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1.º - CRISES link
2.º - The Next Step on Health Reform link
3.º - EXCLUSIVE: Dems 'Almost Certain' to Bypass Conference link
4.º - Is the Public Plan Option a Necessary Part of Health Reform? link
5.º - Getting to a Public Option that Contains Costs: Negotiations, Opt-Outs and Triggers link
6.º - Tax Proposals in the 2010 Budget link
7.º - Implications of Health Reform for Retiree Health Benefits link
8.º - Health Spending Rises in 2008, but at Slower Rate link
2.º - The Next Step on Health Reform link
3.º - EXCLUSIVE: Dems 'Almost Certain' to Bypass Conference link
4.º - Is the Public Plan Option a Necessary Part of Health Reform? link
5.º - Getting to a Public Option that Contains Costs: Negotiations, Opt-Outs and Triggers link
6.º - Tax Proposals in the 2010 Budget link
7.º - Implications of Health Reform for Retiree Health Benefits link
8.º - Health Spending Rises in 2008, but at Slower Rate link
1.º - Where the Action Is on Climate link
2.º - On issues like global warming and evolution, scientists need to speak up link
3.º - America on the Move link
4.º - Copenhagen climate summit: Five possible scenarios for our future climate link
2.º - On issues like global warming and evolution, scientists need to speak up link
3.º - America on the Move link
4.º - Copenhagen climate summit: Five possible scenarios for our future climate link
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White House Is Wrong - Again - On Health Care Spending
But all that report says is that U.S. health care spending continues to increase – even though the rate of increase actually hit a historic low in 2008 (the latest year for which figures are now available). DeParle’s argument is basically this: We spend too much on health care, therefore the reform proposals currently in Congress will fix everything.
However, DeParle seems to have missed the actuaries’ earlier report on what those reform proposals will actually do – which is, to make health care spending grow faster, not slower. In particular, actuaries estimate that if the Senate health reform bill becomes law, total U.S. health care spending would increase by 0.7%, or $234 billion through 2019. And that’s after taking into account what little savings would be achieved by cutting Medicare benefits and encouraging employer to cut health benefits by taxing private insurance plans that are “too generous.”
In other words, the primary source of “savings” in the Senate bill comes not from making the health care system more efficient, but from (1) denying health care services to seniors under Medicare, and (2) from encouraging private insurance companies and employer to deny health care services to everybody else. Even after taking account of that so-called “savings,” total health care spending would still increase faster than it would without reform!
The inescapable conclusion is that reform proposals currently in Congress will take an inefficient health care system and make it even more inefficient than it is now. One does not have to be one of what DeParle dismissively calls “defenders of the status quo” to oppose a reform plan that will produce a result clearly even worse than the status quo.
DeParle claims that if “opponents of reform get their way,” health care spending will continue to increase. The fact is, if the administration gets its way, health care spending will increase faster than it does already and we’ll get less health care for our money. If opponents get their way, we might instead have real reform that gives patients more choices, gives providers incentives to give the best treatment instead of the most expensive treatment, and ultimately better health care at a lower cost. Unfortunately, that’s the opposite of the outcome the bills in Congress would give us
The headline on that health-spending report link in the news today is “Health-Spending Growth at a Historic Low in 2008.” That’s true as far as it goes — growth increased at a rate of 4.4%, the slowest rate in the past 48 years.
But an arguably more important figure to keep an eye on is national health-care spending as a percentage of total GDP. If health-care spending rose at the same rate as GDP, we could leave the current system in place and be fine (at least in a macroeconomic sense). But because health-care spending is rising faster than GDP, we are spending an ever-larger portion of our national income on health care.
So what happened with health-care spending as a percentage of total GDP in 2008? Not only did it rise — it rose at a faster rate than in recent years. In 2005, health-care spending accounted for 15.7% of GDP. It rose to 15.8% in 2006, and 15.9% in 2007. Then, in 2008, it jumped to 16.2% of GDP.
That happened because, even though the growth of health-care spending slowed in 2008, overall GDP growth slowed a lot more. This is typical during economic downturns: The paper notes that “larger increases in the health spending share of GDP generally occur during or just after periods of economic recession.” (The authors are based at CMS, the government agency that runs Medicare and Medicaid.)
This makes sense on an intuitive level, because people may keep paying for health care even when they cut back on other spending. What’s more, the federal government — always a big payer via Medicare and Medicaid — upped its contribution as well. Federal spending for health services and supplies grew sharply in 2008, up 10.4%, according to the paper, which was published in the journal Health Affairs.
One final note: Most of the increase in 2008 was due to higher prices, not due to population growth or more use of health-care service, according to the analysis.
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