William Coburn 
Dec. 20, 1993 
William H. Coburn, 76, Of Chilla Vista, Calif., Died Dec. 20 At Home.

9-to-5 Snowstorm Kept Removal Costs Down 
Officials Say Relatively 
Little Overtime Was Paid In 
Keeping Roads Clear

By JEFF THOMAS; Colorado Springs Gazette Telegraph
 Thursday, January 06, 1994 &nbsp;&nbsp;&nbsp;&nbsp;Page: 1A QUICK WORDS: POWER OF SUGGESTION 





First, President Clinton takes over the White House, promising to overhaul
the health-care system and hold down runaway costs. &nbsp;&nbsp;&nbsp; 
 Then, employers find that their health insurance premiums didn't go up as
much during the past year as the year before. And consumers discover that the
price of their prescription drugs has stabilized. &nbsp;&nbsp;&nbsp; Coincidence? &nbsp;&nbsp;&nbsp; 
 "How come it hasn't happened sooner? Why has it happened just this year?"
asks Ed Rothschild of Citizen Action, a Washington-based consumer advocacy
group that specializes in health-care issues. "Why is it happening in a year
that the president has announced a comprehensive plan for reform?" &nbsp;&nbsp;&nbsp; 
 But experts say there's more to it than simple posturing. Also at work,
they say, are time-tested inflation cycles and the fact that some insurers are
already pushing the kinds of changes in health care that Clinton envisions. &nbsp;&nbsp;&nbsp; 
 Health insurance premiums charged to larger employers for traditional
coverage had been rising at double-digit rates for five years. But in 1993,
they increased just 8 percent, about one-third of the increase in 1989,
according to the consulting firm KPMG Peat Marwick. &nbsp;&nbsp;&nbsp; 
 And last spring -- just as Hillary Rodham Clinton began hearings on health
care -- 18 of the country's largest drug makers voluntarily capped the rate of
their 1993 price increases. Drug prices had been rising nearly twice as fast
as overall inflation for a decade. Last year, they were up just 3.3 percent. &nbsp;&nbsp;&nbsp; 
 Indeed, the rise of medical costs moderated across the board last year,
raising the question: Why now? &nbsp;&nbsp;&nbsp; 
 Insurers and drug makers say the slowdown in price hikes is proof the
health-care industry is reforming itself. &nbsp;&nbsp;&nbsp; 
 "Manufacturers are interested in holding down the overall cost of health
care," said Jeffrey Trewhitt of the Pharmaceutical Manufacturers Association. &nbsp;&nbsp;&nbsp; 
 Is this a sudden interest? Merck &amp; Co. Inc., the nation's largest drug
maker, has voluntarily capped its price increases since 1991, and "as long as
economic conditions and government policies permit, we will continue to do
it," said spokesman Tony Fiskett. &nbsp;&nbsp;&nbsp; 
 And by several measures, the rise in health insurance premiums has been
tapering off for four years, well before the president told Congress and the
nation in September that the United States needs "limits on how much plans can
raise their premiums year in and year out." &nbsp;&nbsp;&nbsp; 
 Insurers credit the shift toward "managed care," which provides consumers
with discounts in exchange for seeking care from a restricted number of
doctors. Five years ago, managed-care arrangements covered just 27 percent of
workers in company plans. Now they cover 42 percent, according to the Health
Insurance Association of America, a trade group. &nbsp;&nbsp;&nbsp; 
 "Managed care is beginning to work," said Richard Coorsh, a spokesman for
the association. &nbsp;&nbsp;&nbsp; 
 Some experts say it's not the main reason insurance-premium increases have
eased. A bigger reason is rooted in a reliable old indicator that goes back to
the 1960s. &nbsp;&nbsp;&nbsp; 
 Like clockwork, they say, the insurance industry goes through predictable
cycles of profits and losses. And when the industry has a profitable year, one
result is smaller premium increases two years later, said Derek Liston, a
researcher for KPMG. In 1991, the industry had a profitable year, Liston said.
Ergo, lower premium increases in 1993. &nbsp;&nbsp;&nbsp; 
 This is the coincidence theory. Clinton's push for health-care reform has
come along during the part of the insurance-profit cycle when price increases
moderate naturally. &nbsp;&nbsp;&nbsp; 
 Overall inflation is down, too, and that has some effect on medical costs,
although medical inflation is still running twice as hot as general inflation.
This is a corollary to the coincidence theory. &nbsp;&nbsp;&nbsp; 
 But others say the slowdown in medical inflation proves only that the
industry will respond to pressure from the federal government. &nbsp;&nbsp;&nbsp; 
 "They're not doing this to help the public," said Rothschild of Citizen
Action. "They're doing this to protect themselves from more severe
legislation." &nbsp;&nbsp;&nbsp; 
 And at least one drug maker acknowledges that the rise of health care
toward the top of the national agenda is part of the reason it decided to put
the brakes on price hikes this year. &nbsp;&nbsp;&nbsp; 
 "We wanted to show a good-faith response to the interest in seeing prices
controlled," said Andy McCormick of Pfizer Inc., the nation's No. 5 drug
maker. &nbsp;&nbsp;&nbsp; 
 (EDITORS: BEGIN OPTIONAL TRIM) &nbsp;&nbsp;&nbsp; 
 Insurers, too, don't entirely dismiss the government's interest in health
care. &nbsp;&nbsp;&nbsp; 
 "It's probably unrealistic to negate the impact of that," said Coorsh of
the health insurance association. &nbsp;&nbsp;&nbsp; 
 Marty Rosenbaum, a vice president of Great West Insurance Co. of Denver,
which provides employee health-care coverage to about 6,000 companies
nationwide, said, "Providers have got some trepidation regarding health-care
reform." But it's a secondary reason that medical inflation has cooled, he
said. The big reason is managed care. &nbsp;&nbsp;&nbsp; 
 Yet there is some evidence that insurance companies won't move unless
pushed. &nbsp;&nbsp;&nbsp; 
 (END OPTIONAL TRIM) &nbsp;&nbsp;&nbsp; 
 In California, a new law took effect Saturday that restricts the widespread
practice of denying insurance coverage to new customers who are already ill.
Days before the law took effect, Blue Shield of California said it would do
the law one better and stop the practice altogether -- a cornerstone idea in
Clinton's reform plan. Blue Cross, a separate company there, quickly announced
a similar policy. &nbsp;&nbsp;&nbsp; 
 The move, company executives said, "is clearly a sign that Blue Shield
intends to sustain a leading edge in the health reform area." &nbsp;&nbsp;&nbsp; 
 But it's a move the company wouldn't have made five years ago, said Ruth
Grossman, a spokeswoman. &nbsp;&nbsp;&nbsp; 
 "It might have been a good idea five years ago," she said. But unless
competitors would have done likewise, "it would have been hard for us to
shoulder that burden." &nbsp;&nbsp;&nbsp; 
 Which is exactly the point, Rothschild said. &nbsp;&nbsp;&nbsp; 
 "Nobody," he said, "was pushing to control costs five years ago."

Power Of Suggestion? 
Health-care Costs Ease 
Insurance Premiums 
Are Moderating And Drug 
Prices Have Stabilized. Is 
It A Coincidence Or The 
Fear Of Federal Reform?

Power Of Suggestion? Health-care Costs Ease Insurance Premiums Are Moderating And Drug Prices Have Stabilized. Is It A Coincidence Or The Fear Of Federal Reform?