Imagine, if you will, what you would have done if gas prices had continued up, rather than starting to decline. Would you have cut back on even essential driving if you had to pay $2 a gallon? What would you do if gas hit $3 or even $4 a gallon?
Luckily, if the current trend continues, these price possibilities will remain a comfortable fiction, and you need not worry that your gas costs could double or triple in the foreseeable future.
But your troubles are not over. What you save in energy costs you may need 10 times over to pay your medical bills if the current trend in health cost increases continues. And unlike the world energy market, where price has an important relationship to levels of consumption, the health care system in this country as yet knows no bounds when it comes to the price paid for a service rendered.
Back to the gas pump. What if you were dependent on the service station attendant to tell you how much gas you needed and what you should pay for it? And what if he had the freedom to charge both his salary and the gas on your credit card? And what if this was the only available way you could keep your car running?
While this is an obvious oversimplification of what is wrong with the way we are paying for our health care, the analogy holds to an uncomfortable degree, especially if you are looking for accountability for how much things cost.
Most industries are enormously sensitive to competition. If gas started selling for $2 a gallon in one location and just $1.20 a gallon a few miles away, pretty soon the station with the $2 gas would lose customers and might even go out of business if it did not drop its prices.
But, consider this: there is one city in Maine where 70 percent of the women will have a hysterectomy by the age of 75. Less than 20 miles away, less than 25 percent of the women will have a hysterectomy by the same age. As far as we can tell, there is no significant difference in the health of the women in the two cities.
If you look at national trends, you find more of the same. The highest rates of hysterectomies and prostatectomies are four times the lowest. The highest rates of tonsilectomies are six times the lowest. And, once again, there are no other factors affecting health status. The differences are commonly explained as differences in styles of medical practice. They are considerable.
If you project forward the impact of our freewheeling medical practice on the nation's budget, you get some truly frightening results. Current levels of medical cost inflation will create a $300 billion to $400 billion deficit in the Medicare Hospital Insurance Trust Fund by 1995. At this level, beneficiaries would have to pay a third of the average hospital bill to keep the system solvent, or $100 a day in 1983 dollars. And we're debating the impact of delayed cost-of-living adjustments on Social Security beneficiaries? Another option to keep the trust funds solvent is to charge $160 a month for Medicare coverage that beneficiaries currently receive at no cost.
The situation is a fiscal time bomb that is, for the most part, being ignored in the national policy debate over keeping the country --and its citizens--solvent.
To get control of health care inflation, physicians are going to have to be held more accountable for the way they practice medicine. Although their fees account for only 20 percent of the nation's medical bills, physicians control how 80 percent of the health dollars get spent.
Change is possible without any compromise in the quality of care.
Patients at the Mayo Clinic in Rochester, Minn., are hospitalized a third less than they would be if they were not Mayo patients. Medicare patients in the Fallon Community Health Plan--a group-practice health maintenance organization in Worcester, Mass.--are hospitalized at a rate of 1.9 days per person a year compared with 5.2 days for the rest of the over-65 population. And if you are worried about satisfaction, an independent poll showed that 100 percent of the Fallon patients would re-enroll today if given the choice.
The current push in Congress and by the administration is to control health care costs by putting a cap on the amount we pay hospitals. That's fine as far as it goes, but what about the physicians? Isn't it a little like capping the price of gas while giving the attendant a blank check for the number of gallons he can pump as well as the amount he can pay himself for pumping it?
We have a good number of examples from other nations of what can go wrong with efforts to address the root causes of health cost inflation, and we should learn from them. In Canada and in England, people have to wait as long as six months for open-heart surgery, and that is only the beginning of the lists kept for medical treatment. We can avoid this scenario and maintain the many advantages of our health system if we act and act now. But we do not have forever, and time is running out on our ability to pay for our system in its current state.