HEALTH CARE'S PROFIT SIDE

DAVID LINDORFF February 13 1989

HEALTH CARE'S PROFIT SIDE

DAVID LINDORFF February 13 1989

HEALTH CARE'S PROFIT SIDE

At the Louisville, Ky., headquarters of Humana Inc. of America—a private firm that owns 83 of the United States’ 6,000 hospitals—executives work in a 27-storey office tower of pink marble with six decorative waterfalls. In 1988, Humana earned a net income of $272 million. But unlike Canada, where any sick or injured resident can go to a hospital for free treatment, millions of Americans would be turned away from Humana’s well-equipped institutions. Indeed, under the United States’ predominantly free-enterprise medical system, an estimated 37 million Americans are without regularly available medical care because they cannot afford the insurance to pay for it. When indigent Americans experience a medical emergency, they can only go to a publicly funded or charitable hospital and hope that the facility has the resources to treat them.

The United States is almost alone among modem industrial nations in operating a medical system in which access to treatment depends largely on the ability to pay. At the same time, U.S. health care costs are rising more rapidly than Canada’s. Last year, the total U.S. medical bill stood at $650 billion, or 11.1 per cent of the gross national product (compared with 8.5 per cent in Canada).

At the same time, efforts to reduce overall costs are increasing the financial pressure on affluent and middle-income Americans. About 60 per cent of Americans with full-time jobs have health insurance that their employers provide through private firms. Increasingly, however, those employers are passing on some of the costs to their employees by raising the deductible—a flat fee people must pay before the

insurance coverage begins—to as much as $600 annually. Similarly, Washington is passing on costs to the 33 million Americans who are over 65 or disabled, and therefore covered under the $100-billion-a-year federal Medicare system,by not paying the full costs of some operations and cutting off funding entirely after the patient has been in hospital for 64 days. Medicare now also pays hospitals a flat, federally approved fee for some 450 medical procedures—and allows hospitals that can perform the service for less to keep the difference. This has led to charges by senior citizens’ organizations that patients are being discharged “sicker and quicker.”

A growing number of U.S. medical experts say that the only way to create a less expensive

and more equitable U.S. health care system would be to adopt a government-backed medical insurance system like Canada’s. David Himmelstein, chief of community medicine at Cambridge Hospital in Massachusetts and co-ordinator for the 1,300member Physicians for a National Health Program, for one, said that by adopting the Canadian model, the United States could save $55 billion to $65 billion a year in administrative costs alone. That, he said, would be “more than enough” to provide free care to the millions of poor Americans who currently have no place in the costly patchwork of U.S. medical services.

DAVID LINDORFF