ANNAPOLIS — Annapolis
The struggle to contain health-care costs is beginning to take on epic proportions in Annapolis, as businesses, providers and insurers move in and out of alliances with each other, depending on the legislation of the day.
With rising costs, a weak economy and growing legions of uninsured, something has to give. Consider:
* Total U.S. spending on health care rose to a record $604 billion in 1989, or to $2,400 for every man, woman and child in the country, the federal Health Care Financing Administration reported in December. The growth rate for the year was 11.1 percent, compared with 6.7 percent growth in the gross national product in 1989.
* Employer contributions to health insurance were $137 billion in 1988, or 29.2 percent of all health-insurance spending, compared with $21.1 billion in 1974, or 18.1 percent of spending.
* Spending on medical care in the Baltimore area rose 9 percent in the first half of 1990, compared with a 4.8 percent increase in the overall Consumer Price Index for the city, according to Charles D. Spencer & Associates Inc., a Chicago benefits consulting firm.
* There are an estimated 570,000 uninsured people in Maryland.
Interest groups and lawmakers have responded with a variety of proposals aimed at pressure points in the health-care industry.
To the chagrin of health-care providers, Delegate Casper R. Taylor Jr., D-Allegany, unveiled last week a plan worked out by business, labor and insurance groups that would allow insurers to sell a stripped-down policy that doesn't include most of the state-mandated benefits.
Health-care providers say the plan excludes much-needed benefits, such as mental-health and substance-abuse care, that the General Assembly has decided are necessary parts of any policy.
"Of course we're concerned because there are absolutely no mental-health benefits offered in the plan," said Casey Hughes, lobbyist for the Maryland Psychological Association. She said a governmental task force is determining whether such benefits ultimately cost or save employers money and that the legislature should wait for the results before acting on Mr. Taylor's plan.
Mr. Taylor, when he announced his bill last week, warned that the rest of the session probably will be spent arguing over "enrichment," or efforts by providers to add benefits to the basic policy.
In fact, there are other bills that would add to the list of 32 mandated benefits. Those bills would require insurers to cover the costs of mammograms, child wellness services and treatment for severe brain disorders such as schizophrenia.
Maryland already ranks second in the nation in the number of mandated benefits, behind Connecticut, according to the national Blue Cross and Blue Shield Association. And employers and insurers say the required benefits, which include in-vitro fertilization and organ transplants, have driven the cost of insurance higher than many employers can afford.
But Blue Cross concedes that the mandated benefits account for only 21 percent of its costs for standard group health insurance. Long hospital stays are what cost so much, and Mr. Taylor's bill would allow an insurer to pay for only 10 hospital days a year, rather than the unlimited number required in most other policies.
Every fight over a mandated benefit is a battle over the livelihood HTC of one group or another, especially the physicians and others who provide the services. But another pressure point is how benefits are provided.
A bill sponsored by Sen. Paula C. Hollinger, D-Baltimore County, would require physicians who have a financial interest in a medical facility to disclose that interest to patients being referred to the facility.
The Senate passed a similar bill last year but couldn't reconcile with the House over a stronger version that would have prohibited such referrals. The physicians lobby helped kill that bill, then helped defeat its sponsor, former Delegate William A. Clark, D-Harford.
"Probably this bill became known as the football of the 1990 session," Ms. Hollinger told the Economic and Environmental Affairs Committee Wednesday. This year, employers, insurers and physicians are supporting the measure. "This bill would be a real deterrent to overutilization of services," she said.
When providers and insurers aren't talking about benefits, they are talking about utilization, how and when patients should be given medical care. To reduce unnecessary treatment, most insurers use utilization review agents, experts who review medical treatment and advise the insurers on what treatment was necessary and should be reimbursed.
For the physicians, that smacks of professional interference, even if they sometimes speak in favor of it. Gerard Evans, lobbyist for the Medical and Chirurgical Faculty of Maryland, the state physicians association, says his group "encourages" review agents to police excessive costs.