Readers may remember Joseph Califano as the one-time Cabinet Secretary who went from three packs of cigarettes a day to abstinence and rather aggressively invited the rest of the nation to follow him. He is back with a new book that clearly and convincingly shows the reasons for the rapid increase in the cost of American health care over the past few decades. He warns that we must either alter the economics of medical care or face a long-term collapse in the health care system.
Califano maintains that the causes of health care cost inflation are the “fee-for-service” arrangement of physicians, and the willingness of private insurers to pay one hundred per cent of costs. Physicians have a direct economic incentive to do more procedures, especially surgery in hospitals. Individuals with complete prepaid medical insurance have never worried about the cost of medical care and so contributed to a big rise in the demand for physicians’ services. With business and government paying the bills, and the doctors in charge, the result has been runaway inflation in costs.
Despite occasional disclaimers throughout the text, Califano clearly paints doctors as the villains of this story, arguing that any success in curbing health care costs must start with curbing their power. Califano urges Americans, particularly business leaders, to demand more cost-efficient delivery of services; the most promising way seems to be to enroll Americans in health maintenance organizations. Above all, the author urges Americans to create a health care system that promotes good health rather than merely reacting to illness.