It is great that health care is a significant part of our national dialogue after more than a decade of silence on the subject.

President Bush spent about half his State of the Union address on domestic affairs, including a number of health-care proposals, and virtually every presidential hopeful has advanced his or her solution to the crisis.

Yes, crisis. Increasing costs and the growing number of uninsured citizens constitute a crisis.

Since the beginning of the decade, the health insurance premiums for the average employer increased by 87 percent. Believe it or not, on a per-car basis, auto giant General Motors Corp. spends more money on health insurance than on steel.

There are an estimated 47 million Americans, or 16 percent of the population, without health insurance. In Georgia, between 12.5 and 15 percent of the population is uninsured.

The bedrock of our system is employer-sponsored insurance. According to a study by the Kaiser Commission on Medicaid and the uninsured, the rate of employer-sponsored insurance declined over the first five years of this decade.

The squeeze is on. Higher costs on one side and the growing uninsured population on the other are crushing American businesses.

President Bush wants to tax all health benefits received from an employer, while creating a standard deduction of $15,000 for families and $7,500 for individuals.

This proposal would do little to help those in low tax brackets and might, in fact, cause the problem to worsen because some employers might drop their coverage knowing that workers could receive a tax deduction if they bought insurance on their own. With individual coverage being more expensive than group coverage, those workers would quickly swell the ranks of the uninsured.

The president's proposal also calls for a $66 billion reduction in Medicare over five years. This plan would severely reduce the amount of money hospitals are reimbursed for serving Medicare patients. What a blow this would be for elderly and disabled people.

The Center for Economic and Policy Research in Washington suggests expanding Medicare to our entire population on a voluntary, pay-your-own-way basis. This option wouldn't make health care affordable for everyone, but it would get us moving in that direction.

I am most troubled by Mr. Bush's proposal to trim Medicaid spending by $25 billion. The Medical College of Georgia is not an indigent care hospital, but, as a safety net hospital, last year we provided 19 percent of our gross patient care revenue, or $139 million in uncompensated care. Unless reimbursement rates substantially improve to offset the loss of Medicaid funds, the president's proposal would pull the rug out from under hospitals such as MCG.

Medicaid does not cover 6 percent of our costs. We already lose $6 million and the president's proposal would mean an eventual loss of $27 million in revenue, at which point Medicaid would not cover 33 percent of our costs. Just imagine what would happen to your business if you couldn't recover a third of your costs.

When the number of uninsured increases and government reimbursement decreases, we create a vicious circle.

Here's what I mean by that:

Those without insurance tend to use the emergency room for their primary care, which is some of the most expensive care.

It is standard industry practice to shift costs from those who can't pay to those with payor sources such as private insurance. To cover their costs, private insurers raise the amount of the premiums paid by businesses. When premiums rise, businesses pass those costs along to their employees or eliminate health coverage altogether. This creates greater numbers of the uninsured, thereby completing the vicious circle.

This is why American businesses are caught between rising costs and the growing number of uninsured.

There was a time when MCG Health System was heavily subsidized by the state. Since the creation of MCG Health Inc. in 2000, we have virtually reduced our dependence on the government except for those programs that every academic medical center and hospital in the nation participates in. When demand increases among a nonpaying patient population, how do we survive? By making every effort to keep our costs low.

Our health system recently earned the distinction of having the lowest cost per case in the University HealthSystem Consortium, which represents 97 academic medical centers or almost 90 percent of the nation's academic medical centers. In addition, for the past three out of four years, Cleverly and Associates named MCG Health System to its Community Value Index Top 100 for adding value to the community by remaining financially strong and having reasonable charges.

Low cost does not mean low quality. There's no lack of data in health care, so we have measurements for every aspect of our business, particularly quality. That is how I know that MCG has some of the highest quality in this region. We constantly review a number of quality metrics that provide us with objective comparisons between ourselves, our competitors and our peers nationwide.

Try as we might to tighten our belts without having an adverse effect on quality, there's only so much individual health care facilities in this country can do. A national solution is needed, and I am encouraged by the national dialogue taking place. I hope we find an equitable, fair and effective solution before the health-care system irrevocably implodes.

DON SNELL IS THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF MCG HEALTH INC. TO LEARN MORE, GO TO WWW.MCGHEALTH.ORG.

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