Coming to Grips With Health-Care Issues : State Is No. 2 in Medical Costs, New Study Says

Californians spend more per person on health care than residents of any other state except Massachusetts, a new study by Families USA, an advocacy group for the elderly, reported Wednesday.

The study, which contains the first detailed state-by-state breakdowns in eight years, showed that per-capita spending for medical services in California totaled an estimated $2,894 a person for 1990, up from $1,186 just 10 years ago.

By the year 2000, the figure will climb to $6,584 for each resident, the document predicted.

The totals put the state just below Massachusetts, where residents pay an average of $3,031 each for medical services. The figure includes payments by Medicare, Medicaid, private insurance firms and out-of-pocket payments by individuals.

The report did not say why costs in California are higher than most of the nation, but other research has shown that hospital costs in the state are higher and doctors charge more.

The study also showed that some 4.7 million Californians--or about 17% of the state’s population--have no health insurance at all, a situation that many health experts say probably will leave the uninsured unable to afford adequate medical services.

The figures on California were part of a study that contends that the cost of health care nationally is soaring out of control and will more than double--from the current $2,425 a person to $5,115 by 2000. By contrast, the same figure for 1980 was $1,016 per person.

“We are paying more and getting less,” Ron Pollack, executive director of Families USA, said. “This is a medical emergency and lives are at risk; what is at stake is whether health care will be affordable for families.”

The report said inflation in the medical services industry is raging far above the general increase in the price level, making costs so prohibitive that many businesses are cutting back on the health insurance they offer, particularly for low-wage workers.

The document said 31.2 million persons were without coverage in 1988, compared to 24.5 million in 1980. The vast majority of the uninsured were full-time workers and their dependents.

“All across America, small businesses are being driven to the edge of bankruptcy by sky-high health insurance premiums,” Pollack said. “It’s also clear that the outrageous inflation in health costs is making it tough for American businesses to compete with Germany and Japan.”

The study, called “Emergency--Rising Health Costs in America,” was issued by Families USA in cooperation with Citizen Action, a liberal consumer organization with chapters in 31 states.

The report uses government figures on total health-care outlays and applies them to a computer model of each state’s population to produce estimates on health spending within the state from all sources. The last official figures on spending in individual states were issued in 1982.

Total outlays for medical services nationally were $230.2 billion in 1980 and are estimated to be $606 billion this year. The report projects that by the end of the century they will total $1.5 trillion.

Dividing these numbers by the population yields an average figure--called per-capita spending--for each man, woman and child in the country.

Government health officials said the Families USA estimates seemed to be credible.

The staggering $1.5-trillion estimate is “in the ballpark, if we continue on the path we’ve been going,” Gail Wilensky, director of the Health Care Financing Administration, which operates Medicare, said in an interview.

Health-care costs have risen by an average 10.4% a year during the last decade.

HIGH MEDICAL BILLS: THE TOP 10

1980 1990* 2000* Per-capita spending for medical care, U.S. average $1,016 $2,425 $5,115 1. Massachusetts 1,284 3,031 6,890 2. California 1,186 2,894 6,584 3. New York 1,257 2,818 6,408 4. Nevada 1,109 2,757 6,272 5. Rhode Island 1,184 2,707 6,153 6. Connecticut 1,148 2,699 6,136 7. North Dakota 1,066 2,661 6,051 8. Illinois 1,093 2,619 5,953 9. District of Columbia 1,241 2,586 5,882 10. Michigan 1,097 2,569 5,840 Total for U.S.: $230 billion 606 billion 1.5 trillion

* Projected. Source: “Rising Health Costs in America,” Families USA Foundation and Citizen Action