Obviously, next year’s deficit is a problem. And if you assume the credit crisis isn’t about to lift ”” which seems smart at this point ”” the ultimate cost of the bailouts could conceivably go higher. Whatever the final figure, it should still be put in some context.
Despite everything, the biggest fiscal problem remains, far and away, health care. Based on the rate that medical spending has been rising, the Congressional Budget Office forecasts that Medicare and Medicaid will take up 10 percent of G.D.P. within two decades, up from about 4 percent now. In today’s terms, that would be the equivalent of adding at least $900 billion to the deficit every single year, in perpetuity. It makes the cost of the bailouts look like a rounding error.
When it comes to health care, we have a situation that is blatantly unsustainable. With the right choices, we can prevent that. But so far, we instead seem to be hoping that the situation will magically resolve itself, which is a recipe for big problems and perhaps even a crisis.
Let’s see. That doesn’t sound familiar, does it?
And the leading cause for skyrocketting healthcare cost is…anyone…anyone…Bueller?
The leading cause for skyrocketting healthcare cost is lawyers. Tort reform is essential to reducing the cost of insurance for doctors and other medical professionals, which reduces the cost of procedures, which reduces the cost of health insurance, which makes it more affordable for more people, which defrays the risk over a larger pool and reduces costs across the board.
Who is talking about tort reform during the current election…anyone…anyone…Bueller?
I’m not sure that tort reform is the silver bullet. We have had some pretty dramatic tort reform here in Florida, and stabilization of med mal rates, along with a pretty dramatic decrease in claims. However, the cost of health insurance keeps rising.
I think a big part of it is there is not adequate attention to prices in health care decisions. There are more and more studies, they are more and more expensive, and doctors order them without any consideration of costs (because they don’t pay). In addition, the role of prescription costs has to be big. Doctors tend not to think about prescribing generic equivalents, because the drug company reps are always pushing the new, updated drug (and some of them are updated merely because their patents are about to expire), and in any event, the doctor does not pay.
Patients don’t respond to price signals becuase those price signals are muted in our current market structure. The cost of health insurance is not a taxable component of income (if you recieve it from an employer). That has to account for a lot of distortion of the market.
I bet we’d see some radical changes if:
The cost of health insurance showed up on employees’ W-2 forms;
There was greater availability of high-deductible policies designed to protect against catastrophic illness or injury only
This was coupled with medical savings accounts, in which pre-tax dollars could be used to buy health insurance and pay for uninsured expenses.
Lawyers? I think not. It’s high tech medicine and drug patents.
Fifty years ago if someone was obviously going to die within a few weeks, it was not routine to blow a million bucks pulling out all the stops on high tech “care” during the last week of life. I think it’s been estimated that if everyone who could benefit from being in a critical care unit were in one, the cost of healthcare would equal the GNP. We could easily have healthcare that costs us what healthcare cost us in the 1950’s if we were willing to accept healthcare with a 1950’s level of effectiveness — and to be blunt about that, the difference between the effectiveness of healthcare then and healthcare now is relatively small.
Well then, if it isn’t lawyers, then why is the cost of insurance driving doctors out of business?
http://www.nysun.com/new-york/rising-insurance-rates-put-city-doctors-out/57934/
http://www.marketwatch.com/news/story/healthmadeeasycom-our-healthcare-system-hemorrhaging/story.aspx?guid={0D4D2279-30AA-49F6-BE32-282FA029640F}&dist=hppr
http://www.mauinews.com/page/content.detail/id/38528.html
http://www.foxnews.com/story/0,2933,52310,00.html
There are plenty more, but I don’t want to hog bandwidth to prove the point.