Rx for Health Care: Pain

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.