
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, September 12, 1993                   TAG: 9309120071
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A8   EDITION: METRO 
SOURCE: The Washington Post
DATELINE: WASHINGTON                                LENGTH: Medium

HEALTH EXPERTS SAY CLINTON PLAN WILL BE DISRUPTIVE

Health specialists said Saturday that it will be difficult, perhaps impossible, for President Clinton to contain costs sufficiently to make his health care plan work without severely reducing medical services for some groups or causing economic pain for others.

"The success of the plan hinges on a very ambitious program of cost containment," said Henry J. Aaron, director of economic studies at the Brookings Institution.

"You'd have to slash and burn on prices [paid to doctors and other health care providers] or drastically reduce services" to achieve the cost savings projected by the year 2000, said Kathryn Abernethy, a health care specialist at the consulting firm Towers Perrin. "In order for this to work, doctors are going to have to make less money; hospitals are going to have to make less money."

Especially hard hit would be hospitals with a large number of Medicare patients, specialists said.

"It's doable, but it's not good policy," said Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management. Anderson said the way the plan is now drafted, fees received by doctors, hospitals and others for treating Medicare patients could fall even further below those paid in the private sector. That would make health care providers less and less willing to serve Medicare patients, and would limit the access to care of many patients in the health program for the elderly.

"The quality and availability of care would suffer under the rapid de-escalation" of Medicare fees, said James Todd, executive vice president of the American Medical Association.

Skepticism that the plan could achieve the projected savings is not universal. "We haven't looked at their numbers in detail," said Lawrence S. Lewin, chairman of Lewin-VHI, a health policy analysis firm, "but changes of this magnitude can be achieved without serious disruption, given enough time, if we can get industry and professional providers and consumers to undertake reasonable changes in their behavior."

Deputy Assistant Secretary of Health and Human Services Kenneth E. Thorpe said, "This is based on months of very rigorous analysis. We think the numbers will be consistent with Congressional Budget Office estimates."

According to a draft of the plan that has been widely circulated in Congress, savings obtained by slowing the growth of health care costs would be used by the federal government or the private sector to subsidize health care for the 35 million to 37 million Americans without health insurance.

The annual growth rate of health spending in the private sector, now 7.4 percent, according to plan projections, would be forced down to 3.5 percent by the year 2000 through caps on how much insurers and others can increase the premiums they charge each year.

In order to stay within the caps, insurers would have to force doctors, hospitals and others to hold down their costs, presumably by operating more efficiently. Businesses, which purchase most of the nation's health insurance for the under-65 population, could expect to have lower premiums than they would under current conditions. As a result, the administration predicts, companies will pay higher wages that in turn generate more income tax revenues that can help subsidize policies.

Aaron said the savings that the plan projects "are just very large, on the outer limits of what people had talked of in the past." He said in some cases the projections of price increases "are getting close to zero" on a per capita basis after inflation is factored in. "To put it mildly, it's very ambitious," the Brookings economist said.

by CNB