Health Cost: What Limit?

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against both points. Califano contends that hospitals braked their price increases only to counter the threat of Government controls, and predicts: "The day the Congress stops working on this problem, hospital rates will take off like a rocket headed for the moon." As for unfairness, Califano replies that, unlike other industries, hospitals operate in a "virtually noncompetitive system that says spend, spend, spend."

Politically, the fight is shaping up along party lines. The Democrats generally favor the bill, although some agree with the Republicans that it would allow an unwarranted intrusion by the Government into hospital affairs. The G.O.P. also sees the bill as a wedge to open the way for price controls in other industries. Contends Republican Congressman David Stockman of Michigan: "It is a classic Rube Goldberg legislative contraption that will be impossible to implement and virtually make Califano the hospital czar in the U.S."

Nevertheless, on balance, the combination of third parties paying most hospital bills and the noncompetitive nature of hospital care seems to have forced costs so completely out of control that, despite the obvious risks, only the Government may be able to clamp on a lid.

National health insurance is a perplexing matter to assess. The issue is also confusing because it takes so many different forms, and the costs, some of them stupendous, are so difficult to pin down. Nearly all sponsors seem to agree, however, on one point: the current mood against increased spending precludes any costly health insurance program for some time.

The three most prominent proposals are those of Kennedy; Louisiana Senator Russell Long, who advocates a far more restricted measure; and Carter, who takes a more modest, middle-of-the-road approach. The three:

KENNEDY. His revised plan, announced Last Monday, would require that all Americans, regardless of income or age, be covered. He has backed away from his earlier advocacy of making the Government the basic insurer. Instead, he would inject competition into the scheme by letting people choose whether they wanted to be protected by a consortium of commercial insurance companies, by Blue Cross-Blue Shield, or by joining independent group health plans or health maintenance organizations (H.M.O.s). Employers would be liable for the premium payments, estimated at $11.4 billion a year more than they pay now, but they could require workers to provide up to 35% of that amount. The workers' share would be related to their salaries. The Federal Government, as it does now, would pay the bills for most elderly and poor patients, but at a cost estimated at $28.6 billion a year more than it now pays. Kennedy would phase in the program over seven years or so, starting in 1983. Opponents claim that the Kennedy plan would cost closer to $45 billion.

LONG. He would restrict coverage to so-called catastrophic illness or accidents, protecting everyone against the huge medical bills that can bankrupt even a moderately well-off family. He has suggested, for example, that payments begin after $2,000 in doctor's fees plus 60 days of hospitalization. At minimum room rates, that would be a "deductible" of at least $12,000. The $3 billion-a-year plan would be financed entirely by employers. Long wants the plan to be fully enacted as soon as possible. "It