Health, Education and Welfare Secretary Joseph A. Califano Jr. said yesterday that American hospitals are wasting billions of dollars a year and "instead of having five pieces of chocolate cream pie for dessert, they should hold it to one."
He was testifying before the Senate Health Subcommittee in defense of the administration's proposal to put a cap on hospital fee increases.
A spokesman for the hospital industry and the head of Georgetown University Hospital, where the hearing was held, warned the Senate panel that the proposed 9 per cent lid on cost increases would reduce the quality of health care.
Sen. Edward M. Kennedy (M-Mass.), chairman of the panel, rejected that argument after hearing Gov. Michael S. Dikakis of Massachusetts testify that Massachusetts managed to control hospital costs while improving the qualify of care in the state's hospitals.
Dr. Leo Gehrig of the American Hospital Association called the administration bill "a meat-axe approach" that will force hospitals to cut back on the recent improvements in patient care. He urged the government to let local planning units and doctors and hospitals try to bring costs under control.
Kennedy engated in a lively exchange with Gehrig, demanding to spokesman's alternative proposals would save. Gehrig admitted he didn't know and doubted he could find out.
Hospital costs "are headed right up through the roof," Kennedy told Gehrig, "and I'm frankly unimpressed with your association's efforts to help us come to grips with these problems."