Testimony De-briefing and Documentation

Donna E. Shalala

Secretary of Health and Human Services

This is a brief summary of the Secretary's testimony followed with the written material supplied to the Finance Committee on Tuesday evening.

Secretary Shalala opened the testimony with a statement endorsing the Democratic legislation that had been introduced. She emphasized that this was an issue that crossed party lines, and was an opportunity for both

parties to come together and make needed reforms. She noted that the Medicare expenditures are a large

portion of the annual federal budget, and reforming Medicare is a big part of the balanced budget goal. By

encouraging bi-partisan approach to Medicare reform, the Secretary notes that perhaps this could be a

starting point for bi-partisan agreement on a balanced budget.

The Secretary stressed that Medicare solvency must be achieved without jeopardizing the promise behind the Medicare program, and without undue hardship placed upon it's beneficiaries.

Secretary Shalala spoke of the importance of passing the 1998 budget proposal for the DHHS, along with

the Democratic legislation. The budget proposal includes VITAL funding to increase the anti-fraud programs.

Operation Restore Trust was specifically cited as being part of the solution to the solvency issue. The

Secretary acknowledged the massive fraud problem within Medicare, and suggested immediate

expansion to all fifty states, due to it's impressive trial period in a few states.

Support was given to the founding of a commission posed by the Democrats to address the long term issue of solvency. The Secretary later commented that the commission's work could be compared to preventative

care in the practice of medicine, and prevent us from being in this solvency crisis again.

Question were then posed from both parties, briefly interupted by a power blackout in the commitee room.

Secretary Shalala closed by reiterating that passage of the Democratic legislation, accompanied by the

reforms in the President's budget and expansion of anti-fraud programs would allow the Medicare program

to become healthy again.