The United States spent $884.2 billion on healthcare in 1993, up 7.8% from 1992 and growing 2.4 percentage points faster than inflation, HHS said. Healthcare expenses grew at their slowest rate since 1986, however. Because healthcare outpaced the economy, its share of the gross domestic product increased to 13.9% in 1993 from 13.6% in 1992 (See related story, p. 25). HHS Secretary Donna Shalala said the slower healthcare cost growth rate was the result of low inflation across the entire economy, rather than any structural changes in the healthcare industry. Private health insurance paid for 34% of healthcare expenses, followed by out-of-pocket payments at 18%, Medicare at 17%, Medicaid and other government programs at 13% each, and other private payers at 5%. Hospital care accounted for 37% of healthcare expenses, followed by dental care, drugs and durable medical products at 24%; physician services at 19%; administrative expenses, research, government public health and construction at 12%; and nursing home care at 8%.
Malpractice reform authority may be stripped from the U.S. House Judiciary Committee and transferred to the Energy and Commerce Committee under a transition proposal being considered by the incoming Republican leadership. Elsewhere, the GOP leadership does not appear to have resolved whether Medicare jurisdiction will be entirely under the Energy and Commerce Committee or if the tax-writing Ways and Means Committee will retain part of that authority. Early reports suggested that all Medicare authority would be given to Energy and Commerce, which would be renamed the Commerce and Health Committee. A lobbyist who spoke last week with staff members of Republicans on both committees said the staff members were not expecting major jurisdictional changes, however. Right now, Ways and Means is responsible for most of the Medicare program, while Energy and Commerce has authority over Medicare Part B and Medicaid.
Seven hospitals in a four-county region of central New Jersey have formed the Healthcare Network of NJ. Network officials said they expect to squeeze out substantial savings but offered no specific target. The chief executive officers and physician representatives of each hospital will manage the network, but there will be no corporate assets or merger of the institutions. Patrick F. Roche, president and CEO of St. Francis Medical Center in Trenton, will serve as chairman. In addition to St. Francis, the network includes Hunterdon Medical Center in Flemington, JFK Medical Center in Edison, Mercer Medical Center in Trenton, Medical Center at Princeton (N.J.), Somerset Medical Center in Somerville and St. Peter's Medical Center in New Brunswick. Healthcare Network of NJ controls 2,500 hospital beds, 750 primary-care physicians, 1,300 medical specialists and more than $1 billion in healthcare resources.
VHA, an Irving, Texas-based alliance of 1,057 hospitals and other healthcare organizations, added Baxter Healthcare Corp. as its fourth supply distributor. Baxter will join Burrows Co., Owens & Minor and Shared Services Systems as exclusive distributors of medical-surgical products for VHA on Jan. 1, 1995.
Capitalizing on the boom in assisted-living residences, newly formed Assisted Living Concepts raised $18.5 million in an initial public offering last week. The Portland, Ore.-based company essentially raised public venture capital to tap one of the hottest niches in long-term care. Oregon is where Assisted Living Concepts will begin operations, using proceeds from the stock offering to buy five assisted-living residences with 137 units. Oregon was the first state to obtain a waiver from HCFA that allows Medicaid reimbursement of assisted-living services.
Michael Bromberg, the outgoing executive director of the Federation of American Health Systems, will practice law with Deborah Steelman, former domestic policy director in the Bush administration. Mr. Bromberg will split his time between his law practice and representing the federation as vice chairman of its board. Thomas Scully, another former top Bush administration official, is moving from the Washington lobbying firm of Patton, Boggs and Blow to take the federation's reins after Mr. Bromberg's departure.