SECRETARY OF HEALTH and Human Services Richard S. Schweiker is seeking over $9 billion in additional savings in his department's 1983 budget. Most of the savings--outlined in a recent memorandum for the Office of Management and Budget--are to come from still unspecified sources. Others are expected from controversial changes in Social Security now before Congress. Even so, the proposals suggest the difficulties of curtailing growth in the entitlement programs that now dominate the domestic budget.
Many of the welfare proposals attempt to tighten work requirements further--job search for all welfare parents and a requirement that recipients not caring for small children work for their welfare grants at community jobs. These aren't assumed to be big money savers, however. The biggest cut is to come from reducing grants to families who live with other relatives or friends. This might make sense were it not that welfare grants in many states are already so low that families have to group together for simple survival.
The welfare proposals are not without moral overtones. Still trickier, however, are the questions raised by the much larger savings sought in the fast- growing medical programs. Almost $3 billion is to be saved in Medicare--medical coverage for Social Security recipients--primarily through limits on amounts paid for certain hospital and physician services and higher premiums and cost-sharing to be paid by patients. If the cost-sharing and reimbursement limits work as presumably intended, they will prompt doctors and hospitals to be more careful in prescribing high-cost diagnostic and treatment services and, perhaps, even to limit their fee increases. Whether they work or not, they are likely to send most of the elderly in search of still more supplemental private insurance--insurance that will cost a good bit more than the value of the lost Medicare coverage because of benefit duplication and the high administrative costs of private plans.
Savings in Medicaid--medical aid for the needy --are to come from shifting additional responsibilities to states along with more latitude for states to pass along costs to participants. The most important change would let states decide what combination of services--supervised residential care, in- home care or skilled nursing home care--can best serve the rapidly growing number of the elderly in need of long-term care. States would like to have this flexibility, and real savings could be expected-- but any proposal that would set unrealistically low limits on future federal aid will be strongly resisted.
Few of the medical proposals are objectionable in themselves--although those that directly affect the proprietary hospitals are already under heavy attack from that quarter. Details are important in deciding whether some of these ideas are workable, but the real difficulty will come in assessing the effect of these changes--and those still to be specified --on the type and amount of medical care that the society sees fit to provide for itself.
Medicaid and Medicare are directly important to almost every citizen. Because they are so large, they exert considerable influence on the quality and cost of the entire health system. They are invaluable insurance for anyone who enters upon old age without the substantial financial resources needed to cover the cost of any prolonged illness. They are also valuable insurance for the many people who are not aged and no longer find themselves facing the agonizing choice between college for their kids and decent medical care for their grandparents.
How much do we, as a society, want to pay for our medical care? How can that cost be controlled in a way that is acceptable to both patients and health care providers? How should that cost be shared among generations? These questions won't be easily answered. While they are being debated, however, the administration might want to curb the talk about a freely operating medical market--talk that has done so much in recent months to fuel the record rise in medical costs. This is one area, anyway, in which talk is not cheap.