Review of all hospital budgets would greatly slow the rapid rise of medical care costs in Northern Virginia and across the country, a health insurance specialist recently told a convention of local health planners.
Stanley B. Peck, an associate director of the Health Insurance Association of America, which represents most health insurance companies in the nation, said Virginia and other states should initiate ways to review hospital budgets. He also said insurance companies want to help plan the review methods.
Peck spoke at the first annual convention of the Northern Virginia Health Systems Agency, a federally created organization that plans and evaluates local health care facilities with an eye to cutting costs.
Hospital costs have increased 14 percent a year between 1974 and 1977, according to the health agency's figures. In 1977, the average cost of a patient's hospital care - including laboratory work, surgery and outpatient services - was $185, compared to $215 this year.
Peck said federal reviews of hospital budgets deal only with expenses for Medicare and Medicaid, allowing hospitals to shift costs incurred by patients covered by government plans to other budget areas.
A review of all patient care "would force hospitals to re-examine their practices in order to justify their current costs," said Peck.
Although insurance companies pass rising health care costs on to their clients in the form of higher premiums, they continue to lose profits to higher hospital bills, he said.
Peck's view was termed "naive and simplistic" by another speaker at the convention, which was attended by more than 100 Northern Virginians interested in economics of health care - including social workers, labor union representatives, physicians, hospital administrators and other personnel, local elected officials and consumers involved in health planning through the health systems agency.
Richard Shoemaker, assistant director of Social Security programs for the AFL-CIO Washington office, said that regulating hospital budgets would accomplish little because "hospitals are adroit at spilling their costs over to other sectors of health care."
He said hospitals could easily move functions like pathology and radiology into "feeder services" outside a hospital, therefore removing them from their budgets and avoiding monitoring of their costs.
"The possibilities for manipulation are practically boundless," he said. "We need to get a handle on the total revenue picture (for health care)."
The all-day convention last Thursday in Alexandria included other seminars on health insurance benefits and how they might be expanded, the role of organized labor in health planning and the amount of technology needed in medical care.