Shame on the private sector.
Indulge yourself with a trip down memory lane. It's 1993, and the troika of Bill Clinton, Hillary Rodham Clinton and Ira Magaziner are knee-deep in their 1,200-page plan to reform the nation's sickly healthcare system. Washington is buzzing with talk about managed competition, universal access, global budgets and employer mandates. Hospitals and healthcare systems are preparing worst-case scenarios.
It wasn't classic socialized medicine, but you wouldn't have known that from listening to the razor-tongued critics.
Insurers, small businesses, conservatives and Clinton-baiters led the drive to keep Uncle Sam's nose out of healthcare delivery. Most hospital and system executives also rallied against the Clinton plan.
Like others involved in free enterprise, MODERN HEALTHCARE* called for a private-sector solution. In the ivory-tower world, we envisioned that hospitals and physicians would link and form integrated delivery systems. HMOs would stress prudent spending and primary care. Visionary entrepreneurs would offer creative remedies and new healthcare concepts. And Wall Street would provide the capital to get it all done. Good for patients and good for providers. No tax increases. No government micromanagement. No stopping us now.
But the dream is over, and it's time for a reality check.
It is 1998, and patients feel powerless and betrayed by providers. Physicians are frustrated with a loss of control and the nagging temptation to make treatment decisions based on cost. HMOs are admitting they can't confidently predict medical costs or keep up with the doctor bills. Well, what is it they do manage?
But surely the market leaders are in control of their destinies. Let's look at Columbia/HCA Healthcare Corp., the nation's No. 1 hospital company, which lost more than $1 billion in the last three months of 1997 and might have to pay at least that much to settle fraud charges with the federal government. Then there's MedPartners, the nation's top physician practice management company. After profits plummeted, a planned merger with PhyCor was terminated and Chief Executive Officer Larry House resigned.
On the managed-care side, Wall Street darling Oxford Health Plans fell off its perch, and industry pioneer Kaiser Permanente came tumbling after. Oxford's billing system collapsed and so did its stock price and credibility. Kaiser, once worshiped for its model of healthcare delivery, posted a 1997 loss of $270 million -- its first loss ever -- and may sell off a number of its operations outside California.
Meanwhile, the rolls of the uninsured continue to swell. More than 40 million citizens lack medical coverage, and the Agency for Health Care Policy and Research estimates nearly one in five Americans has no usual source of healthcare. Those are embarrassing statistics for what many in the private sector say is the richest, smartest nation in the history of humankind.
Time is running out on the private-sector "solution." Unless real progress is made very soon, watch for strong consideration of a national healthcare system more ambitious than Hillary Clinton ever imagined.
And if that occurs, there will be plenty of blame and shame to go around.