Speaking to a joint meeting of members of the Stanford Hospital and Clinics Deputy Chiefs' Committee, the Medical Center Task Force and the Medical Board, Van Etten said health care "now represents 14 percent of the GNP [gross national product]. We are one seventh of the economy . . .

"We drive the economy in a significant way," said Van Etten. Because of this, "health care will become a national crisis that will change the political system. We are the dog, not the tail. Whether it [the crisis] happens in 2000 or 2004 we can't say, but I certainly see the day in which a presidential candidate wins an election and gains control of Congress with a proposal to address the fundamental dislocations that are going to continue to take place.

"Technology increases are going to result in rationing" if fundamental changes don't occur, said Van Etten.

Van Etten said the only solution is to change fundamentally the way in which health care is financed, and move in particular, to change voluntary employer-based financing. "That needs to be replaced with some form of universal coverage, some basic core benefit provided to all Americans," he said.

"If you're employed, your employer should have to provide basic health care coverage. If you're unemployed, the government will have to provide it. [But either way] you will have a core benefit that covers hospitalization, physician office visits and prescription drugs. [For extras] we would be able to buy additional coverage."

The American tradition of individualism motivates most people to seek aggressively the best immediate medical solutions for themselves and their loved ones, but the economy cannot support the resulting spiral of increased technological development and costs, he said.

Marketplace efforts to lower costs haven't worked well, he added; lower prices have caused HMOs, hospitals and physician groups to lose money. This loss has forced providers to capitalize on the public's thirst for choice and a dwindling share of fee-for-service or preferred provider business.

"For the past 40 years, health care costs have increased 3 percent more than all goods and services annually, and this will continue." He added that partisan politics have interfered with progress to identify effective solutions to the problem. "The only thing President Clinton and the Republicans can agree upon is to double the NIH budget."

In addition, Americans are not satisfied with applying technological advances to the greatest good, because of the cultural focus on individualism, he said. "We don't have public health goals."

But despite foreboding predictions, Van Etten noted that unknown forces could easily change this outlook, as they have changed expert opinion in the past. "The common wisdom three or four years ago was that delivery would involve nearly universal capitation, combined with the demise of the specialist in favor of primary care physicians." These changes haven't happened, he said, because consumers, especially outside California, defeated contract channeling of HMO patients by demanding greater choice in their providers. Also, specialists gained more control of patients after it became apparent that specialists can often more effectively manage and treat the 10 percent of patients whose complex illnesses result in 70 percent of health care costs.

Van Etten noted that a major breakthrough in information technology could also fundamentally change the direction of health care. For example, if online medical records, controlled by consumers became available, consumers could nimbly shop for and control each component of their care. This technology would fundamentally change the relationship between providers and the consumers - although probably would not radically alter costs, he said.

President of the Medical Staff

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