Skip to content ↓

Sessions address coming changes in health care

The state of the country's health care system and how it's expected to change under the reform plan proposed by President Clinton were explained last week at two IAP sessions sponsored by the MIT Medical Department.

Spending on health care is indicative of the current crisis, said panelist Katherine Swartz of the Harvard School of Public Health, who was joined in a January 6 session by MIT Assistant Professor Jonathan Gruber and Professor Peter Diamond of the Department of Economics on January 6. Health care costs account for 14 percent of the country's gross domestic product (GDP), a proportion that could rise to 20 percent by the year 2000, Dr. Swartz said. Medicare and Medicaid spending are rising the fastest, yet less than half of the people living below the poverty line get Medicaid because many poor people do not meet welfare criteria, she added. Additionally, there were 39 million Americans without insurance at some point last year and even more who did not have sufficient insurance, Dr. Swartz said.

The United States spends far more than comparable European countries on health care, said Dr. Michael Myers, an internist with the MIT Medical Department who was previously in private practice. For example, Germany and Sweden spend nine percent of their GDP in this area, while the figure is just six percent in Great Britain, he said. "In a global economy, our country can't be this out of step with other industrialized countries," he said. Dr. Myers spoke at his own session on January 5.

As a result of these imbalances, the old system whereby most Americans chose their own physicians and other providers in different locations is on its way out, the speakers said. "By the year 2000, HMOs are going to be the major form of [health care] delivery in the country," Dr. Myers said. The fee-for-service system "is going to be a thing of the past."

Part of President Clinton's proposal involves establishing regional alliances to administer coverage, with most companies paying the bulk of premiums for their employees' coverage as they do now. A governmental single-payer system such as Canada's, where there is essentially no private health-insurance industry and no consumer choice about insurance, "is the only way to save a lot of money in a hurry," Dr. Diamond said. However, he and others noted that such an option is politically unacceptable in this country.

There are concerns in some quarters that the mandate for companies to provide health insurance for their workers creates a new tax on employers that don't already do so, resulting in job losses, Dr. Gruber said. However, most affected companies will probably shift the burden onto workers in the form of lower wages overall rather than layoffs, he said. "My sense is that this is not going to be a big deal. I think the job loss is really going to be trivial relative to our huge job base here in the US." Lower administrative costs for firms that already provide insurance will also offset this effect, he added.

President Clinton's plan may actually loosen up the job market, Dr. Gruber indicated, since universal coverage will allow people who are working only for health insurance benefits to quit. Reform may also have an impact on the phenomenon of "job lock," wherein workers are afraid to change jobs because of the possibility of loss of health insurance, he said.

The plan for reform as it now exists will undoubtedly change as Congress debates it, the speakers noted. However, the administration will stand firm on certain elements that form the foundation for the package. Among these are universal coverage, subsidies for low-income workers, and employee contributions toward premiums, Dr. Swartz said. "When people feel they are paying for something, they also feel they have a stake in it," she said. "They may feel it's important to start controlling health care costs."

In addition, Dr. Myers said, President Clinton wants the final version of the reform package to ensure that administrative costs are minimized (of the $1 trillion in annual medical expenses in the United States, $250 billion goes toward billing and other paperwork, he said). To achieve this goal, regional alliances and provision of care through HMOs are vital, he added.

Existing HMOs such as MIT's and the Harvard Community Health Plan-which consist of a multi-specialty group practice at fixed sites with ancillary services such as labs, X-ray and a pharmacy-offer one model for the future of health care nationwide, Dr. Myers said. Another system now in place is the independent practice association, which is a hybrid between an HMO and fee-for-service whereby an HMO contracts to send patients to certain providers under certain terms of payment. Tufts Health Plan and Bay State Health Care come under this heading.

Since most people faced with health-care choices will be picking managed-care systems rather than individual providers, Dr. Myers suggested some guidelines. Consumers should find out how easy it is to see physicians, whether they are board-certified, at what hospitals they have admitting privileges, the range of provider choices, and on-site ancillary services. Deciding solely on the basis of cost is "penny-wise and pound-foolish," he said.


A version of this article appeared in the January 26, 1994 issue of MIT Tech Talk (Volume 38, Number 20).

Related Topics

More MIT News