Carter administration officials looked to the Senate yesterday as the last hope for a strong hospital cost control bill this year.
The Senate Finance Committee is to meet Friday to consider less legislation that would attempt to slow hospital cost increases by setting annual targets for the hospitals' Medicare and Medicaid costs.
Some administration official were hoping yesterday that legislation could be used to obrain a vote on the broader controls they have been seeking.
On Tuesday, the House Commerce Committee gutted an administration backed bill that would have imposed mandatory federal controls on hospital costs if, over two years, a voluntary controls program by hosptials failed to meet prescribed targets.
The bill before the Senate Finance Committee is sponsored by Sen. Herman E. Talmadge (D-Ga.), chairman of the panel's health subcommittee. Talmadge's approach has been opposed by the administration, but it is one of the few remaining vehicles left after the House committee vote.
Sen. Edward M. Kennedy (D-Mass.), who helped push an even stronger adminstration bill through the Senate Human Resources Committee last August, said Talmadge had promised him that he would join in an effort to get the issue onto the Senate floor for a vote this year.
Kennedy's bill was referred to the Senate Finance committee.
The Talmadge bill would set annual target rates for hospitals' Medicare and Medicaid costs which amount to roughly one-fourth of hospital revenues, then allow or disallow future increases, depending on how close a hospital came to its target.
Some administration officials said they are urging HEW and White House leaders to try to get Talmadge and Kennedy to agree on one plan.
"It might work like this," one official said. "They could give hospitals two years to continue their present voluntary cost controls, which they claim are working. But if the voluntary effort falters, the law could automatically trigger in a mandatory plan like Talmadge's, but one applying to all hospital costs, not just Medicare and Medicaid."
The same official said, "I think Kennedy would accept that approach if the president and the secretary of HEW really pushed it."
Kennedy and Talmadge aides reported no such approaches yet.
However, Health, Education and Welfare Secretary Joseph A. Califano Jr. told a news conferenec, "Cost containment is going to be a feature of the legislative landscrape until all of us face up" to the need for it.
House Ways and Means Committee leaders said they were still uncertain whether they could win the committee votes to strengthen the bill voted out by the Commerce Committee. It would eliminate any threat of federal controls and create a federal commission to watch hospital costs and recommend action if hospitals' own cost controls fail.