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REMARKS BY:  DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES
PLACE:       ARCO FORUM OF PUBLIC AFFAIRS, INSTITUTE OF POLITICS, JOHN F. KENNEDY SCHOOL OF GOVERNMENT, HARVARD UNIVERSITY, CAMBRIDGE, MASS.
DATE:	     April 7, 1998

Thank you, Senator Simpson, for your gracious introduction, and for giving me the opportunity to speak at the world-renowned ARCO forum. I have been here before -- for many years I was a member of the visiting committee of the JFK School. Today, I've come to Harvard to talk about some of my experiences in Washington.

So let me start by noting that our nation's capital not only attracts the best, it sometimes loses the best. There are great public servants and scholar-teachers like David Ellwood and Mary Jo Bane: Friends and colleagues of mine who are back at Harvard - but whose intelligence and integrity still represent the standard that the rest of us try to meet.

And then there are the tall cowboys with a sense of humor, a big heart - and the grace of self-examination. There weren't many to begin with. And now that Senator Alan Simpson has left town, there's one less.

I know he'll never admit this, but I always believed that Senator Simpson was a closet Democrat. He's plainspoken in the tradition of Harry Truman. You don't hear Newt Gingrich saying, "I sometimes don't know when to stuff a sock in my mouth." Senator Simpson chose Democratic Cambridge - not Republican Casper - as the place to share his wisdom and wit. And most telling of all, Hollywood adores him - especially after his bravura performance in the movie Dave. He was so good in that film, there wasn't room for some of his best lines, like describing the movie's main character - a befuddled impostor President - as being "two tacos short of a combination platter."

The fact is, Senator Simpson doesn't fit any mold. Instead he is - as he once said he wanted to be remembered - someone all of us would like to have on our side. So it a great honor to join Senator Simpson and the Institute of Politics for a look back, and look forward, at the making of public health policy in Washington.

The timing could not be better. Today is World Health Day - a day to reflect on our half-century of public health achievements - and the hard work that lies ahead.

Let me begin with a simple proposition: No one - whether in government or the private sector - gets it right all the time.

Our best computer programmers wrote billions of lines of code in the 60s and 70s, apparently thinking the world would stop at midnight, 1999. Last summer there were predictions that Titanic would sink at the box office. And just a couple of weeks ago, astronomers made headlines around the world by announcing that an asteroid headed toward earth would barely miss us. The next day they had an update: The near-miss turned out to be 600,000 miles.

I'm not an astronomer, but I understand that determining the course of an asteroid is not as simple as drawing a line from A to B. But it is at least a puzzle with a straightforward solution. Were it only so with people. Think about the real Titanic. Engineers knew exactly how the ship would break up, and how long it would take to sink. But no one could predict how the passengers would react: Who would panic? Who would show courage? When would the will to love be stronger than the will to live? We're gripped by these questions because they measure who we are - and our will to overcome.

I've spent most of my adult life on the borderline between making public policy and being a student of public policy. After many years of doing both -- I can tell you solutions rarely rise to the surface with mathematical precision. Yet time and again, I've seen leaders from both political parties rise to the occasion, put nation above party, and better the lives of millions of Americans.

I say this as a Cabinet member who has been there from the beginning. My five years as Secretary of Health and Human Services has been an exhilarating ride - with more bends than the Charles River, and I hope as many successes as there are banners hanging above Fleet Center.

But for all the joy and satisfaction of my job, I've had to contend with two myths about running HHS. The first is that because the department is so large, my job is impossible: Too many difficult clients. Too many internal conflicts. Too little public confidence. The second myth is that large organizations like HHS are essentially machines. Pull the right levers in the right way, and you'll get the right result.

Between these two extremes, that nothing works and that everything can be made to work, lies a basic truth: Managing a large organization is the art of the possible. With talent, hard work, and a dedicated staff - the possible almost always becomes probable, then doable, then done.

Still, there are always lessons to be learned along the way. Take James Cameron for example. He is a naturally gifted director, but he probably couldn't have made Titanic for $200 million dollars if he hadn't learned a few things making Terminator for around $6 million dollars.

Cabinet Secretaries have their own learning curve. For me, the lessons came fast - and on occasion painfully - in our early days of trying to reshape the Department to get better information out to the public; to keep our science and technology second to none; to preserve our promises to children, the poor and older Americans; and to sketch out a working relationship with a new White House staff. All the while trying to integrate a new political staff with an existing career civil service.

So here are Donna Shalala's: Six Lessons of Separation from the Policy Making Crowd. None are quite as pithy as the one Alan Simpson offered about how a public official should deal with the press. He said, "When they're after your ass, pick up the phone." But I think they'll give you a snapshot of how to be successful if you're in the business of making public policy that affects almost every American.

First, know your organization. Large organizations have many cultures - each with unique ways of doing things. When I became Secretary, personnel managers in the Office of the Secretary had overall responsibility for hiring scientists at NIH. Have you ever tried applying standard personnel rules to hiring scientists? It works about as well as hiring players for the Red Sox based on their zip code. So I put this hiring responsibility where it belonged - with top people at NIH.

Second, make sure the right hand knows what the left hand is doing. Organizations have to meld their separate cultures into a larger team. That's why I asked each of my top appointees to participate in the budget hearings of other appointees - and to prepare a budget for the entire Department. I wanted them to see the forest from the trees by looking at the Department the way I have to look at it every day.

Third, stand up for the people who work for you. I truly believe this. People behave at work pretty much the way they behave outside of work. Friendship, support and loyalty motivate them. So, showing people you care really pays dividends.

I had a chance to prove this during the government shut down in 1995. Congress and the Administration told federal workers that they would still be paid. But people were scared. They had families to support. They felt their futures were uncertain. I sent everyone in the Department a letter saying: I'm fighting for you. And I talked to the media about the devastating impact of the shutdown. This calmed a lot of nerves - and motivated our employees to come back after the shutdown and work even harder for the American people.

Fourth, set firm goals and stick with them. The old saying is still true: To govern is to choose. I have six Secretarial initiatives: Children's health insurance, tobacco, welfare reform, cutting fraud and abuse, health care quality and fighting drugs. Although we're farther ahead in some than others - we're not quitting on any. But the larger point is this: Choosing priorities is not the same as choosing what's easy. So be like a utility infielder: Go where is the need is.

Fifth, politics is always part of policy making. Policy is not made in political vacuum. That's why I really believe in being nice to Republicans - and maintaining professional relationships with more conservative newspapers like The Washington Times and the Wall Street Journal. In fact, I have two rules of thumb: One, be fiercely loyal to the President on policy and appointments. Two, be skillfully bipartisan in the administration of the Department. When we go to Capitol Hill to testify, we present the Administration's case as vigorously as possible. And when we return, we treat requests from Democrat and Republican governors with exactly the same professional consideration.

Sixth, be flexible and realistic. In 1994, we lost on universal health care - in part because the other side organized quickly and framed the debate. We learned our lesson. In 1996, we were flexible enough to find a slower more targeted -- and successful - approach. That year, under the great leadership of Senator Kennedy, we passed the Kassebaum-Kennedy law so people who lose their jobs - or have a pre-existing condition - won't have to live in fear of losing their health insurance. And last year, we passed our Children's Health Insurance Program - or CHIP - a $24 billion dollar program to provide coverage for up to 5 million uninsured children.

Both of these legislative accomplishments came after the Republicans took over Congress in 1995. Back then, people feared that divided government was a recipe for gridlock - that Republicans were Republicans, Democrats were Democrats and never the twain could meet.

That didn't happen. Instead the change in Congress led to what I think was a very healthy national debate about the role of government. The American people were obviously saying that they wanted some limits on the size and cost of government. The President heard that message and declared, "the era of big government is over."

But the President also believed - and still believes - that government has an important role to play in protecting the health and well being of our children; opening the door of America's economic bounty to all who are locked out; preserving the promise of Medicare and Medicaid; and making sure that the root of basic research becomes the flower of life saving medicine.

We fought hard for this vision of America - an America that would live within its means without sacrificing it principles - or its soul. That fight was worth having. The days were long. The bargaining hard. The compromises sometimes difficult. But what followed the shutdown was a period of almost unparalleled legislative achievement.

We passed major welfare reform legislation - that along with the booming economy - has brought the number of welfare recipients below 10 million for the first time in more than 25 years. Today, fewer than 4 percent of Americans are on welfare.

But we wanted to do more than reform welfare. We wanted to strengthen families and make sure that work is a better deal than welfare. So after we expanded the Earned Income Tax Credit in 1994, we raised the minimum wage in 1996. We approved tough new child support measures that are expected to increase collections by $24 billion dollars over the next ten years. And as I mentioned, we passed CHIP - which is the largest expansion in health care since we made the promise of Medicare and Medicaid over 30 years ago.

At the same time, we strengthened both Medicare and Medicaid - adding important new benefits and extending the life of the Medicare Trust Fund to 2007. Head Start was restructured and we invested in a quality strategy. We cracked down big time on fraud and abuse. And we're still cracking down.

Childhood immunization rates soared to record highs - and the infant mortality rate hit at a record low. Teen pregnancy rates have declined for five straight years, paternity establishments are up, and overall drug use among younger teens leveled off last year for the first time since 1992. We're starting to see real results from new AIDS-fighting drugs. AIDS deaths dropped 44 percent in the second half of last year. And just a couple of weeks ago, we announced that overall cancer incidence and death rates fell from 1990 to 1995.

All of this happened in defiance of conventional wisdom - and with the smallest government since John Kennedy was president.

Democrats and Republicans have also worked together on blazing a trail toward fiscal sanity. We all remember the line from the song in The Wizard of Oz, "Somewhere over the rainbow, blue birds fly?" Well, for years we were operating in Washington on the theory that, "Somewhere over the rainbow balanced budgets lie."

This year we found the end of the rainbow. The President has submitted to Congress the first balanced budget in 30 years. Talk of deficits as far as the eye can see has morphed into talk of surpluses as far as the eye can see. We have reached a new day - not of a limited future, but of a future that students across our nation can believe in without limit.

And that is the most important message I can bring to you.

I'm going to change somewhat words Martin Luther King uttered exactly 30 years ago last Friday - because they express how I think we should view the next 30 years. There will always be difficult days ahead. But America is still the Promised Land. And I want you to know tonight that each of you can - and will - share in the fruits of this Promised Land. This is a time to be happy. To not worry about any barrier. Or fear any tomorrow. The glory of this great nation is just beginning.

But remember, Dr. King saw a Promised Land, not a Perfect Land.

So we must not expect a future without public health challenges, or expect government to meet these challenges without help from businesses, communities, parents and schools. But government does have a role to play. Setting the agenda. Leading the fight. And finding new and creative ways to win that fight.

Which brings me to one of my most memorable recent experiences - sitting for six hours being photographed with a milk mustache. Maybe you've seen the ad. I did the ad as part of my strategy of going where no HHS Secretary has gone before to communicate important public health messages. Teaching teenage girls that they can prevent osteoporosis by drinking milk is just one piece of a much larger agenda for living longer and healthier lives in the 21st century.

I'm going to pull back the curtain on the rest of that agenda so you can see where we're going - and why.

This is the era of closing deficits. We've done it with the budget. Now the time has come to do it with our health, to bring balance into our lives - and close the national health deficit through prevention, research and better access to quality health care.

For America's racial and ethnic minorities, the health deficit is all too real. Go right down the list of our major killers and the story is almost always the same: racial and ethnic minorities suffer from these diseases at higher rates than whites. Here are some examples. Infant mortality: The rate is 21/2 times higher for African Americans - and 11/2 higher for Native Americans. Heart disease and stroke: African Americans are hit twice as hard. Tuberculosis: Three times as hard. Hispanics suffer from stomach cancer at 2 to 3 times the rate of whites. And Chinese Americans are 4 to 5 times more likely to be victims of liver cancer.

The point is: We have a moral obligation to close these gaps, and by focusing on the health needs of minority Americans - we'll improve the health of all Americans. That's why the President just announced a goal of eliminating by the year 2010 racial disparities in six critical areas: Infant mortality, diabetes, cancer screening, heart disease, HIV/AIDS and child and adult immunizations.

There is another kind health deficit. The difference in life expectancy between children who smoke and children who don't smoke. Today - on World Health Day - just like every other day, 3000 teens will light up their first cigarette, and 1000 will die prematurely. Fortunately, we now have a President who is willing to take on Big Tobacco. We sent Joe Camel packing. We have tough new rules for retailers: No selling to anyone under 18. On Opening Day last week, we announced a new screening and cessation program with Major League Baseball to help ballplayers score a victory against spit tobacco - and to keep children and teens from ever starting to use snuff.

Now we're calling on Congress to pull together as a team and pass comprehensive tobacco legislation this year. That's comprehensive - not piecemeal.

Tobacco legislation must uphold the President's five principles for effective legislation. It must include measures that will allow us to regulate children's access to tobacco, stop tobacco marketing and promotion, raise the price of tobacco to cut teenage tobacco use, and protect tobacco farmers.

Again, our message to Congress is simple: Don't go home without passing comprehensive tobacco legislation. Just don't do it.

Closing the health deficit is about more than eliminating disease. We also need to balance the books on access and quality. And that's exactly what we're doing.

The world has changed dramatically since President Johnson promised Americans they would not have to live in fear of being old without health insurance. Today, many people near retirement age are losing their jobs - and their insurance just when they need it most. That's why the President is calling on Congress to extend Medicare benefits to Americans 55 to 65. This Medicare buy-in will be fully paid for. We won't raise taxes. We won't hurt the Trust Fund. But we will do what's right.

We're also going to do what's right to assure quality in our health care system. If you go to the movies, and one of the characters complains about an HMO, chances are the audience will break into a loud cheer. Still, as I told Harvard medical students yesterday, managed care is here to stay. There are, of course, many good HMOs. But we must never ever sacrifice quality for efficiency.

That's why a year ago, the President appointed a commission that I co-chaired to study health care quality. The Commission just issued its recommendations including a Patient's Bill of Rights that will assure greater choice, better information, emergency care, privacy of health records - and much more. We've already given these rights to every person with federally subsidized health insurance. That's one-third of all Americans. Now we're calling on private insurers to sign on and do the same.

When the President announced the first balanced budget, he said he wanted the surplus - and future surpluses - to go to saving Social Security. That's because closing the health deficit not only means paying up today - it means investing for tomorrow. And that's exactly what we're doing - investing in the children of the millennium. And their children.

First, by proposing the largest single investment in child care in our nation's history - almost $22 billion over five years to make child care more available, more affordable and more trustworthy for millions of working families. And second by making sure these children of the millennium grow up safe from some of today's most dangerous diseases.

To do that, we're proposing a new 21st Century Research Fund. That fund will mean millions of dollars for a prevention research program. But that's just the beginning. The Fund will also give our National Institutes of Health the single largest budget increase in its history: $1.1 billion next year as a down payment on a historic five-year, 50 percent expansion. These new resources will allow us to boost the number of funded research grants to an all-time high - and increase NIH cancer funding by 65 percent by 2003.

Since I spent most of today talking with groups of students, I felt like I was once again wearing my Chancellor's hat - learning as much as I was teaching, and experiencing fellowship as much as fulfilling the honor of being a Heffernan fellow.

Under the stars of a beautiful spring evening in Cambridge, it's easy to forget that while learning has its own rewards - how we use what we learn is much more important. So if we fail to build on the blessings of knowledge, the fault, as Shakespeare wrote, will not be "in our stars, but in ourselves."

That means as we near the end of what has come to be called the American Century - we have the chance to plant the seeds of an American Millennium. Where the burden of history - and the yoke of disease - is finally lifted from our children. Where every child can grab the baton of education and sprint to a prosperous future. Where equality and economic opportunity are a certainty - and intolerance a long ago memory. Where we refuse to forego our principles - or make others forego their dignity.

Too idealistic for the hard ball world of politics and policy - budgets and bureaucracy? No.

In a century where millions died because governments thought they could impose a utopia, the lesson for next century is unmistakable: policies that move the human spirit - are policies that change us for the better. And forever.

Thank you.