Outlook for the ‘90s : ...

Health-care cost containment was the major issue in the industry in the 1980s and promises to be the dominant theme of the 1990s. The reason is simple. Despite a decade or more of efforts to keep costs down by the people who pay most health-care bills--the government and private employers--health-care costs continue to rise at rates above the general rate of inflation.

The surprise of the last year or so was the emergence of support for some form of national health-care insurance among a small group of business leaders who in the past have been extremely hostile to the idea. The major reason for their sudden interest is that they perceive the cost of providing health care to their workers as threatening the ability of the businesses to remain competitive in worldwide markets. Critics charge that these business leaders are not offering a solution to containing health-care costs but are merely proposing shifting the cost to taxpayers.

Despite the interest of business leaders, the political climate still may not be ready for national health insurance. Nevertheless, the issue is back on the public agenda, and Congress is expected to consider in 1990 a new public plan for the uninsured as part of a bill introduced by Sen. Edward Kennedy (D-Mass.) requiring that all employers offer basic health insurance.

What is not in doubt is that the people who pay the bills will continue to strive to become more intelligent consumers of health care and demand that providers justify both the cost and quality of their services. Business groups, in particular, are increasingly likely to ask providers to discount their services and send back data on patient utilization and treatment results. Industry observers say providers who cannot give sophisticated information to their customers will lose a competitive edge in the future.

In response to new pressures, health-care firms are searching for niche markets and forming partnerships to take advantage of increasingly fractured markets. Home health care is expected to continue to grow in the 1990s because of the potential to deliver services at lower costs.