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ONE-THIRD OF U.S. MEDICAL SPENDING ISN'T NEEDED, SAYS HEALTH EXPERT; CUTTING OUT THE WASTE COULD COVER THE UNINSURED

ONE-THIRD OF U.S. MEDICAL SPENDING ISN'T NEEDED, SAYS HEALTH EXPERT;
           CUTTING OUT THE WASTE COULD COVER THE UNINSURED
    BOSTON, Dec. 11 /PRNewswire/ -- Just by cutting out waste and unnecessary spending in its health system, the United States could provide essential care for the millions of people who currently lack health insurance, according to a leading national expert in health policy and medicine.
    "At least a third of all the money we now spend on medical care in this country could be eliminated in a rational and better-organized system without loss of medical effectiveness," Arnold S. Relman, M.D., writes in the fourth quarter 1991 issue of Health Management Quarterly, released today.  "The primary need is not more money but a better system; with such a system, we could afford to do everything medically appropriate for all our people."
    Relman, recently retired editor of The New England Journal of Medicine, is professor of medicine and of social medicine at Harvard Medical School.  He reports in his HMQ article that per capita health spending in the United States is now 25 percent higher than in Sweden or Canada, two-thirds more than in Japan, and almost twice as much as in Great Britain.  Yet as measured by such factors as infant mortality and life expectancy, the general level of public health in the United States is not as good as in those other nations.
    "If all the money we are now spending on health care isn't buying us such important benefits as longer life expectancy, lower infant mortality and better infant immunization, what is it buying?"  Relman asks.  "It buys what modern medicine has to offer -- but with the encumbrances of a system that wastes enormous amounts of money in marginal, duplicated and unnecessary services and in nonessential overhead costs."
    Relman points out that the U.S. system is much more highly specialized than those of other countries.  About three-fourths of all U.S. physicians now limit their practices to specialties; in most other countries, at least half the physicians are generalists.
    "We have more cardiac surgery, bone-marrow transplantation, joint replacement and MRI units per capita than any other country in the world, and unlike so many other countries, we have no waiting lists for these or other special services -- provided, of course, that the patient or his insurer is able to pay," Relman writes.  "However, most of the poor and uninsured do not have easy access to this kind of tertiary care.  They do not even have adequate access to relatively low-cost primary care from family physicians, general internists and general pediatricians."  An estimated 35 million Americans lack health insurance.
    Relman cites several examples of health spending deemed unnecessary. He says at least 15 percent -- sometimes as many as 30 percent -- of all tests and procedures are not medically indicated.  He says at least 12 to 15 percent of insurance premiums paid to private insurance companies go to overhead costs like marketing, advertising and administration.
    He adds that a significant fraction of the overhead costs for an average office-based physician -- a cost that may total 40 to 45 percent of gross revenues -- goes for expenses such as billing, collecting and malpractice insurance.
    Relman prescribes several system realignments to eliminate such unnecessary spending:
    -- an integrated and simplified insurance plan for most people, based on prepayment at a fixed negotiated price for comprehensive care (similar to an HMO);
    -- delivery of services by not-for-profit physician-managed groups that employ doctors and make greater use of generalists and technology assessment;
    -- elimination of entrepreneurialism among physicians and restriction of investor-owned medical facilities;
    -- increased support for technology assessment and the evaluation of outcomes for medical procedures;
    -- malpractice reform;
    -- reform of medical education to change the balance between specialists and generalists and to put more attention on preventive medicine.
    "We will either have to impose increasingly restrictive external management on the practice of medicine or change the delivery system to one that encourages physicians to practice prudently and responsibly under their own professional management, for a fixed prepaid price," Relman concludes.
    Health Management Quarterly is published by The Baxter Foundation, the philanthropic arm of Baxter International, a global health-care company.
    -0-        12/11/91
    /CONTACT:  Les Jacobson, 708-948-4555, for The Baxter Foundation/ CO:  Baxter Foundation ST:  Illinois IN:  HEA SU: SM -- NY053 -- 1502 12/11/91 13:19 EST
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Date:Dec 11, 1991
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