THE LONG STRUGGLE to control the super-inflation in hospital bills is not, from a politican's point of view, a very inviting enterprise. So far there have been many failures and few successes. But the Carter administration is again going after it, for the rather bleak reason that it hasn't any choice. It can't ignore the prime transgressor of its price guidelines.
This time the administration is asking only for voluntary compliance, since Congress refused to pass the president's bill for mandatory controls. Secretary of Health, Education and Welfare Joseph A. Califano wants the hospitals to limit their spending to an increase of 9.7 percent over last year. In the first nine months of 1978, hospital spending was rising at an annual rate of 12.8 percent. That was an improvement over the previous year. But it was still far above the general level of inflation.
The people who speak for the hospital industry immediately denounced Mr. Califano's suggested 9.7 percent as unreasonable, impossible, unrealistic and so on. Hospitals would, in our judgment, do well to reflect on the changes overtaking American attitudes toward them. There have been too many studies showing unnecessary surgery, redundant tests and needlessly prolonged hospitalization. It is slowly beginning to dawn on laymen that there is no very persuasive correlation between increases in hospital costs and improvements in health and longevity in the communities that they serve. Laymen are also becoming aware that measures to improve care can also sometimes save money when, for example, a state centralizes maternity services in the best-qualified hospitals and requires those with under-used maternity services to close them.
Is Secretary Califano's 9.7 percent rule as unreasonable as the industry claims? We recall a letter, printed on this page several months ago, from Harold A. Cohen, the executive director of Maryland's very effective Health Services Cost Review Commission. He pointedout that for the year ending last March, average costs per day in the District of Columbia hospitals rose 18 percent -- and, since patients were kept longer in the hospitals, the average bill rose a staggering 33.8 percent that year. In the Northern Virginia hospitals costs per day rose but length of stay fell, resulting in a 9.4 percent increase in bills. In suburban, Maryland, where Mr. Cohen's commission reviews hospital budgets, costs per day rose only 6 percent. Since the length of stay was reduced over the year, the average hospital bill in suburban Maryland actually dropped 7 percent.
The hospitals in Northern Virginia and the Maryland suburbs would fit comfortably within the administration's guideline. The city hospitals would violate it massively. The contrast suggests that there is more at work here than blind economic necessity.
Just about everyone would prefer, ideally, that the hospitals themselves proceed, voluntarily, to restrain their inflation rate. But, although some have done an exemplary job, there's little evidence that enough hospitals are capable of that kind of self-discipline. The second choice would be intervention by the states, following Maryland's example. But most states have been very reuctant to act. That leaves federal legislation. If the hospital industry continues another year in its present role as one of the most egregious and visible violators of the rule of reason, the case for federal cost-control legislation will, unfortunately, become unanswerable.