Miller Center

All the Incentives are Toward Less Medical Care

In this conversation excerpt, domestic policy advisor John Ehrlichman briefed President Nixon on what he viewed as the advantages of relying on Health Maintenance Organizations as a key component of the U.S. health care system, using Edgar Kaiser's Permanente as an example. True HMOs at the time had been devised by health care reformers who hoped to control costs, improve patient care, and facilitate coverage for the uninsured. For Ehrichman, however, the HMO idea represented an opportunity to develop a private sector-based, profit-driven alternative to a national health care proposal offered by Senator Edward "Ted" Kennedy (D-MA).

Nixon succinctly endorsed the idea in this conversation, and his administration soon made it the core of what would eventually become the Health Maintenance Organization and Resources Development Act of 1973.

Date:  Feb 17, 1971
Participants:  Richard Nixon, John Ehrlichman
Conversation Number:  450-023

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