The state of the State

Health care: costs, quality and access

By NORA NEWMAN JURGENS

HEALTH care costs have increased every year for the past 50 years, comprising 10 percent of the gross national product by 1984. But while the rate of increase has slowed recently, a number of questions — political, economic and ethical — about how to ensure effective health care for everyone remain to be answered.

Some of the relevant issues were raised on May 3 at the 47th annual Theodor Lang May Day Clinic for graduates of the University of Illinois College of Medicine at Rockford. A panel discussion entitled "The rising cost of medical care: Who pays the bills?" gave the alumni a chance to hear the views of five people: U. S. Rep. Lynn Martin (D-16, Loves Park); Mark Green, a consumer advocate and New York candidate for the U.S. Senate; Johanna M. Lund, chairman of the Illinois Health Care Cost Containment Council (IHCCCC); and representatives from the American Hospital and Medical associations (AHA, AMA).

Everyone on the panel agreed that costs for medical care are rising faster than the rest of the consumer price index. The debate arose over controlling those costs. Rep. Martin pointed out that the audience was in no position to discuss the topic objectively. "You get some of the money for health care costs," she said. "You are that which you detest in everyone else — you are special interests."

Martin said that the cost of health care has been slowing because of the decline in inflation, but also because of "pressure" brought to bear on health care providers by both the recipients and the payers. At the same time, the amount of health care costs paid for by the federal government has grown faster than defense spending. "Since 1975, tax funds have provided 42 cents for every dollar of health care compared to 1965 when it was only 26 cents," Martin said.

She pointed out the ethical problems raised by medical advances. Such fields as neonatology, which can sustain high-risk babies, are effective but also very expensive. Most of those costs are paid by Medicaid, and many of the babies will require care throughout their lives. "How far do we go?" Martin asked, in the discussion of the ethical questions surrounding high-risk cases, especially when costs for sustaining life can be prohibitive.

Johanna Lund of the IHCCCC noted that rising medical costs have led to a lot of "finger pointing." She talked about a 1971 meeting of the local medical society, where a hospital administrator was guest speaker. The administrator proceeded to blame his rising costs on doctors. A physician responded by saying doctors are trained to deal with illness, not business administration. The problem, he said, lay with the insurance companies and their "liberal benefits." An insurance company representative cried foul, saying the companies were only reacting to the demands made on them by businesses. And a local businessman said, "No, we have to deal with labor demands." To which state Rep. E.J. "Zeke" Giorgi (D-68, Rockford), a friend of labor, replied, "Hey, don't blame us if you're lousy negotiators." Besides dealing with rising costs, Lund said the IHCCCC is also focusing on the issue of indigent care: "How do we get it and how do we pay for it?" The council, concerned with the financial viability of the state's hospitals, is determining how much help the state should lend to those hospitals who serve Medicare and Medicaid patients.

Mark Green raised questions from the consumer's perspective about the rising cost of health care. Why are there 70 million Americans who are not poor enough to qualify for Medicaid but too poor to be able to afford health insurance? Why were there 10,000 people killed by unnecessary surgeries performed in 1977, at a cost of $4 billion? He believes the traditional payment methods of fees for service and insurance payments have led to "perverse incentives." Green told the audience that costs could be reduced through more preventive medicine, a better incentive system and the involvement of consumers, including business, in the delivery of health care benefits.

Green would like to see business become more cost-conscious about health care. He claims most companies lack the most basic information about what their health care dollars are buying. Managers and employees view health care benefits as a low-cost alternative to wage increases, Green said, when in reality businesses are paying more for health care than they pay out in dividends. Health care benefits have grown from a half percent of a company's payroll two decades ago to about 8 percent today, Green said. Because of this many businesses are "finally experimenting with alternatives that can cut their medical bills without burdening employees or sacrificing quality of care." These range from self-insurance to wellness programs, as well as shifts to health maintenance and preferred provider organizations.

Bruce McPherson of the American Hospital Association acknowledged that there has been a decline in the growth of costs, due to changes in the system of payments, as well as the emergence of technology enabling doctors to perform more procedures on an out-patient basis. He warned of the approaching increase in demand for both acute care and long-term care as the size of the country's aging population continues to grow. Meeting those costs will raise more questions, since right now the only ones who can afford long-term care are those who are eligible for Medicaid or who are very wealthy.

Echoing Lund, McPherson said that the AHA is greatly concerned about who will pay for the medically indigent. Because of increasing price competition, hospitals can no longer shift as much of the cost of caring for poor patients to private payers, be they insurance companies, self-insured businesses or individuals. There needs to be a better balance between controlling costs and providing quality care for those least able to afford it, McPherson said.

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Barry Eisenburg of the AMA supported McPherson's concern about a coming "explosion'' in the demand for long-term care. The focus has been on paying for acute care services through Medicare, Eisenburg said. Not as much attention has been paid to long-term care, "a leading cause of the impoverishment of the elderly," he said. The federal General Accounting Office estimates that 75 percent of the 1.35 million residents in nursing homes depend on Medicaid, and that at least 40 percent of them had to give up whatever assets they had to become eligible, he said.

Eisenburg suggested three ways to pay for long-term care: expansion of cost-sharing by increasing the amount of disposable income available to the elderly; prepaid long-term care; and more financial responsibility by family members, other than a spouse, which could be offset by incentives to keep their elderly relatives at home.

Questions raised by the audience dealt with some of the realities of controlling health care costs, ranging from political considerations to changing social attitudes. Responding to a suggestion that limits be placed on access to care, Lund pointed out that Americans see quality health care as their right. But, she said, people are going to have to decide at what level: Does every hospital in town have to have identical equipment? Lund believes competition has escalated costs rather than reducing them.

A large percentage of health problems are related to life style, more than one participant pointed out. How much responsibility should an individual take for those problems he has brought on himself, and how much should the medical community and government take?

The panel discussion in Rockford raised more questions than it answered. Is this new approach to health care cost containment simply the latest "magic bullet," as was suggested by Eisenburg? While health care can be provided at a lower cost, will quality suffer as a result? Who will end up paying for those who cannot pay for themselves?

One forum for seeking answers to these questions is the newly created Senate Select Committee on the Indigent Health Care Crisis. Providing reasonably priced, high quality health care to all who need it will require lawmakers to make difficult decisions about who pays the bills and whether government intervention can control the costs further.

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