This or that political wile generally gets credited for Congress' persistent refusal to put effective clamps on medical costs. But all that clever lobbying would be for naught if it weren't that the health-care industry has quietly become the colossus of the American economy.
Unlike other economic giants, health care is so institutionally fragmented that, in contrast to steel or oil or housing, it doesn't seem to deserve the term "industry." However, on the basis of what it claims to sell to its customers -- healthful longevity -- it's all one big economic system, even if its parts range from neighborhood drugstores to electronics-laden operating rooms.
Looking at that way, the health industry is easily the nation's biggest conglomerate. With current annual revenues of over $200 billion, it dwarfs the celebrated military-industrial complex by more than $50 billion. It's nearly double the size of the farm industry, as measured in terms of what farmers get for their products, and in sales, it's about three times the size of General Motors.
As a provider of jobs, health care is a boom industry, with its employment up from 4.2 million to over 7 million in this decade. During that period, health care accounted for more than one out of every seven new US. jobs, but many more than that if the definition is extended to biomedical research, pharmaceutical manufacturing and all sorts of other work that the government's job figures record elsewhere. While the daily patient load in the nation's hospitals has gone up, so has the number of hospital employees per patient. It was 1.5 per patient in 1960; now it's over 3.7.
Medical schools, the institutions that train the kingpins of this system, have also experienced a decade-long boom. Since 1970, we've opened 18 new medical schools, bringing the national total to 126; enrollment this year is at a record high of nearly 64,000 medical students. Almost all the experts agree that we're headed for an M.D. glut, but though it costs about $20,000 a year to train a physician, no one knows how to turn down the system.
What makes this doctor-training machine even more worrisome is that doctors do manage to find paying patients, regardless of the physician-patient ratio. Thus, the Public Health Service observes in its newly issued report, "Health: United States 1979," that "although there is no evidence of change in the prevalence of conditions leading to surgical intervention, surgical rates have risen over time. The surgical rate per 1,000 populatin has climbed from 78.4 during 1966-67 to 94.5 during 1976-77."
What accounts for this epidemic of surgery? Rather than medical necessity, says the health service, "this over-utilization may in part be the result of an oversupply of surgeons and the availability of third-party payment for operative services."
In recent years, Congress has passed several basic statutes that are supposed to control the availability, cost and quality of health care. But what's evident from attempts to apply this legislation is that the price of passage was that the laws have no real bite on the actual practices of the health-care industry -- never mind the moans of the ideologues of medical free enterprise. In this respect, health-cost control is like international arms control. SALT is politically feasible only if it is accompanied by the development of a new arsenal of strategic weapons. Similarly, medical cost control is acceptable only if it is guaranteed not to work; and this insistence is backed up by an alliance that embraces hospital unions, medical-equipment manufacturers, physicians and so on down the line of the many economic beneficiaries of the American health-care industry.
Any disintterested look produces the same conclusion: we've got too many hospitals, too many medical schools, and we're producing too many doctors, most of whom continue to shun the rural and inner-city areas where they are most needed. But little gets done about it. And despite the mounting costs of medical care -- yearly health-insurance premiums now average about $1,000 per head -- it's not likely that anything will get done until the costs become so unbearable that parts of the system will simply go bankrupt.
But in the meantime, if you think it's hard to close an army base or a naval shipyard, think about trying to close a medical school.