalent in quality to the best plans that are available today. 6. Reduces the administrative burden on businesses. Today, businesses face a blizzard of paperwork which severely taxes their administrative resources. Under reform, a single streamlined system will reduce the burden of paperwork on business. Unlike the current system, there will be (1) a single, comprehensive benefit package, (2) one standard form for reimbursement and claims submission, (3) changes to worker's compensation and automobile insurance and (4) malpractice reform.
7. Provides discounts to many businesses. Premium costs for all businesses in the regional alliances will be limited to a maximum of 7.9 percent of payroll. Additionally, low wage workers of these firms will also be receive discounts for the employee contribution. These discounts are not available today and represent a tremendous benefit to business.
8. Subsidizes the high cost of early retirees and makes U.S. manufacturing companies cost-competitive. Today, many businesses, including the country's largest manufacturing companies, are at a substantial competitive disadvantage in global markets because of the high cost of their retirees' health care. Under reform, employees who retire early will be subsidized for the employers' share of their health care premium. This will relieve many of the nation's most important manufacturing businesses of this burden and allow them to have globally competitive cost structures. It will also allow all early retirees between the ages of 55 and 65, who find their health care costs prohibitively expensive, to enjoy high quality health care at affordable prices.
9. Preserves a local health care system. The plan promotes localized health care through the corporate and regional alliances. These employers and employees will have first-hand knowledge of how their premium contributions are spent and will have an opportunity to have a meaningful voice in the design and operation of their health care system. 10. Provides an economic foundation for businesses to prosper in the future. Today, health care costs are growing largely out of control. Left unchecked, rising health care costs will consume • 12 0 percent of the projected increase in wages, • 60 percent of the growth in the federal budget, and • almost two-thirds of the increase in GDP for the rest of the decade. Health care costs will grow from 14 percent of GDP today to 19 percent without even an expansion of coverage. This will significantly increase the burden of health care on business and will increasingly make the U.S. economy uncompetitive internationally. By getting health care costs under control, this reform will reduce future deficits, freeing resources to be invested in our economy in ways that will promote economic growth and job creation. •crocnure 9/24/93 7:16 PM Page 1
The Health Security Act Benefits for Business
HEALTH SECURITY
r-
"The Health Security Act preserves our employer-based, privately-financed system of health care. It will control the costs that are hurting American businesses* ability to compete. And it will help small business owners provide affordable insurance for themselves, their employees, and their families." - President Bill Clinton •orocnure 9/24/93 7:16 ?M Page 3 <7
My Fellow .Americans:
Ever>' American must have the security of comprehensive health care benefits thai can never be taken away. That's what our health security plan is all about.
.\menca's private sector is known for its ability to create permanent, productive, private-sector jobs, and offers many benefits, including health care coverage, to workers. But that ability has been threatened in recent years by rising health care costs
The Health Security Act reaffirms an American principle: that our high-quality health care system should be rooted in the private sector and should respond to market forces.
The Health Security Act preserves our employer-based, privately-financed i system of health care. It will control the costs that are hurting .American businesses' ability to compete. And it will help small business owners provide affordable insurance for themselves, their employees, and their families.
This brochure explains what our health security plan will provide and why we think it is so important.
The battle for health care reform will be tierce. The special interests who benefit from the current system will try to drown out your voice and keep us on a road that will only increase your costs and decrease America's competitiveness.
If you speak out and together we accept the challenge and responsibility, I am convinced that we can provide affordable health care to every American. •brocr.uro 9/24/93 1:15 PM Pago 5
THE HEALTH S E C L R I T Y ACT The Problem: America's Health Care Crisis
All Aniencans, ihose who have health insurance and • Quality is uneven. Because no clear standards define Uiose wno do not. understand lhat serious problems best medical practice, lack of information and inad exist m the health care system: equate attention to prevention make the quality of health care across America uneven. Employers and • Thirty-seven million Americans have no insurance consumers have no reliable information with which at all. .Another 22 million have inadequate coverage. to measure the quality of their health care. • One out of four—or 63 million—.Americans will lose healih insurance for some period during the next • Coverage for long-term care is inadequate. Many two years. elderly and disabled Amencans enter extended care facilities when they would prefer to remain at home. • Losing or changing a job often means losing Insur Families exhaust their resources trying to provide ance. Becoming ill or Living with a chronic medical care for relatives. condition can mean losing insurance coverage or not being able to obtain it at all. • Many Americans cannot obtain quality care. In many rural and inner-city areas, shortages of doc • Health care costs are rising faster than other sectors tors, clinics and hospitals prevent Americans from of the economy. Left unchecked, rising health care obtaining quality health care. costs will consume almost two-thirds of the increase in ihe gross domestic product (GDP) for each • Fraud and abuse cheat everyone. Exorbitant .American for the rest of the decade. Costs are pro charges, fraud and abuse undermine both quality jected to grow from 14 percent of the GDP to 19 and access to care, and cost S80 billion each year— percent, even without any expansion of coverage to nearly 10 cents of every dollar spent on health care. insure all .Americans. Everything that is wrong with the American health • Bureaucracy now overwhelms employers and health care system is threatening everything that is right with providers and drives up costs. Studies show that a the system. We must fix the system, while preserving signiiicant amount of the cost of running a typical every American's right to choose a doctor and obtain doctor s office or a hospital is administrative. high-quality care, before the system self-destructs.
Small Businesses Face Higher Administrative Costs As much as 40c of every dollar which small businesses spend on health insurance is consumed by administrative costs.
Firm ^4 Size
2U-49
100-499 - . - . 16% Administrative costs as a percentage of claims by Rrm size More than 10,000 •orocnura 3/24/93 7:15 PM Page 4
THE HEALTH S E C L R I T Y The American Health Care Crisis The Crisis: The Response: Coverage Security One out of four .Americans—63 million people—will The Health Security Act provides all Americans with a lose iheir health insurance for some period during the guaranteed comprehensive benefits package of med next two years. Today, more than 2 million Americans ical services delivered in hospitals, clinics, professional lose iheir insurance each month. offices, and community health centers. The Health Losing or changing a job often means losing your Security Act provides employers and employees with health insurance, and becoming ill or living with a health care they can afford, regardless of their circum clironic medical condition can mean not being able to stances. buy insurancH at all. No civilized society can justify this. Savings Cost Health care costs are rising faster than other sectors of' the economy. That rate of growth in health care costs Left unchecked, by ihe end of the decade, rising health robs workers of wages, reduces business investment care costs will consume nearly 60 percent of all busi capital, fuels the federal budget deficit, and puts nesses pre-tax profit. This spiraling growth in costs affordable care out of reach for millions of Americans. robs workers of wages, fuels the federal deficit and t2- puts affordable health care out of reach for millions of .Americans. Simplicity With a uniform, comprehensive benefits package Complexity offered to all Americans, businesses and consumers The excessive paperwork now required by the system will no longer be faced with a confusing array of poli confuses and frustrates doctors, nurses, patients, hos cies and forms. Employers will be relieved of the pitals and employers. Bureaucracy drives up costs administrative responsibility for wading through health and takes time away from direct patient care. So it is care plans, negotiating competitive premiums and not surprising that the number of health care adminis- administering claims. A simple billing format that con traiors is growing four times more quickly than the verts the current paper-based claims process to a com number of doctors in the U.S. puterized, electronic system will cut costs and time.
Today: Charles, an electronic equipment manufactur Today: Danita and her husband have a small con er, pays $420,000 a year for health insurance. He has struction company and they pay $6,000 a year for 130 employees and pays an average annual salary of health insurance. She and her husband receive an $28,600. annual salary of $12,500 each. Reform: Their premium costs will be at most $1,100 Reform: Charles' premium cost will be. at most, (4.4 percent of payroll), saving them $4,900. In fact, $293,722 (7.9 percent of his payroll), saving him Danita could provide insurance for 4 additional $126,278. And his employees will have rock-solid, employees and their families for what it costs her to comprehensive health care. insure her family today. •orochura 9/24/93 7:15 PM Paga 6
THE HEALTH SEC I B I T V A C T What Is the Health Security Act?
Overview The Health Security Act organizes the private market for health insurance to create incentives for health plans to The Health Security Act wiU guarantee comprehensive compete on the basis of quality, service and price. health coverage for ail .Americans and legal residents, regardless of health or employment status. Health coverage will continue without interruption whether How It Works .Americans change or lose their jobs, move, become ill The Act builds on our employer-based, privately or confront a family crisis. An employer's ability to financed system of health care. Employers and con afford premiums for all their employees is not depen sumers will band together in large purchasing pools to dent on the health status of a single employee. strengthen their bargaining power in the marketplace. The Health Security Act builds on our current employ Health providers will be forced to compete for busi er-based system and asks all Americans and their ness, leading to lower prices and improved quality. employers to take responsibility for their health cover This will shift Uie power of the marketplace in favor of age. In return, they will have the security of knowing employers and their employees. that they will always be covered.
-e- How You Get Coverage: The New System Health care reform brings people closer to their doctors and the high quality, affordable care they deserve.
Health Plan A I Health Plan B I Health Plan C I Fec-for-Scrvice I I I You Choose Medicare
Health Alliance .^^f^^: Big Small '.Individuals/ Business Business Families Consumers and businesses are joined together Older into health alliances Americans 'brocr.ure 9/24.-93 1:15 PM Page 7
THE HEALTH ' S E C L H I T Y ACT
Lvcrybody's Hole Under the Health Security Act, employer contributions for insurance premiums are capped at 7.9 percent of Iinplementation wiU be managed at the local level by payroll. The cost of providing health coverage declines employers, employees and the states. This will create for most firms that currently provide insurance. Qexibility at trie state level for employers and employ Smaller businesses (those with fewer than 50 employ ees to design and control the local health care system. ees) with low wages will receive discounts of between An independent National Health Board acts as the 30 percent to 80 percent compared to what the aver board of directors for the health care system, setting age big business pays. national standards for comprehensive benefits, quality and cost Heaith plans must meet national standards Employees on coverage, quality, and access to care, communities will tailor the new system to local needs and condi Employees pay the difference between the employer tions, opening the way for local innovation within a contribution and the premium of their chosen health nanonal framework. plan. If they choose a plan that charges an average premium, they may pay up to 20 percent, unless their employer chooses to make a higher contribution. How Will the Cost of Health Premiums Bc Paid? Lm ployers How Employees Participate Under reform, employers contribute 80 percent of the Every employee will receive their own Health Security uisurance premiums, calculated on the weighted aver Card which will provide access to high quality, com -e- age premium among health plans in their area. prehensive health care that can never be taken away.
Caps On Employer Contributions Employer contributions are limited to a percent of their payroll costs, depending on their size and average wage. Government subsidies cover the remainder. Average Wage — (in ThouaantU) Caps as Percent Small of Payroll Firms
All Firms
Small Firms (fewer than 50 workers): Caps are placed on their premium contribution ranging from 3 5% of payroll to no more than 7.9%, depending on the average wage of that firm. Large Firms (more than 50 workers): Not required to pay more than 7.9% of payroll for their employees's premiums. •brocnure 9/24/93 7:15 PM Page 8 —o
T II I! HEALTH S E C L R I T V Benefits for Business
Reduces the Cost of Insurance for The Health Security Act will eliminate much of the Employers administrative burden of providing health care cover age, because it-. The HeaJth Security Act will reduce most employers' • Provides a single, comprehensive benefits package, direct out-of-pocket costs, because it: eliminating the need for time-consuming annual • Guarantees that no employer in a regional alliance reviews of benefits packages; will pay more than 7.9 percent of payroll (in many • Establishes regional alliances which will enjoy cases, employers' actual premium costs will be tremendous economies of scale and which will below 7.9 percent of payroll and the cap will act assume much of the administrative burden current only as a ceiling on costs); ly bome by businesses; • Offers greater discounts (30% to 80%) to the small • Consolidates reimbursement and claims submis est businesses and to low wage employees; sions into a simple, easy-to-use format; and • Increases the buying clout of small- and medium- • Includes the health care portions of workers' com sized companies through their participation in pensation and auto personal iryury. health alliances; Finances the New System Responsibly • Ends insurance abuse: no more occupational red lining, restrictions on pre-existing conditions, or dis and Fairly crimination against small businesses; The present system is inequitable and unfairly penal • Allows larger employers to continue to manage their izes companies currently providing health insurance to own health care insurance programs; their employees. The Health Security Act seeks to lift that burden. • Reduces the burden of early retiree health care The Health Security Act injects fairness into the sys costs by supporting the employer's share of early tem, shifting power in the marketplace in favor of retiree premiums, and employers and their employees: • Reduces the health care premiums for workers' • Today, employers who insure their employees bear compensation. a large "cost shift," amounting to $25 billion, from the uninsured. Under reform, that burden is lifted. • Increases consumer awareness of the cost and qual ity of health-care; • Today, in many cases, one employer pays the entire insurance bill for a family, while the employer of a worker's spouse pays nothing at all. Under reform, Reduces the Administrative Burden the costs for families are spread over all firms. on Businesses • As in the private sector, the growth in major govern Today, businesses face an avalanche of forms and a ment programs, including Medicare and Medicaid, bewildering array of rules and reviews. Little wonder, will be restrained. then, that the number of health care administrators is • If the savings attained through effective competition, growing four times more quickly than the number of reductions in administrative costs, and controls on doctors in this country. public spending don't achieve the spending goals, there will be, as a backstop, a limit on the rate of •brochure 9/24/93 7:15 PM Page 9
II t A L T II S L C t R I T V
increase in premiums. This brings to health care • Continues to exclude employer premium payments spending the kind of cost discipline which is com from an employee's taxable income; and monplace in business. • Allows employers with 5,000 or more employees who self-insure to continue to manage their own Maintains the Best Features of the plans. Current System While the current patchwork of health care coverage is Increases a Company's Ability to expensive and cumbersome, portions of the current Attract and Retain Quality Employees system do provide important benefits to the business community and ought to be retained. • Under the Health Security Act, businesses of all sizes will enjoy all the benefits of an insured work The Health Security Act recognizes the value of impor force: less absenteeism, decreased turnover, fewer tant features of the current system. The act: errors and a reduced need for training. Each of these elements translates into reduced costs. • Offers consumers a choice of at least three types of health plans, one of which must enable employees • By offering comprehensive health care benefits, to choose their own doctors; smaller businesses will be better able to compete for qualified workers. • Continues to make employer premium payments tax-deductible to employers; Additional Benefits for Small Business
The plan is phased in over a period of years as the The plan removes all the hassle that small business cost of health care is brought down. now has to go through in dealing with insurance companies, and freesu p valuable time for the small The plan provides caps and discounts to hold down business owner to manage and grow their business. the cost of health insurance so that small businesses can afford to provide their employees with compre The plan removes all of the abuses that are current hensive, real insurance coverage. In most cases, ly so rampant in the health insurance marketplace. employers' actual premium costs will be well below If one worker in a small business, or a worker's the caps, which serve only as a ceiling on premi dependent, becomes seriously ill, the business will ums. no longer see astronomical rate increases or lose coverage for the sick employee or dependent. The plan calls for a significant percentage of the cost of insurance to be paid by the employee so that the The plan controls the future rate of growth of health employee has the same incentive to hold down the care costs so that the rate of increase of health cost of health care as does the employer. insurance costs in the future will increase by approximately the rate of growth of wages, as The plan calls for employees to pay more if they opposed to the skyrocketing costs that small busi choose more expensive health plans so that the nesses have incurred in the past employee has a strong incentive to choose economi cal provider groups. Most importantly, small businesses get rock-solid, comprehensive coverage and a guarantee that they The plan is combined with the health portion of will never be in danger of losing insurance again. workers' compensation and brings this skyrocketing expense under control. And each small business will have a happier, health ier, more productive work force. The plan enables the self-employed to deduct 100 percent of the cost of health care coverage from their taxes. •brocnura 9/24/93 7:15 PM Page 10
: <: i: it i T v A <: i Questions and Answers
Q. My company already offers health insurance that Q. I'm afraid that the new system will not really con provides low cost, affordable care. Will it be able to trol costs —how can I know that it will? continue and will I be able to remain outside of the A. In the last five years, health care costs for employer health alliance? have risen almost 15 percent every year. Small bus. A. As long as they adhere to national standards for ness costs have risen even more rapidly. That's wh; choice, quality, and comprehensive affordable care, a tough approach to controlling costs is a comerstor companies with more than 5,000 employees will be of the Health Security Aa. Providing health care am able to act as their own health alliances. As the a comprehensive benefits package to every America: regional alliances prove their ability to reduce costs will cut the cost of uncompensated care. Stimulatinf and provide high-quality health care, larger compa competition, increasing consumer awareness of the nies will have the opportunity to join the regional cost and quality of health care, streamlining adminis alliances. tration, and changing workers' compensation and auto-insurance health coverage will dramatically Q. I provide a generous health care plan today. Won't reduce costs nationwide. In addition, premium this plan require me to provide my employees with increases in the whole system — including Medicare reduced benefits? and Medicaid — will be limited as a backstop to con A. No. Your employees will have a choice among plans tain costs. This will bring to health care the kind of which offer the nationally guaranteed benefits pack discipline which is commonplace in business. age, and you will be able to provide your employees with whatever additional health care benefits you Q. My company operates in a number of different would like. states. Today, I provide health benefits for my employees through one system. Under reform, will Q. This plan sounds complicated. Isn't it really going have to change the way my employees get coverage to drive up my administrative costs? A. No. Large employers will be free to operate as their A. No. Health care is admittedly a complicated subject. own alliances, as long as they adhere to national But today's health care system is vastly more com standards for choice, quality, and comprehensive, plex than this plan. Administrative costs now con affordable care. Small groups of employees in distai sume a large portion of what all businesses pay for locations, however, will have the opportunity to health care. One of the goals of this plan is to reduce receive health care through the local regional this burden. The plan achieves significant adminis alliances if that is more convenient and cost-effective trative simplification by using: Q. Can we be confident that this plan had been ana • one comprehensive benefits package, lyzed rigorously and that the financing is reliable? • a single, standard form for insurance reimburse A. Yes. At the very beginning of this process, the ment claims submission; and President brought together some of the best minds ii • economies of scale for businesses pooled in the the country to help design a financing package for alliance. health care reform. The numbers and analyses that underline the President's proposed plan for health Q. Doesn't this plan eliminate the tax benefits which I security represent months of rigorous work by have today? experts from various federal agencies for the first A. No. Health care premium payments will continue to time. An outside group of economists and actuaries be tax-deductible for employers and will not be audited the work that was done, and examined and included in your employees' taxable income. If you validated the costs and savings projections. These offer your employees more generous benefits than in cost and savings projections are solid, credible and the nationally guaranteed benefit package, your pre conservative. mium contributions will continue to be tax-deductible for 10 years, as long as that plan was in force at the beginning of 1993. •brochure 9/24/93 7:15 PM Page 12
S £ C L It
Q. I employ lots of part-time workers. Will I be A. No. Truly independent contractors are considered required to pay for all of their health care? self-employed and will be responsible for all the costs A. No. Businesses will be required only to pay a pro of their own health care, i.e., both the employer and rated share of the employer portion of the health care the employee portion. premium for part-time workers. Businesses will be required to pay nothing for the health care of part- Q. How will my workers' compensation costs be time workers who are full-time students and who are affected? under the age of 23. A. Medical treatment for workers' compensation claims will be provided through the alliances and will enjoy Q. My company hires independent contractors to per the alliances' cost benefits. As a result, premium form many services for us. Will I be required to pay rates, fraud and excessive utilization all will be dra all the costs of their health care? matically reduced.
For more information. contact- US. Department of Commerce. 14th and Constitution. Washington. DC 20230 Attn: Health Security Act or the U.S. Small Business Administration. 409 Third St.. SW, Washington. DC 20416 Attn: Health Security Act
U.S. Small Business Administration First-Class Mall 409 Third Street SW Postage and Fees Paid Washington. DC 20416 Small Business Administration Official Business Permit No. G-82 Penalty for Private Use $300
An Equal Opportunity Employer
\wm\ U.S. Department of Commerce Ronald H. Brown, Secretary
U.S. Small Business Administration Erskine Bowles, Administrator 1200 SEVENTEENTH STkEETT. N.W.. WASHINGTON. DC 20036-3097 202/J31-5900 FAX: 202/531-2429 NATIONAL < , RESTAURANT ' 1 ASSOCIATION
March 18, 1993
Mrs. Hillary Rodham Clinton The White House Washington, DC 20500
Dear Mrs. Clinton:
In early February the National Restaurant Association's board of directors endorsed many of the principles of a "managed competition" approach to health care reform, and applauds your Task Force's efforts to build on the strengths of the current market-based system to make health insurance more available and affordable. However, the National Restaurant Association is extremely concerned about the consequences of an employer health-insurance mandate, which would spell the end for literally thousands of the nation's 710,000 foodservice operations.
The same characteristics that have made foodservice such a dynamic economic force and the source of millions of jobs for entry-level employees and people seeking flexible or jparMime employment also make foodservice operators especially sensitive to the cost increases that would be imposed by a mandate. Because of the sheer numbers of workers foodservice employs (nine million today, and an expected 12 million by 2005); the unique nature of the foodservice workforce, with its large numbers of part-time workers; and the fact that the industry is dominatecLby small businesses, the labor-intensive U.S. foodservice industry has unique cQQgerns with an employer mandate, and urgently seeks a meeting with your Task Force to discuss these concerns.
As you confront the complexities of refashioning the current U.S. health care system to cut costs and widen access, we believe it imperative for your Task Force to understand the unique perspectives of the $267 billion foodservice industry, and develop solutions that will make it easier for foodservice operators to provide health benefits — without taking away the industry's capacity to thrive and provide incomes to millions of working Americans.
We look forward to a meeting at the earliest possible date.
Sincerely,
Richard E. Marriott Chairman and President of the Board leading the Foodservice/Hospitality Industry A
1200 SEVENTEENTH STREET. N.W.. WASHINGTON. DC 20036-3097 202A331-5900 FAX: 202/331-2429 NATIONAL^7 RESTAURANT ASSOCIATION
March 23, 1993
Ms. Amy Zisook Special Assistant to the President The White House Washington, D.C. 20500
Dear Amy:
Many thanks for your call of yesterday asking for more information about our position on health care reform.
I have attached a copy of the Healthcare Equity Action League (HEAL) Statement of Basic Principles regarding solving the health care crisis. The National Restaurant Association was a founding member of this group and continues to be very active. Our membership now exceeds 600—including small and large businesses, insurers, providers, trade associations and others.
As you can see, we have been actively seeking health care reform for quite some time. We look very much forward to working with the Administration to find an acceptable solution to this overwhelming problem. Basically, we support the concept oftmajaaged competition which would build on the strengths of the free market system but we oppose employer mandates, global budgeting and price controls. " ~
Forcing employers to provide health insurance to all of their employees would have a devastating impact on the restaurant industry. We have outlined some of our concerns in the enclosed letter to Ms. Clinton and also in the attached RX for Relief: A Foodservice Operator's Prescription for Health Care Reform. This document was prepared during last Congress when there were three options for reform being discussed; "play-or-pay", single payer, and market-based reform. It is a little outdated but the mandate arguments still hold.
Please let me know if I can provide any further information. You are undertaking a monstrous task and I really appreciate your making the extra effort to include us.
Sincerely,
Elaine Z. Graham 1
SOLVING THE HEALTH CARE CRISIS: STATEMENT OF BASIC PRINCIPLES
The Healthcare Equity Action League (HEAL) was formed in 1991 to suppon the enactment of federal legislative reforms which would bring about an effective, affordable, market-based solution to the healthcare crisis facing the Nation. HEAL enters its second year encouraged that healthcareTefemrhas become a high priority on the national agenda, and rededicated to the proposition that federal legislation must be enacted to facilitate the reform of the healthcare marketplace.
The essential element of any healthcare refonn proposal is cost containment. While there is no single step that can guarantee that healthcare costs will be controlledrtrue cost containment will come from-Ti an interrelated series of changes, including but not limited to: managed competition, insurance reforms, J tax incentives, advanced technologies and medical malpractice reforms.
Problems of cost and financing have limited access to quality healthcare for millions of Americans who do not have health coverage and they jeopardize future access for additional millions of Americans whose coverage is at risk due to rising costs or expensive individual health problems. HEAL also recognizes that rising healthcare costs inhibit U.S. economic growth, and that restraining these costs can make a major contribution to restraining the Federal deficit.
HEAL believes that health care reform legislation should: foster an environment in which the private system is strengthened and insurance is affordable; provide sufficient government assistance to the poor and the near poor, appropriately fund Medicaid and Medicare; increase preventive health measures; and make significant public health improvements in urban and rural areas -- so that basic quality healthcare benefits are indeed accessible for all Americans.
BASIC PRINCIPLES
• (JVjgnaged Competition HEAL believes an acceptable solution to healthcare reform lies in the concepTKnoVvn as managed competition, which builds on the strengths of our current free-enterprise system. Elements of managed competition should be set in statute. HEAL supports transforming the competitive marketplace through the establishment of Health ^ Insurance Purchasing Cooperatives (HIPCs), a pooling system through which small businesses, other purchasers, and the currendy uninsured could obtain quality health care at affordable rates. HEAL believes employers who may be required to use HIPCs for the voluntary purchase of health coverage should bc no larger than necessary to spread risk equitably. HEAL agrees that the^continuation of self-insurance farjai^ providers, such as quahjiea " association, union and other group plans, should be deemed acceptable on a nationwide basis as long as th'eymeet Federally-qualified standards.
• Insurance Reforms. HEAL suppons other health insurance reforms, including community rating^as long as age, sex and other appropriate risk adjustment factors are considered; the prohibition of pre-existing condition clauses once coverage has been initially established; guaranteed availability, renewabihty and portability of coverage provided to any individual or group; and elimination of coverage denials upon diagnosis or claims filing.
(continued) HEAL suppons effons by the Federal goveniment^ru^^aitaBcm^ymh states, localities, businesses, labor, insurers and providers, to develop a stflficiard benefit papkafrr^hasir quality healthcare services for all Americans and to serve as a benchmark for consumers to compare costs. In this regard, state laws that mandate specific benefits or restrict managed care should be preempted.
• Tax Incentiyes^HEAL believes the unlimited tax deductibility and exclusion of health coverage^cSStTTTavrconffibuted to the growth of unnecessary medical care and wasteful spending. The exclusion and deductibility of health coverage should be carefully and constructively limited to discourage employers from providing unlimited insurance coverage and to encourage individuals to be more discriminating health care consumers. Revenues generated by this limitation should be used only to provide greater access to healthcare. Employers, including the self-employed, however, should be allowed the full tax deduction and employees should be allowed the full tax exclusion for the cost of a standard healthcare benefit package whenjusestablished. Individuals should be free to purchase- eriRanced coverage with after-tax dollars.
Even partially funding a national healthcare program for the working age population through additional payroll taxes could threaten the security of the Medicare and Social Security funding base. HEAL opposes any increase in payroll taxes. Payroll tax increases destroy jobs. AQ * Global Budgets. HEAL believes global budgeting and wage and price controls are ^ unworkable, ineffective, and fundamentally at odds with the principle of competition in the marketplace. Neither is likely to accomplish anything more than magnifying current inefficiencies and inequities. Government must not be allowed to ration healthcare for patients. • Advanced Technologies. While HEAL does not endorse national healthcare expenditure targets, it does recommend the establishment of data systems necessary to measure and analyze national and state healthcare expenditures. In this regard, HEAL believes that the federal government should establish a clearinghouse on technology_assessments that would collect and disseminate information about procedures and technologies, and any other data that would result in a more efficient healthcare delivery system.
HEAL believes that incentives for innovation must be preserved and that technology must remain readily available to those whose medical conditions require it. Care must be taken so that increases in productivity, technological advances and innovations are encouraged zj\d are made available promptly to the healthcare community. Administrative reforms to reduce paperwork, create a uniform electronic claims system, ensure timely claims payment, and curtail fraud and abuse should be implemented expeditiously.
• Medical Malpractice Reforms. HEAL supports medical liability reforms which would reduce defensive medicine practices that generate unnecessary medical services. Tort laws should be reformed and new methods of resolving medical malpractice disputes, such as alternative dispute resolution, should bc implemented. In addition, HEAL supports the admission of treatmen^practice guideUnes as a defense to a malpractice claim. f\0 • Government Mandates. HEAL opposes the creation of statutorily-mandated healthcare coverage of any kind - either immediately or through the use of a trigger mechanism that would mandate health coverage at some later date. Universal access, quality healthcare, and long-term cost containment can only be accomplished through strengthening the competitive healthcare marketplace.
**********
HEAL pledges to work with the Administration and the Congress to formulate the details of healthcare reform legislation, so that we can enthusiastically suooon its enactment. Clinton Presidential Records Digital Records Marker
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RELIEF
A. NATIONAL < RESTAURANT ASSOCIATION
Revised June 1992 NATIONAL RESTAURANT ASSOCIATION
MEMBERS: 15,000 foodservice operations REPRESENTS: Nine million foodservice employees with a large number of entry-level and part-time employees. Founding member of the Healthcare Equity Action League (HEAL), designed to find market-based solution to healthcare crisis. TODAY'S SPEAKER: Stephen Elmont, Vice President SCOPE OF INFLUENCE: Large organization, Influential and conservative. APPROACH TO REFORM: Managed competition SUMMARY OF POSITION: HIPCs no larger than necessary to spread risk equitably. Continuation of self-insurance for large employers. Insurance reforms including community rating with risk adjustment factors, elimination of pre existing condition clauses once coverage initially established. Standard benefit package. Limits on employees tax exclusion for health benefits. Federal clearinghouse on technology assessments. No global budgets. No employer mandates - very concerned about part-time workers. POSITION ON PLAN: Will not support employer mandate. INTERACTION W/ TASK FORCE AND WORKING GROUPS: HOT BUTTON ISSUES: Employer mandate, particularly coverage of part-time employers STEPHEN E. ELMONT
Stephen E. Elaont i» the proprietor of Mirabelle, a contwnporary European restaurant located in Boston's Back Bay neighborhood. He is also the founder of Creative Gourmets, today the largest caterer in New England. After holding a variety of commercial and institutional foodservice xnanageaient positions, Elmont established Creative Gourmets in 1975 vhen he opened a soup and salad restaurant in a Boston office building. This led to the solicitation of Creative Gourmets to manage the employee cafeteria of the building's major tenant. As Creative's reputation grew, the company became a major regional contract foodservice organization that today operates 55 institutional cafeterias, a bakery and catering division with accounts ranging from Fortune 500 firms (Reebok and General Cinema) to Harvard's Kennedy School of Government and the Dana Farber Cancer Institute. Events catered by Creative Gourmets include the Maria Shriver/Arnold Schwarzenegger wedding/ Leonard Bernstein's 70th birthday party at Tanglewood and a dinner for President Bush at Boston's World Trade Center. In 1989, Creative Gourmets was acquired by Gardner Merchant Food Services, a division of Forte PLC. Recently, Elmont and his wife, Linda Schwabe, founded The Food Group, Ltd. The major focus of the new company has been to open a neighborhood restaurant, Mirabelle, serving breakfast, lunch and dinner seven days a week. Elmont has been elected to serve as president and chairman of the National Restaurant Association for the 1993-94 term. He has been a director of the association since 1984 and is a past president of the Massachusetts Restaurant Association. 'FR3,:SI2ER. C. 10= MftR 25• 1993 is07PM 0606 P.02
MARCH 29TH PUBLIC HEARING
TASK FORCE ON HEALTH CARE REFORM
STATEMENT OF
STEPHEN ELMONT PRESIDENT, THE FOOD GROUP, LTD.
ON BEHALF OF THE NATIONAL RESTAURANT ASSOCIATION
NaWonal Rcslnuranl Association, 1200 Seventeenth Street, NW, Washington, DC 20036, 202,^31-5900, FAX: 202/331*2429 2024567739 MAR 25- 1993 f-BTPM 0606 P.03 FPOM:SIZER. C. TO!
Ms. Clinton and Members or the Task Force on Healthcare Refonn -
My name is Stephen Elmont. I am president of The Food Group, Ltd., in Boston, 1 also serve as Vice President of the National Restaurant Association.
Our industry is tremendously concerned about heakh care reform. For the past few years, restaurateurs have struggled with double-digit inflation in healih care premium costs; with cancellations and denials of coverage; and with the frightening prospect of a health-benefits mandate.
We arc not engaging in hyperbole when we say that mandated employer- provided coverage or higher payroll taxes to pay for health benefits would literally sound the death knell for thousands of restaurants - and discourage thousands of other restaurants from ever opening up.
Our research indicates that COST is the major deterrent for restaurateurs who want to buy health plans for their employees, as well as for those trying to continue providing health benefits.
Since I know my time before you today is veiy limited, Til focus on two areas: First, the unique nature of foodservice businesses and their workforces; and second, the specific reforms we endorse because we know they would mean more coverage for more foodservice employees. We urge you to take these into consideration as your task force deliberates.
FoodseA'ice differs from other industries in several important respects:
• FIRST, we are dominated by small businesses.
• SECOND, our profit margins are extremely slim.
• AND THIRD, we are labor-intensive - and our workforce looks much different than many other workforces.
Today, foodservice employs nine million Americans. By 2005, that number will climb to 12 million. Our typical employee is young, female and single; 3A live at home with their parents. And our employees are more likely to work part- time. The combination of these characteristics means we are at once tremendously affected by labor-cost increases and at the same time lacking options for absorbing these cost increases. FRDM^SIZER. C. TQ: 2024567739 MAR 25. 1993 i:0aPM «606 P.04
You have asked us to discuss the best ways to ensure that employees of small businesses get health coverage.
We believe lhat the most essential clement of healthcare reform is cost containment. We adamantly oppose employer mandates, price controls, and global budgets. Instead, we support many of the concepts behind "managed competition" which build on the strengths of our free-market system. Here are the reforms we urge you to adopt:
• ONE, we support pooling systems that would help small businesses and uninsured individuals buy quality health insurance at affordable rates.
• TWO, we support tax changes to give all businesses a full tax deduction for the cost ofhealth insurance premiums, but limiting the employer tax deduction and employee tax exclusion for excessive health coverage costs.
• TH REE, we support reforms to the insurance market for small businesses, so smaU business owners and employees are guaranteed insurance coverage.
• FOUR, we support federal pre-emption of costly state laws, such as those requiring even basic benefit plans to include non-essential care and those that put a damper on managed-care programs.
• FI VB, wc support reduction ofpaperwor k by creating a uniform electronic claims system that guarantees timely payments and curtails fraud.
• AND FINALLY, we support reforms to medical-malpractice laws.
These recommendations are aimed at removing the barriers that prevent businesses from providing health insurance to their employees.
Yet if legislation is adopted that mandates all employers provide health care coverage for their employees, it would result in disaster for the nation's foodservice operators, large and small. SMALL BUSINESS LEGISLATIVE COUNCIL
MEMBERS: Coalition of 100 small business trade associations REPRESENTS: The Council organizations represent at least 1.6 million small businesses in diverse economic sectors (manufacturing, retailing, distributing, professional and technical services,construction, transportation and agriculture). TODAY'S SPEAKER: Gary Frank Petty, Treasurer and member of the Board of Directors (see bio) SCOPE OF INFLUENCE: Newsletter widely distributed, Well liked by key congressional members. APPROACH TO REFORM: Their health care reform proposal does not include an employer mandate, but have signaled their willingness to discuss if the cost issue is adequately addressed and small businesses are not unduly burdened. SUMMARY OF POSITION: They developed a reform proposal about two years ago. Establishment of global spending goals and rate structures that reflect local circumstances. Recently released statement supportive of price controls. Encourage creation of voluntary small business "buying groups." Limits on employee tax exclusion for employer-paid health coverage. Reform of small group case market should recognize importance of association insurance plans (including MEWA's) as a means of providing coverage and relevance of workers compensation as a large component of the health care debate. POSITION ON PLAN: Noncommittal, but open.
INTERACTION W/ TASK FORCE AND WORKING GROUPS: Transition. HOT BUTTON ISSUES: Cost control, employer mandate. Small Business Legislative Council Representat ive Gary Frank Petty Treasurer and Member of the Board of Directors [Gary Frank Petty] is the Treasurer and a member of the Board of Directors of the Small Business Legislative Council (SBLC). He is one of SBLC's volunteer officers. He is the President and CEO of the National Moving and Storage Association (NMSA), one of the trade association members of SBLC. Mr. Petty has served as the President and CEO of NMSA since 1988. He has a background in association management, law and higher education. He holds a Juris Doctor degree from Delaware Law School, a Doctor of Philosophy from the University of Michigan, a Master of Arts and Bachelor of Arts from Western Michigan University. Mr. Petty will be accompanied by John S. Satagaj, the President of the SBLC. Mr. Satagaj has served as the President of the Small Business Legislative Council since 1986. He began representing small business interests in Washington in 1978 when he served as a special counsel to the first Chief Counsel for Advocacy for Small Business, Milton D. Stewart. Mr. Satagaj is a partner in the law firm of London and Satagaj. He has a Juris Doctor degree from the University of Connecticut and an L.L. M. in Taxation from George Washington University. e3/23/'93 12iei X 2622965333 82
Oral Presentation of Gary Frank Petty on Behalf of the MULLiuiMiIfIISlftTIVf* Sirflll Business Legislative Council c o u • e i i Thank you for this opportunity to present the views of the Small Business Legislative Council (SBLC) . In accordance with your request, I will not describe our organization and we are sulinitting a written statement for the record. Let me begin by saying we approach this debate with great optimism because if the election of the President sent one signal to us, it is that the country would finally be united in agreeing upon the need for iirmediate, corrprehensive health care refom. For at least two years, we have been preaching the need for conprehensive refonn led by meaningful cost containment and the pews have been alirost erpty. We are pleased they are now filling up fast. The question today is "what is the best way to ensure that enployecs of small business get health coverage?" The answer begins and ends with the statement "control costs. • We are well aware of the number o£ Americans enployed by small business without health care coverage. That fact, however, must be placed in context. What about the many, many millions of Americans who do receive their health care benefits through a small business errplqyer? In conparison, this latter figure is a rather significant number. We are convinced the gap would shrink even further if small employers had the comfort of knowing that the costs of coverage would not became a quagmire from which they could not extricate themselves. Further, we are more concerned about all those currently providing coverage. They have sirrply non out of options for controlling costs by their own actions; tht^ have changed programs, tried managed care, self-insurance and cost sharing. They have absorbed all the costs they can. Unless we control costs, all is for naught. For that reason, we have concluded that in the short-term, seme form of fee and price controls is necessary to rein in health care provider costs. The truth is, we need to separate the health care profession from the health care business. We wish the marketplace would make these adjustments, but we are not so naive to believe free enterprise guarantees the perfect system. Since 1977, SBLC has been an outspoken advocate of antitrust policy, taxation policy (such as the President' s investment tax credit) and procurement policy that allow the government to smooth out the market "inperf ect ions" to permit a conpetitive econony to thrive. In this health care debate, we have come to the conclusion, the government must undertake a role to control costs. We think the health care provider conmunity should be asked to defend or oppose a particular cost control approach, rather than the enployer community. It is time to recognize the market is not going to produce cost containment by itself. I know the subject of using iremdates to require srrali businesses to provide coverage is under consideration. Let me say, it is hard for us to iiragine that anyone couid warmly embrace the concept of mandatory participation, particularly small business owners, for whom economic freedom, the right to Extended Page 2.1
Having said that, let ne first mke two observations and then some suggestions about mandates. In our on-going discussions with our members, it is apparent to us tliat most small bosinesses have ccme to view access to health care as almost a fundamental right. It is scanething they do expect all Americans to have. Second, most small business owners would tell you they believe it is their responsibility to provide it. Ihe barrier, as noted, is cost and the framework for undertaking the responsibility is the freedom to determine how to do it. These observations, combined with the recognition we are asking others, such as health care providers to nake dramatic changes in their contribution to the system, lead us to the conclusion we cannot summarily rule out any alternative tliat adversely effects us, if it is part of a coerprehensive solution, notwithstanding our reservations. Six years ago it may have been appropriate. Now is the time to be agents for change, not shackled servants to the past. After all, is it not the nature of the successful entrepreneur to take the risky road to pursue a better tomorrow? First, as noted above, cost controls would hove to be put in place as a condition precedent. It does get a little tiring to us for others to suggest enployers need to do more. We are prepared to make further sacrifices, but not before others in the system have been made to do their fair share. Let's not forget we are currently responsible for providing coverage to many Americans. Second, any irandatory responsibility would have to be a shared responsibility. The enployer and ertplqyeemust share the responsibility for health care. At best, price and fee controls or global budgeting are short- to mid-term solutions; without getting the individual directly involved in some financial way, we will never impose the long-term discipline necessary to restrain our health care appetite. We believe taxation of the excess cost of benefits to the enployee would be an excellent starting point. If there is to be e mandatory participation requirement, it should be bome by both the enployer and enployee. Third, resolution of the growing problem of workers carrpensation costs must be part of a corrprehensive solution. We are certain cutting workers ccrcpensation costs would be a very attractive inducement for accepting any mandatory responsibility. A smll business moving and storage conpany in Des Moines, Iowa has six local drivers making annual salaries in the range of $20,000 to $25,000 each. The conpany does not provide health insurance for these drivers, primarily because of the high cost of workers carrpensation insurance. At the state rate of $20 per $100 of payroll, a driver earning $25,000 would cost the conpany $5,000 a year in workers ccrpensation insurance premiums. On the other hand, that same driver, 30 years old and single, would cost the conpany $190 per month, or $2,280 per year, for health insurance, if offered by the conpany. If the conpany paid both workers conpensation insurance and health insurance, the total annual cost would be almost 30 percent of the driver's salary. For the six drivers on an annual basis, the conpany pays about $27,000 for workers conpensation, or more than the annual salary of any single driver. Even assuming $250 a month for health care insurance per driver, the ccnpany's annual cost would be^$18, 000. Obviously if the ccrpany provided both types of
-3- Extended Page 2. 2 If the task force presents a proposal to the President that is credible on these counts, we believe you will be able to ireike a strong case to small business that they need to be a part of a conprehensive solution. There are several other conponents of the health care debate I would like to touch upon briefly. Ihe first is the delivery system itself. We have supported the basic concept behind •managed corpetition. • The idea of buying groups appeals to us. What we have not been able to reconcile is a mandatory requirement for snell businesses to join such a group. As I indicated earlier, snell business owners want to retain the flexibility to choose their approach to assuming this responsibility. Associations, for exanple, have offered one alternative approach for many small businesses to provide health care benefit coverage. Further, we do not think one can rule out self-insurance, in whole or part, if there is a way to ensure its legitirrecy under conprehensive refonn. We do not know how one reconciles self-insurance options with managed conpetition, but we are always struck by the number of smaller businesses that do provide meaningful benefits to their enplpyees with some type of self-insurance arrangement. We believe snell business will want to retain some flexibility in that regard. At this time, we are not sure what role the insurance industry will play in the new world after conprehensive reform. If we build on the current, system, some administrative reforms are necessary, to reduce the high cost of administering snail business programs. We do know that using pre-existing conditions and other underwriting devices to "cherry-pick" the market are not. acceptable if we are to have conprehensive reform, universal access, and cost control. Even if we have mandatory responsibility for coverage, sliared by enployers and errployees, we still have those who are unenplcyed, are part-time enployees, and others who, for one reason or another, do not fall within the enployer-based system. As you know, the price tag for universal access is significant. How we pay for universal access, even with some mandatory shared responsibility, is rapidly replacing the nandate issue as a irajor concern. We dc not have a specific revenue proposal in mind, but we do believe it must be one that is absorbed by the citizenry as a whole, rather than one that is rolled directly into the costs of health care that must be bome by the enployer community. There are many other aspects of health care refonn I have not touched on in our renerks. For exanple, we believe reforms of public sector programs. Medicare and Medicaid, are in order. We believe strongly that medical malpractice refozms are necessary. We believe significant cost savings can be achieved by fundamental civil justice refonn. In conclusion, we believe it is important for snail business to be part of a solution, not an obstacle to refonn. Clearly, controlling costs is our paramount concern. In our minds, this debate is "a work in progress" and wc cannot take any option off the table. We look forward to working with the members of this task force and the President to find a solution that works for all Americans in a fair and equitable manner.
/S2595A November 23, 1993
Steve Larrick Chernin's Shoes 1001 South Clinton Stree Chicago, IL 60607
Dear Mr. Larrick: Thank you for your letter regarding the reform of our nation's health care system. As you may know, since late January our office has been hard at work on the health care reform initiative which we hope will be passed into law before the end of the 103rd Congress. Your thoughts, and those of many Americans like you, have been of great value in the formulation of the comprehensive health reform which President Clinton introduced to Congress on October 27, 1993.
[ISSUE PARAGRAPH] Your question/statement about
The Health Security Act that President Clinton is proposing is based on the following six principles: comprehensive benefits, cost containment, quality, choice, simplicity and responsibility. It is imperative that all Americans become involved in the debate which will continue to shape the policies that effect our nation and each of us personally. Regards,
Ira C. Magaziner Senior Advisor to the President for Policy Development ICM: your initials October 25, 1993
Steve Larrick^ 1001 South^tlnton Street Chicago, IL 60607
Dear Mr. Larrick:
Thank you for your policy suggestions for the reform of ouour nation's health care system. I appreciate hearing your commenj^si^p'" and concerns on the financial effect upon service industries .'^tip you may know, since late January our office has been hard at Work on a health care reform initiative that we hope will be passed into law before the end of the 103rd Congress. Correspondence such as yours has provided us with many thought provoking and innovative ideas about how to reform our health care system. eu-E^-of-f-rce—hers-e"s"tabli~sh-ed—a—pr-oeess—to f\J)^A&tffcM \ incorporate these—Po4-i-ev—SAJqqe-s-ti.-Qns—in-to—the—r-e-form-p3rari. I hope you find that the plan adequately adressses your concerns.
Thank you again for your interest and suggestions.
Regards,
Ira C. Magaziner Senior Advisor to the President for Policy Development
ICM:yg 0- WJUJ Chernin's Shoes RRICK president
September 21, 1993
Mr. Ira Magaziner THE WHITE HOUSE 1600 Pennsylvania Avenue, N.W. Washington, D.C. 20500
Dear Mr. Magaziner:
I must convey to you our feelings about a very disturbing aspect about what we are reading regarding The Clinton Health Care Proposal. It is obvious that, even after modifications are made by Congress, the intent, or the result, will be to shift a tremendous financial burden to service industries. ^This would certainly have hugely detrimental, if noF'"ca"tai^roph'icr, effects on companies such as ourselves. Let me explain.
Chernin's Shoes employs approximately 1,100 people, of which 350 are full-time and 750 are part-time. Ninety-five percent of our part-time employees do not want to make a full-time commitment either because they are in school, have another job or because of some other reason. There is, of course, a tremendous need in our business for these part-time people because the busy selling hours in retail are in the evenings and on weekends. Therefore, the current employment structure, as it now stands, serves the needs of our 750 part-time employees, as well as the needs of our business, very well.
Chernin's offers its full-time employees a very competitive benefits package which is similar to the standard package proposed under the Clinton Plan, except that we also include dental, and long- and short-term disability. The total cost of our benefits package is approximately $900,000, which, this year, is an amount that we expect will exceed our corporate profit. With our part- time employees averaging approximately twenty hours per week, if we were forced to pay for two-thirds of the standard benefit package for 750 employees, it would add approximately $1.2 million to our benefits expense. Even assuming the Clinton Plan accommodates prorations for multiple employers and for young people still living with their parents, our financial responsibility for health insurance would be overwhelming. There is no way we could adjust the benefits and salaries of current employees enough to meet this additional burden without becoming uncompetitive in the marketplace for employees and/or tremendously disrupting the lives of all of our loyal, full-time employees already receiving benefits.
1001 south Clinton street • Chicago,'Illinois 60607 • (312) 922-5900 Page 2 9/21/93
In a world economic situation where America's competitive advantage is diminishing and where the expectations of the vast majority of it's population are having to be reduced to coincide with reality, can we really afford a disruption of the magnitude the Clinton Plan will cause? We certainly cannot afford to create a new, huge bureaucracy at the federal level to over-manage a health care system which is probably moving in the right direction at the present time. As far as the uninsured are concerned, it would probably be better to have us all contribute to subsidizing hospitals and doctors to see patients who cannot afford to pay than to disrupt 190 million people who are currently adequately covered. The enclosed article from "The New York Times" is the best analysis I have yet to read regarding the issues we need to be facing if we are to really bring an end to spiraling health care costs and provide a minimum basic package for all. If the ethical and moral issues are not addressed now, then the total cost of health care in our country will never be under control.
Thanks for your time. Yours truly,
Steve Larrick
SL:tk enclosure A15 THE NEW YORK TIMES OP-ED WEDNESDAY, SEPTEMBER 15, 1993 The Health Plan Misses the Point
1 By Willard Gaylin makers in Washington have been fo such operations are performed strict eryone' ; health care costs directly, AIDS drugs.- psychotherapy for un- cusing on the deficiencies and fail ly so thai ihe patient can continue 10 an option, though highly efficient, that happmess, surgery for the tennis el ures of modern medicine: greedy lead a '•normal" life, to be able to wc seem unwilling even.to consider. bow, intensive care for the infirm HASTJNGS-OS-HUPsON, N.Y. pharmaceutical and insurance com play golf or ski. Are these justifiable Second, they are not, in fact, offer elderly as well as for the one-pound Ms Presideni Climon pre- panies (not to mention physicians); medical expenses? if one is free of ing comparable services. Their fetus. M\ pares io announce his unnecessary procedures and bureau pain except on the tennis court, is one health care system does not make Limited resources will force us to m ^ " health care proposal cratic inefficiency; expensive tech ••ill"? nearly as much use of technology, make tragic choices — if not now, ' next week, it's hard nologies, and so forth. The shibbo As our definilion of illness expands, and they are willing, at least for now, under the Clinton plan, then very M % to escape ihe feeling leths that identify their approach in so does our appetite for high-tech io settle for less. (But this appears to soon. These may look like medical ihat the debate over clude managed care, H.M.O.'s and treatments. All of us know that doc be changing: most nations with man- choices, best made by medical pro reform has been missing the poinu managed competition. Implicit in tors can be seduced by medical tech fessionals. In fact, they are decisions U'hai could have been a far-ranging their recommendations is the as nology, but patients and iheir fam that are best made by all of us, strug public discussion about the deeper sumption that the elimination of ilies can be,"loo — and not because of gling toward consensus. issues of health care — the meaning waste will obviate the need for ration an infatuation with gadgetry, but be . There is a precedent for just such a of 'health," suffering versus surviv ing health care, ll will not- cause of the nature of decision mak Face it: We can't public process. Five years ago the al, who shall live and who shall die Waste is incidental lo ihe basic ing in matters of life and death. Deci State of Oregon sought to guarantee a (and who shall decide) — Has been forces driving up costs. The greatest sion making becomes distorted when do everything basic health care package to every-' supplanted by relatively narrow quib pan of the increase in health care ever extreme risks are involved; one; at the same time, il acknowl bles over policy. costs can best be understood as the also, our perceptions of probability for everybody. edged that doing so would bankrupt It is. a lot easier and safer for result not of the failures of medicine vary significantly depending on the the state unless some hard moral politician's and policy makers lo talk but of its successes. The releniless setting choices were made about what should about regional health alliances and increase in costs is actually a product Driving 65 miles an hour, for exam constitute basic health care. In a se premium caps than about what care of our unbridled appetite for health ple, carries a greater risk of a fatal aged'eare are now accelerating iheir ries of town meetings and a statewide to give a desperately ill newborn or care and our continuing expansion of accident than driving 55, yet this well- health care spending at a more rapid "health parliament." medical priori- whether a kidney patient over the age the definition of what constitutes publicized fact doesn't seem to keep rale lhan we are.) lies were debated publicly, some- of 50 should be eligible for a trans health. many drivers under the speed limiL The health care crisis is so severe limes fiercely. The state's health plant. The paradox of our current ll is ofien'difficuli for laypeople to The possible consequence is loo re in America not only because we are commission then published a compre situaiion, however, is that unless we appreciaie"lhat'good medicine does mote. These'perceplions change in a the pre-eminent high-technology cul hensive lisi of medical conditions and address such basic, almost existen not reduce the percentage of people hospital setting. ture but also because of the nature of treatmenis, each ranked according to tial questions, we stand little chance with illnesses in our. population; it Imagine if a doctor were to tell a ihe American character. Under ihe its costs and benefus. medical sysiem in England, health of solving our nation's health care - increases lhal percentage. There are patient that he saw no sign of a tumor More debaie ensued , the list was care services are free and widely crisis. in the X-ray and lhat though a CAT revised. Finally, the Legislature de distributed, but there is a long wait Partly because at its unwillingness scan might pick up the 1 percent of cided exactly where ihe state could ing period for voluntary surgery to io confront these issues, the Clinton HEALTH CARE tumors that X-rays miss, he was not afford to draw the necessary cutoff correct conditions lhat are not Iift- Administration now finds itself tan SECOND OPINIONS sure ii was worth ihe exlra money. line, it would pay for hip replace threatemng Americans, by contrast, gled in a profound yet largely unac The patient would fire him on the ments and neonatal care, for exam refuse to believe there are limits to knowledged contradiction. The two An Occasional Series spot He warns any edge, however ple, .but not liver transplanis or in anything — let alone to life itself. key goals bf its health reform plan minute, when what is at stake is the viiro fertilization. By conducting are to democratize health care — to life of his child, his wife or himself Consider ihe st ruggle in A merica to • much of this process in public, ihe confront the problem of ihe 37 million proportionally more people in the People will pay anything to defend define such terms as death with health commission was able to de uninsured Americans who can't get United States with arlerioscleronc against the possibility of death, all the dignity" and -'growing old graceful velop a consensus behind some other-, adequate care — and to control the heart disease, diabetes, essential hy- more so when ihe money involved ly"; the latter, on closer analysis, wise unpopular decisions ballooning portion of our gross r.a; : pertension and other expensive doesn't come directly out of their own means living a long time without ag ing. Dying in one's sleep at 92 after tional product thai goes io pay for chronic diseases than there are in pockets he Oregon plan, which having won three sets of tennis from health care. Iraq. Nigeria or Colombia. Good We are also wrong to assume lhat will go into effect next one's 40-year-o)d grandson lhat after Never mind lhat the Administra medicine keeps sick people alive, medical technology, like CD players year, is by no means' noon and having made love to one's tion has yet to explain convincir.gly We also have :o recognne thai and personal compuiers, will become perfect. Bui at least' wife twice that same evening — this how it plans to cover the costs of the health today does not mean what it cheaper as the industry' matures. the state addressed the is about the only scenario 1 have program. No amount of tinkering did a hundred years ago. My reading When what is being improved is life uncomlonable truth" found most American men Willing to with the process of delivery or pay glasses, for example, are paid for by expectancy, all the rules change: peo that people cannot have equity in' accept as fulfilling their idea of deaih T ment can resolve ihis paradox: It.you z health insurer, based on the diagno ple are willing to pay substantially iheir health care sysiem without set-, with dignity. promise everyone broad access 10 sis of presbyopia (an eye "disease':) more money for relatively minor im ting limns. medical care you. will enormously made by an ophlhalmologist. Before provements Medical (ethnology will In its cun enl form, the Clinton plan We are now- told lhat ihe Presi-- increase the total amount the nation the invention of the lens there was no iherefore continue to be expensive will apparently offer a generous dent's health care plan has lo be sold, spends on health care — ihe very such disease as presbyopia; there simply because it pays for companies package of basic health care benefits lo the American people. M, as in Ore costs Presideni Clinton was elected to were also no ophthalmologists A de to market a 5 percent improvement to everyone, indulging in the wishful gon, the Amencan peopk- had al bring under control. cline in lacuhies was simply pari of even though U might be 100 percent thinking thai we can have il all as ready been consulied, instead of be-, Mosi economists agree thai the the aging process; with age, sight more expensive long as we get the flow charts and mg left out by experts working in need to contain medical costs is abso would be impaired or lost, as would People often ask htiw nations like systems theory right By focusing pri secrecy, ihe plan would not now h:ive' lute and urgent. The questions thai be hearing, potency and fertility. England and Canada can provide marily on cosi efficiency, ihe Clmtoi, to be sold to ihem. Perhaps n is not - divide us imolve how i\ should be The vast expansion ol the concept health care comparable io ours ior plan will do little io disturb the self- loo late to begin a searching public-, done. So far, the experts and policy of healih can be demonstrated in sur much less money First of all, they desiruciive belsef-lhai wc can meei debdic about how much healih care - gery, orthopedics, menial heaith. gy use a single-party payments sysiem cvfrv American's every '•heahh' we can aiford — and whai n really milord Gaylin protessor of psychi- necology — indeed, in anv field of — ihat JS. the Government pays ev need, organ uariiplams. unproven means io be hc-iiltliv.' O any ai Culuni'via U'HWi Miy and co- medicine. People do not have opera founder and presideni of the Hastings tions on their knees or elbows merely C'cmpr-/or hioflhicul research TJus IS HJ continue io be employable, for ex = adopted fiom the- Ociober issue of ample; niosi of us do noi work al jobs Harper's moiiazinc. requiring physical strength Many
PHOTOCOPY PRESERVATION