The economics of health care

Our lead story on page one of this issue reveals that Lifespan, the state’s largest health care system and its largest private employer, is making significant strides toward improving its own financial health. Lifespan is ahead of schedule in its drive to reverse years of running deep deficits.


In fact, Moody’s Investors cites "recent evidence of stabilizing performance at Lifespan, in a report issued this May. The report says Lifespan’s operating loss for the first half of fiscal 2002 was $5 million – compared to a loss of just under $25 million during the same period last year.


We hope that Lifespan’s fiscal situation represents a silver lining of sorts because the prognosis for the health care industry here in Rhode Island remains mostly gloomy.

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A recent national study shows that Rhode Island residents and those of neighboring New England states spend more on personal health care than anywhere else in the country. The national average spent per person on health care was $3,760, while in Rhode Island it registered 20 percent higher or $4,497.


This represents a very real concern for anyone interested in the health of the state’s economic climate. While being a small state has its advantages, it does not appear to do us much good when it comes to containing health care costs.


Dr. Michael Fine, chief of Family and Community Medicine at Rhode Island Hospital, puts it this way: "We are the perfect storm. We are a state without many different health plans, we are a small employer state, and we have relatively underdeveloped primary care capacity."


Dr. Fine raises an interesting point. He describes a system that needs work.


It is the players on the front lines – the hospitals and the health insurers – that are in the best position to get that work done.


We hope those two camps – which are more accustomed to being adversaries – can begin working together on long-term contracts to reach agreements where both sides can claim a measure of victory.


Containing health care costs is a critical component of our economic health. Doing so will help us lure larger businesses here.


If in fact Lifespan is turning a corner with regard to its finances, than that is at least some evidence that progress in the health care arena is in fact possible.

Schools producing poor
ROI


No one is against education. For candidates running for public office, whether it is for governor, mayor or a local town council, education is an easy issue upon which to profess support.


Along a campaign trail, there is room to debate the pros and cons of charter schools, a voucher system, curriculum and even the length of the school year.


But such arguments tend to deflect attention from a simple, yet disturbing trend that has become all too familiar here. With regard to per-pupil-spending, Rhode Island ranks among the top ten or 15 states in the country each year. So we are in fact quite generous when it comes to spending tax dollars on public education.


But review national test scores and students in too many of our cities and towns slip to the back of the pack. The tax dollars we are spending are producing a poor return on investment. And that is unacceptable.


There is no panacea for our public school system.


In fact, it makes sense that a variety of approaches need to be employed to ensure that our children can compete effectively with children from other states. It may be that the answers to our educational ills include charter schools, vouchers, a longer school year and even as one mayoral candidate has suggested, military-style training. What is critical is that each and every approach must be reviewed and held accountable.


Accountability means that poor test scores should result in swift changes. High test scores should result in the expansion of a curriculum that works.


So when a candidate professes his or her support for a particular educational approach, ask them how they will hold that approach accountable.


Education is easy campaign rhetoric. Don’t let it be. Make the candidates earn the points they score the votes they get, by professing support for education.


Year after year test scores suggest that we are making very little progress on this front. That we can do much better. Low test scores must not be acceptable. If we are not holding our teachers, our administrators and our students accountable, than we’re throwing our money away.


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