The Healthcare Reform We Need

Here’s a pretty succinct characterization of the problem that I have with healthcare reform legislation in its present form:

If you’re thinking the legislation will tamp down overall health care spending, reconsider. Policy analysts ranging from the neutral Congressional Budget Office to the HMO lobby see no abatement in the growth rate of health care spending. That sector of the economy is growing at a 7.4% annual rate, says actuarial firm Milliman. Medicare’s chief actuary, Richard Foster, thinks that the Senate bill would expand health spending by $234 billion above current projections.

In the absence of robust growth in the rest of the economy that would push the healthcare sector to over 20% of the total economy. I’d have no gripe for that except that healthcare derives at least three fifths of its revenues from government spending and employs only 8% of the people. I honestly don’t see how that’s sustainable.

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