The next health care battle

August 17, 1999|By James P. Pinkerton

THE ERA of the Health Maintenance Organization is coming to an end. No doubt many Americans will cheer, just as they did when the Helen Hunt character in the 1997 film "As Good as It Gets" forcefully denounces the HMO industry.

But if HMO coverage is bad, no coverage is worse. And a government takeover of all health care, still the enduring dream of many, would be the worst outcome of all.

According to a recent study by the William M. Mercer consulting company, the percentage of workers enrolled in health maintenance organizations and point-of-service plans fell in 1998, after rising steadily for years.

That could have something to do with the cost: $4,164 per employee in 1998. Such a sum isn't much to Hollywood millionaires, but for waitresses, such as Ms. Hunt's character in the movie, that's not chump change.

No wonder, according to the Census Bureau, a quarter of families with incomes of less than $25,000 were uninsured, compared with just 8 percent of those with incomes over $75,000.

And the trend lines are ominous. Mercer found that, after dipping earlier in this decade, health costs are on the ascent again. They were up 6.1 percent last year and are projected to rise 9 percent this year.

To be sure, higher costs come naturally to an aging and technologically advancing society: More old people need more drugs and devices.

But some expenditures are distinctly unnatural. The Manhattan Institute's Walter Olson calculates the price of malpractice litigation as $20 billion a year; the cost of lawsuit-conscious defensive medicine is perhaps triple that.

This $80-billion total works out to $300 per American; if that seems like a small price to pay, just wait, because it's going to go a lot higher.

Mr. Olson's figures do not include product liability. But forget, for example, the billions that went to women and their lawyers for breast implants that were later found to be harmless; the cost of those dubious damages has already been folded into the cost of health care.

Focus instead on a recent decision by a Texas jury to award $23 million to a woman who took Pondimin -- the "fen" half of fen-phen -- and who now suffers from shortness of breath and fatigue. About 3,000 similar lawsuits already have been filed, but with that kind of money in play, many more suits are no doubt being planned.

Across the country, politicians are piling more mandates on HMOs -- Doesn't "social justice" require that every oldster get his Viagra? -- and Congress, prodded by the president, is likely to enact a "patients' bill of rights" that will swing open the litigation door even wider.

Economics dictates what will happen next: The price of health care coverage will rise, and so the number of those covered will fall. Today, 43 million Americans are uninsured, a higher number than five years ago, when unemployment was two points higher.

In the years before the Russian Revolution, Bolshevik leader V.I. Lenin would hear of the last catastrophe befalling the Tsarist regime and say, "The worse the better!"

And so it is today; the hand-rubbingest critics of the current health care regime don't want to reform the system, they want to ruin what exists and take over what remains.

In the July 14 Journal of the American Medical Association, four leading leftists, David Himmelstein, Steffie Woolhandler and Ida Hellander, all of the Chicago-based Physicians for a National Health Program, plus Sidney Wolfe of the Public Citizen Health Research Group, describe the present system as "a failure," without mentioning the legal and political factors that are causing it to fail.

Moreover, their proposed solution, national health insurance, is a proved failure; it works only for those in the nomenklatura who get to cut to the front of the line.

Some have suggested tax credits or vouchers that would empower all Americans, including those who have no coverage, to seek out the best deal on health care, with or without an HMO. But the media, always inclined toward grandiose initiatives, are likely to dismiss such ideas as too simple.

If so, then the next debate over the "crisis" in health care will resemble the last debate: a struggle between the defenders of a disintegrating status quo and the bright-eyed advocates of a new bureaucratic order along the Potomac.

James P. Pinkerton is a columnist for Newsday.

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