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Can Clinton Sway Health Reform's Most Crucial Critic?


Washington Outlook

CAN CLINTON SWAY HEALTH REFORM'S MOST CRUCIAL CRITIC?

As President Clinton's advisers put finishing touches on the Administration's plan for health-care reform, they're focusing on its toughest critics. No, not doctors, hospitals, employers, or any other health-care interests. The last and highest hurdles the plan faces--before being introduced as legislation--are the anonymous analysts at the Congressional Budget Office. The CBO has the final say in "scoring" the impact of health reform on the deficit. Under the enforcement rules of the just passed deficit-reduction plan, the health program can't increase red ink in the short run. And to fulfill Clinton's promises, it must trim spending after 1998.

Administration experts insist the savings are there. They have shipped reams of data to Capitol Hill in support of their startling claim that reform can pay for itself by sharply slowing the growth of health-care spending. But the CBO is a hard sell. "Over the next 10 years, it will be exceedingly difficult to realize significant budgetary savings as long as any reform proposal extends coverage to the uninsured," warns CBO Director Robert D. Reischauer.

TOO GLOOMY. The budget office saves its deepest skepticism for "managed competition," the combination of market incentives and government regulations that provides the broad outline of Clinton's plan. CBO analysts give little credence to the Clintonites' claims that increased competition in the medical market can produce big savings.

"CBO just doesn't believe in managed competition," grumbles a top Clinton health aide. Some private analysts agree that the CBO is too gloomy. Washington health economist Jack A. Meyer, for example, concluded that a managed-competition bill sponsored by conservative Democrats could cut annual health spending by between $5 billion and $51 billion by 1998. The CBO found the measure increased spending by $34 billion.

The CBO's bias for regulation over competition has already influenced the White House. Instead of claiming savings from increased competition or streamlined administration, the Clintonites are counting on caps on health-care premium hikes to convince the CBO that the plan adds up. But controls will stiffen the opposition of health-care providers and may jeopardize Corporate America's support for reform.

Twenty years of unsuccessful efforts to contain health-care costs support the CBO's caution. It'll be tough to overcome the budget analysts' skepticism that Clinton can provide more care for less money.EDITED BY STEPHEN H. WILDSTROM Mike McNamee


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