Let's be frank. Health-care costs in the United States are making the economy sick, according to economists who see an increasingly large chunk of America's gross national product focused toward medicine.

Americans seem to be convinced it's their inalienable right to have immediate access to the best health care in the world - regardless of one's ability to pay. And for years, they've gotten it.Yet no study has proven that Americans are healthier than people in countries that spend considerably less on state-of-the-art medical technology.

What statistics do show is that Americans are less than satisfied with the system - and frustrated that someone can't cure what ails it.

Meanwhile, between 31 million and 37 million people have no health insurance - either because they can't afford it, or because insurance companies refuse to sell them a policy at any price. Millions more have no protection against a catastrophic illness.

So tragically, many are going without care. And it shows.

In 1987, the United States' infant mortality rate was the third highest of 20 member nations in the Organization for Economic Cooperation and Development.

Why is one of the world's wealthiest countries now finding itself in a health-care crisis? And who's to blame?

"When it comes to health care, we as Americans want the very best - and we want it now. And until the last 10 years we haven't spent a lot of time talking about how much it costs," said Scott S. Parker, president and chief executive officer of Intermountain Health Care, Inc. "Cost was a secondary factor. The care for our loved ones was the driving factor. And still is. But now cost is becoming an issue and, as we deal with costs, we find there is not simply one problem and not one simple solution."

Others are more willing to point the finger.

The Governor's Task Force on Health Care Costs said hospitals have been, and continue to be, the most significant factor in rising health care costs. Expenditures by Utah hospitals have risen at rates higher than the regional and national averages since 1976, according to the task force's 1988 report.

But according to data from the Utah and American Hospital Associations, in-patient costs per stay nationally are 20 percent higher than those in Utah, and 13 percent higher on a regional basis. But from 1984-89, Utah's in-patient cost per stay increased 1 percent faster per year than in the region and the nation.

IHC Vice President William H. Nelson attributed Utah's slightly faster increase to the fact that Utahns use out-patient services more often than residents regionally or nationally, reserving hospitals for "an increasingly sicker mix of patients."

The Utah Hospital Association said that hospitals also have high in-patient costs because they must absorb millions of dollars annually in care not compensated through Medicare and Medicaid payments. The facilities, their association says, must shift the cost of uncompensated care to those who can pay - or hospitals will go broke.

Yet rising health-care costs, caused partly by cost-shifting, continue to drive insurance rates up - prompting employers to frantically search for ways to contain the costs.

American corporations spent 14.4 percent of corporate profits on employee health care in 1965. By 1987, health-care costs swallowed a staggering 94.2 percent of corporate profits, according to "Health Care Financing Review."

A stark example - Chrysler Corp. spends more on employee health care than it does on steel.

Meanwhile some groups of physicians through the United States, including Utah, are forming corporations to negotiate the highest payment for services from insurance companies. And attorneys defending physicians in malpractice suits continue to get wealthier.

"Some 900 new malpractice suits are filed in this country every day. The average award amounts to $300,000 or more," Sen. Orrin Hatch, R-Utah, said. "Medical malpractice lawsuits rightly or wrongfully filed probably cost 35 cents of every health-care dollar because of the fear that reputations will be destroyed."

In next week's News Extra, the Deseret News will examine medical malpractice.

Hatch noted that at the very time the federal government is undertaking new efforts to reduce infant mortality, almost half of family practitioners and 12 percent of obstetricians/gynecologists have given up obstetrical care because "they can't afford medical malpractice insurance."

And health-care costs keep rising - eating a widening hole in the federal budget. In 1970, the United States spent $2 on defense and education for every dollar spent on health care. In 1990, total health care spending by government and individuals exceeds the amount spent on education and defense combined.

"In 1988 our national health-care costs were $540 billion. Probably in 1990 they will be in the neighborhood of $650 billion. They are going up three times the rate of inflation," Hatch said. As minority leader of the Labor and Human Resource Committee, Hatch vows to make escalating health-care costs one of his top priorities. He has sponsored several bills to remedy the problem, and in Deseret News interviews, Hatch, Parker, Nelson and others recommended a plethora of possible solutions (see accompanying box).

The Health Care Financing Administration projects that, without major system reforms, both total and per capita health care spending will more than double in the next 10 years. At more than $1.5 trillion, health care expenditures would account for one-sixth of the gross national product in an already ailing economy.

"Now we are coming to a crossroads - and we should be going into a great debate," Parker said. He believes the health-care crisis will be the key issue in the next presidential election.

But Nelson warned that Americans, accustomed to instant gratification, should not expect a quick fix.

"To reform the health-care industry, it's going to take all of us - users, government, hospitals, doctors, insurance companies - working together and talking about the level of resources we put into the system and how we allocate those resources to the health-care needs of the population," he said. "There's no single problem, no rascals, no one bad person cheating everyone else, and no single quick fix. The problem is not regulation, but what we demand as citizens. Until we deal with what Americans demand in health-care services, we are going to be putting Bandaids on a system ineffectively for a long time."

The American Medical Association has a task force addressing the crisis, as does the American Nursing Association, the American Public Health Association, the American Association of Retired Persons, and the American Hospital Association. Automobile companies have come forth with their own recommendations for health-care reform, as have several unions.

"They all have their policy statements. Why? Because we have to decide now what we are going to do. We have enjoyed the very best for a long time, but we have run out of money. Now we have to talk about hard things like reform and rationing," Parker stressed.

Hatch agrees.

"Who should have the transplants when there are a limited number of organs? Should we be giving open-heart surgery to people in their 80s and depriving others in their teens? Should we be funding and keeping up all of the very expensive scientific equipment? Do we keep every baby alive? Can we allow cooperation among hospitals and health-care providers without getting into anti-trust difficulties?" Hatch asked. "These are all tough questions to answer and they involve serious ethical issues. Who is going to decide these questions?"



Health Care Cost Containment

During recent discussions, Sen. Orrin Hatch, R-Utah, Scott S. Parker, IHC president, and William H. Nelson, IHC vice president, suggested the following measures:

- Foster restraint and adopt appropriate/cost-effective procedures

- Prioritize health care

- Develop a system of ethically rationing care

- Provide incentives for health promotion/disease prevention

- Teach patients to be effective consumers

- Increase payments by consumers

- Provide alternative care for elderly

- Integrate and/or ration high-tech medical equipment

- Reform tort law

- Index Medicare benefits to ability to pay

- Measure and reward high-quality care

- Close some hospitals, some beds in others


Spiraling health-care costs

Factors responsible for rising health-care costs and premiums







SOURCE: Hewitt Assoc., Lincolnshire, Ill.

Total exceeds 100% because of rounding

Percent of Gross Domestic Product spent on health care







SOURCE: Health Affairs, 1989