The United States is among the world's leader in technical innovation in medicine; but the way we market our high-tech gains boosts U.S. health costs dramatically, often without attendant health benefits. For example, look at how some of the other countries run their health programs.

In Britain the National Health Service provides free cradle-to-grave services to 90 percent of the country's population. financed through general taxation, the program employs more than 25,000 general practitioners and 14,000 dentists and runs more than 2,000 hospitals.

The Japanese system is a mix of public and private doctor and hospital care and public and private health insurance. Nearly everyone is covered by some program. In general, fees are controlled by the government with medical care typically costing very little for an individual. About half of the population is covered at work; they contribute about four percent of their salary with company contributing another four percent to a government managed program. Also from associations of nonprofit, private or community hospitals. The poor are insured under a general assistance program.

The French government health insurance is funded by social security contribution deducted from paychecks; it covers all residents and pays for most hospital care and doctor's office visits. Physicians in private practice receive a set fee from the government but also can charge the patient additional fees. Patients may select their physician.

A national system in Sweden organizes both physician services and hospital care and is funded through general taxes. Everyone receives these services and hospital care free of charge, but people pay some portion of the costs for drugs and dental care. Patients may choose their own physician.

In Canada, a national system of government-financed universal health insurance provides Canadians with access to the doctor and hospital of their choice. The program, supported through general taxes and small local fees, pays physicians directly for services rendered. All hospital charges are covered.

In the United States, there is no national health insurance system, except for the poor, who are covered under state Medicaid programs, paid for by state and federal taxes, and the older people, who are covered by Medicare, a Social Security Administration program.

Some of the programs that try to help the American health problems are: Fee-For-Service - The traditional system of paying doctors in America, through a separate fee for each medical service, such as a doctor's visit, medical test, or operation.

Medicare - Federal program that pays for medical care of those over 65 years old, and others such as disabled.

Medicaid - Joint federal-state program that pays for medical care of low-income citizens.

Diagnostic Related Groups (DRG) - A list of more than 400 medical conditions specified under the PPS system, together with the ratio at which the federal government will reimburse hospitals . Preferred Provider Organization (PPO) - A list of doctors who agree to treat the members of a group health plan. In return for the expected increase in patients, the doctors frequently agree to offer their services at a discount. Health-Maintenance Organization (HMO) - An organization of physicians, frequently salaried, that charges each patient a fixed annual fee for all medical care.

Prospective Payment System (PPS) - The system introduced by the Reagan administration in 1983 to reimburse hospitals for Medicare patients "prospectively" on the basis of rates established ahead of time rather than on the basis of the hospitals' charges. The system was intended to hold down the federal government Medicare costs.

Utilization Review - Describes several method used by insurance companies and corporations to reduce the cost of covered employees' medical claims, usually for elective surgery. These include reviewing a doctor's recommended treatment plan once the patient is in the hospital.

Despite the growing popularity of cost-containment programs, many of their original advocates express disappointment over their ability to hold down medical costs . Recent studies seem to bear out some observations of Jon Gabel of the Health Association of America. For example, a 1988 study by Blue Cross and Blue Shield says cost-containment efforts saved the plans about $4.8 billion between 1983 and 1986. Yet the savings barely made a dent in the insurance plan's continually rising expenditure.

The most impressive savings for Blue Cross and Blue Shield were found in the hospital sector, where most of its' cost review efforts have been directed. Blue Cross and Blue Shield planned to reduce the amount they paid for hospital inpatient care by 11 percent in 1986, by cutting back on the number of patients admitted and on the number of days they stayed. But although insurance companies have been successful in holding down hospital costs, their success has not translated into overall cost-saving. For one thing, many procedures that were once performed in hospitals are now done in physicians' offices or oupatient clinics. The explosion of outpatient utilization is just one of the factors that has frustrated efforts to realize net cost reductions.

One of the better ways to sum up this research paper is with a quote from Douglas S. Peters, of the Blue Cross and Blue Shield Association, and that is, "We squeeze the balloon in one area only to realize that there are other things that cause the pattern overall."

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