Less Time in Hospitals Not a Panacea : Medicine: Despite fewer and shorter hospital stays, the average California family still spends more on health than the national average.

Californians are admitted to hospitals less often than the national rate and when they are admitted, are released faster--spending an average of 6.1 days per hospital stay, a full day less than the national average.

Such statistics provide both good news and some cautions for the Clinton Administration as it struggles to find a way to expand health care coverage to all Americans while containing costs.

California’s focus on hospital stays appears to have had some success in at least limiting the rate of growth in overall health care cost. Californians still pay more per hospital visit, but the gap is narrowing between expenses here and in the nation as a whole, according to American Hospital Assn. statistics.

The average California family spent more in 1991 on overall health care than the average U.S. family, but only 3% more, according to a study by Families USA, a Washington-based, nonprofit consumer health care group.

That California has not made more progress in reducing costs illustrates the complexity of health care, in which a myriad of factors contribute to overall expenses, analysts say. Trying to reduce savings in one area does not reduce overall cost. In many cases, costs are merely shifted, experts say. They argue that California policy makers and health care providers need to give more attention to other cost factors.

The reduction in hospital admissions and length of stays in California reflect, in part, a younger and perhaps healthier population, health care experts say. But they are also due in large measure to the significant market share in California of health maintenance organizations whose “managed care” tactics tend to limit hospitalization to save on costs.

Hospital care is no doubt the most expensive element of health care--accounting for 43 cents of each health dollar spent, according to state health officials. That is why aggressively monitoring hospital use has been much of the focus of the HMOs that provide care for about 31% of Californians.

California’s hospital admission rate is 103 per 1,000 population compared to 126 per 1,000 for the nation as a whole, according to the California Assn. of Hospitals and Health Systems.

Overall health care cost are higher in California for several reasons including, the higher cost of living, the large number of medical facilities that are dispersed throughout the state and the vast pool of doctors and medical entrepreneurs providing outpatient services.

“We have a lot of duplication of high-cost facilities----open-heart surgery facilities, magnetic resonance imaging units----that are dispersed throughout California as opposed to having them centralized the way they are in Canada, which would cut down on administrative costs,” said Stanford University health care economist Victor Fuchs, who studied hospital admission and length-of-stay statistics for the New England Journal of Medicine article.

In the article, Fuchs and co-author Dr. Donald A. Redelmeier, a professor at the Toronto School of Medicine, studied factors in California and Canada’s Ontario province to compare differences in health care costs between the United States and Canada.

“The cost of living is higher here and so is the cost of human resources. Nurses are paid a lot in California, for example, relative to other states,” said Alain C. Enthoven, a Stanford University Business School professor.

“California’s an attractive place to live, so doctors move here, and the seven major medical schools are turning out doctors who want to stay here. So there is a lot of doctoring being done by a lot of doctors, and that’s expensive. Supply has a way of creating its own demand,” he said.

Enthoven is among proponents of the “managed competition” health care concept embraced by the Clinton Administration. Under managed competition, health care consumers would be organized into large purchasing groups that would bargain with health care plans on prices for a standard set of benefits. The theory is that health care plans would have to compete on price and quality and thus would be forced to cut waste. Also, in theory, managed competition would eliminate excess supply as the least efficient and effective providers were winnowed out.

California’s success at limiting unnecessary hospitalization is seen by analysts and consumer advocates as a positive step in health care reform, but only one piece of the puzzle.

“There has been a dramatic decline in length of stay, and that’s a positive development,” said Geraldine Dallek, executive director of Medicare Advocacy Project in Los Angeles and a former RAND Corp. researcher. Even if patients haven’t completely recovered, early discharge may be better, she said. Dallek does not claim that less hospitalization significantly reduces health care expenses, because some costly high-technology care that once would have been restricted to a hospital setting is now being administered to patients in clinics or at home.

“We do things in the home that we never did before,” she said.

The Clinton Administration is taking a close look at California’s performance and that of other states as it fashions its nationwide health care reform plan, said Robert Boorstin, a spokesman for First Lady Hillary Rodham Clinton’s health care task force.

“We are looking at what’s best in every state program and state model,” Boorstin said. “Shorter hospitalizations are a better thing for all concerned. But on the other hand, we’re trying to get costs under control, and the way to do that is not always to bring down the number of (hospital) stays but rather to improve preventive care.”

Hospital Stays Sick Californians spend less time in hospitals than the national average, thanks largely to the managed care methods of the health maintenance organizations that have a large share of the state’s health insurance market.

Average length of hospital stay in 1991: U.S. average: 7.2 days California: 6 days But Californians spend more per hospital admission And Californians spend more per household on health care than the national average (1991 figures):U.S. average: $4,433 California: $4,296 Source: American Hospital Assn., Families USA