ECONOMIST: MARKET FORCES LEAD TO HEALTH CARE CRISIS

Health-care reform attempts to correct a variety of problems that have developed from market forces at work in the country, said a university economist.

"If health-care markets worked perfectly, then every economist would conclude that there is no role for the government in health care. Unfortunately health-care markets do not work very well," said Timothy D. McBride, assistant professor of economics, public policy and gerontology at the University of Missouri-St. Louis.

McBride spoke Tuesday at the St. Francis Medical Center Foundation Donor Recognition Banquet.

Problems abound in the health-care system, but McBride said no one player is to blame. "There are rational explanations for everyone's behavior in this health-care market," he said. "Instead, it is the system itself which is to blame.

McBride said most people identify two major problems with the health-care system: escalating health-care costs and access to health care for the uninsured and underinsured.

"Americans now spend more money on health care than they do on food and housing combined," McBride said.

The trouble stems from a variety of causes, he said. Rising medical costs are partly to blame on insurance companies, which make health care affordable for millions of people, he said. Physicians too are partly to blame because they can prescribe costly treatments that may or may not be needed, he said. Patients too share some blame because often they are not well informed about health-care decisions, said McBride.

The Clinton health-care plan unveiled in October is based on elements of managed competition, McBride said.

If the managed competition fails to contain costs, Clinton has proposed a "global budget," which puts a limit on the amount that health insurance premiums are allowed to increase.

"The global budgets in Clinton's plan only force health-care costs to grow at a slower rate than they would otherwise," McBride said.

What will be impacted by the slower growth in spending? "The result is inevitable," McBride said. "Global budgets will lead to cutbacks in the incomes or providers and the number of services they provide. What does this sound like? To me it sounds like rationing."

But McBride said many health economists say rationing is inevitable in health care.