Diverging Views on Health Care Reform
Christine, Brian, Risk Management
BY NOW IT'S an obvious, indisputable fact: The United States is in the throes of a health care crisis. In 1990, health care spending in the United States reached $666.2 billion, an astonishing 12 percent of the nation's Gross National Product (GNP); the U.S. Commerce Department predicts that health care costs will equal 14 percent of the GNP in 1992. These cost rises have been growing steadily, from $2,572 per family in 1980, to a staggering $6,535 per family in 1991.
Despite the exorbitant amount of money spent on health care, approximately 37 million Americans have no health insurance. Additionally, among the uninsured, 66 percent are fulltime workers or their dependents and 14 percent work part-time or belong to families with one or more part-time workers.
Employers have been especially hard hit by spiralling health care costs. A U.S. Chamber of Commerce report shows that corporate health expenditures in 1990 averaged $3,197 per employee, a 12 percent increase from the previous year. In response, some companies have altered their benefits packages by increasing deductibles and co-payments, changing their funding systems, requiring second opinions for surgery, refusing to pay for certain procedures and offering managed care programs such as HMOs, PPOs and point-of-service plans. Some large companies are taking a different tack: they are dealing directly with doctors and hospitals for health services or, in the case of certain very large firms, they are hiring their own physicians and running their own medical facilities.
Other approaches also exist. John Groskopf, senior vice president at MMI Companies Inc., a health care risk management company, says that in the 1990s, risk managers will need to take a proactive approach to managing health care costs. "The emphasis will be on reaching an 'appropriateness' level of care. This means ensuring the patient gets the right care for his or her condition. This approach involves asking the question: `What is the appropriate level of care for a particular condition?'" Mr. Groskopf remarks that to perform this function, risk managers have to be conversant with medical issues and terminology. "A health care risk manager must have a working knowledge of medical issues so as to be effective in helping ensure that standards of medical practice are met. For example, many hospital bills are higher than they should be because of medical mistakes. For example, in the case of unsterilized equipment that leads to an infection, the cost of the treatment for the infection will be on the bill, but may not be designated as such. The risk management function can make a big difference in discovering and preventing unnecessarily costly occurrences such as this. In working toward this end, the risk process must involve the medical profession; there's a direct link between quality of risk management and the quality of care."
While companies and their risk managers are doing whatever they can to contain increasing health costs, various reform proposals are being discussed at the federal level. According to Dr. Roger Taylor, National Leader Health Care Consultant with the Wyatt Co., there are approximately 50 health care reform bills currently before Congress, not to mention numerous other proposals not yet embroiled in legislation. These plans, advanced by members of Congress, research analysts, academics and trade associations, take different approaches to resolving the crisis.
THE VARIOUS PROPOSALS aim to accomplish two goals: first, to broaden the availability of health care for the millions of uninsured Americans, and second, to reduce the costs of health care inflation. Proposals aimed at undertaking modest alterations of the current system are often referred to as incremental reforms. Changing malpractice insurance policies is one such step. Critics of the current system say that malpractice insurance rates are so high that health care providers must pass those increases onto consumers; hence, the continuing increase in health care costs. …