10c) Balancing the budget – The Elephant in the room
If you have been following this blog you will know the identity of the elephant and why it is the most important element required to be addressed with respect to both the deficit and the unfunded liability. If not, then please take a look at earlier blogs. Our healthcare system is completely out of control! But what about the affordable health care act? Did it not address this issue? The short answer is absolutely not. From my perspective, by requiring everyone to have insurance, it will actually add cost (not all of your premium will reach the system). Until we address the real issues of obesity, insurance, drug costs & law suits this problem will continue and possibly accelerate. Currently we have an extremely high cost of care for 2nd rate quality of care. Until we seriously & professionally examine the systems being used by other countries that are providing a high level of quality at a reasonable cost we will continue to suffer. A couple of examples to examine (in my opinion) would be France and possibly Italy.
Both Countries rank near the top (France is #1) in terms of quality of care and both accomplish this level of performance at less than ½ of the per capita cost in the US: France at 48% and Italy at 35%.
“The Facts About Rising Health Care Costs – underlying medical costs drive growth
Total health care spending in the United States is expected to reach $4.8 trillion in 2021, up from $2.6 trillion in 2010 and $75 billion in 1970. To put it in context, this means that health care spending will account for nearly 20 percent of gross domestic product (GDP), or one-fifth of the U.S. economy, by 2021.”
Current government spending is just under $1 trillion annually ($924 Billion).
Let’s assume that we were able move to a similar system where we were able to achieve a per capita cost of 25% less than currently (nowhere near what either Italy or France achieves). This would decrease spending in this area by over $230 Billion! I suspect that moving to a much less insurance dominated system would be difficult to enact given the “special interest” election funding involved.
Another factor to consider are the cost of health care to both companies and individuals. This is currently running at over $2 trillion a year. Wouldn’t it be great if both companies and individuals were able to free up $500 billion a year for investment or spending in other more productive areas?
Please stay tuned next week for more on this issue.