Thomas W. Moloney

Medical Technology — A Different View of the Contentious Debate over Costs

There is a growing conviction that medical technologies are major contributors to escalating costs, and regulating them is generally viewed as the least contentious way to control expenses in the 1980s. Five forms of technology control are being discussed or developed. All aim to reduce costs by controlling big, expensive technologies in the class of computed tomographic (CT) scanning. We present evidence that technologies such as the CT scanner account for far less of the growth in medical expenditures than do the collective expenses of thousands of small tests and procedures. Furthermore, we suggest that each strategy for controlling large technology involves substantial practical and conceptual problems that would severely limit its effectiveness. We thus suggest a shift away from attempts to harness the big technologies, and toward incentives to encourage the more discerning use of all technologies. To this end, we propose changes in physician reimbursement and education and expanded insurance incentives to encourage physicians and hospitals to be more selective in the use of technology.

Who needs Medicaid

Faced by a worsening economy and a powerful public mandate to decrease taxes and non-defense government expenditures, many are calling for additional cuts in spending for Medicaid-a large, not very popular program that pays for the medical care of many of the nations poor. Available evidence suggests that Medicaid has been far more valuable than is commonly realized: It serves a broad cross-section of the American people, its adoption coincides with major improvements in the health of Americans, and its costs per recipient are about the same as the costs of care per person for all Americans of similar age. Not widely recognized is the programs importance to the financial well-being (if not the very survival) of any major teaching hospitals and the majority of nursing homes in this country. Public and professional awareness of the accomplishments of this program may be a crucial factor in determining whether the cuts will spare many of the gains in access to medical care that have been made during the past two decades. If we do not wish to reduce needed medical services to the poor, health-care institutions and health professionals will have to cooperate with each other and with the government in developing less costly ways of delivering high-quality care.

Foundations' role in health policy

As organizations exempt from taxation, private philanthropies have an obligation to serve the public through their givings. The challenge foundations face is fulfilling this obligation. In the Winter 1987 issue of Health Affairs, Eli Ginzberg, an economist and an emeritus professor at Columbia University, wrote at issue on the role of foundations in relation to the nations health agenda. Ginzberg, who has been an active participant in a variety of social welfare, health, and labor market issues for fifty years, has been affiliated with foundations as a consultant and a grantee. Thus, his long experience in the health sphere and his knowledge of foundations and how they function qualified him to offer an opinion of the world of private philanthropy. Ginzbergs essay provoked widespread interest and some controversy in the foundation community. The contributions that follow reflect a sampling of the views expressed by individuals who have a direct involvement and an interest in foundations.