Hey, Gov. Blagojevich.
State-by-state efforts, including yours, to subsidize insurance coverage for working families are only deepening America’s health-care dilemma instead of providing a solution.
That’s because the central and inescapable problem with medical care in the United States is, simply, that it costs too much. And the cost is growing a lot faster than the economy as a whole.
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So while I sympathize with the plight of the uninsured and agree that every family ought to have access to affordable care, trying to solve the problem by taxing and spending for more insurance is like pouring gas on a fire.
This realization did not occur to me in my sleep, Governor. It came to me after reading a scary new report by the Congressional Budget Office. It’s called “The Long-Term Outlook for Health Care Spending,” and you can read it, too, at www.cbo.gov.
It’s a simple study that extrapolates how much more we’ll be spending on health care over the next 75 years if we keep doing what we’ve been doing for the last 30 years. The CBO concludes that:
*Total spending on health care will rise to 25 percent of our gross domestic product by 2025, from the current 16 percent. Health-care spending will increase by 37 percent in 2050 and 49 percent in 2082.
*Within that total, federal spending on Medicare (for the elderly) and Medicaid (for the poor) will rise to 7 percent in 2025, from 4 percent of the GDP in 2007. By 2050 it will rise to 12 percent and to 19 percent in 2082.
Then again, the authors acknowledge that this scenario is probably not going to happen. We cannot keep increasing health-care spending — already more than $2 trillion a year — by an annual average of 4.2 percent while the economy grows by only 2.1 percent. Doing so would produce a massive production shift away from other goods and services — housing, food, education, transportation, national defense, arts and entertainment — to keep up with payments for all things medical.
What’s behind medical inflation? “The most important factor” says the CBO, “…has been the emergence, adoption and widespread diffusion of new medical technologies and services.” Lesser factors include increases in personal income, the historic spread of insurance coverage (a factor now reversing as the number of Americans without insurance reaches 47 million and counting) and the aging of the population, especially the Boomers, into Medicare eligibility.
But that last factor is not as big a factor as many think. The CBO says the Boomer problem accounts for less than 20 percent of future cost increases. The lion’s share will be due to the ever-increasing cost of diagnostics, drug therapies, hospitalizations and exotic treatments yet to be discovered.
So we’re all going to be a lot healthier by 2082, right? Not necessarily, the CBO cautions, because “substantial evidence exists that more expensive care does not always mean higher quality care.”
The politically neutral CBO avoids pointing fingers at who, or what, might be pumping the marketplace with overpriced or unnecessary medical marvels. Other experts claim that unnecessary care accounts for 30 percent of all medical spending.
Certain op-ed writers, however, do have some culprits in mind.
Big Pharma, for one, especially after lobbying Congress to ensure that Medicare can’t bargain for reduced prices under the new Part D drug coverage. The big drug companies also have maneuvered to slow the arrival of cheaper generic drugs, all the while hiding behind claims, often bogus, that they need to charge top dollar to recoup their cost of research and development. Then there are fabricated epidemics such as erectile dysfunction … but I’m not going there.
Big Hospital isn’t far behind, having forsaken the charitable premise upon which its tax exemptions are based for a more corporate, bottom-line approach. Look no further than Chicago’s major medical centers, all flush with cash, all run by execs earning in the high six figures, all endlessly embarked on megamillion-dollar expansion programs. Forgive me, Governor, for not oohing and aahing over the spalike amenities at the new Prentice Women’s Hospital.
As for Big Doctor, I could wisecrack about cross-ownership of expensive diagnostic labs or about Pharma-financed junkets to warm places in the name of “continuing medical education.” But I have a medical appointment this week so I won’t.
Altogether, the new CBO study makes it clear that something has to give. And that, no, we’re not going to solve the health-care crisis by covering more people with insurance, even if we covered everybody with insurance.
Somebody or something has to apply the brakes. Health maintenance organizations and other forms of managed care were a start, but that’s not enough. Somebody or something has to rule that aspirin works as well as the “ask your doctor” pain relievers hyped on TV, that the elderly may not rate an organ transplant or a joint replacement, that everybody should not have to pay for that fancy new hospital … or some guy’s more dependable sexual arousal.
You’re right, Governor, to seek health care for all. But in the long run, that’s going to require something more than insurance: political courage.
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John McCarron writes, teaches and consults on urban affairs.