In spite of the wider role Congress created for private insurers in the recently enacted Medicare reform bill, the chief executive officer of the region's largest health insurer yesterday said he believes the country will inevitably move toward a national health insurance plan for all age groups.

Before any such move, however, the region might be forced to seek "a unique solution" to tame the skyrocketing costs of medical care that are pushing insurance premiums beyond affordability for businesses and individuals, Highmark Inc.'s CEO, Dr. Kenneth Melani, said after giving a speech at the University of Pittsburgh's Graduate School of Public Health. He was speaking at the school's Health Policy Institute lecture series.

Melani, tapped to head the nation's 11th-largest health insurer nearly a year ago, said a host of factors have driven double-digit increases in health care costs across the country the past four years, including technology, greater consumer demand from an aging population, litigation and labor costs. The increases, he said, had come without corresponding gains in life expectancy, meaning much of the technology has proven to have dubious value.

With health care costs now accounting for roughly 15 cents of every dollar of the nation's economic activity, he predicted a backlash among voters.

At some point, "Democrats will get into office and say the Republicans have made a big mistake. There will be sweeping reform and then we'll have national health insurance," Melani said. "That's where I think we'll end up. I can't say when."

Melani said he wasn't necessarily opposed to the scenario and is positioning Highmark to capitalize on national health insurance if it unfolds.

He noted that cost increases have been higher in Western Pennsylvania, with Highmark's recent medical outlays advancing at about 15 percent annually compared to a national average of about 13.7 percent, he said. With the region's population aging and persisting in unhealthy behavior such as smoking and overeating, "Our trends are bad, and our trends are going to get worse," he predicted.

Melani also sounded a warning about the state of the region's hospitals. He said the facilities are aging and in need of replacement but few have amassed sufficient capital to do the job "and I'm not sure where we're going to get it."

If the region suffers any "more [economic] pain ... we may be forced to come up with a unique solution" to combat all of the costs.

He wasn't specific, but in general said such solutions might include community-instituted controls on which facilities are allowed to offer certain types and levels of care. He also said more "rationalization" among the region's hospitals is likely needed, a euphemism for closings or reductions in size.