Editorials
Steinfels, Margaret O'Brien
CORROSPONDENCE Health-care justice Former Secretary of Health and Human Services Margaret Heckler was right about one thing, there really is a "health-care inflation monster'' lurking out there....
...Every suggested limit is resisted by some special interest group...
...The nation has placed its hopes in efficiency measures, new technological breakthroughs, and a heaping dose of "it will work out...
...even so, prices are rising here too...
...For nearly two decades, various ' 'cost- containment measures'' have been proposed and enacted, but health-care costs have continued to mount, outpacing inflation generally...
...But until the whole health-care cost discussion can be freed from special-interest pleading, inflammatory rhetoric, and destructive political lobbying, we will succeed neither in creating a just system nor in containing health-care costs...
...In 1984, Medicare implemented a new "prospective payment" system, reimbursing health-care providers with fixed fees, based upon the diagnosed illness...
...Because HMOs promised real competition in the healthcare industry, it was reasonable to expect lower health-care costs along with substantial profits if large numbers of people would sign on...
...some 30 million Americans are presently enrolled...
...More than 30 percent of Medicare's money goes to patients in the last year of life (of whom many, though not all, are elderly...
...These sometimes require trained nurses, making home care no less expensive for some patients than hospital care...
...Home care, for conditions that once required hospitaliza-tion, often depends on new technological devices- chemotherapy, intravenous medicine-dispensing pumps, tele-monitoring, even home dialysis...
...There are more people over sixty-five...
...How much of this care is life-saving, and how much is an uncalled-for effort to prolong the lives of dying people...
...The strategy has boomeranged...
...Then there are new technologies, sometimes introduced as money-savers, but which end up increasing costs: diagnostic tests, such as CAT scans...
...In the world of de facto rationing, many of these persons when in need of medical care are "dumped" by private hospitals, and sent on to public facilities...
...That remains to be seen...
...uncovering fraud in billing...
...He was turned away from four other hospitals because he lacked health insurance.'' There are 35 to 40 million Americans who, like Eugene Barnes, are not covered by any form of health insurance...
...Public discussion is easily dominated by influential individuals and single-issue groups, especially those that are particularly powerful or can pull on people's heartstrings...
...But recent reports show that for varied reasons-including high advertising costs, overly ambitious expansion plans, increases in doctors' fees, mergers, and a recent period of unexpectedly sluggish growth- HMOs' costs, and then prices, escalated...
...HMOs stressed total health care...
...Health insurance premiums have jumped sharply this year with increases ranging from 10 to 70 percent...
...Hospital pharmacists may decide to stock very expensive, but rarely used, drugs thereby limiting monies available for more standard Pharmaceuticals...
...Home care and outpatient clinics were set up to compete with hospitals and thereby to lower costs...
...Then there are regional variations in the services and charges of hospitals: hospitals in many urban areas are dangerously overcrowded, while many rural hospitals have high vacancy rates...
...There appear to be drawbacks to this new system- there is evidence that some hospitals skimp on care and resort to premature discharge of patients when their costs come close to, equal, or exceed the new fixed fees-but it has shown signs of cutting costs...
...Policy questions about distribution, access, and equity, along with more diffuse but crucial questions of community responsibility for the sick, compassion for the suffering, and care of the dying are primary to any national discussion...
...Still, Chrysler's 1984 employee health-care costs exceeded $500 per car, and the figure continues to rise...
...Recent suggestions that life-extending procedures-not primary care-be limited for people over 85 have met with charges of Nazism and euthanasia...
...they live longer than previous generations...
...The very notion of principled rationing, and the setting of limits, meets with objections...
...This system was designed to give hospitals incentives to control costs, incentives lacking in the previous "retroactive reimbursement" payment system...
...Several have significantly reduced their employee health-care costs...
...Until 1984, Medicare paid medical bills retroactively...
...For the last fifteen years, a surge in prepaid plans or Health Maintenance Organizations (HMOs) led insurers and employers to expect that health-care costs would fall...
...On top of all of this, the system is riddled with inconsistencies and injustices, which are hidden from many of us by a silent de facto rationing system...
...For starters, the population is aging...
...Home care may be preferable for other reasons...
...and requiring second opinions before surgery...
...Massive fraud and padded bills became widespread, hiking up the national health bill...
...Medicare reimbursement procedures have been another source of higher healthcare costs...
...Because of these Medicare reforms, restricted tax deductions for medical expenses, and higher Medicare premiums, the federal government is paying proportionately less of the nation's health-care bill than in the recent past...
...Compare monies spent for neonatal care with prenatal care, keeping in mind that medical attention during pregnancy could prevent much of the need for neonatal care in the first place...
...Children's Defense Fund figures show that for every dollar spent on prenatal care, three dollars are saved on neonatal care...
...and since we have not squarely faced the problem of limits in health care, we are left with a system that is unjust and ultimately impossible to contain...
...There are several reasons...
...Soon, hundreds of these revenue-short rural hospitals will be financially unable to operate...
...Hospital administrators in deciding what kinds of care their hospital will offer may choose to add a wing for intensive care, while limiting the hours of a more widely used emergency room...
...they need more medical care than other segments of the population...
...Since we cannot afford to give everyone the maximum care possible, even if we were to spend 25 percent of the GNP on health care...
...The recent decision to suspend funding for artificial heart research-because the money spent did not show enough benefit for society as a whole-has met with the opposition of such influential surgeons as Dr...
...expensive drugs...
...Many employers and health-policy experts believe that, from the viewpoint of society as a whole, home-health care will not prove cost-effective...
...By scrutinizing employee medical bills, offering monetary incentives for using Chrysler-selected physicians, and encouraging sound preventive health measures, Chrysler saved millions of dollars over several years...
...A 20 percent increase is expected in 1988...
...Corporations and unions, despite significant savings on the health-care costs of their own employees, have failed to contain the nation's ballooning health-care bills...
...This leaves states and employers and employees to carry more of the load...
...Lack of health insurance is not the only form of de facto rationing...
...Despite cost-containment efforts, health-care costs continue to balloon...
...Regardless of where people seek health care or who pays the bill, the costs of treating the nation as a whole are soaring...
...Certainly a just health-care system requires more than considerations of cost...
...HMOs grew rapidly at first...
...contained in one place, they bulge in another...
...It hasn't...
...Hospitals, the single most expensive part of the nation's health-care system, are paying a price for the success of home care and outpatient care...
...William C. DeVries...
...According to Robert H. Blank, associate director of biosocial research at Northern Illinois University, the 11 percent of the GNP now spent on health care (it was only 6 percent in 1965) will reach 15 percent by the year 2000...
...HMOs earned a profit whenever prepaid fees exceeded the cost of their services...
...As insurers and employers succeeded in encouraging people to go to the hospital less frequently for nonemergency care, the home-care and outpatient industries boomed, increasing prices in all of these areas, including those of the physician and hospital services with which they were supposed to compete...
...And try as we might, we have yet to constrain it...
...Some states will allow Medicare coverage of organ transplants, while other states refuse...
...However, as hospital admissions, length of stays, and occupancy rates decreased, hospital prices skyrocketed, in part to make up for revenue lost through vacant beds...
...Many of these services are still less expensive than hospital care...
...Some experts are predicting even steeper rate rises in the near future...
...exerting pressure on local hospitals and negotiating directly with surgeons for reduced fees...
...They had built-in incentives to keep patients healthy and using as few medical services as possible...
...Why have health-care costs risen so rapidly during a period of relatively stable inflation rates...
...And fees for outpatient treatment have risen as well, often for the same reasons that hospitals inflate costs- performing unnecessary procedures-and because outpatient care is not yet subject to strict government and insurer controls...
...Every day, decisions to admit and discharge patients are made, depending upon whether or not they are insured and the extent of their coverage...
...Consider the Chrysler Corporation, which, in the early eighties, hired Joseph Califano-Secretary of Health, Education, and Welfare under President Carter-to lead a health-cost-cutting committee...
...Because this type of reimbursement paid bills in full, without ceilings, doctors and hospitals were given incentives to perform as many services as possible, charging as much as possible...
...then patients may have to travel to the nearest city to receive care, increasing health risks when time is a factor and increasing the burden on urban facilities...
...Corporations and unions-which pay for the bulk of the nation's health insurance as part of employee/member fringe benefits-have been particularly creative in trying to cut their costs: hiring their own teams of physicians...
...and procedures like kidney dialysis...
...In Rationing Health Care in America (Notre Dame, 1987), Larry R. Churchill provides a striking example of our current rationing system: "We spent $250,000 to keep Barney Clark alive, tethered to an air pump, for 112 days of 'encumbered twilight...
...At the other extreme] Eugene Barnes, a thirty-two-year-old, unemployed, stab-wound victim, died in a San Francisco hospital in February, 1985...
...Has anything been done to contain costs...
...As these become a routine part of the medical armamentarium, they add substantially to health-care costs...
Vol. 115 • June 1988 • No. 11
