I have to be brief today but wanted to point out a certain fantasy quality to the way the Health Care debate is being promugated. Today, Peter Orszag notes that the crisis in health care is a crisis of cost of care:
This week confirmed two important facts -- that health-care costs are the key to our fiscal future, and that even doctors and hospitals agree that substantial efficiency improvements are possible in how medicine is practiced.
The numbers speak for themselves. The Medicare and Social Security trustees' reports released this week show that health-care costs drive our long-term entitlement problem. An example illustrates the point: If costs per enrollee in Medicare and Medicaid grow at the same rate over the next four decades as they have over the past four, those two programs will increase from 5% of GDP today to 20% by 2050. Despite the attention often paid to Social Security, spending on that program rises much more modestly -- from 5% to 6% of GDP -- over the same time period. Over the long run, the deficit impact of every other fiscal policy variable is swamped by the impact of health-care costs.
The rest of his article is a pure flight of fancy. We are expected to believe that there are immense savings lurking in the Medical system that can be addressed even as we increase utilization!
(Just in case Peter Orszag has forgotten one of the fundamentals of the markets, when you increase access to a system and decrease its cost to the consumer [which is what lowering health care insurance premiums and making Medicaid and Medicare mroe available does] you increase the use of those now less expensive resources.)
There is only one way to decrease the cost of health care without overt or covert rationing that distorts the market and artificially creates either scarcity or increased expence, and that is to raise the cost of medical care to the consumer (nee patient.) If patients are expected to pay a portion of their care and are expected to take greater responsibilty for their care (I have yet to find a single pill or intervention that can make people exercise or diet, two of the most well researched, effective, and proven interventions that can actually increase one's health and decrease one's utilization of health care resources) they will use health care resources more judiciously. Some will neglect their care, get sick, and die prematurely; others will make their own personal, and often brutal, calculations of how much their future health is worth in comparison to their present comforts (ie, should I pay $40 for my blood pressure pills at the cost of giving up cable TV?) and some will change their lifestyle to be able to afford maximal care. Of course, such a change in our health care model (from "Cheap Health Care is a Right" to "Health Care is [Mostly] Your Responsibilty") will never happen; it is not "compassionate", would never be accepted by a population that has come to expect that they can have it all, and would never even be offered by politicians who want to be re-elected. Instead, we will either tinker on the edges, or if the left has their way, make wholesale changes in our Medical system that will, in the long run (and maybe not too long) delay major advances in Medicine and Biotechnology and make all of us more equal in our access to less health care than desired, ideal, or possible.
Remember, when it comes to Health Care:
Universal, High Quality, Affordable: Choose two of the three.
Anyone who tells you we can have all three is either a liar or a fool.
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