Financing health care

Do you think Government has no business in funding health care? Think again. In the US, the government is already paying almost half of health care costs. But with the US having the most expensive health care system in the world and with poorer health outcomes than many industrialised countries, there has to be a more efficient way of doing things. The US could have a "single-payer" system* that covered more people, more effectively and more efficiently with far less coming out of individual's pockets.

The current sytem is groaning under the strain and here are some of the reasons why, according to Uwe Reinhardt, a Princeton University health economist, speaking to a conference of state finance officers:
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Reinhardt warned his listeners that his remarks would “make you scared of health care, as you should be.” Health care, he pointed out, is now “the locomotive that pulls the economy.” Flashing his slides, he noted that half of GDP growth now comes from health care. “Aside from saving lives, health care also creates enormous numbers of jobs. Having said that, I will now beat up on it.”
Among the economic “beat ups” Reinhardt set down for GFOA listeners:

• There is a “2 1/2 rule” of health care spending in the United States. “Every year, the health sector wants 4.5 percent more real dollars per American than the year before. GDP is growing 2 percent. So, every year the health care system wants to grow faster than the rest of GDP. Health care always gets this money. and we can assume it will continue to do so.”
• Canada, with its universal health system, spends 57 percent per capita of what the United States spends.
• Today, one-third of all health spending is by private insurance companies, 15.3 percent comes from individuals and government writes 48 percent of the checks.
• While health insurance premiums rose 9 percent in 2004, 55 percent of American businesses experienced premium increases of more than 10 percent — some more than 20%. “What this means is that businesses will dump employees into your laps.”
• As the economy roared during the 1990s, the number of insured never grew. “This shows that the idea that we can grow out of this problem is dead.”
• “With current trends, the average cost of health insurance per American family will price out one-third of Americans. Yet there is no legislation on uninsurance before the U.S. Congress. So the real question is, will we in the upper one-third be willing to come up with help subsidizing health care for the lower one-third? You’ll have to read your old and new testament to answer that.”
  
  (Article by Penelope Lemov, Governing.com)
  
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  *always a misnomer, since the wealthiest will always be able to opt-out and go private if they want to - you can still get your cadillac care if you want to.