Congressional Hearing Looks At Problems With Health Care

As costs spiral out of control, many warn improvements are needed

AT the foot of Capitol Hill yellow jonquils in annual spring rite now turn delicate faces to the sun. But they are dwarfed in impact by the huge wreath of yellow ribbon that hangs at Pennsylvania Avenue's other downtown end, high above the main entrance to the White House and in remembrance of the half-million American fighting men and women in the Persian Gulf. Similarly the war dwarfs all other subjects in Washington these days. In normal times one hearing held in a high-ceilinged Senate room this week might have been the much-watched start of a major congressional debate.

Instead it turned out to be a little-noticed discussion. The subject: America's shaky health-care system.

Care system impaired

By broad agreement it is gravely impaired in two key areas - health-care costs are spiraling out of control, and more than 30 million Americans lack health insurance and, increasingly, cannot afford or obtain health care when they seek it.

For several years health economists have warned that if these trends are not reversed Americans within a few years will discover that health care is rationed, formally or informally.

``As the US health-care system becomes increasingly competitive and cost-conscious, the plight of the uninsured will only worsen,'' says Dr. Robert Graham, executive vice president of the American Academy of Family Physicians.

Improvements needed

A Senate finance subcommittee held this week's hearing to seek perspectives on what virtually all experts agree are the main national problems surrounding health care.

Practically everyone in Congress, and in health care and related professions, concurs that significant improvements are required. However, no agreement exists on what should be done.

No one can even agree on who is to blame for the problems. For years physicians, hospitals, insurance companies, lawyers, government at all levels and citizens who seek medical aid have engaged in endless finger-pointing.

The existence of so many competing interests impedes solution, experts say.

``There are powerful and diverse interests involved in this debate,'' says Jeffrey Joseph of the United States Chamber of Commerce. Building coalitions is an important element ``in moving the health-care debate forward,'' he adds.

Tinkering with the system is useless, says economist Stuart Butler of the Heritage Foundation. Instead, he argues for dramatic change, especially to parts of America's tax structure, in order to provide subsidy to those who need it most - the nation's poor.

Dr. Butler says the current tax system does not treat as income the health insurance that employers provide, thereby subsidizing the health insurance of the affluent but not the insurance of the poor, who often have to buy their own insurance. He says the tax incentives need to be reversed.

`It's upside down'

Also needing reversal is what health insurance actually covers, says Douglas Besharov, a social scientist with the American Enterprise Institute.

``It's upside down,'' he says: Most insurance pays for routine and relatively inexpensive costs, like office visits, but provides nothing for catastrophic care, which typically costs $25,000 to $100,000 a year.

In health issues ``the major agenda before this Congress is the cost element,'' Dr. Graham says.

He adds that only three ways exist to contain costs: provide fewer medical services, charge less for them, or change the definition of the services provided.

Dr. Graham says the key question for Congress and the country is: ``What system of constraints ... will be acceptable to us?''

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