Comments and observations on social and political trends and events.

Saturday, October 10, 2009

Megan McArdle's Controlling Healthcare Costs The American Way: Not Doing It

Megan McArdle posts an
excellent analysis why we should not believe the mantra we're hearing that the proposed health care bill will save money or at worst be revenue neutral. As she points out,

we've got a single payer system, called Medicare. It negotiates huge cost discounts with providers. It has low administrative costs. It has a gigantic apparatus to evaluate reimbursements for various treatments. It has . . . a faster rate of per-capita cost growth than the rest of the health care system, according toa CBO report issued by one Peter Orszag.

After showing how health care rate of increase in costs in Massachusetts have accelerated she asks a good question:

so I'll turn it around on reformers: why do you think that we can control costs, given that we couldn't at the state level? Massachusetts is a very liberal state, a very rich state, and it started out with a relatively low proportion of its citizenry uninsured. Proponents of reform often say it has to be done at a national level because states can't borrow money in downturns, but this doesn't explain why the spending side is headed through the roof.

No comments: