There is a hospital bill on my desk. On October 10, Mrs. A—, a Boston resident, aged 66, fell and broke her hip. Her hip was operated upon and nailed, and she left the hospital on November 18. Excellent care contributed to her recovery. The hospital bill was $2949.38. The surgeon’s fee is not known. It is this problem of paying the cost of medical care that the Forand Bill and its many rivals, including a reluctant Administration’s proposal, have been attempting to solve. And yet there is more, much more, to the problem than the question of how, and how much, the government will pay.
The issues that the Forand Bill sought to deal with seem fairly clear: Man is mortal, a fact which is remorselessly driven home to the age group of over sixty-five years. They have more diseases and higher death rates than younger age groups. They visit their doctor’s each year half again as often as younger people, and they require about twice as much hospitalization. These fat medical bills must be paid from a thin purse. The Census Bureau reports that almost 60 per cent of persons over sixty-five years of age had cash incomes of less than $1000 in 1958, while about 70 per cent of couples had incomes of less than $3000. Some have cash, some own homes. Some live with children, and their expenses are probably small. But not many are on Easy Street.
This is a difficult situation that many people would be happy to turn over to the government. Some of the public opponents of governmental health insurance for the aged, in fact, privately support it, and with reason. While the voluntary health insurance organizations are pointing with pride to the progress they have made in enrolling the aged, progress has brought them problems. The Blue Cross organizations have repeatedly raised premiums to keep pace with hospital charges and increased hospital use; the public complains, and there are threats of investigation. Successfully insuring the sick old people would be a Pyrrhic victory. Commercial insurance is based upon “experience ratings”—the likelihoods that the insured will have to make claims—and the experience of the aged is such that the companies probably are not eager to compete for their premiums.
Even so, almost 45 per cent of our older citizens have some health insurance now. Does this mean protection against the costs of illness? A publication of the Health Insurance Institute points out that the hospital benefits which older persons receive may range from $5 to $25 per day. Most hospital charges run $25 per day and up. The person over sixty-five who goes to the hospital will stay there an average of almost fifteen days, compared with just under eight days for the general population. An average old person going to the hospital can thus expect a bill of about $375. Some of those who are “insured” will get back as little as $75. Medical costs are therefore a common cause of indigence in this age group.
Somewhere between organized labor, picturing the aged as victims of universally besetting misery, and organized conservatism, dwelling glowingly on the joys of the sunset years, is the uncomfortable liberal. He appreciates that the problem is real and that political action is almost certain. Why, then, is he concerned? Because the Forand Bill was not very good, and its rivals are no better. These bills assume that paying the medical expense is the only issue—in short, that this is just another welfare problem—when actually the problem deeply involves the practice of medicine, the quality of care, and the organization of medical care services. Inevitably, any legislation providing government health insurance will have consequences in these areas, too. There has been a great deal of experience with government support of medical care, much of it in Europe, which should help us to understand why this is so.
For example, a great weakness of the Forand Bill was that it provided only for hospitalization and medical care in the hospitals. People who have health insurance are hospitalized more than noninsured persons, in part, at least, because they know that their hospital care will be paid for. The demand that would have been created by the Forand Bill would have been even more serious. Old people tend to live alone or in easily broken homes, and once hospitalized they might have nowhere else to go. This is particularly true when there is some residual disability.
In England, where virtually all medical services are now provided through the National Health Service, this problem was pressing during the early years of the service. There was much “silting up” of the hospital beds by old patients with chronic diseases. The Forand Bill could not have been better designed to silt up our hospital beds and to keep them silted up.
Later bills have included provision for payment for home care and nursing-home care, which are cheaper and often more appropriate for the patient. Care in a doctor’s office is the most economical and sometimes the best form of treatment, but it was conspicuously absent from most of the proposals advanced earlier. Thus, a patient who has to pay for an X ray in the doctor’s office, but who is insured against the cost of that X ray in the hospital, has a good chance of ending up in the hospital.
A second frequently overlooked consideration in the Forand debate was the fact that a payment mechanism alone may have inflationary effects. Since the aged have low incomes and much illness, the advent of social security or other payments for their medical care would probably produce a sharp rise in the amount of medical care they receive, and therefore in the total cost. The history of fees and charges, furthermore, shows that they rise more easily when paid by insurance than when they have to be pried out of individual pockets. However, any attempt to control the cost and use of health service by fiscal means alone will not he more than partly successful. This would be like trying to control automobile accidents by manipulation of insurance premiums, when we are well aware that safe driving is a function of road construction, traffic cops, stop-and-go lights, licensing practices, driver training, and many other things. The problem of controlling the cost of health services is one of the considerations that will inevitably push the government more deeply into the field of medical services, once it has entered. It is equally certain that before long the government would become preoccupied with the problems of the quality and distribution of the care it purchases. We have already seen this in the Hill-Burton Bill. The government granted money for hospital construction only after each state had formulated a regional hospital plan. A plan was essential, the Public Health Service knew, simply to make sure that the government dollars would build the right kind of hospital in the right place. Pleasant Farm County needs general medical and surgical beds; the city can use one specialized neurosurgical ward that may serve patients from most of the state. Without a plan, hospitals might build the medical equivalent of a Yankee Stadium in Cokato, Minnesota.