Health-Care Economies at What Price?

How do managed care companies save their customers so much money? Very appropriately, they manage this near miracle by negotiating low-cost contracts with physician and hospital providers and by paying only for the medical care of their own members. They don’t subsidize anyone else’s care or pay extra for medical research projects or physician training. Managed care companies do the job they’re paid for, and that’s all.

Which is perfectly OK, but in moving from a genteel world of noblesse oblige to the lean, mean ‘90s, we risk leaving behind a trail of unintended casualties. And, unless we wake up to this reality, we will find many cherished institutions no longer there when we need them.

Simply put, we must ask ourselves if we are really prepared to lose the crown jewels of our health-care system. Many of our finest teaching and research hospitals are in dire financial straits and have already slashed their operating budgets to the bone in order to survive. Children’s Hospital of Orange County (CHOC), for example, recently cut $11 million per year out of an annual operating budget of $54 million--a 20% decline in one year. There just isn’t any more to cut without slicing into the meaty heart and soul of these facilities.

As a community, therefore, we must consciously decide whether or not we are willing to pay the cost of having the services that these types of institutions provide available to our families and neighbors. If the answer is yes, then we must agree to support them with tax subsidies (not likely in an era obsessed with budget cutting and rightly terrified by still untamed deficits) or stepped-up charitable support.

And, no matter how brightly they shine, a thousand points of light won’t do the trick by themselves. Once hospitals like CHOC are gone, they will never again be there when your child needs them.