A strict federal limit on how much hospitals can charge patients for care was proposed by President Carter yesterday as a first step in cutting the country's runaway medical costs by billions of dollars a year.
In what could become the nation's first permanent health cost control, the administration said it would ask Congress for authority to set a hospital charge ceiling that could save those who pay for health care more than $2 billion in the fiscal year staring Oct. 1.
Health, Education and Welfare Secretary Joseph A. Califano Jr. denied that the step would be a wage-price control for hospitals - President Carter has said he would not impose wage-price controls - but rather a way of negotiating with hospitals to give them "a reasonable price increase" but no more. The heatlh industry was under temporary price conrol in former President Nixon's "economic stabilization" period of August, 1971 to April, 1974.
Califano said a 9 per cent increase in hospital charges to the government, health insurers and individuals in fiscal 1978 would be "ample." He added that such a limit would save the government and the public $2.4 billion.
Hospital charges rose 15 per cent last year to make the average daily cost $154 per patient for room and other services, he explained. The $154 is a nationwide average - the current figure is more than $200 in the Washingon area and equally high in other big metropolitan centers.
Califano called the 9 per cent figure only an example of the possible ceiling to be negotiated with hospitals. But he called it "an ample increase," in his opinion, and said it could save the federal government alone $829 million in fiscal 1978 Medicare and Medicaid payments.
Medicare-Medicaid payments for the elderly and the poor make up wome 40 per cent of the country's toal hospital bill. Savings to health insurers and cash-paying patients could total another $1.6 billion.
If the Carter measure is not enacted, Medicare-Medicaid spending will rise from an expected $38 billion in fiscal 1978 year to $66 billion in 1982, Califano warned.
He said the measure is needed to allow time to design a permanent system to contain other health costs and to make compehensive national health insurance possible.
The negotiations on actual hospital charges might be conducted by federal officials with state hospital associations or - in states that have them, like Maryland - with state hospital cost control agencies. Califano said he would name a national advisory board to help him set hospital cost limits.
He said details of a bill must still be worked out, "hopefully in the next two weeks," with health leaders in Congress, the American Hospital Association, American Medical Association and Blue Cross.
Alexander McMahon, hospital association director, said yesterday that any program that controls one part of the economy without controlling others is "inequitable and unworkable," and hospitals will battle any limit that fails to consider each hospital's circumstances, Califano said earlier that exceptions would be allowed of perhaps "an additonal 1 per cent" in "unusual" cases.
An American Medical Association spokesman said that group would state no position until its officers confer with Califano this week. Califano said the program would not cover payments to doctors at present, though "I think we'll be looking at that" possibility.
Califano also said the revised budget omits any proposal for increased charges to citizens over 65 for Medicare, charges that the Ford administration had calculated would save more than a billion dollars a year. This would have been unfair to the elderly and would never have been accepted by Congress, Califano said.