High Medical Costs Add to Ills of Poor, Health System

As a 25-year-old first-year graduate student in communications, Brigett McDaniel was diagnosed two years ago as having sarcoidosis, a life-imperiling disease that causes abnormal growths in various parts of the body.

One such growth was on one of her lungs. Although it was benign, doctors warned her that it could turn malignant at any time. Yet McDaniel decided not to undergo the recommended operation.

The reason was simple: She didn’t have the money. Her husband, unemployed at the time, carried no insurance, and McDaniel’s insurance from school covered only one-third of her bills.

“It was at this point that I stopped seeing the private physician,” she told a Senate subcommittee recently, “because his fee was between $250 to $400 per visit, and I couldn’t afford it.”

Millions of Americans face the same predicament. While this nation boasts of the world’s highest quality medical care, studies show, it is financially out of reach for a mounting number of families.

Health care in the United States is a story of poverty amid plenty.

Americans spent an extraordinary $540 billion on health care in 1988, the most recent period for which government figures are available. That was more than double what they had laid out just eight years ago and represented 11.1% of the nation’s entire economic output.

No other industrial nation spent such a large share of its wealth for health care. And in no other industrial nation has health care spending been rising so fast.

So expensive has medical care become that millions of Americans are denied it. Experts have no way of pinpointing exact numbers of those without health insurance, given the diversity and mobility of the population. But the Ford Foundation estimates that between 31 million and 37 million Americans have no private health insurance and do not get Medicaid benefits. Most of these people do not have pockets deep enough to cover the cost of the health care they need.

And beyond the uninsured are countless millions of others who have had to accept less than first-class medical care because their insurance provides nothing better, according to the Ford Foundation, a private nonprofit corporation that is active in and funds scientific, educational and charitable programs.

Of the uninsured, about 24 million are employed workers or their spouses and children. And, despite a popular belief that the indigent are covered by the federal-state program known as Medicaid, there are 11 million Americans below the poverty line who have no health insurance, Ford Foundation and federal figures show.

From these roots spreads a thicket of additional problems. Big-city hospitals are so crowded that critically ill people are sometimes denied admission because there is no room to treat them. Thirteen of the 18 private hospitals in Los Angeles County have dropped out of the county’s trauma care system because emergency room patients suffering severe trauma are frequently uninsured.

Black men in Harlem can expect to live a shorter life than the impoverished citizens of Bangladesh. The U.S. infant mortality rate--a prime indicator of the nation’s health care access--exceeds 10 per 1,000. In a U.N. survey of 22 industrial nations, the United States ranked 20th, only slightly better than Israel and Greece.

The well-to-do catch the ricochet. Because hospitals and doctors have no hope of collecting from poor, uninsured patients, they compensate by charging more to those who can pay. The rebound has become a significant cause of rising health costs for those who can pay and for the companies that insure them.

The ailment has a cure. Karen Davis, chairman of the Health Policy and Management Department at Johns Hopkins University in Baltimore, wrote recently that society is facing a fork in the road.

“Either a basic societal commitment will be made to ensure access to health care for all,” she said, “or we risk a nation that is increasingly divided into the cared-for and the neglected--with the consequent toll in human suffering, loss of life and economic productivity, and diminished social solidarity.”

Such a commitment would cost money--lots of money.

The Pepper Commission--named for the late Rep. Claude Pepper (D-Fla.)--whose members were appointed by Congress and former President Ronald Reagan, recently called for an ambitious program to provide health insurance coverage for all citizens. The price tag: $66 billion a year in federal funds and $20 billion in private financing. The commission ducked the obvious question; it did not suggest how the public money should be generated.

A more modest proposal by the Ford Foundation last year would oblige employers either to provide health insurance for their workers or to contribute to a public fund for uninsured workers. The cost would be covered by $22 billion a year from employers, $3 billion from employees and $2 billion from the federal government. In addition, Medicaid coverage would be extended to the rest of the uninsured poor at a cost of $3 billion a year.

The Bush Administration has rejected both proposals as too costly. In Congress, which would have to legislate any such programs, the issue is dormant.

Existing federal health insurance programs have proved a blessing for their beneficiaries, but at enormous cost. Federal health-care programs already consume more than $150 billion a year and account for $1 of every $8 that the government spends.

Medicare alone, which insures the elderly, costs nearly $100 billion a year. Without it and Social Security, the Ford Foundation says, almost half of all elderly Americans would live in poverty; at present, only 12% do.

Medicaid, at a cost of $40 billion a year, provides a safety net for 22 million poor people, according to Health Care Financing Administration figures. But most states extend Medicaid coverage only to the minimum required by Washington--recipients of Aid to Families with Dependent Children and of the Supplemental Security Income program for the blind and disabled poor. An intact family with an employed worker--regardless of how low the household income--usually has trouble qualifying. In California, as in Illinois, such families qualify only if the worker has recently lost a job.

In Washington, the record of the past decade is one of federal program cuts, not expansions. Medicare and Medicaid benefits were largely untouched during that period, although Medicare reimbursements to hospitals and doctors were trimmed and states were forced to pay a greater share of Medicaid costs. But at the urging of then-President Reagan, Congress made substantial cuts in smaller programs to assist community-based health-care providers such as those that popped up in rural areas and inner cities during the 1960s and 1970s.

“The result has been a marked slowdown in further improvements in . . . the health of the poor and mounting evidence of a deterioration in access to health-care services,” Davis of Johns Hopkins wrote.

A 1986 report by the Robert Wood Johnson Foundation found that the years from 1982 to 1986 “witnessed a reversal in the trends over several prior decades of improving access to health services for low-income groups.”

To discover how America’s poor now receive their health care, a visit to Atlanta’s Grady Memorial Hospital, operated by Fulton and DeKalb counties, is instructive. On one recent afternoon, the long and cramped corridor in the basement was lined two-deep with more than two dozen men, women and children, some bleeding, some moaning, some sleeping. Some sat on the floor; others were in wheelchairs and on gurneys. Many had been there for hours and would remain for hours longer.

Gail Anderson, supervisor of the hospital’s emergency room, said that about 800 persons a day are treated there. Many of them are poor people who go to the hospital, where the service is free and relatively quick, for routine care. “They know they’ve got ease of access to care at this hospital,” Anderson explained.

“Emergency rooms are not used just for emergencies today,” said Anderson, whose father is director of the Los Angeles County Hospital emergency room. “They’re used for convenience. This is true for any department, about 15% true emergencies, maybe another 35% what I call urgencies and the rest are conveniences.”

Upstairs, Hamilton Holmes, the hospital’s affable medical administrator, said that the institution has grown so crowded that it has to turn patients away.

“We have a significant number of people who are making, say, $10,000 or $20,000 that just cannot afford to take out health insurance that come to Grady for their medical care,” Holmes said. “It’s a significant problem to try to maintain quality health care for people who are not paying anything.”

It is a far graver problem for the poor themselves. For the Hoffman family of Jennings, Mo., medical disaster turned into financial disaster last year.

Seven-year-old Eddy Hoffman, struck by lightning in his own back yard last July, was left with severe burns over more than half of his body. He is now an invalid requiring constant care and life-support systems at home.

His parents, Edward and Paige Hoffman, were both employed when their son was crippled, he as the manager of his own vending machine company and she as a part-time hairdresser and waitress. But they had no health insurance. A trust fund set up by the Jennings police department paid almost $15,000 of Eddy’s bills. The Hoffmans expect never to be able to pay all the rest, which may climb to more than $200,000.

Edward Hoffman, who had to give up his job so that he could spend more time with his ailing son, now works only part time with another vending machine company. Paige Hoffman quit working entirely.

“We still have been unable to afford health insurance,” Paige Hoffman told a Senate subcommittee recently. “When and if we are able to afford it, it’s doubtful that we’ll ever be able to insure Eddy.”

For the Baretta family of Oak Grove, Mo., financial disaster struck in the form of an illness, not an accident.

Neal Baretta, now 39, lost his job as an auto worker soon after his 3-month-old son, Jason, was diagnosed as epileptic 11 years ago. And with his job, Neal Baretta lost his health insurance.

“We went out and tried to find an insurance company that would cover my son for his disability,” Baretta said before the same subcommittee. “They told us no way.”

In the years that followed, Jason accumulated medical bills of about $40,000. Fortunately for Baretta, most of this gigantic sum was paid by a Missouri program that helps low-income families with medical emergencies.

Now Baretta and his wife work full time, but neither employer provides health insurance. For $240 a month, they have purchased a private policy that covers them and their daughter. But they cannot find an insurer willing to cover Jason--at any cost.

So now the family tries to keep Jason sheltered, for fear that he will suffer some injury that could seriously hurt him and financially destroy the family.

“Jason is 11 now,” said Baretta, “and he wants to do what 11-year-old boys would like to do--play baseball, play football, soccer, ride a skateboard. He can’t because he doesn’t have any insurance. How do you tell an 11-year-old boy that he can’t do normal things?”

What has happened to the Hoffmans and the Barettas is happening nationally to groups that cannot afford proper health care. Consider, for example, the collective health of the nation’s blacks.

Mortality rates are significantly higher for middle-aged blacks than whites. Mac W. Otten, an epidemiologist at the national Centers for Disease Control in Atlanta, determined that income disparities between blacks and whites accounted for 38% of the difference. Other factors included blacks’ higher incidence of high blood pressure, smoking, obesity and diabetes.

Colin McCord and Harold P. Freeman, doctors at Harlem Hospital in New York, recently analyzed 1979 and 1980 death certificates at the hospital, which is located in a neighborhood where 96% of the residents are black and 41% live below the poverty line.

“Black men in Harlem,” they concluded, “were less likely to reach the age of 65 than men in Bangladesh.” Most fatal diseases, including heart disease, cirrhosis of the liver, cancer and drugs, struck blacks at an earlier age than whites, they found.

“Harlem is extreme, but it is not an isolated phenomenon,” the doctors wrote in the New England Journal of Medicine.

Today’s system of paying for health care gets bad marks nationally. In a recent Los Angeles Times poll, 55% of the respondents called for “fundamental overhauling” of the system. Nearly one in four said that they had denied themselves health care treatment for fear that they could not afford it. Almost half said that they could not afford care if they became critically ill.

The weight of public opinion has not been lost on federal policy-makers. President Bush has appointed an interagency task force to study proposals for improving health care. Constance J. Horner, undersecretary of health and human services, leads a team studying what she called “every conceivable option.”

But Horner made clear in a recent interview that, at least in President Bush’s view, not every option is conceivable. The task force, she said, has ruled out universal health insurance provided by the government for those who are otherwise uninsured. Nor, she said, will it approve mandatory employer-provided health insurance.

“This Administration is not well disposed towards national health insurance proposals,” Horner said. “We want to find ways that are both humane and economical.”

Others have advanced more sweeping proposals. The American Medical Assn. recently called for a costly package that would require businesses to provide medical insurance to all workers, expand health care for the poor and limit malpractice lawsuits.

Some of the nation’s largest corporations, including Ford Motor Corp., American Telephone & Telegraph and Eastman Kodak, have joined with some of the largest labor unions to create the National Leadership Coalition for Health Care Reform. Organized labor long has called for national health insurance and some corporate leaders, watching worriedly as their health-care benefit packages have consumed an increasing share of their profits, have joined labor’s call for greater federal involvement in health care.

“There is a greater degree of concern now than ever before that there is a need for radical change in the nation’s health care system,” said Bert Seidman, the AFL-CIO’s health policy director.

Edna del Weinel, head of Family Care Center, a 1960s-era store-front community clinic that treats a predominantly working-class clientele in St. Louis, is more direct and more pessimistic.

“We have not had a way to bring our society face to face with the fact that all citizens have a right to primary health care,” she said, her voice carrying the timbre of hammer on nail. “There isn’t the will at the top to bring anything about for the health of poor, working people. What kind of country do we have?”

DRIVING UP HEALTH CARE COSTS Total Spending: 1980: $270 1988: $580 Sources of Increase: Increased use of medical services: $102 billion (33%) General inflation: $133 billionn (43%) Additional inflation in health-care sector: $74 billion (24%) Source: Health Care Financing Administration

WHO PAYS FOR HEALTH CARE PRIVATE Individuals: 1980: $90.7 1987: $200.6 Private business: 1980: 68.1 1987: 134.6 Philanthropy: 1980: 1.6 1987: 3.3 PUBLIC Federal: 1980: 41.7 1987: 78.5 State and Local: 1980: 34.1 1987: 66.2