HEALTH AND Human Services Secretary
Richard S. Schweiker hopes to enlist the consumer in the battle to control the rising costs of medical care. After several months of study and consultation with specialists and interested groups, HHS has sent to the Cabinet a set of proposals to encourage more careful use of medical services.
At the core of the proposals is the common-sense idea that when people have all or most of their medical bills covered by insurance, they aren't very worried by the cost of what they buy. As a result doctors may prescribe unneeded services, and all health care providers may raise their prices more than if they had to consider the possibility of scaring customers away. To curb this "overconsumption" of health care, HHS would put more of the cost of routine health care on the public and private health insurance consumer, while increasing coverage for prolonged, high-cost treatment.
Since most working-age people obtain their health insurance through their employers, the proposals would use tax credits to encourage companies to offer their workers a choice of health plans. There would be a ceiling on business tax deductions for contributions to health plans so that companies would have a stronger financial incentive to offer plans with more limited coverage or better cost control. Workers choosing less expensive plans would also get tax-free rebates. All plans, however, would have to provide full coverage for very high medical expenses.
The Medicare program for the elderly and disabled would be redesigned to shift more of the cost of short hospital stays to patients while increasing protection against catastrophic expenses. A "voucher" option would reimburse persons choosing a private plan instead of Medicare--but the plan would have to provide equal or better coverage.
These are not revolutionary proposals. Their details have been carefully chosen, and they respond to most of the criticisms leveled against earlier versions. The Medicare voucher, for example, provides necessary assurance that the elderly will not be exposed to the risk of less adequate coverage. It also recognizes that most private insurers won't be able to provide lower-cost coverage than the inexpensively administered Medicare program. However, the voucher plan may encourage older people to enroll in efficient prepaid group health organizations, and it may also encourage private insurers to improve the often redundant and overpriced Medicare add-on packages that many older people buy.
The most controversial proposal--and the only one for which large budget savings are claimed--is making patients pay more of the cost of short-term hospital stays. This loss, however, is partially compensated by the new full coverage of longer stays. Protection against devastating medical expenses-- while it is not without potential for abuse by health providers--will be welcomed by the elderly.
The idea of using consumer choice to help control the medical market is a sensible one--as far as it goes. Americans, no doubt, consume somewhat more medical care than makes good sense. A lot of that, however, is the fault not of the patient but of the doctors and hospitals who in large measure control his treatment. HHS has still to consider what direct pressures may be needed to make the providers of health care worry about health costs as well as about their patients.