With all of the debate in Congress over health care reform, here are excerpts from an article from Investor's Business Daily which our elected officials really need to read carefully. While the focal point is on increasing access to health insurance, costs are important and need to be a critical part of any reforms.
As taxpayers, here are some key points from the Investor's article which need to consider when thinking about a government health insurance plan to compete with the private sector plans. Remember preliminary costs show these reforms could add $1.6 trillion in new government spending that we have to pay for.
Across the years, Medicare's costs have risen far more than the costs of privately purchased care.A new study I've completed, published by the Pacific Research Institute, takes all health-care spending in the United States and subtracts the costs of the two flagship government-run programs, Medicare and Medicaid. It then takes that remaining spending and compares its cost increases over time with Medicare's cost increases over time.
The results are clear: Since 1970 — even without the prescription drug benefit — Medicare's costs have risen 34% more, per patient, than the combined costs of all health care in America apart from Medicare and Medicaid, the vast majority of which is purchased through the private sector.
Since 1970, the per-patient costs of all health care apart from Medicare and Medicaid have risen from $364 to $7,119, while Medicare's per-patient costs have risen from $368 to $9,634. Medicare's costs have risen $2,511 more per patient.
According to the Investor's Business Daily article, The New York Times and others have quoted studies claiming that private insurance has failed to contain costs as well as Medicare. Such studies are deeply misleading, for they omit any consideration of out-of-pocket spending, thereby neglecting a major shift in the private health care market.
All of this goes to show that President Obama and Congress need to be extremely cautious and thorough about what they propose. Do your homework and do the math. We ought to know what we are buying and if it solves the problem or makes it worse.
Don C. Brunell, President (DonB@awb.org)
