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REMARKS BY:	DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES
PLACE:		The American Medical Association, National Leadership Conference
		Philadelphia, Pa.
DATE:		MARCH 17, 1997
Health Care Delivery System

Good Afternoon:

	It is a genuine honor to join you today as the American 
Medical Association celebrates its 150th anniversary.  Like W.C. 
Fields - but for very different reasons - I'm  glad to be in 
Philadelphia.  This is a city rich in history and tradition much 
like your association.  

	For a century and a half, the AMA has been a leader in 
providing high-quality, sensitive care to people in this nation 
and around the world.  You have been the leaders in the 
advancement of our medical and scientific knowledge, helping to 
produce new miracles that have saved the lives of millions and 
millions of women, men, and children.  And you have been ardent 
advocates for the rights of your patients - standing up to all 
kinds of pressure to make sure that in every case, the rights of 
your patients come first.  I want to thank you for your 
leadership, for your vision, and for your caring.

	We know we must be your partner in your efforts to further 
improve the quality of the lives of the American people and 
people around the world.  And that partnership has already begun. 
 One of the things I admire most about the AMA's leadership and 
professional staff is their ability to identify initiatives on 
which we can be partners while they also work hard to explain 
where we disagree.  Both are vital to our ability to make 
progress in the months and years ahead.

	In these past four years, we have worked together to find 
ways to increase access to care, protect and improve the quality 
of that care, and prepare our nation for a new century of 
scientific progress and new medical miracles.  We stood up to the 
special interests and protected the public health by kicking Joe 
Camel out of our children's lives.  We reduced the rate of infant 
mortality in this country to record lows and raised childhood 
immunization rates to record highs.  We reduced the incidence of 
teen pregnancy and helped to bring down the number of Americans 
who are dying with AIDS.  We have rebuilt and refocused the 
leadership of the Public Health Service and the infrastructure of 
our public health system, bringing new talented leaders to 
institutions like the National Institutes of Health and the 
Centers for Disease Control and Prevention.

	As a result, I believe we are seeing an unprecedented level 
of partnership between medicine and public health that is 
producing great results.  These are very real success stories and 
they would not have been possible without the kind of teamwork 
that we have created.  

	But I also recognize that the relationship between our 
Administration and the medical profession did not get off to the 
best of starts.   And we accept some of the blame for that.  But 
today I think that relationship is again on very solid ground and 
it is producing tremendous dividends.

	Over the next two months, I expect to announce a new group 
of physician leaders for major posts in the Department.  I think 
you will be pleased with the quality of the people from your 
ranks and joining us for the second term.

	There is a lot of progress we have made in these last four 
years and we will make a great deal more in the next four.  We 
are enormously proud of the work we are doing together to address 
the very important issues of medical ethics.   I understand the 
conference you held in this city last week got this effort off to 
a great start.  We also look forward to the collaboration between 
my Department and your association to establish a National 
Clearinghouse for Clinical Practice Guidelines.

	But I came today to talk about the fundamentals.  I don't 
have to tell any of you about the revolutions taking place in our 
health care delivery system or about the worries they create.

	We see the explosion of information, technology, and new 
delivery systems.  We see the lines between payers, providers, 
and insurers continue to blur.  As America continues to age, we 
see a seismic shift from acute to chronic care we see too many 
Americans locked out of  the best health care system in the world 
- as the ranks of the uninsured swell to 40 million strong.  We 
see biomedical research continue to push the frontiers of science 
-- raising new hopes and new ethical dilemmas.  We see more and 
more consumers playing an active role in their health care -- and 
demanding that quality and choice not be pushed aside in the race 
for efficiency. 
	
	As we look ahead to this next year and these next four 
years, we know that we are going to need that kind of teamwork 
more than ever.  We have a lot of challenges in front of us but I 
am confident that there is no challenge too great for us to meet. 
 I'd like to use my time with you today to talk about three of 
those challenges:  Preserving and modernizing Medicare; 
protecting and improving quality; and expanding access to health 
insurance for our most precious commodity - our children.

	I believe the Medicare program has changed the history of 
our country.  It has lifted a generation of senior citizens and 
those with disabilities from poverty to comfort.  It has helped 
to translate the medical advances you and your colleagues have 
made into longer lives and a much higher quality of life for our 
parents and grandparents.  And it has helped to fuel a revolution 
in technology that gives patients and their physicians an armory 
of weapons to combat disease and disability.

     	For more than 30 years, Medicare has worked well.  It is our 
job to make sure that it works for another 30 years.  And 30 
years after that.  I don't think anyone in this room would choose 
to drive across country in a car that was built in 1965 and 
hadn't been overhauled in at least a decade.  And we should not 
ask our country to move into a new century with a Medicare 
program that has not been made ready for the journey.  That is 
why, as we preserve Medicare for the future, we must also 
modernize Medicare for the future.

	That is what the President's plan to balance the budget will 
accomplish.  Let me be very clear - despite what you read in the 
papers - this  is not an exercise in numbers.   This is an effort 
- a bipartisan effort - to make sure that the protections we 
provided for our grandparents are there for our children when 
they are grandparents.  And when we talk about modernizing 
Medicare, we intend to preserve the basis structure of the 
program that provides a guaranteed set of benefits to all those 
who qualify rather than a guaranteed contribution.

	Modernizing Medicare must mean six things:  First, we must 
make sure that our benefit package is up to date with medical 
practice and science.   That is why we are adding important new 
prevention benefits like annual mammograms, colon cancer 
screenings, and diabetes monitoring and education.  Let me add 
here, that I was very heartened by Speaker Gingrich's endorsement 
of this proposal last week.  He has been a real leader on this 
issue.

	Second, we must make sure that beneficiaries have a free 
choice of health plans.  That is why we are adopting your 
proposal to add preferred provider organizations and provider 
sponsored organizations to the Medicare choice list.

	Third, we're protecting our low-income Medicare 
beneficiaries - who already spend  21 percent of their out of 
pocket incomes on health care - by holding Part B premiums at 25 
percent.

	Fourth, we're providing additional assistance to rural 
facilities and health care professionals and offering new 
incentives for health plans and others to practice in these 
communities. 

	Fifth, we're continuing to work with the medical profession 
to rid it of the bad apples who give it a bad name by 
perpetrating fraud and abuse.

	And sixth, we're making sure that Medicare becomes a more 
prudent purchaser of health care services, by proposing a series 
of payment reforms aimed at those parts of the Medicare program 
where we are currently overpaying or underpaying.

     	If we are to modernize Medicare, physicians must play the 
leading role.  After all, it is you who have the daily contact 
with the patients we both care so deeply about.  I am sure you 
know that we are asking the medical profession to shoulder a 
portion of the burden of making Medicare a more solvent program. 
  

    	 But it is important to note that we are not asking you to 
bear a substantial part of this burden.   That is because your 
profession has already done such a great job in controlling the 
rate of growth in Medicare spending for physician services.   You 
have set a high standard - an example for other parts of the 
medical and health care profession and we will be working to make 
the Medicare program more sensitive to the needs of physicians 
and other health care professionals.

	I am particularly proud of our proposals to reshape the way 
Medicare pays for graduate medical education.  As the recent 
report issued by your organization indicates, we are training too 
many physicians in this country and this oversupply has 
consequences not only in the area of costs but also in the area 
of quality.  We will work with you in the coming months to shape 
a GME policy that makes sense to doctors, patients, and 
administrators.  I am confident that this year we will pass a 
good proposal and the President will sign it.

	Which brings me to my second challenge:  We must continue to 
work together to ensure that high quality care is always our 
bottom line.  That is why the AMA and the Clinton Administration 
have joined hands to pass legislation requiring managed care 
plans to guarantee at least 48 hours of hospitalization for women 
who give birth.   That is why the AMA and the Clinton 
Administration have stood firmly against the imposition of so-
called gag rules.  And it is why the President will appoint the 
new Advisory Commission on Consumer Rights and Quality in the 
Health Care Industry, which I will co-chair with the Secretary of 
Labor.

	I am sure that many of you are as anxious as I am to see 
this commission appointed and let me assure you that an 
announcement should be made very soon..  And let me give you one 
further assurance - the medical profession and the American 
Medical Association will be well represented on that commission.

	The Quality Commission has great potential for making the 
lives of patients and the health care professionals who care for 
them.  Now, believe it or not, there are some who claim that 
quality is not a valuable commodity in today's tough marketplace. 
 They should look at the rebirth of the American auto industry, 
which made changes to offer better quality cars at competitive 
prices.  And they should look at the revolution in the kinds of 
foods being manufactured today.   The fact is, as more and more 
consumers learn about good nutrition, and as the food label helps 
them to shop and compare, food companies are competing - and 
winning - by offering low-fat, low-cost foods that taste good.   

     	Because that's what consumers are demanding.  I recently 
heard a health care professional joke that Americans want "the 
best health care that someone else will pay for."  But you and I 
know that isn't the case.  Increasingly, your patients are asking 
tough questions; they're surfing the web; they're calling 800 
numbers; and they're reading articles and comparing health plans.

	In plain English, we intend to use our extraordinary 
purchasing power to demand and develop a system of quality in 
health plans with which we contract on behalf of millions of 
Americans.  So none of us can afford to stick our heads in the 
sand and hope this revolution is over soon.   If we don't make 
quality count economically, we run the risk that there will be a 
race to the bottom..  I believe that quality may be the leverage 
we need to stop the profiteering that our citizens and your 
profession are increasingly worried about.  The question is, what 
is quality health care?  Quality, unlike obscenity, can't simply 
be defined as:  "I know it when we I see it."  Taking our cues 
from science, we must give Americans the tools they need to 
measure and compare quality.  Not by simply focusing on process, 
but by using our best research to measure real outcomes and real 
consumer satisfaction across all providers.   So that we're 
comparing apples to apples, and making sure that our citizens are 
the winners.  With your help, that's exactly what we're working 
to do.

	The consumer survey we're developing will help us find out 
what Americans think about their health care plans - so they can 
shop among plans armed with insights from their peers.  By using 
the Health Plan Employer Data Information Sets (HEDIS) for 
Medicare and Medicaid, we are providing performance measurements 
that will further help beneficiaries make smart choices for 
themselves and their families.  And not just in managed care.  We 
are working to apply the same approach to all types of health 
plans.   Working with the Foundation for Accountability, we're 
developing sophisticated outcome measures that will allow us to 
compare the quality of care provided in managed care and fee-for-
service settings.   But, we must do much more than that.  Because 
whenever I'm traveling, people approach me to confess that 
they're worried about their health care.   And, frankly, what 
they're often worried about is their managed care plans.  They're 
worried that somehow the quest for the almighty dollar will leave 
them without the care they need.  It is our job - yours and mine 
- to reassure them.  Not simply with words, but also with action.

	A key element to quality and consumer rights is the issue of 
privacy.  It seems that almost every month we read another story 
- or hear another example - of  how science is in a race with 
ethics.  The controversy over cloning, of course, is the clearest 
example.

	But how do we balance the right of people to keep their 
medical records and histories confidential while at the same time 
advancing research and improving care.  The fact is, maintaining 
a zone of privacy and dignity is an old and cherished American 
ideal.  In 1928, Justice Brandeis said the most valuable right of 
a civilized people is the right to be let alone.  What is new is 
the growing impact of technology on privacy:  Technology that 
links databases; increases access through the Internet; and 
speeds the dissemination of information.  That's why, I believe, 
 the time to start facing up to this great challenge is now.  But 
not by focusing simply on how to limit or prohibit access to 
electronic medical records.

	Most Americans assume their medical records are private and 
kept only in their doctors' offices.  You and I know that 
increasingly that is not true.  To protect patients and their 
doctors, we need a more thoughtful and a more sophisticated 
approach that asks tough questions, and comes up with smart 
solutions.  That's the kind of approach we're seeing today from - 
among others - the AMA.  I want to thank you for your February 
statement on patient confidentiality to the National Committee on 
Vital and Health Statistics.  Your bottom line must be the 
nation's bottom line.  As you wrote: "Patients must feel that 
they can disclose to their physicians personal facts and 
information that they would not want others to know."  We 
absolutely agree.  And we are looking to you and other experts to 
help us clear a path to that goal.

	As you know, the National Research Council just issued a 
comprehensive report on electronic medical records that includes 
a wide range of recommendations on technical standards, security, 
access, consent, training and public education.  And NCVHS will 
be soon be making its own recommendations to the Department.   In 
addition, I have commissioned a series of studies that include a 
look at the European experience.  All of this information will 
then become the building blocks for our own recommendations to 
Congress which are due in August.  Those recommendations will 
certainly include better protection for information that is 
already in medical records.  

	What is adequate security?  What's the best way to protect 
the identity of patients?  What restrictions should be placed on 
people who are authorized to see medical records?  These are just 
a few of the questions we'll need to answer.

	But we also have to think through some of the larger policy 
questions that electronic medical records pose.  For example, in 
order to protect research that is critical to preventing and 
curing disease, we have to ensure that records are available to 
researchers while simultaneously protecting the identity of the 
patients.  At the same time, we have to help people gain access 
to their own medical records to help them play a more active role 
in their own health care.  We also have to carefully consider the 
best way to design a universal health identifier.  

     	Marketing is another issue we cannot ignore.  Medical 
records should not be used as a data base for companies trying to 
market their products to unsuspecting customers.  When you go to 
your corner drug store to get a prescription filled, you don't 
expect your name to be given or sold to a large drug 
manufacturer.  Finding the delicate balance among competing 
privacy needs is one of the biggest challenges our country faces 
and we must face it now.  But it can be solved - if all of us 
work together. 
	
	I know, too, that the AMA will be a tremendous ally in the 
third major challenge of the year ahead - providing coverage for 
millions of American children who are uninsured.  It is time to 
get back to the job of reducing the number of Americans who are 
without health insurance.
	
	I don't need to tell you that today, there are 10 million 
children in America who don't have health insurance -- and the 
vast majority of them are in families where parents are employed. 
 I don't need to tell you that because you are providing the care 
to those children when they come to your offices or your 
hospitals in need of treatment.
	
	By the end of this century, we intend to be well on our way 
to insuring every American child.  And I know you will help us.  
I know you will, because it is the medical profession that has 
always been at the vanguard of improving access to care in the 
United States.  So, when it came time to develop our strategy, we 
listened to your counsel and followed your example.  We knew that 
there was no silver bullet.   We knew we needed a comprehensive 
strategy that brought together health plans, employers, states, 
health care professionals, and other leaders -- both public and 
private.  And that's what we have proposed.
	
	First, we're helping workers between jobs get up to 6 months 
of coverage for themselves and their families.  This will help 
insure 700,000 children and another 3.2 million adults in those 
families.  Second, we're dedicating $750 million dollars in state 
partnership grants to help cover children whose families earn too 
much to qualify for Medicaid and not enough to afford private 
insurance.   And I am particularly glad to be in the state of 
Pennsylvania talking about this proposal because this state has 
shown tremendous leadership in working with the private sector to 
design a program that reaches out to the working poor and helps 
them buy private health coverage.  Third, we're allowing states 
to provide one year of continuous Medicaid coverage for all 
children who qualify for it.  Fourth, we're adding one million 
adolescents to the Medicaid rolls over the next four years 
between the ages of 14 and 18 who are below the poverty line.   
And fifth, we're teaming up with the public and private sectors 
to reach out  to the three million children who qualify for 
Medicaid but aren't enrolled.
	
    	Let me, of course, note that there are many other proposals 
on the table or in the works to expand coverage of children.   
The most important thing to recognize is that all of us - 
Democrats and Republicans - share the exact same goal:  covering 
more children.  We don't care who gets the credit - all we care 
about is the results.  At the end of the day we must have 
significant progress toward covering every child in this country. 
 And I believe we will.
	
	This challenge -- like the others I have posed today -- will 
never be met by any of us acting alone.  We will need your help 
getting it enacted by the Congress and we will most certainly 
need your help in making sure it becomes reality.  When the 
history of this time is written, I hope that they will write of a 
time when government and physicians worked together to 
dramatically change the future of our nation and its people.  You 
and I have that rare opportunity to help write that history and I 
am confident that we will. 

	Thank you.

	
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