System needs dose of strong medicine.

• Position: Health Care

North Carolina's health-care system could use a good doctor. Suffering from shortages of nurses, pharmacists and other professionals, plagued by rising insurance costs, reeling from federal Medicare cuts and overwhelmed by malpractice-insurance costs, health care is showing weaker vital signs across the charts.

Even though Blue Cross and Blue Shield of North Carolina's bid to become a for profit business dominated health news in 2002 -- a final recommendation by state Insurance Commissioner Jim Long was due in mid-January -- the controversial effort is a small part of the state's larger health picture. Regardless of how the Blue Cross saga turns out, health-care experts say labor shortages will likely keep growing, malpractice costs will keep multiplying, Medicare cuts will keep bleeding hospitals and medical practices, and costs will keep surging.

Some say the problems are so acute that private health care may collapse, leading to a national system run or backed by the federal government. "It's pretty clear that the health industry is in turmoil," says Dr. Gordon Def rise, president of the North Carolina Institute of Medicine in Durham. He says officials are "trying to figure out where things are going to land."

One thing is for sure: Everybody will pay more this year. Companies will pay sharply higher prices for insurance, workers will fork over heftier fees for coverage, hospitals and doctors will spend more for malpractice coverage, and insurers will spend more on medical and prescription claims. In a recent nationwide survey, Towers Perrin predicted costs for larger companies would go up 1.5%, the steepest hike since the consulting firm began surveys in 1989. And it follows three years of double-digit increases.

David Garbrick, senior health-care consultant for Towers Perrin in Charlotte, says North Carolina costs are outpacing the national average. Companies paid an average of $25 a month for each employee's family coverage in 1969. Now, he says, the cost has ballooned to as much as $900. Towers Perrin forecasts that employees will contribute about $160 per month for family coverage in 2003, up from $134 last year. "A lot of these new costs are going to fall on employees," adds Paul J. Mahoney, executive director of the North Carolina Association of Health Plans in Raleigh. "Employers are maxed out."

Of course, North Carolinians covered by health insurance are fortunate because about 1.4 million have none. That's 17% of the state's...