CHICAGO - President Clinton and U.S. Department of Health and Human Services Secretary Donna Shalala yesterday said reform of the nation's health care would give counties greater flexibility in providing services.

In a live video conference via satellite with the National Association of Counties conference in Chicago, Clinton said his reform plan would allow counties to opt in or out of a new national health system.

"The counties that want to stay in business will be able to do it with a much more reliable funding stream and in more innovative and comprehensive ways," Clinton said in introductory comments before Shalala addressed specific health-care issues.

Shalala, also speaking via satellite, said the administration's plan should be unveiled within the next month or so. The Clinton administration believes it is "important" to continue its "commitment to public heath infrastructure," she said.

"One of the things we intend to do as part of health-care reform is to rebuild some of that public health infrastructure." Shalala said. "There simply is no way that the new [reform] system will totally substitute for some of our public health needs. And we're going to have to continue that system and beef it up where appropriate."

The current Medicare reimbursement system should remain intact under a new national health-care system, the health secretary said.

Cook County, Ill., commissioner John Stroger Jr., president of the counties group, said he was "impressed" with the President's commitment to counties. He added that Shalala is "genuinely concerned" about using her office to improve health care for the nation.

Barbara Shipnuck, Monterey County, Calif., supervisor, said she was "encouraged" by Clinton's and Shalala's comments about increased flexibility for counties.

"I was encouraged by the President's comments that counties will be allowed the flexibility to participate or opt out. That says to me that there will be some flexibility in the system," said Shipnuck, who is also head of the county association's task force to promote its role in health issues.

Shipnuck said she believed that under the administration's new plan counties that continue to provide health services will have reimbursement rates equivalent to those being given to other health-care providers, such as private health maintenance organizations.

But Shipnuck said that a county should have "the right of first refusal whether they want to stay in or stay out of the system, be subsumed by [another] system, or be a part of a partnership."

Referring to Shalala's comments on maintaining the infrastructure of county health-care facilities, Shipnuck said she felt "a county person had written [Shalala's] script."

During the question and answer part of the health-care program, Shalala was asked about the anticipated replacement of the federal "essential community provider" designation. The designation, which allows for more federal funds to facilities that serve a disproportionate share of Medicaid and Medicare patients, may be replaced with another system. Shalala replied that Clinton has not yet revealed his position on the issue.

"Whatever takes its place, we want to make sure that counties are eligible for that [new] designation," Shipnuck said. "I hope they realize that is a bottom-line issue for counties and that we need that designation. But I was encouraged that they appear to be moving in that direction."

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