Keynote Address to the Fifth Annual Awards Luncheon (and 38th Annual Midwest Clinical Conf[erence]), Chicago, Illinois
C. Everett Koop took office as U.S. Surgeon General in November 1981, after several years of high inflation and rapidly rising
health care costs in the late 1970s, and in the midst of recession in the early 1980s. In this speech to the Chicago Medical
Society, Koop warned about the effects of inflation and recession on the financial stability of the U.S. health care system.
He addressed efforts by President Ronald Reagan to reign in rising health care costs, and to shift some public health responsibilities,
such as maternal and child health programs, from the federal government to the states in the form of block grants under Reagan's
"New Federalism" initiative. Koop discussed the ways in which this shift would likely affect the medical profession.
Finally, he discusses federal support of biomedical and behavioral research in a time of recession and budget pressures.
Number of Image Pages:
14 (849,518 Bytes)
1982-03-14 (March 14, 1982)
Koop, C. Everett
This item is in the public domain. It may be used without permission.
Medical Subject Headings (MeSH):
Health Care Costs
"Keynote Address to the Fifth Annual Awards Luncheon (and 38th Annual Midwest Clinical Conf[erence]), Chicago, Illinois"
Deputy Assistant Secretary for Health and Surgeon General
US Department of Health and Human Services
To the Fifth Annual Awards Luncheon (and 38th Annual Midwest Clinical Conf.)
Sunday, March 14, 1982
(Greetings to hosts, guests)
I'm delighted to be here today as part of a program that honors an individual physician, that seeks to strengthen the
profession of medicine, and which also scans the horizon of clinical medicine.
It's an agenda that does great credit to the Chicago medical society and its leadership. In the next few minutes, I hope
I might make some contribution worthy of this meeting.
I am reminded of the story of the young man who was starting out on the lecture circuit. After one particularly awkward evening,
his house handed the young man a note. It said, "Your bus is outside waiting to leave. Be under it."
As a matter of fact, I think there are many people today who feel they have been struck down by the economy and may never
get up again. It is a feeling that patients have expressed to their physicians in growing numbers for the past several years,
going back to 1974, when inflation jumped to 12.2 percent at year-end. It settled down for a while, but climbed steadily again
from 1977's year-and rate of 6.8 percent, up again to 9 percent, and then up to 13.3 percent by the end of 1979.
For nearly everyone in this room, the last time the inflation rate went that high was in 1946. But even at that momentous
time in our history, the rate to remain high for very long. By 1949 it was minus 1.8 percent.
Compare that to today, when, with a major program of economic recovery led by a new and very effective president, President
Reagan, we have been able to bring inflation down to 8.4 percent, as of the end of January. That's progress . . . but
it also reveals how much more complex the inflation problem is in this time of our national history and how pervasive it is
in our society.
I'm not an economist or an accountant, but I have been personally and professionally impressed with the way inflation
was shaping how I lived and how I worked as a surgeon, serving the children of Philadelphia. And I am committed, as Surgeon
General, to work with the President to continue to bring down that rate of inflation.
As I indicated a moment ago, inflation has affected the health and well-being of all Americans. It has raised the cost of
medical and health care. It has raised the cost of providing that care as well. The cost of equipment, medical supplies, technicians
and aides, space, drugs, vaccines, and insurance . . . all these things and more have also been part of the cost spiral in
medical care. It's the part that the people in this room have seen at close hand.
But we have, it seems to me, a need to be especially vigilant on this matter of the cost of care. Yes, the inflation rate
is now down some 4 percentage points or so below the 1980 level. And it would be down even more, were it not for the medical
component. While the cost of most other goods and services in our economy were being trimmed, the cost of medical care rose
in 1981 by 12.5 percent above the level of 1980. I hate to say this, but the two other major factors in the inflation rate
that shared the spotlight with medicine were fuel oil and used cars.
That 12.5 percent rise was medicine's biggest year-end rise over a previous year since the records have been kept. In
dollar terms, it is also impressive. When all the figures come in, we expect that the total expenditures for personal health
care in 1981 will come to about $250 billion. Of that total, inflation was responsible for some $25 billion. That extra money
didn't buy better health, didn't reduce the risks of disease and disability, didn't prevent deaths from occurring,
and obviously did not contribute to our people's general sense of well-being. Nevertheless, the American people paid it.
That's the kind of fight we are in today in health and medical care. We are fighting to gain control over the costs of
care . . . before the costs of care get complete control over us. In this light, we need your total assistance . . . as professionals,
as individuals, and as citizens.
I make that plea today because we are here to honor a physician who sets an example for all of us as to what the standard
might be for self-less public service. It is an award for outstanding service to the community. And it is truly an honor to
share the podium with such an individual. But I hope I am also sharing in this entire room . . . counting all of you here
. . . a dedication to work, each in our own special ways, for the more effective delivery of medical care at a price that
our patients and our country can afford.
It's complicated. There are no simple answers. There is no "magic bullet" for inflation. Yet, the worst thing
we could do would be to shrug our shoulders and simply give up because we don't understand or -- much worse -- because
we just don't care.
I spent this much time on economics because it does dominate our lives, whether we like it or not. And, quite frankly, I don't
like it. I'd much rather spend all my time on medicine. We don't lack for things to explore.
In the next few moments, I'd like to share with you some of those areas in which we believe government and the private
practice of medicine, as partners, can provide significant benefits for all Americans.
One of the first areas concerns the protection of the profession itself. It is our hope that the government will be out of
the PSRO business by the end of fiscal 1984. This proposal is now before the Congress as part of the President's program.
We believe that professional standards are essential in medicine, let there be no mistake about that. But we also believe
that you can't buy standards, you can't regulate them into existence, you can't legislate them into existence.
If the profession simply doesn't care about keeping its house and all its tenants in good order, something like a PSRO
will not make the difference. The change has to come from inside the profession itself.
For many years the medical profession itself has taken this position. Well, the opportunity is now here to demonstrate that
we do, indeed, have the interest and the will to do the required job of setting and maintaining standards . . . without directions
from the Federal Government.
I am less concerned about the survival of this or that particular PSRO then I am about the survival of the concept of professional
standards and the sense of proprietorship that physicians have for their own professional standards.
Similarly, the President proposed last year that a number of health services programs, managed at the federal level, be transferred
to the states where, we believe, they can be adjusted to respond more effectively to the needs of the citizens being directly
served. The Congress did not go along with the whole package, but the members did authorize the delegation of authority of
some 22 programs back to the states and localities.
In his fiscal 1983 proposals, now before the Congress, the President hopes to build upon that strong beginning. I see here
the same opportunity for state and local leadership by physicians as I see in the matter of PSROs. State and local governments,
private voluntary agencies, and all concerned citizens need your participation in the planning and implementation for these
so-called "block grants." I know that in most of the 53 states and territories that have already applied for -- and
adopted -- the Maternal and Child Health block grant, members of the medical profession have been of great help in assessing
needs, setting priorities, and getting the message out to the community that control of these services is now much closer
We need the same kind of involvement by physicians to help states get the most from the other three block grants -- the prevention
block, the primary care block, and the alcohol, drug abuse, and mental health block. It's a time of extraordinary challenge
and extraordinary opportunity for persons committed both to the strengthening of state and local government and to the invigoration
of the medical profession itself.
And in this connection, let me say that I am especially pleased with the kind of involvement the medical profession has already
demonstrated in two very important areas of disease prevention.
The first is the leadership role played by the American Medical Association and its state and local affiliates directing public
and scientific attention to the health concerns involving sodium, salt, and hypertension. The first AMA-sponsored symposium
on the subject was held in November 1978 and the second conference, specifically concerned with sodium labeling of foods,
was held in Washington just last week. The medical profession and the food industry joined with government in addressing the
issues of sodium levels in the food supply, the role of public education, the significance for patient care, and the effects
of diet on health. It was a very important meeting.
The second area concerns smoking and health, a special concern of Surgeons General since 1957. In fact, I am the sixth Surgeon
General to address this issue. In our report on smoking and cancer, released on February 22, one of the strong conclusions
is that "brief and simple advice to quit smoking delivered by physician has substantial potential for producing cessation
in a cost-effective manner." The behavioral evidence on this aspect is quite clear. And physicians are giving that life-saving
advice to more and more patients.
Lastly, I want to mention a fundamental tenet of this administration's health policy: the continued support of biomedical
and behavioral research, even in a time of budgetary restraint.
Clearly one of the great strength at the federal level is the capacity to support extensive, complex, and costly medical research.
And we have done so with excellence. For nearly a half century, the Public Health Service supported the research of 60 Noble
Laureates in medicine, physics, and chemistry from a total of 352 persons who received awards in those fields in the same
period of time. That's about 1 of every 6 Nobel Laureates -- a truly astonishing national achievement.
As the president took special pains to mention in his State of the Union address two months ago, and as his budget proposals
for fiscal 1983 indicate, we intend to increase the budget for the NIH to $3.75 billion next year, up from the $3.64 billion
of the current fiscal year. Granted, that is only a modest 2 percent increase, but if we can in fact get the inflation tiger
back into its cage, that 2 percent will buy much more next year than it would have bought this year.
The research agenda, as you know, is lengthy. And there is reason to believe that we are on the verge of a series of highly
significant breakthroughs in a variety of areas. Naturally, there is no way of predicting when these will call about. But
just look at the kinds of things for which we already have a pretty significant knowledge base:
In the field of immunology and virology we've come a very long way toward harnessing the new recombinant DNA and hybridoma
technologies. We now have available a marketable hepatitis "B" vaccine that may shed more light on how to reduce the
morbidity and mortality rates for chronic active hepatitis, cirrhosis, and cancer of the liver.
As pediatric surgeon, I am particularly interested in the development of a convenient, low-cost test to screen neonates for
cytomegalovirus, which we think is one of the leading causes of children's hearing impairments.
We have made a great deal of progress as well in the development of new, non-invasive diagnostic techniques. I am thinking
in particular of the PETT. The Positron Emission Transaxial Tomography used quite extensively to study epilepsy, schizophrenia,
and Alzheimer's disease. There is also the development of equipment using the principle of nuclear magnetic resonance,
And finally let me bring to your attention the expanding new field of prevention research. I've already mentioned the
appearance of the hepatitis "B" vaccine, but there are others in the research stream. For example, a live attenuated
varicella vaccine appears to have some promise for preventing chickenpox infections among leukemic children, for whom the
infection can be fatal.
There is a great deal of work still to be done in the field of diet and nutrition, asthma, allergic diseases, and the development
of antiviral drugs to fight Influenza "A" and the recurrence of herpes virus among patients are receiving immunosuppressive
These are by no means the only research areas that are "hot" today nor are the only ones that are promising. Rather,
they form a kind of "snapshot" of the great range of exciting research going on right now, with the aid of federal
funding. Some fields of research, such as genetics and gene regulation, now have a variety of funding interests involved --
government, industry, and private foundations, for example. We can only continue to encourage others to put additional funds
into basic and applied research. However, in doing so, we must not withdraw in any substantive way the presence of the Federal
Government in this activity that is so important for our survival both as a nation and as individual members of the human
I hope that, in the past few minutes, I've been able to sketch for you the general direction of this administration in
the area of public health policy. It centers around these three propositions:
1. We need to bring down the destructive rates of inflation so that physicians and the public can afford the quality of care
this nation is capable of delivering.
2. We need to return to the states and localities and to the medical profession itself certain responsibilities of health
service delivery as well as responsibilities for professional self-regulation.
3. Finally, we need to maintain the focus and the strength of federal support for behavioral and biomedical research, activity
for which the Federal Government is the best mechanism over the long term.
Once again, let me thank you for having me join you today. And to the recipient of the Public Service Award and, indeed, to
all members of the Chicago Medical Society, may I offer my best wishes for an excellent year in medicine.