Provider groups, which have been looking for a strategy to combat the Medicare spending reductions they expect to see in next year's budget, found a rallying point last week.
The latest development was a leaked White House memo that shows the Clinton administration might call for as much as $60 billion in Medicare spending restraints over five years.
The memo also revealed that the White House is considering a new healthcare reform package with "significant" deficit-reduction measures. The memo said such a package would include a slower phase-in of benefits, a greater emphasis on cost control and a cap on the tax deductibility of benefits.
The measure would reduce the deficit by as much as $75 billion over a five-year period, the memo said.
A plan such as the one outlined would be exactly what providers do not want to see-strong cost-containment and Medicare cuts without a significant expansion of insurance coverage.
White House officials were quick to dismiss the document as merely a list of options. However, Republicans jumped on the memo-which included as one option limits on entitlement spending-arguing that it proved such measures were possible next year. Meanwhile, many Democratic candidates made strong statements against Medicare cuts and tax caps.
The memo also energized the senior citizen and provider groups that traditionally oppose Medicare reductions.
"It was helpful, that's for sure," said American Hospital Association President Richard Davidson. "Everyone is rallying to defend Medicare. Now, the trick will be to hold these people to (that support)."
In another healthcare reform development, administration officials and Capitol Hill staff last week agreed that the political climate in 1995 will make it difficult to reform how graduate medical education is funded or to change the mix of specialists and generalist physicians.
Several of the reform plans introduced last year included a new fund for graduate medical education that would be funded by all payers of healthcare services, usually by taxing health plan premiums. The funds were generally linked to a mandate that schools graduate a higher percentage of generalists than specialists.
But according to Brian Biles, M.D., deputy assistant secretary for health at HHS, any healthcare reform plan put forth by the administration in 1995 is not likely to include those provisions.
"The focus next year is going to shift to deficit reduction and that will make any discussion of all-payer financing of (graduate medical education) difficult," Dr. Biles told a meeting of the Council on Graduate Medical Education in Washington last week.
Several congressional aides agreed.
"There is a concern among Republicans and some conservative Democrats that all-payer funding is a tax," said Martin Sieg-Ross, M.D., an aide to Sen. Nancy L. Kassebaum (R-Kan.). "It will still look like a tax next year."
Dr. Biles and other aides agreed that it would also be difficult to pass a plan to increase the number of generalist physicians. Senate Finance Committee Chairman Daniel Moynihan (D-N.Y.) opposes such a measure and has said he would kill any legislation that included such a plan.