Pushing Ahead with Health Reforms

January 23, 1994

While the Clinton administration attempts to shift the spotlight back to health care reform, a number of respected critics are raising new doubts about the financial underpinnings of the plan.

Alain Enthoven, the Stanford University economist credited with developing the concept of managed competition, now says the Clinton plan "puts the federal budget at enormous risk and will result in huge tax increases." He maintains the plan cannot work and suggests it be rewritten -- a significant criticism since managed competition is a centerpiece of the Clinton proposal.

Meanwhile, Peter G. Peterson, an investment banker and former secretary of commerce, has offered similar criticisms, arguing that the country simply cannot afford to guarantee the extensive package of benefits proposed.

Some form of national health care reform is likely to be enacted, but the shape is as uncertain as ever. One danger for Maryland is that national reform could overturn the successful innovations already in place here. A notable example is the Maryland Health Services Cost Review Commission that has kept hospital cost increases in Maryland significantly below the national average. Further reforms enacted by the General Assembly last year have not yet taken effect, but they show great promise in extending health benefits to thousands of people currently uninsured.

Health-care experts worry that Maryland's reforms aren't comprehensive enough to be protected in a national plan. Despite the proven value of the hospital cost review commission, it covers only one part of the health care industry. It would have to be part of a broader system to be grandfathered into any national plan. The same is true of the reforms enacted last year in Annapolis. Congress and the Clinton administration may come up with a terrific system for health care. They might also come up with an expensive, bureaucratic, one-size-must-fit-all system. History would lead many to put their money on the latter possibility.

Given these considerations, Maryland would be wise to hedge its bets -- which the General Assembly can easily do this session by filling a few key gaps in previous state reforms. Proposals to do this are already attracting support from legislators, health care providers and experts on health care financing and delivery. They deserve serious consideration. With the uncertain outlook in Washington, tailoring Maryland's own health-care reforms so the state isn't folded into a national system could be one of the greatest accomplishments of this General Assembly.

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