Presidential Prescription for Health

IN the U.S. today, only the rich can afford to be ill; even the modestly well-off may not be able to bear the financial burden of a long, debilitating illness. The average daily cost of hospitalization has risen from $56 to $144 since 1960, while the nation's total health bill has more than doubled, to $70 billion, or $324 per person, a year. As his prescription for the malaise of the American health-care system, President Nixon last week sent to Congress a package that aims to improve and augment existing programs through private enterprise rather than new forms of Government control. Under the President's plan:

>The major burden of increased medical costs would fall on U.S. employers, large and small, who would be required to provide alt employees with a health-insurance plan that includes hospitalization and major-medical, maternity and pediatric benefits, plus catastrophic-illness coverage to the tune of $50,000 a year. The program would cost employers at least $2.5 billion a year--and the Government at least $2 billion, since their outlays would be taxdeductible. Employees would be required to pay 25% of the cost. Such a system would cover 150 million Americans, including 10 million working poor who now have no coverage at all.

> The Federal Government would pay either all or a substantial part of the cost of health insurance for some 5.3 million lowincome, largely nonworking families through a new Family Health Insurance Plan. Under it, families with incomes below $3,000 a year would be given the equivalent of a $600 annual premium in private insurance; those earning up to $5,000 would be required to make at least token payments toward the policies.

> The Government would pick up the entire $1.4 billion annual tab for the Part B supplement to Medicare, which now covers doctor bills and outpatient services for nearly 20 million of the program's participants. As a result, the elderly who now pay $5.30 a month for the supplemental coverage would receive what amounts to an average 5% increase in Social Security benefits.

> Grants totaling $23 million, plus loan guarantees for buildings and working capital, would be made available to encourage formation of prepaid health-maintenance organizations like California's Kaiser Plan. Such groups, which provide broad medical and preventive health services for fixed annual fees, now cover 7,000,000 Americans. Some Administration officials believe that the plans can reduce by half the average number of days that patients spend in hospitals.

> Funds totaling nearly $100 million would be made available to encourage medical schools to train more doctors and allied health personnel. Direct grants and financial incentives would be offered to doctors to form group practices or work in ghettos and rural communities, and $15 million would be set aside to establish family health centers in areas where medical facilities are scarce.

> Efforts would be made to reduce overall medical costs by developing preventive-care programs and thus cutting down on hospital admissions. A watchdog commission, added to the Administration proposals as an eleventh-hour afterthought, would have regulatory power over the private health-insurance industry, including authority to prevent unwarranted increases in coverage costs.

Drafted by a team headed by Health, Education and Welfare Secretary Elliot Richardson, the Administration package emphasizes the use of private resources. This approach is understandable. The President is ideologically opposed to complete federal direction of medicine. Says Nixon: "There simply is no need to eliminate a segment of our private economy and at the same time add a multibillion-dollar responsibility to the federal budget." Richardson, a member of one of New England's most distinguished medical families,* is a staunch supporter of marketplace medicine. "The American health-care system today is at best exceedingly good," he declares, "and in any case better than health-care systems in other parts of the world."

The Nixon plan is a moderate compromise among the dozen or so other health reform proposals currently before Congress. It stops short of the bills put forward by Senator Edward Kennedy and Representative Martha Griffiths, which would have the Government itself provide comprehensive national health coverage out of federal revenues. It goes well beyond the American Medical Association's halfhearted Medicredit plan, which would allow families to deduct all or part of the cost of private insurance policies on their tax returns.

But the President's package does make a significant contribution to the coming national health debate; it reduces, though it does not recapture, the initiative long held by the Democrats in matters of health care. Health insurance has, after all, been an important aspect of the welfare state since Bismarck initiated it in Germany in 1883, and for a Republican President in the U.S. to espouse such a concept is a major step.

Prospects Good. The President's proposals were well received. The Association of American Medical Colleges gave its qualified approval, and A.M.A. President Walter Bornemeier described his organization's initial reaction as "generally favorable." Many Senators and Congressmen withheld comment until they could study the Nixon package, but Kennedy, whose plan has the backing of 24 Senators and whose Subcommittee on Health will open hearings on the crisis in medical care this week, was sharply critical. He described the employer insurance provisions as "wasteful and ineffective," branded the Family Health Insurance Plan "poorhouse medicine," and declared that the President's plan would give the $14 billion health-insurance industry "a windfall of billions of dollars annually." His last point has some validity. The Family Health Insurance Plan alone will give carriers nearly $3 billion in annual premiums. The mandatory employee health-coverage provision could pour at least another $3 billion yearly into their coffers.

Still, the President's plan has promise. Though major reform of the U.S. healthcare system is not only essential but inevitable, the need for the all-encompassing approach of the Kennedy-Griffiths program has not yet been established. Nixon's proposals, which address themselves to the inequities of a system that equates health with wealth, are feasible, and could, at the very least, be a needed first step toward a more radical restructuring of the U.S. medical establishment. His package represents, as he said, an effort to shape "a new national health strategy that will marshal a variety of forces in a coordinated assault" on the U.S. health problem.

Prospects for passage of the Nixon plan are good. Most Congressmen are prepared to vote for some expansion of health coverage, and even the most conservative know that they must go further than the A.M.A.'s offering if they are to satisfy their constituents in 1972. Only the more liberal are willing to go along with Kennedy and approve a plan that even backers admit could cost $57 billion to put into operation; critics estimate that it could require as much as $77 billion, though not all in new money. The majority of Congressmen are likely to find Nixon's remedy, which will cost only $3 billion in new Government moneys, an acceptable middle way in a situation where they must take some action before facing the voters in 1972.

* Richardson's great-grandfather, both grandfathers, father and two uncles were doctors. Two brothers, Edward and George, are on the staff of Massachusetts General Hospital in Boston.

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