Setting Limits on Medical Care

November 23, 1990

Report Outline
Special Focus

Introduction

Over the past two decades, the federal government and private industry have been trying to hold down medical costs through a variety of cost-containment efforts. The results have been disappointing. The cost of medical care continues to rise at a faster rate than overall inflation. Many experts say the only solution left is to “ration” health care. The idea of withholding certain medical treatments from certain patients is still very controversial, but some forms of rationing are already being tried.

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Overview

For more than a decade, government and private industry have tried to get a handle on skyrocketing health-care costs. They have looked over doctors' shoulders to make sure hospitalizations are needed before authorizing payment. They have set a fixed fee for each procedure. They have instituted or increased copayments or deductibles so patients will feel at least some of the cost of the care they are receiving. But nothing seems to have worked. Despite all the cost-containment efforts, health-care costs have continued to soar. In fact according to one recent report, total spending on health care more than doubled between 1980 and 1990, rising from $230 billion to $606 billion.

“Not a single serious observer that I know of has shown that cost containment has come anywhere near reaching its goal,” says Daniel Callahan, director of the Hastings Center, a medical ethics research institute in New York. Among the signs that cost-containment isn't working is the ever-growing share of the nation's resources being devoted to health care. In 1965, health-care spending accounted for about 6 percent of the country's gross national product (GNP). By 1989, that figure had climbed to 11.5 percent.

ISSUE TRACKER for Related Reports
Health Insurance
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Jun. 11, 2010  Health-Care Reform Updated
Aug. 28, 2009  Health-Care Reform
Mar. 30, 2007  Universal Coverage
Jun. 14, 2002  Covering the Uninsured
Apr. 16, 1999  Managing Managed Care
Apr. 12, 1996  Managed Care
Mar. 17, 1995  Primary Care
Nov. 23, 1990  Setting Limits on Medical Care
Oct. 14, 1988  The Failure to Contain Medical Costs
Aug. 10, 1984  Health Care: Pressure for Change
Apr. 08, 1983  Rising Cost of Health Care
Jan. 28, 1977  Controlling Health Costs
Aug. 09, 1974  Health Maintenance Organizations
Jun. 13, 1973  Health Care in Britain and America
Jan. 18, 1970  Future of Health Insurance
Jun. 20, 1962  Health Care Plans and Medical Practice
May 28, 1958  Health Insurance Costs
Feb. 17, 1954  Government Aid for Health Plans
Nov. 22, 1949  Compensation for Disability
Aug. 30, 1946  Public Medical Care
Jan. 25, 1944  Medical Insurance
Sep. 16, 1938  Health Insurance in Foreign Countries
Mar. 06, 1937  Toward Health Insurance
Jul. 09, 1934  Sickness Insurance and Group Hospitalization
BROWSE RELATED TOPICS:
Health Insurance and Managed Care