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Panel Debates Health Care Issues

Spiraling health care costs must and will be brought under control by national health care reform, panelists agreed at an Industry Summit on Saturday, but they were not unanimous on the causes of the problem or on what direction that reform should take.

"The largest drag in this country on economic growth for individuals, for corporations, for state and federal government is the rate of health care cost increases," said Dr. Jerome H. Grossman, chairman and CEO of New England Medical Center, Inc. Consequently, many companies that provide health insurance to thousands of employees have already moved to change their methods of purchasing and providing that benefit, he and other panelists said at the session on the health care crisis.

Before such a re-examination at General Electric, "we weren't purchasing health benefits with any of the same models or any of the same intelligence with which we were purchasing plastics or widgets or gears," said Dr. Robert S. Galvin, medical director for General Electric, AEBG. "It became clear to us that we didn't know what we were buying."

Change is indeed around the corner, "but I don't think it's going to come out of Washington," said John W. Brown, chairman, president and CEO of Stryker Corp., a medical supplier. "It's really the Fortune 500 companies here in the US that are starting to drive these changes." At the heart of this movement is the way in which the country measures medical care, he said. Until now, people have embraced any real or perceived improvement in care with little regard to cost. But the problem now facing reformers is that "there is no standard by which the providers and customers can universally agree on what the quality is," John Brown said.

Insurance companies have unfairly been targeted as villains in the debate on spiraling health care costs and left out of the group that has been charting reform, said Stephen L. Brown, chairman and CEO of John Hancock Mutual Life Co. It is also misleading to characterize American health care costs as substantially higher than those of other industrialized countries, because the US has a greater share of problems that drive up costs, such as violence, inner-city poverty and AIDS, as well as more research and high-tech therapies, he said.

"Cost can surely be reduced at the expense of quality and slowing down technological advances," Stephen Brown said. "But is this really what the public wants?" The insurance industry supports government-mandated changes to allow for universal access to care, and malpractice reform, he added. "What we do not support is eliminating consumer choice [of providers] or the development of monopolistic and mandated health insurance purchasing schemes. Nor do we support the imposition of arbitrary and capricious price controls."

Although health care reform is being sold to the middle class, most people in that category already have insurance; it is uninsured people's care (which is spotty and often too late) that is really driving reform, said Uwe Reinhardt, professor of political economy at Princeton University. President Clinton should have started by fixing that problem and focusing on overall cost control later, he said. "Instead of making it a moral issue, they made it a debit and credit issue and they're now struck with it," Professor Reinhardt said.

A key element of reform is getting healthy people to plan in advance for illness by signing up with competing plans, providers and facilities, choices that most Americans have not had to make in the past., he said. Eventually, the global medical care model will consist of a combination of European-style budgeting and American managed care, Professor Reinhardt said.

In the short term, getting reform approved will require enlisting the support of various factions and interest groups, he said. "Constituency by constituency, it's going to be bought out with little goodies. In the next nine months, you'll see this monster being shaped by political chisels so in the end, even a DNA test couldn't identify the parent."

A version of this article appeared in the September 15, 1993 issue of MIT Tech Talk (Volume 38, Number 6).

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