Health Cost: What Limit?

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is time to stop talking about these problems and start doing something," he insists.

CARTER. The details are still being worked out by HEW, which has taken so long on the plan that a White House aide reports: "Carter is pissed off with Califano." Now expected to be made public later this year, the scheme would expand Medicare and Medicaid benefits for the aged and the poor. In addition, it would give those unprotected by company or public plans a chance of buying insurance at a "reasonable" cost, although that figure has not yet been determined. This insurance, subsidized by the Government, would provide a "core benefit package," including hospital and physician services, X-ray and lab tests, and would also probably provide some kind of catastrophe coverage. Cost of the total Carter plan to the Government: $15 billion a year. Employees and employers would pay $5 billion.

Both Kennedy's and Carter's plans make a desperate stab at trying to control the alarming rise in health costs. Carter's assumes passage of the hospital cost containment bill and it might also require that the fees charged by physicians be negotiated by the Secretary of HEW and a board composed of consumers, insurers and health care representatives. In essence, Kennedy advocates giving the Government veto power over payment scales worked out on a state basis through bargaining among the insured, the insurances, the doctors and hospitals.

The White House and Kennedy contend that public sentiment is building irresistibly for the eventual enactment of some kind of universal health insurance plan. The present programs vary wildly but have one thing in common: the costs keep rising.

Beyond the politicians' remedies, there are more immediate, if less comprehensive steps that the profession and the various insurance plans already in force could take to control costs.

The first essential is to reform insurance practices. Some beginnings have been made: Blue Cross-Blue Shield will no longer automatically pay for a battery of tests administered to every patient who enters a hospital unless each test is specifically ordered by the attending physician. Insurance policies should be rewritten to pay for lab tests and other care administered in a doctor's office rather than a hospital. If Congress will not push the Blue plans and private insurers in this direction, corporations could and should. Exxon, General Motors and AT&T have the bargaining power that individual patients lack and a powerful incentive to hold down medical costs: the lower the insurance premiums they pay, the more money they will have to expand plants, raise wages or distribute to stockholders.

The Government should revise Medicare and Medicaid reimbursement formulas to pay hospitals a set amount for, say, removal of a gallstone, rather than costs-plus. Says Dr. Mitchell Rabkin, director of Beth Israel Hospital in Boston. "I'd like to see a system of incentives—say, if we saved money, that money could be split between the insurer and the hospital." Califano and some state regulators also are launching a drive to require that a majority of the directors of any Blue Shield plan be laymen. At present, many Blue Shield plans are dominated by doctors, who, to put it delicately, have no great zeal to question fellow physicians' fees.