LETTERS: COMPETITIVE HEALTH CARE

To the editor:

Your Sept. 27 editorial, "Hospitals and HMOs," failed to address the central issue. What's at stake in Southeast Missouri is whether or not a free market, and the resulting benefits that accrue to consumers, will be allowed.

Nationwide, for the first time in many years, the annual percentage increases in the cost of employee health benefits have actually declined from double-digit to single-digit figures.

The chief reason that business and industry are realizing health premium cost relief is due to growth and competition among managed-care plans. Consider that the percentage of the U.S. population enrolled in managed-care plans has increased from 12 percent in 1982 to more than 75 percent today.

These date strongly prove that in communities throughout the nation, including in Missouri, hospitals are doing business with a variety of managed-care plans. Or, to use your own words, "Hospitals maintain some kind of equity among all insurance companies they deal with."

Does participation with more than one managed-care company drive down hospital costs? You bet it does. A recent study conducted by Georgetown University offers this perspective. From 1984 to 1993, hospital costs per admission increased 28 percentage points less in areas where HMOs cared for a sizable percentage of people than in areas where HMOs cared for a small percentage of patients. Do hospitals with managed-care contracts cost-shift to other paying customers? Maybe, but not for long. To succeed in today's competitive market, hospitals have cut the fat and become more cost efficient.

The result is that consumers of health care and the employers who pay the tab for it enjoy more quality choices at an affordable price. Simply put, the new economic order in health-care delivery is derived from a free-market society that demands and expects competition. To behave otherwise is an insult to the American way.

MARY DUNN, Executive Director

Southeast Missouri Business Group on Health

Cape Girardeau