Public Attitudes and Expectations in the Escalation of Health Care Costs

PUBLIC ATTITUDES AND EXPECTATIONS IN THE ESCALATION OF HEALTH CARE COSTS MARCEL FRENKEL* Conventional analysis of the escalation of health care costs in America usually includes a discussion of the generic and structural factors, such as inflation, demographic changes, and technological advances, that drive this process. In addition, there are other real generating forces behind rising costs that relate to cultural and political factors. These include, among others, public attitudes and expectations as expressed through political choices, legislative mandates, and government initiatives and regulations, as well as rules promulgated by insurance carriers. The object of this article is to emphasize that this nation has knowingly or unwittingly made certain choices that have propelled the growth of the health care industry and its claim on the national purse. Let us first review those general factors that are partial causes of the problem. General Inflation Worldwide inflation since the end of World War II has been only partially controlled, and the Consumers' Price Index has tripled since 1967y causing an escalation in nominal prices (actual dollars and currency equivalents) everywhere. In the United States, health care costs have increased at twice the general inflation rate and thus now garner an increasing share ofthe gross national product, rising from 6.7 percent of GNP in 1967 to 11.4 percent in 1987 [I]. While this disparity relates to specific factors in this country, most industrialized nations have witnessed a parallel increase in the proportion of funds allocated to health. Where nations have avoided this fate, stringent controls have capped the Work supported in part by Core Grant 1 792 from the National Eye Institute, Bethesda, Maryland. ?Associate Professor of Ophthalmology, Neurology, and Neurosurgery, University of Illinois College of Medicine at Chicago, 1855 West Taylor Street, Chicago, Illinois 60612.© 1989 by The University of Chicago. AU rights reserved. 0031-5982/89/3202-0627$01.00 Perspectives in Biology and Medicine, 32, 2 · Winter 1989 \ 257 level of total expenditures in this sector and reduced availability of services , as in Britain. Some nations, such as Japan, have witnessed a relatively more rapid growth of GNP, thereby reducing the fraction devoted to health. In Canada, both factors have been at play [2]. Structural Factors demographic changes Americans are aging in absolute terms and at a rate slightly in advance of the world population. Contributing to increasing demand are the needs of people over 65 who, though comprising only 20 percent of the citizenry, consume some 40 percent of health care. The ratio of retirees and elderly to the general population has been growing steadily, with a remarkable increase in the "elderly old"—those 85 and above [3]. Note also that some 27 percent of Medicare expenditures, which themselves constitute about 20 percent of national health expenditures, are incurred in the last year of life [4]. intensity of treatment or medicotechnological advances Marked progress in the science of medicine in the last 40 years has contributed to escalating costs both by the types of available therapies and the increased intensity oftreatment. Therefore, when one compares expenditures, one must consider that one is not purchasing the same basket ofgoods and services that one purchased 20 or even as recently as 10 years ago. As an example, we are now funding dialysis services under Medicare and providing renal transplants to an increasing population who would have previously succumbed to renal failure. Besides the initial costly technical procedures involved, this surviving cohort then requires exquisite continuing care to maintain their precarious state of health. Further examples abound in our ability to treat cancer and coronary disease, as well as the preservation of neonates who would previously have floundered. Cultural and Political Factors Beyond the above factors, which are outside the immediate control of the political process, there are a host of factors that are subject to cultural change and presumably represent societal choices. It is not altogether certain that these choices are volitional. Instead, the options followed represent compromises in the political process to favor certain groups or foster certain activities. While the majority of political initiatives are well motivated, the possible adverse societal side effects ofsome of these activities may not be apparent for years or even decades. 258...