September 26, 1993
"So Much Care (And So Much Money)"
San Jose Mercury News
By Timothy Taylor
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IN HIS health care address to Congress, President Clinton said: "This
is not a free system. There can't be any such thing as a free ride. We have to
pay for it." Then he repeated, for emphasis, "We have to pay for it."
We're certainly paying through the nose right now. America will spend about
$940 billion on medical care this year. Whether measured in absolute dollars,
or spending per person, or as a share of gross domestic product, this is far and
away the highest level of health care spending for any nation. Although only 5
percent of the world's population lives in America, this nation consumes 41 percent
of global health care spending, according to the World Bank.
The most prominent guarantees of Clinton's health care plan would raise this
figure still higher.
Begin by assuring health insurance benefits as generous as those typically
provided by Fortune 500 companies to every American. This involves both providing
insurance for the one-sixth of all Americans now without it, as well as expanded
coverage for those with relatively skimpy policies.
In addition, Clinton proposes expanding the available benefits. He included
mental health benefits for all and prescription drug benefits for Medicare patients.
He plans to phase in insurance for long-term care, dental care and more. Of course,
the home care providers, chiropractors, podiatrists, acupuncturists, herbalists,
and every other healing profession will be clamoring to be included.
As Clinton emphasized, high medical care spending is already harming the U.S.
economy. It is creating a fiscal crunch for government at all levels, making it
harder for U.S. business to compete in global markets, and sopping up money that
could otherwise have gone into wage increases or capital investment. So how are
we going to pay for the additional security promised by Clinton's plan?
One possible answer is to take a tough line with the pro-paperwork lobby, and
call for simplicity and efficiency. Easier said than done, of course. Clinton
is proposing the creation of state-regulated regional health alliances, new taxes
and subsidies for various businesses, collecting information for "report
cards" on health plans, and a wide variety of federal and state mandates.
Even with his promise of a single simple form for health insurance claims,
it requires a certain optimism just to believe that paperwork won't get worse
under such a plan.
Moreover, even if the proposal can scuttle enough paperwork to save, say, $100
billion per year on the nation's medical bill, America will still be spending
far more than any other country, any way you measure it, and medical spending
will still be rising rapidly.
Clinton also promised that regional health care purchasers, negotiating on
behalf of consumers, will hold down costs. It should help, over time. But many
large purchasers exist already -- including Medicare, Medicaid, Blue Cross/ Blue
Shield and large health maintenance organizations -- and costs have been rising
The other proposals for saving money are substantially less credible. Clinton
trotted out the old warhorse of avoiding fraud and abuse. He has promised Medicare
and Medicaid savings, but without any clear notion of how they will come about.
He argued that covering the medically uninsured would save money, by catching
health problems earlier. But any such savings will not come close to outweighing
the additional costs of giving 37 million uninsured people greater access to medical
If the promised savings don't materialize, only two possibilities exist for
taking up the slack. One is to find someone who will pay. The likely possibilities
seem to include tobacco users, businesses, and perhaps younger workers. While
I strongly support higher cigarette taxes, making businesses and workers pay more
is part of the medical cost problem, not part of the solution. The other option
is to cap medical care spending, either by placing a lid on health insurance premiums
or on overall spending. Without such caps, Clinton's plan seems unlikely to hold
In his 53-minute address Wednesday, Clinton never quite got around to explaining
the most fundamental reason America has such extraordinarily high spending on
medical care. It's not paperwork. It's not gluttony, sloth, a predilection for
violence, or some other moral failing. It's not fraud or greed or price-gouging
Such factors all make a contribution. But the basic reason America spends so
much on medical care is, simply enough, because Americans receive so much care,
especially of the high-technology, high-cost variety.
Patients, understandably, want everything done that might benefit their health.
Medical care professionals, understandably, want to do everything they can to
help their patients. But no society, not even the richest in the world, can afford
for every person to have every technologically possible diagnosis and treatment,
regardless of cost.
Holding down medical expenditures will require health professionals and patients
to confront hard decisions about which types of medical care and new technology
will be delayed, or available only at additional cost to the patient, or largely
unavailable. When it comes to controlling medical costs, the controversy over
these choices will be where the rubber hits the road.
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