The University Record, May 9, 1994

DHHS’s Feder on health care reform: ‘Academic medical centers stand to gain from the fact that everyone is covered’

By Margo Schneidman
Medical Center Public Relaitons

Committed to combating rising health care costs as well as declining coverage, Judith Feder, chief health policy analyst with the U.S. Department of Health and Human Services, took to the podium here last month to tout the benefits of President Clinton’s health care reform plan to provide universal coverage for all Americans.

Called the “architect of health care reform,” Feder spoke April 26 at the School of Public Health as part of the University’s Forum on Health Policy Reform, a two-year series of lectures coordinated by Marilynn M. Rosenthal, director of Health Policy Studies at

U-M Dearborn.

“The problem used to be one in which a minority of people were falling through the cracks,” Feder said. “Now, the majority of people have become frightened they will lose their health care coverage ... that it will not be there when they need it.”

Hiding behind discriminatory practices, insurance companies are competing by avoiding risk rather than by spreading it, according to Feder. She says Clinton’s Health Security Act will change this by re-establishing a community pool of risk-sharing through health care alliances. In these alliances, the same amount of coverage will be available to every applicant.

“We are hoping to see a guarantee of health care insurance for all Americans at all times, the outlawing of discriminatory practices, a choice of plans, and a strengthening of Medicare,” she said, anticipating that the final bill would be written in this Congressional session — in August or September.

In a panel discussion following her lecture, Feder fielded a range of questions from University faculty members, administrators and students, and several raised the issue of how academic medical centers and tertiary care medicine will fare under Clinton’s plan.

“Academic medical centers stand to gain from the fact that everyone is covered,” said Feder, adding that the concern of academic medical centers are in a few areas. They include:

  • Restricted access to academic medical centers to save money.

  • Adequate compensation for services provided—from complex cases to research and training functions.

  • Direct funding for training.

    Feder says the plan speaks to these concerns by requiring that alliances contract with academic medical centers and by setting up a separate pool of funds—drawn from premiums and from Medicare—to pay for residency training and extra costs that go along with high-tech, tertiary care. She admits, however, that there is disagreement over exactly how much money is needed in that pool.

    The bottom line, she said, is that the Clinton plan will slow the rise of health care costs and without it, the runaway increase of the last decade will continue unabated.

    “If we put more money in up front as we expand coverage, we slow the rate of increase in premiums. We have health care prices rising at twice the rate of inflation, and we’re talking about cutting that to the rate of inflation. People act as if it’s the end of health care as we know it,” she said.

    “We need to have everyone covered, not only for human reasons, but also to build a stable health care financing system.”