Health Cost: What Limit?

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enough to insist that new technology should be subject to rigorous cost-benefit analysis, but if a new machine costs, to be hyperbolic, $5 million, and saves one life in ten years, who is to say the price is not justified? Asks Dr. David Thompson of New York Hospital-Cornell: "If you decide to do without some product of the new technology, which one would it be? And are you willing to take the chance that it won't be available when you, the patient, need it?"

More fundamentally still, the system of third-party payments may be the root of much medical inflation, but the old-fashioned alternative is a kind of rationing of medical care by ability to pay that the nation now would rightly find abhorrent. Says Rashi Fein, a noted Harvard medical economist: "Medicine is a social product like education. To ration health in terms of price is not the hallmark of a civilized society. You can differentiate between rich and poor with Cadillacs and yachts, but not with medicine."

Yet unjustified surgery, unnecessary hospitalizations, unneeded tests and an unwillingness even to consider costs do no one any good. The time is past when the nation could accept the resultant inflation as an inevitable side effect of good health; the price is simply becoming too high.

What then can be done? The experience of other industrial nations offers little comfort; many of them are struggling with medical-cost problems too. In West Germany, where most medical bills are covered by insurance companies supported by tax funds, doctors charge so much that their incomes average $100,000, far higher even than in the U.S., and medical costs consumed 12.8% of G.N.P. last year. The government, reluctant to raise taxes further, is pressing doctors and hospitals to hold down charges.

In Sweden, where the government provides free medical service, health costs have risen from 9.5% of G.N.P. in 1974 to 11.3% last year. As in Germany, the government is pressing for a hold-down; among other things, Sweden routinely denies expensive organ transplants to people over 70—a cruel but necessary form of rationing. Britain's National Health Service has done a better job of holding down costs; medical outlays as a percentage of G.N.P. (5.6% at last count, in 1977) have been fairly stable. But there has been a price to pay. The nation is suffering from a doctor shortage, because many physicians have left the country feeling that they cannot earn enough under NHS, and waits of three to six months for elective surgery are common.

In the U.S., the Carter Administration's immediate proposal is a bill imposing mandatory controls if the medical profession does not clamp down itself. Government interference is, of course, anathema to hospital officials and doctors. Michael Bromberg, executive director of the Federation of American Hospitals, claims that the public "doesn't care" about the cost problem. "But it is a good issue to demagogue about," he adds, "even if the President loses his bill."

Carter and HEW Secretary Joseph Califano are betting that Bromberg is wrong about a complacent public. Indeed, many members of Congress are feeling so much heat from constituents that they are also seriously beginning to consider a long-range, broad solution to the whole problem of high health care costs. A surprising total of 21 bills