Health Reform Is Happening Anyway

October 17, 1994|By DANIEL S. GREENBERG

WASHINGTON — Washington. -- Health-care reform is dead and buried on Capitol Hill. But the cost-shaving part of it is alive and rampaging across the American landscape as insurers and employers dig in against rising bills.

The thrift rebellion is personally felt in the highest-paid medical specialties, where for the first time ever, annual incomes nosed down last year. The decline in fiscal fortunes does not warrant public mourning. The median annual take for cardiologists, for example, dropped from $499,401 in 1992 to $446,990, while diagnostic radiologists went from $271,723 to $257,414.

While it's possible to survive on such incomes, physicians are mathematically literate. Understanding that trends make the future, they are gloomy, and thinking the formerly unthinkable: that skimpy incomes, or even unemployment, might lie ahead for a profession that has experienced only prosperity throughout the postwar period.

Now, government-financed health programs are shifting the income rewards toward general practitioners, and private insurers are tending that way, too. And though several studies suggest that the medical-education system is pouring out too many doctors, medical-school applications are at a record high, and the number of schools and enrolled students hasn't changed in decades.

The decline in income for specialists was recently reported in the American Medical Association's weekly newspaper, which also conveyed a heavy dose of despair from Los Angeles, traditionally one of the most medically affluent metropolises. ''Specialists like cardiologists, endocrinologists and neurologists are hurting, and they're coming very close to driving taxi cabs,'' according to Robert Karns, president of the Los Angeles County Medical Association. An increase in requests for hardship waivers of medical association dues was also reported.

The shifting economy in health care results from a convergence of interests among employers, insurers and health-care systems. Seeking to hold down premium costs, employers flock to insurers who offer good rates. To achieve those rates, insurers have been buying Low pay, it is said, has forced cardiologists, endocrinologists and other specialists to consider driving taxis.

up hospitals and health-care chains in an effort to control costs. And frugality is achieved by routing patients to doctors who work for set fees, either as employees of health-maintenance organizations or as contractors for insurance firms.

Because of the complexities and capital costs of medical practice, freestanding solo practitioners and small partnerships were fading away before managed care took off. But today, they're rapidly disappearing as insurers -- the dominant economic force in health care -- decide where patients are to be treated.

It's still early in the process, but the market-driven rush to managed care does seem to be producing the economies sought in legislatively mandated health-care reform. Annual increases in health-care inflation and insurance premiums have fallen substantially over the last couple of years.

Lost in the process, however, was one the main objectives of government-directed reform -- coverage for the nearly 40 million people who lack health insurance. They still exist on the periphery of the medical system, receiving spotty care that's frequently billed to the insured majority through the underground accounting technique known as cost shifting.

Health legislation was in large part blocked by fear of the heavy costs involved in bringing the uninsured into the system through government-subsidized premiums. But the fears were misguided. A sense of decency dictates that the uninsured do, in fact, receive medical care -- but usually only when they desperately need it. As a result, they are often hospitalized with advanced stages of diseases that could have been treated far more easily and cheaply if caught earlier. From hospitals come reports of how very sick the uninsured are when they finally receive attention.

The failure of health-care reform on Capitol Hill doesn't mean no reform. On the economic front, costs are being restrained -- at least for the present. But market forces seek out profit, not losses. The uninsured and the poorly insured still suffer from the failure of reform.

Daniel S. Greenberg is a syndicated columnist specializing in the politics of science and health.

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