Altman sees industry unwilling to control costs - interview with Stuart H. Altman of the Prospective Payment Assessment Commission - interview

Healthcare Financial Management, April, 1991 by Richard L. Clarke

CLARKE: Would that suggest an administrative program that would be more state driven rather than Federally driven? Or do you see it as being dictated at the Federal level?

ALTMAN: From a geographical point of view, I think [the system would be] better if administered at the state level, but I think the level of technical capacity is greater at the Federal level, that there is tremendous variance in terms of technical abilities at the state level. Some states are very sophisticated - way ahead of the Federal government - but the average state surely is not. I think states should seek technical guidance from an overarching strategy that's developed at the Federal level. Only if a state comes up with a system that it likes better should it be allowed to opt out, provided the system meets some overall goal.

CLARKE: A final question: Many healthcare financial executives are concerned about the financial viability of their organizations. What advice would you give to financial executives of provider organizations on how to deal with some of the issues we've discussed concerning a very uncertain future? Should they get out of health care?

ALTMAN: No, no. Everything is relative in this world. I think [healthcare financial managers] are in a lot better shape than financial people who work for many other industries, [such as] financial services, real estate, and universities. . . . I can appreciate the frustration of not knowing what's coming down the pike and trying to plan, budget, and allocate . . . in this uncertain world.

On the other hand, even though there has been a lot of heat, the amount of real fire has been quite limited. Whatever we say, funds have been available to health care, to continue to generate that engine. And even though I would like to see it cut back, I don't see it cut back to the point where it seriously jeopardizes the whole industry.

PHOTO : In its first seven years, Medicare's prospective payment system has operated "fairly well," says Stuart H. Altman, PhD, chairman of the Prospective Payment Assessment Commission. "Not everybody gets as much money as they want. . . . But by and large, it has not brought the system to its knees."

PHOTO : Altman speaks with HFMA President Richard L. Clarke, FHFMA, at Altman's Brandeis University office in Waltham, Mass. Altman is interim president at Brandeis and professor of national health policy.

PHOTO : "I am very sympathetic to administrators who find themselves in situations they feel powerless to control," Altman says. "If you ask me about the average administrator, I am really sympathetic. If you ask me about the industry as a whole, I am less sympathetic."