Healthy, Wealthy, or Wise? Issues in American Health Care Policy

By Charles T. Stewart Jr. | Go to book overview

holding down increases in fees, much less reducing them. Freedom to raise fees gives hospitals the flexibility to shift costs.

If we do not succeed in reducing prices (or their rate of increase, as the case may be), we face the prospect that an unbalanced stress on reducing quantity of services and procedures could go too far, in particular because DRG compensation makes inadequate allowance for the initial condition of the patient or for the severity or complexity of the illness or procedure. In fact, such a stress makes the M.D. more prone to raise fees, as the only way of maintaining or increasing earnings. If we could restrain prices, there would be less incentive for hospitals to reduce the quantity of services rendered, inasmuch as quantity would then be the preferred, if not the only, means of preserving or increasing earnings.

And then there are the veterans' hospitals--171 of them, costing $17 billion a year, most of them of poor quality, most of them scampering for patients to fill their beds. They should be closed. There may be a few areas where the presence of a veterans' hospital could preclude the need to build another, if this hospital were open to the general public; but then it would cease to be a veterans' hospital. Veterans' hospitals, like the Rural Electrification Administration, are evidence that bureaucracies live forever even though their job is done.


Notes
1.
Richard Auster, Irving Leveson, and Deborah Sarachek, "The Production of Health: An Exploratory Study," Journal of Human Resources 4 (Fall 1969): 411- 36. See also Charles T. Stewart Jr., "Distribution of Medical Inputs across Standard Metropolitan Statistical Areas and Implications for Health," in Advances in Health Economics and Health Services Research, ed. Richard Scheffler and Louis Rossiter, 191- 220 ( Greenwich, Conn.: JAI Press, 1982).
2.
Joseph Newhouse and L. J. Friedlander, "The Relationship between Medical Resources and Measures of Health: Some Additional Evidence," Journal of Human Resources 15 (Spring 1980): 200-218.
3.
Rick Carlson, The End of Medicine ( New York: Wiley, 1975), 232-40.
4.
Rosemary Stevens, American Medicine and the Public Interest ( New Haven, Conn.: Yale University Press, 1971), 354.
5.
R. Jeffrey Smith, "Carter Attempt to Limit Doctor Supply Faces Tough Going in Congress," Science 203 ( February 16, 1979): 122. William Metz, "Califano to Medical Schools: Cut Back Class Size," Science 202 ( November 17, 1978): 726.
6.
Richard Lyons, "AMA Expects the Doctor Shortage to Get Worse," Washington Evening Star and Daily News, November 23, 1972, B5.
7.
David Kindig, "Specialist Glut, Generalist Shortage," Washington Post, September 7, 1994, A21.
8.
Edward F. X. Hughes, Victor Fuchs, John Jacoby, and Eugene Lewit, "Surgical Workloads in a Community Practice," Surgery 71 ( March 1972): 315-27.
9.
Rita Ricardo Campbell, Economics of Health and Public Policy ( Washington, D.C.: American Enterprise Institute, 1971), 11, 95.

-77-

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Healthy, Wealthy, or Wise? Issues in American Health Care Policy
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Preface vii
  • Notes viii
  • 1 - Determinants of Health 1
  • Notes 6
  • 2 - Why Are Costs Out of Control? 7
  • Notes 27
  • 3 - Must Living Standards Decline? 28
  • Notes 38
  • 4 - Health Insurance Raises Demand and Supply 40
  • Notes 49
  • 5 - The Excess of Physicians and Services 51
  • Notes 77
  • 6 - The Medicalization of Health 82
  • Notes 97
  • 7 - Mental Illness 99
  • Notes 119
  • 8 - The Excessive Demand for Medical Care 123
  • Notes 136
  • 9 - Research and Technology 138
  • Notes 161
  • 10 - The Physician as Agent 164
  • Notes 179
  • 11 - Prevention: Environmental and Behavioral Modification 181
  • Notes 210
  • 12 - The Demedicalization of Health Care 213
  • Notes 222
  • 13 - What to Do? 223
  • Notes 250
  • Index 253
  • About the Author 263
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