From PATRICK BROGAN
Washington, Tuesday
THE American health care disaster is growing worse by the month. The
Department of Commerce has just concluded that in 1992 the cost of
health care came to 14% of gross domestic output, compared to 13.2% in
1991.
The cost was $838.5 billion last year and will hit $1 trillion, a
million million dollars, in 1994. Health costs are rising 12 or 15% a
year, according to the commerce report, and will continue to do so for
the next five years at least ''unless significant changes in the health
care system occur''.
Simultaneously, the Blue Cross health insurance system in New York has
increased its premiums by 22.5%. This is the non-profit scheme that
insures small companies and individuals that the large insurance firms
will not insure. The result of the increase will be that scores of
thousands of people will lose their medical insurance.
There are several forces at work here. Medical technology is expanding
at a dizzying rate, and doctors and hospitals always give their patients
the best treatment possible. In the process, doctors, hospital
administrators and everyone who provides health care, becomes very rich
-- except, of course, the nurses and people who do the grunge work.
At the same time, the cost of medical insurance is so high that firms
that provide insurance for their employees look for the cheapest deal,
and insurance companies oblige by offering much reduced rates for young
and healthy people and refusing to insure older people.
This is fine for the young and healthy until they, too, grow old and
sick. Even in America the young know that their turn will come, but in
the meantime they seize the advantage of their youth, and join the cheap
insurance plans.
All over the country insurance companies are refusing to insure people
who might actually need health care. A third of Americans now have no
health insurance and the percentage is rising rapidly.
When they fall sick, they cannot go to a doctor so they go to hospital
emergency rooms. This costs far more than a visit to a doctor's surgery,
but they have no alternative, and most states oblige hospitals to treat
everyone who presents himself. This puts up the cost to paying patients
and speeds the cycle around.
This effects governments. Pensioners have their basic health costs met
by the Medicare system and indigent people by Medicaid.
The federal government has tried to shift as much of the burden as
possible onto the states. State governments, including New York and
California, face budget crises every year as they try to balance the
books while paying Medicaid.
Health care costs are now the largest item on the federal budget,
bigger than defence or education, and Mr Clinton has no hope of cutting
the $320 billion federal deficit by half in the next four years, as he
has promised, unless he can bring health costs under control.
It is his greatest challenge. The lobbies pushing for greater
spending, led by the serried ranks of pensioners who want Medicare
spending increased, not cut, are the most powerful in Washington. But
America now spends more than twice, proportionately, what Japan, Britain
and many other countries spend on health, and half as much again as
Canada or Germany.
The only spark of hope is that Mr Clinton, unlike his two
predecessors, recognises the problem and proposes to try to do something
about it.
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