A broad based coalition is working to defeat the tax cap. Senator Bob Packwood
recently spoke to a gathering of representatives from HSAC, business, labor, senior
citizens groups, professional societies and the insurance industry. He said he expected
a tax cap would lead to sizeable cutback in company health plans. It would place a heavy
burden on the lowest paid workers in any group, older workers, workers in regions of
the country where health costs are highest, and in hazardous industries and environments.
PROFITING FROM SICKNESS: While President Reagan in his state of the union message
referred to the need to contain health care costs, health-for-profit has become one of
America's fastest growing industries. Wall Street brokers recommend one profit maker
whose net profits rose 61% a year and cash dividends 47% a year for the last five
years. At least ten commercial entrepreneurs are similarly well-regarded on Wall
Street. They are rapidly changing the face and the focus of sickness care in America,
as Paul Starr describes in "The Social Transformation of American Medicine". Profit-
making chains own kidney dialysis centers, labs, medical office buildings, ambulatory
surgical centers, and shopping mall emergency centers. Large insurance companies are
buying HMOs; nearly 80% of nursing homes are operated for-profit. 600 of the 6000
U.S. community hospitals, are owned by przfit-making_companiesamwhich_8]52. marec
300 more under contract. In the first quarter of 1982, one company reported $48
million profit, and recent acquisition of hospitals in 13 states.
The curbing of Health Systems Agencies (HSA ended review of hospital applications,
eight for-profit chains applied to build in two suburbs within 5 miles of major hospitals.
Combined with the increase of physicians per capita, expected to be down to 1/440
people by 1990 (now 1/536 people), the face of health care will be drastically altered
in ways unrelated to budget cuts and consumer needs.
Concern about the public and inner-city hospitals, and the availability of decent care
for the poor and those with complex illnesses has increased when the profit makers
take over. As for-profit chains advertised $40,000 salaries for a nursing director, New
Orleans Charity Hospital had to close 700 of its 1500 beds because it could not afford
nurses salaries. The Health Advocate reports that Cook County Hospital is managed
by Hyatt Medical Management, a subsidiary of American Medical , which owns a fleet
of airborn C.T. scanners, ready to fly instantly anywhere in the world. At Cook County
Hospital, emergency scans are frequently delayed for 24 hours, and then done in private
hospitals, which charge the County $800 per scan. The Committee to Save Cook County
Hospital wonders why Hyatt has been unable to find just one earthbrund scanner for
the patients of Cook County.

Health Sccurity Action Council 1757 N Street, N.W. Washington, D.C. 20036

NON-PROFIT ORG.
U.S. POSTAGE

PAID
WASHINGTON, D.C.
PERMIT NO. 4229

21

New Health Care Cost Containment Plan Proposed

A broad based coalition has proposed a comprehensive plan to contain fast-rising health care costs as an alternative to further destructive cutlacks in sucii progcumi aj Medicii sini Medicare.

Called H.A.L.T., or Health Action to Limit Takeaways, the plan was drawn up over the past several months by health care experts working with the Health Security Action Council. The coalition includes more than a hundred labor, consumer, religious, senior citizen, business, civii rights and farm groups.

Legislation embracing the cost containment proposals will be introduced ear in the next session of Congress, according to ALTSN WILAOTZ Chairman of the Health Security Action Council.com

Naises Wilkotzailed lc "The only constructive alternative that has been offered thus far to further cuts in programs."

If adopted, the plan would imediately save $5 billion annually in federal expenditures and would result in comparable savings in the private health sector.

Over several years, the H.A.L.T. plan is aimed at bringing, down yearly increases in health custs to the level of increases in the Consumer Price Index. Over the past year or so, the health care component of the C?! has continued rising at a double-digit pace despite the overall lessening of inflation. , ;

The plan would be implemented in two phases. Under the first phase, hospital and nursing homes charges, doctors' fees and other health care costs would be limited to the necessary cost increases of the previous year. These limits on charges would include the Medicare and Medicaid programs as well IS private insurance.

After two years of this initial phase, the plan would be fully in place. The states would have the flexibility to work out specific budgets to contain health care costs within the general cost increase limits, as well as federal guidelines. These budgets would be determined in annual negotiations anong a state health commission, Medicare intermediaries, providers, insurance companies and consumer representatives.

Chc 1.A.L.T. plan is "comprehensive rather than drastic;" according to Melvin A. Glasser, Director of the lealth Serwrity Action Council. "It's a systematic rather than a piccome'sil if:03ch

20 containing health costs" and thus would be likely to succeed wtre previous measures have failed". "It einbodies long-advocated principles like prospective budgets for hospitals, already approved !1. principle" by the hospital and health insurance industry".

Glasser added that "negotiation is a major element." "Hospital and doctors would be encouraged to work together and eliminate rane: sive duplications," he added.

' (otini! cirknowledat; thirt

plini: liiniloc. For : 1;.. it wouldn't help the unemployed who have lost or the working poor who have lost Modicaid protection under the budget cuts of the past two fiscal years.

"A comprehensive national health insurance program is needed to help these people and millions of others," said the Council. But "since it does not appear politically viable at this time, H.A.L.T. offers an immediate program of restraining costs and protecting consumers."

Under the Reagan budget cuts approved by Congress, over a million people have been cut from thc Medicaid rolls and millions of others have suffered reduced benefits.

Rep. Charles B. Rangel (D-N.Y.) recently wrote his House colleagues, "We want to avoid the annual agony and bloodletting which has been taking place as we seek piecemeal economies in a health system which is out of control. The H.A.L.T. plan gives us an opportunity to do that."

Dea: Clcague:

I am reply concerned with what is happening to thic tenericiries of pealth Progress as a result of blocet cues Corcm?!:; de 1.2.51 year and last month. T:cross sluctibies and contents are hurting the ?!?ly rock. Ova sillion cople have been cut from tine Micaid roll.. Those who still have Medicaid

0,5? Po stay on the tig!trore between larger and larger holes in the safety net, as limits and restrictions proiirelte. Nineteen states bilva ülready limited use ci crije:16. y Roons and Outpatient Departments, while +0nty-ons have creased numbers of visits to doctors, poliatrists and prometrists. Two states will no !crgos Supriy yi: 51.4.1, in:1. W whilure. inc states have limiter the irequency of prescriptions one statc to i maximum of $30 per nonn.

Co-insurance remiremorto have multiplied in the last year from 50 cents per prescription, to $2 for ambulance services. One chate requires a medically needy individual, who already has proved iniligency, to pay $30 as a condition of acmision to a liospital. The millions o? workers who have lost their jobs and family health protection as well, the clderly diabetic no longer abic in afford insulin, the inner city hospitals under pressure to discharge extremely ill patients when their allowali?e twelve days ar: P, confront: us with SOM? cf the results of Congressional actions and state implementation.

I believe that surely, 1. the evidence nou! accurulated, the Members of Concress recognise that she wa; we save gone about: rcrucire inrra! cponciitures for health projrami, indignctor''. Wa kiow that it will probably ncc0357 Piscothrough a sinilar Unsatisfact!! prenos 12:1

Hel! ale, possibile a recinction san required to spend for indicaid ratching.

Rather than restraining increases in cost of hospital care alone, or hospital care under medicare alone, the plan deels with all the principle cost increasing elements in the heaith care system.

Finally, this is a cost containment, rather than a cost shifting, prograin.

As such it is a major constructive alternative to the present decreases in Federal expenditures in health prograas by means of increasing obligations of ite statr., th: locality, the private sector and individual patients. I hope it will be possible for you to attend the briefing session at which technical experts will be available to outline the plan and

7 Siles: 102

Charlie

Charles B. Rangel
Chairman

CBR/cll