Samuelson: Rx for Health Care: Pain - Robert J. Samuelson

Health care is ultimately a political issue of making choices. The present politics aims to hide the costs and skew the choices.

Updated: 3:41 p.m. ET Dec 1, 2007

From the magazine issue dated Dec 10, 2007

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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. The Bush administration created a new Medicare drug benefit, congressional Democrats urge more coverage for children, and now there are the uninsured.

It's understandable, because expanding benefits is so much easier and 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 automatically determine national priorities. Consider some facts:

• Health spending already totals more than $2 trillion annually, about 16 percent of national income (gross domestic product). By 2030, it could easily exceed 25 percent—one dollar out of four—projects the Congressional Budget Office. Higher health spending is the main force expanding the federal budget.

• There's a massive transfer of income from young to old. Americans 65 and older now represent about an eighth of the population and about a third of all health spending. By 2030, their population share will be about a fifth, and they could account for nearly half of health spending, finds a study by the Centers for Medicare & Medicaid Services. Under present law, the 19- to 64-year-old population would pay most of those costs.

• Neither the government nor the private sector has succeeded in controlling health spending. From 1970 to 2005, average spending per Medicare beneficiary rose 8.9 percent a year; spending for Americans with private health insurance rose 9.8 percent annually over the same period (the figures cover similar health services). The small difference may reflect cost shifting. When Medicare imposes prices controls, doctors and hospitals increase prices for privately insured patients.

Questions arise. How much will health spending increase taxes, depress take-home pay and crowd out other government spending—on schools, roads, parks, defense, the environment? Is the growing intergenerational transfer fair and sensible? But our national policy toward these issues is: don't ask, don't tell.

Mr. Samuelson accurately states that ???runaway health spending??? is our biggest health care problem. His statement that doctors profit from this is inaccurate. Medicare is still paying physicians the same rate as six years ago, even though the costs to run a practice have increased 18% over that period. To make matters worse, Medicare plans to cut its payments to doctors by 10% on Jan. 1, 2008 and 40% over the next nine years. Last year Congress stopped a planned 5% cut at the last minute, but there was no increase. Meanwhile, for each of the 5.6 million Medicare enrollees in managed care, Medicare spent an average of $922 more per year than it would have for regular fee-for-service Medicare. This money went to the health insurance companies, not to physicians who are struggling to remain in business. Malpractice insurance premium costs in many states continue to skyrocket, since Congress has failed to pass any bill to reform the system. Physicians??? organizations have repeatedly offered long term solutions for these problems without being heard. Many physicians in suburban and rural areas have already had to close their offices. If the Medicare cuts take place and the malpractice system is not made rational, many more will follow.

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Posted By: wataylor @ 12/16/2007 10:40:02 PM

Runaway spending is a symptom of the biggest problem which his described here:
http://www.scragged.com/blogs/scragged/archive/2007/08/28/the-only-health-care-question.aspx
Unless this question is answered, debate is futile.
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Posted By: AGROSS @ 12/15/2007 5:00:05 PM

Mr. Samuelson accurately states that ???runaway health spending??? is our biggest health care problem. His statement that doctors profit from this is inaccurate. Medicare is still paying physicians the same rate as six years ago, even though the costs to run a practice have increased 18% over that period. To make matters worse, Medicare plans to cut its payments to doctors by 10% on Jan. 1, 2008 and 40% over the next nine years. Last year Congress stopped a planned 5% cut at the last minute, but there was no increase. Meanwhile, for each of the 5.6 million Medicare enrollees in managed care, Medicare spent an average of $922 more per year than it would have for regular fee-for-service Medicare. This money went to the health insurance companies, not to physicians who are struggling to remain in business. Malpractice insurance premium costs in many states continue to skyrocket, since Congress has failed to pass any bill to reform the system. Physicians??? organizations have repeatedly offered long term solutions for these problems without being heard. Many physicians in suburban and rural areas have already had to close their offices. If the Medicare cuts take place and the malpractice system is not made rational, many more will follow.
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Posted By: Motordrive @ 12/12/2007 3:53:41 PM

We may do well to look at the infrastructure of the individual corporations. Their lust for the bottom line is erroding the quality of care. There are viable reasons for the ever increasing costs of health care and include rising staff turnover rates, increased length of stay and insurance companies who continue to run amok.