Finding Answers to Health Care

The big problem is rising costs as US wrestles issues of the uninsured and long-term care

BOTH Congress and the Bush administration are wrestling with two major national health-care problems. Each comprises a major deficiency in the nation's ability to offer affordable health care to citizens who seek it. One problem is that tens of millions of Americans lack health-care insurance and therefore often have insufficient access to care. The other is that many Americans, perhaps a few million, need help to afford or obtain long-term care in their own homes or in nursing institutions. Such care averages $25,000 a year.

But behind both problems lurks a third problem: the rising cost of health care. Until that is brought in check, the United States will find it almost impossible to afford major new initiatives.

``Cost is central'' to finding solutions to America's health-care difficulties, says Ed Howard, general counsel of the bipartisan Pepper Commission, established by Congress. The commission is at the point of completing its recommendations for dealing with long-term care and the uninsured. Members hope that they will reach final agreement on remaining recommendations at today's commission meeting.

Congress is awaiting the commission's report, which could come next week, before it decides what action if any to take this year on health issues. The commission is expected to take a measured approach, recommending incremental changes to reduce the number of uninsured and provide modest amounts of funding to at least a few people who require long-term care. The biggest unsolved question the commission members face is how to pay for even these relatively moderate changes.

Another important report on health care is expected months from now, probably before the end of this year. Constance Horner, undersecretary of Health and Human Services, chairs a department task force that is carefully assessing major US health-care problems, especially the uninsured, long-term care, and health-care access of the poor and minorities.

Ms. Horner says America should not take major action in health care without a national debate; one purpose of her task force is to provide fundamental information necessary to permit an informed debate. For example, no one is sure how many Americans are uninsured. Estimates run from 17 million to 70 million people. Her report ultimately is expected to form the basis for health-care recommendations from the Bush administration.

The cost problem is not new: Health expenses have outpaced inflation for years. For the past 25 years ``national health expenses have risen at an average annual rate of about 12 percent,'' says Keith Stevenson, vice president of issues and communications of the Aetna Life Insurance Company. ``It is trivially obvious that we cannot keep national health-care expenditures growing at 12 percent forever.''

The cost of prescription drugs alone has risen 88 percent in the past decade, says Sen. David Pryor (D) of Arkansas, chairman of the Senate Committee on Aging. ``The US is paying the most [for drugs] of almost any country in the world,'' he says.

Senator Pryor says drug costs can be reduced - at least for government programs like Medicare, for the elderly, and Medicaid, for the poor - by buying in large quantities and negotiating a price. ``We could save between $150 million and $200 million in the Medicaid program'' annually, he says.

Drug prices are only one factor involved in health-care cost inflation. Experts cite other causes:

New technology for health care, which is ``enormously expensive,'' Pryor says. For instance, high-tech Multiple Resonance Image scanning machines can cost $1.5 million each.

``High malpractice insurance premiums, and the accompanying defensive medicine practiced by doctors - overutilization of tests, for instance,'' Horner says.

The third-party system where private insurance companies and the government pay much of America's health-care bill. ``It isn't working,'' says Edmund F. Haislmaier, health-care policy analyst of the Heritage Foundation. This is because individuals have no incentive to care how much they are being charged - and health-care professionals have no incentive to keep costs down, he says.

America's growing population of senior citizens. Older people use more health care than do the young, health experts say.

``The growth of illnesses related to personal decisions - related to smoking, accidents, AIDS, obesity,'' Horner says. ``These are all preventable.'' Every year Americans pay $22 billion just to hospitals for the cost of medical care provided to smokers, she adds.

Washington is not short of ideas to improve health care, but none would be easy to put into effect.

Some experts say costs can be kept down by streamlining. Pryor says, for example, that people should ``go to regional health facilities,'' instead of permitting every hospital to own all the latest high-tech equipment. In addition, more managed care should be considered in which physicians band together to share administrative help, and in which administrators of health programs try to prevent unnecessary medical procedures. Health Maintenance Organizations are an example of managed care. ``There is significant long-term potential [savings] in managed care,'' Horner says. ``We believe managed care is working.''

Reexamining certain state and federal health-care regulations may also be in order, say observers. Some health-care experts advocate letting nurses and physicians' assistants perform certain work that state regulations allow only physicians to do. ``We should only use highly trained people where they're really needed,'' says John Rother, legislative director of the American Association of Retired Persons. In addition, Pryor says more federal regulation and state certification of health procedures are needed.

Insurance companies should be better regulated as well, say experts.

The practice of insuring only the best risks in any given group - which contributes to the rise in the uninsured - should stop, health-care experts say. ``If there's one area of consensus on our commission,'' Mr. Howard says, ``it's that we've got to do something about the insurance company practices.''

Health-care observers also say Americans should be allowed do their own shopping for medical services by being provided with tax money, instead of having insurance companies or government pay for their health services. In this way, physicians would have ``incentive to turn around and offer good value,'' as is already the case when purchasing eyeglasses, Mr. Haislmaier says.

But no effort to slow costs will produce quick results.

``What I worry about is that Americans want silver bullets, and that they want them immediately,'' says Howard Bailit, vice president of medical management of Aetna. ``We're in a long, long process.''

``Reform of our health-care system should be pursued deliberately and without a rush to judgment,'' Horner says.

``We have to avoid political steamrollers. We want to do right by the American people and not just by the collection of interests that surround health-care delivery,'' she says.

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