By Robert J. Samuelson
Its hard to know whether President Obamas health-care reform is naive hypocritical or simply dishonest. Probably all three. The president keeps saying its imperative to control runaway health spending. Hes right. The trouble is that whats being promoted as health-care reform almost certainly wont suppress spending and quite probably will do the opposite.
A new report from Obamas own Council of Economic Advisers shows why controlling health costs is so important. Since 1975 annual health spending per person adjusted for inflation has grown 2.1 percentage points faster than overall economic growth per person. If this trend continues the CEA projects that:
-- Health spending which was 5 percent of the economy (gross domestic product) in 1960 and is reckoned at almost 18 percent today would grow to 34 percent of GDP by 2040 -- a third of the economy.
--
Medicare and
Medicaid
the government insurance programs for the elderly and poor would increase from 6 percent of GDP now to 15 percent in 2040 -- roughly equal to three-quarters of present federal spending.
-- Employer-paid insurance premiums for family coverage which grew 85 percent in inflation-adjusted terms from 1996 to $11941 in 2006 would increase to $25200 by 2025 and $45000 in 2040 (all figures in constant 2008 dollars). The huge costs would force employers to reduce take-home pay.
The message in these dismal figures is that uncontrolled health spending is almost single-handedly determining national priorities. Its reducing discretionary income raising taxes widening budget deficits and squeezing other government programs. Worse much medical spending is wasted the CEA report says. It doesnt improve Americans health; some care is unneeded or ineffective.
The Obama administrations response is to talk endlessly about restraining health spending -- bending the curve is the buzz -- as if talk will suffice. The president summoned the heads of major health-care groups representing doctors hospitals drug companies and medical device firms to the White House. All pledged to bend the curve. This is mostly public relations. Does anyone believe the American Medical Association can control the nations 800000 doctors or that the American Hospital Association can command the 5700 hospitals?
Read the rest of this article HERE
*This article is from www.WashingtonPost.com
Its hard to know whether President Obamas health-care reform is naive hypocritical or simply dishonest. Probably all three. The president keeps saying its imperative to control runaway health spending. Hes right. The trouble is that whats being promoted as health-care reform almost certainly wont suppress spending and quite probably will do the opposite.
A new report from Obamas own Council of Economic Advisers shows why controlling health costs is so important. Since 1975 annual health spending per person adjusted for inflation has grown 2.1 percentage points faster than overall economic growth per person. If this trend continues the CEA projects that:
-- Health spending which was 5 percent of the economy (gross domestic product) in 1960 and is reckoned at almost 18 percent today would grow to 34 percent of GDP by 2040 -- a third of the economy.
-- Medicare and Medicaid
