In 1965 Congress, through amendments to the Social Security Act, established the Medicare and Medicaid programs and mandated that hospitals participating in those programs be reimbursed for the “reasonable cost” of providing inpatient services to Medicare and Medicaid patients. In this Article, the Chairman of the Massachusetts Rate Setting Commission contends that HEW—which, like Congress, was anxious to stimulate the voluntary participation of hospitals in the Medicare and Medicaid programs—interpreted “reasonable cost” with excessive liberality toward participating hospitals and created a fiscally burdensome and inflationary reimbursement system lacking principles of efficiency and planning. The author then describes a series of attempts—varying in scope and success—to reformulate “reasonable cost,” as applied to Medicare and Medicaid reimbursement, in a manner more consistent with the author's concept of sound public policy. The culmination of these attempts to date, he states, was Public Law 92-603 (Social Security Amendments of 1972), which introduced to the reimbursement system the concepts of (1) tough evaluation of the reasonableness of hospital costs, with emphasis on efficiency, utilization, and planning; (2) shifting de facto power over reimbursement rates away from the hospitals and into the hands of the agencies that purchase their services; and (3) increased public scrutiny of hospital operations. The author contends that this law, and the philosophy which underlies it, represents a healthy balancing of the needs of hospitals and the needs of the public; that the trend toward cost control and public control which the law embodies has been substantially furthered in those states which have statutorily established hospital budget or charge review programs; and that such trend will continue and profoundly affect any national health insurance plan enacted in the future.

The author of this Comment describes how recent federal legislation (P.L. 93-641, signed into law in January, 1975)—and improved scientific techniques for integrating (1) community medical needs assessment, (2) institutional budgeting linked to regional/state health plans, and (3) budget ceilings—have given the public new authority and technology to shape the nation's institutional health services. He urges administrators and trustees of health institutions—both proprietary and charitable—to become aware of recent developments in this area, and says that active consumer and provider participation in Health Systems Agencies and Statewide Coordinating Councils is necessary if the new federal expectations concerning health planning and regulation are to be met. Given the rising costs of medical care, stronger federal control might be forthcoming if the purposes of P.L. 93-641 are not achieved.

The rapid growth of medical technology gives rise to difficult dilemmas concerning the appropriateness of, and access to, new equipment and devices capable of maintaining life or improving its quality. Such a dilemma already exists, for example, with regard to kidney dialysis machines. In 1972, Congress amended the Social Security Act to make such machines available under Medicare to all who needed them. But almost immediately the overwhelming cost of such equipment—in the billions of dollars—made the original appropriations totally inadequate, and prompted serious questions of whether access to kidney dialysis should be made available at public expense—and, if so, to whom.

This Comment takes the reader 25 years into the future through the medium of a hypothetical U.S. Supreme Court decision** regarding a federal health agency's regulations that establish a system for allocating artificial hearts to those whose lives can be lengthened by implantation. The author assumes that a national health insurance system has been enacted and implemented, that all physicians are employees of the federal government, and that the enabling legislation has placed broad powers in the hands of the federal government to regulate the development and allocation of scarce and expensive medical resources. The opinions of the various Supreme Court Justices reflect a broad range of legal and ethical viewpoints, and—in keeping with the difficult, indeed frightening, life-or-death issues involved—are often intensely personal in nature.

The struggle for control of this nation's life-giving blood resources was, up until five years ago, largely a private affair between representative organizations of the blood collectors. The system that emerged from that struggle was declared unhealthy by several experts who complained that blood was too often unsafe or unavailable. Then in 1972 the government, predominantly the federal government, responded to public pressure and joined the fray. This Comment examines some legal, political, and policy aspects of the battle over blood collection—a battle from which no stable guiding force has yet evolved.