Health Cost: What Limit?

• Share

(10 of 11)

Hospitals could keep a far sharper eye on costs. Says Duke University's William Anlyan: "You must have someone who is a rat and not a mouse on the hospital board—someone has to say no to a request for buying a $100,000 piece of equipment." If the Government and private insurers provided an incentive to hold down costs, the "rats" could force a much greater sharing of facilities. Detroit's Henry Ford Hospital, for example, provides computerized electrocardiogram analysis for seven other hospitals in Michigan. When a heart patient checks into Crystal Falls Community Hospital in the Upper Peninsula, a physician attaches wires to the patient's arms, legs and chest, then pushes a button that activates a line to the Ford Hospital computer. As soon as a circuit is clear, the Detroit computer signals "go," then reads the electrical signals and transmits an analysis of the readings—at far lower costs than if the Upper Peninsula hospital had its own computer.

A number of hospitals are already making efforts to keep a sharper eye on costs. At California's Long Beach Community Hospital, staff doctors meet at least four times a year for what they call "economic rounds," studying patients' bills to make sure they are not padded. At one such meeting a few weeks ago, a slide of a bill was projected on a screen. A tumor specialist quickly asked why the hospital had ordered two computerized blood tests when one—the cheaper one, at that—would have sufficed. In a very different cost-cutting program, New York University Medical Center has designated 104 rooms in a new building for a "cooperative care" experiment in which patients who are well on their way to recovery but cannot yet leave the hospital are looked after by friends and relatives rather than staff members.

On a far larger scale, one of the most promising alternatives to the traditional medical system is group-practice health maintenance organizations, which hire doctors to work on salary rather than charging fees for specific services, and sign up hospitals to take on their patients. A customer joining an H.M.O. pays a set monthly fee—$47 for individuals, $116 for families in the Harvard Community Health Plan in Boston. That fee entitles the subscriber and his family to any medical services they may need, from a routine physical exam to open-heart surgery.

The monthly fee would be too high for most prospective patients to afford, unless employers paid most of the premiums. Companies are only beginning to explore the idea. In the Detroit area, GM, Ford, Chrysler and the U.A.W. have joined to sponsor the largest H.M.O. in Michigan, called Health Alliance Plan. Says Jim Walworth, executive director of the plan: "It is our feeling that H.A.P. rates will be 10% lower than the costs of typical conventional medical programs in this area."

Many physicians argue that the only way the U.S. is going to bring its medical costs under control is by emphasizing preventive medicine instead of crisis care. They stress exercise, weight control, cutting out drinking and smoking. Says Dr. Hoyt D. Gardner, president-elect of the A.M.A.: "America medically suffers more from affluence—and consequent self-indulgence—than from poverty." But not many doctors are genuinely optimistic that much will be done.