The Real Health Care Issue
Robert Samuelson puts his finger on the real issue with American health care: rising costs.
We need to have a candid debate about health care in 2008, but the odds are against it. The fact that covering the 47 million uninsured already looms as the centerpiece of this debate is a warning sign that it won’t be serious. We’re told that the uninsured are our biggest health-care problem, but they aren’t. Runaway health spending is. Although politicians pay lip service to that, what they really enjoy is increasing spending.
It’s understandable because expanding benefits is so much more politically rewarding than trying to control them. Everyone believes in adequate health care; people should have it when they need it. Politicians cater to these beliefs. But the intellectual and even moral laziness of this approach results in an invisible abdication of political responsibility. We are letting the unchecked rise in health spending determine national priorities.
This is exactly right. Currently the CBO is predicting that by 2082 that health care expenditures will account for 49% of GDP. That is just about every other dollar in the economy will be spent on health care. Obviously, this means that expenditures on other forms of consumption will have to decline as a percentage of GDP.
One reason for this increase in health expenditures is the aging population, so this increase in is, at least in part, a wealth transfer from the young to the elderly. Given that the elderly typically have more wealth and assets than the young it is fair to say that the haves are taking resources from the have-nots.
And expecting the government to do something about this is just blindingly stupid. No candidate right now really talks about this issue. They all talk about the uninsured, as if these people are denied necessary medical care. And if we look to government administered health care programs, e.g. Medicare and Medicaid, we see programs that are wildly out of control from a fiscal stand point. Medicare expenditures are expected to triple by 2082 as a percentage of GDP (see the above linked CBO report).
To help solve this problem people need to see and feel these expenditures. Right now that is not the case. Most people don’t think of their health care benefits as their money. They think of it as money their employer spends on them—i.e. it is other people’s money. However, from the employer’s stand point health care benefits are a cost associated with hiring a person. Getting rid of employer provided health care would go someway towards helping solve the problem. Of course politically, this doesn’t rise to the status of a dead horse.
Such a proposal would inflict “pain” in that people would see how much health care really costs in an explicit manner. And this kind of thing politicians avoid at all costs. Politicians love mealy-mouthed non-sense about how something can be done faster-beter-cheaper than we are currently doing it and about how health care is a right or a public good. Talking about reality like how health care is a private good just like tennis shoes or candy bars just wont cut it during election time.