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July 26, 1999 01:00 AM

AN EXCUSE FOR EVERYTHING: IN TROUBLED TIMES, THE BUDGET ACT IS HEALTHCARE'S SCAPEGOAT

Neil McLaughlin
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    Do you know the No. 1 explanation offered by American corporations for a down performance? It's the weather. Not bad strategy, criminal behavior, mismanagement, overindebtedness or anything that executives might have been able to control or compensate for.

    The Balanced Budget Act of 1997 is rapidly becoming the "weather excuse," the all-purpose alibi, for the healthcare industry. Hospitals and other healthcare businesses in trouble tell horrifying tales of a financial maelstrom created by the law. The gale is roaring through, destroying every enterprise in its path.

    This storm is overblown. True, the restraints on Medicare spending imposed by the budget law are undeniably severe. But constantly citing the law as the reason for every problem is cavalier and embarrassing.

    Last month, our reporters, Kristen Hallam and Deanna Bellandi, noted that some hospitals threatening to cut services because of the budget law have suffered from poor management or marketplace changes (June 21, p. 2).

    In this week's cover story (p. 30), Ann Saphir reports that while the long-term-care industry blames Medicare for recent woes, experts see many other causes, including faulty management and overexpansion.

    If the people covering their posteriors with the Balanced Budget Act were hurting only themselves, no one should care. They hurt the national healthcare debate, however, diverting public attention from more-important issues and possible long-term solutions. Unfortunately, the industry seems inclined to cry along in the hope that Uncle Sam will loosen the Medicare purse strings for everyone.

    We don't need more excuses. We need to design a rational healthcare system. A key portion of that overhaul must address how to get health coverage for more Americans so that Medicare and other payers don't have to subsidize programs unrelated to their beneficiaries.

    The healthcare industry could take the lead in this cause. But fixing the problems requires enlightenment, not obfuscation. So far, a depressing number of executives are opting for the latter.

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