Industry-Sponsored Health Programs: Basis for a New Hybrid Prepaid Plan

Any successful plan to control health-care costs will necessarily focus on the physician's role in generating costs. Although physicians' incomes constitute only about 15 per cent of national health-care expenses, their orders — notably for prescription drugs and hospitalization — directly commit at least another 50 per cent of total expenditures for health.1 Hospitalization alone consumes about 40 per cent of the health-care dollar2 and is now widely acknowledged as a prime target for cost control.Some prepaid group practices, such as the Kaiser–Permanente Plan in California, have demonstrated their capacity to decrease hospitalization and consequently to reduce costs.3 The . . .