Government Can't Bend the Healthcare Cost Curve
By Peter Roff, Thomas Jefferson Street blog
The proponents of healthcare reform claim costs will spiral out of control if the government fails to fundamentally change the nature of the American system. They are quick to point, for example, that the United States spends more per capita and more as a percentage of GDP on healthcare than any other nation. And that these expenditures are, for the most powerful economy in the world, somehow unsustainable unless something is done to, in the words of White House Office of Management and Budget Director Peter Orszag, "bend the cost curve."
President Obama said much the same thing in his joint address to Congress, in which he pledged he would not sign a healthcare bill that added to the deficit. Which is part of the reason—the other is to reduce the total advertised cost of healthcare reform—that Senate Democrats tried to move a piece of legislation that would freeze the automatic cuts in the reimbursements made to doctors and hospitals under Medicare. With that provision included, as I wrote Wednesday, a healthcare reform bill that also included what House Speaker Nancy Pelosi refers to as "a robust public option" would do to the spending and deficit targets what the iceberg did to the Titanic.
Those who argue the government needs to play a bigger role in the healthcare marketplace often point to Canada and Europe as examples of where single-payer systems and socialized medicine allegedly help to keep costs down. But, as the Republicans on the Joint Economic Committee explain, "the annual percent change in per capita health care costs in the U.S. has not been any higher than that of other developed nations that have primarily government-run health care systems."
In fact, say the JEC Republicans, "over the past decade U.S. growth has actually been lower than the average growth in all of the nations of the Organization for Economic Cooperation and Development (OECD)... Over the past decade and a half, the U.S. has done a better job of reining in healthcare costs than the average OECD nation."
There is no evidence to suggest that government-run systems have succeeding in bending the cost curve, except for savings that have been realized through rationing. To assume, as is being argued now here in the United States, that putting the government in charge of healthcare or increasing the role it plays in the healthcare marketplace will result in costs savings is to buy a pig in a poke.
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Reader Comments
Government is More Efficient?
I am a small business owner. I pay 100% of my private health insurance premiums. I ALSO pay 100% of the private health insurance premiums for 3 employees (yes, 100% of premiums ... no shared cost outside of co-pays & deductibles). So in one respect, maybe I get 4 votes? I love my insurance, my employees are very happy with their benefits. Gov't mandates in proposed healthcare reforms will drive private health insurance costs much higher. Tax my insurer and you tax me. Oh, unless I'm a special interest like the unions who get exempted from taxing benefits .. I love equal rights & protections.
Government is efficient, eh? guess we can't squeeze any savings out of Medicare, etc. from fraud waste & abuse? uh oh, how will reforms be deficit neutral? can't speak out of both sides of your mouth.
Dictate prices. cool, I love dictatorships. Who gets to choose? those wonderful politicians (of any party) that never have to make a living in the real world? Land of the free, eh? Might need to rewrite our national anthem.
PS - the ones who love gov't provided benefits are the ones not paying for it. Half of citizens don't share in any tax burden to pay for any share of benefits they receive. I've done pro-bono work before. There is one constant, it's the ones who don't pay for service that don't care how much cost they actually incur. Cost control comes from accountability, not give-aways.
Misleading use of statistics?
Time to look in the mirror about who has a better handle on the facts.
http://atlanta.bizjournals.com/atlanta/stories/2009/10/26/daily32.html?surround=lfn
Government does it better?
Medicare, social security, H1N1 vaccinations, John Murtha Airport, TARP transparency and accountability, an emergency stimulus that distributes more money after the economy recovers than before, $3.4 billion in that "stimulus" to have a smart grid control my electronics rather than me, mandates requiring lenders to lend to non-credit worthy applicants (which WAS THE REASON for the financial crisis), on & on & on.
Detroit, Baltimore, and other cities with liberal policies that force these cities near bankruptcy, when will we stop deamonizing differing opinions and try things that work. The US has provided the highest standard of living in the world ... guess freedom and capitalism get something right.
Being sick should not mean being broke .. sure, that's a great bumper sticker, but do we really need to dispose of the entire healthcare system, including my freedom to decide what's right for me? Can't we come-up with solutions that don't irrevocably damage the entire system? Can the media not tell constituents that Republicans have no alternatives, even though SIX separate healthcare reform bills have been quietly squashed in committee by the majority party?
When will people stop saying what they want to be true, and actually critically examine the truth? Two senate finance committees offer bills without a public option ... poof .. it magically appears in the majority leader's bill. Wish I could get what I want without consensus.
America is something special, something NOT ordinary. We are about to lose that, and become ordinary. Well done! As the presidential candidate said, he will fundamentally transform America! The thing about freedom that is so hard to maintain, you have to allow those who don't agree with you to live their lives the way they choose, not the way you tell them to. Be careful, if next time 51% of elected representatives are conservative, should we start telling you how to live and how we'll spend your hard earned money? I HAVE SUBSTANTIALLY reduced my charitable giving because of the proposed tax increases. Is that what you wanted, to subsidize a smart grid instead of my giving to food banks? Mission accomplished! Proud?
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