Wednesday, June 28, 2006
New study reveals growth in government health care spending
[Christian Hagist and Laurence J. Kotlikoff, "Health Care Spending: What the Future Will Look Like," NCPA Study No. 286, 28 June 2006.]
The National Center for Policy Analysis just released new data on the growth of government spending in the U.S., and the numbers are sobering:
European critics of the U.S. health care system often focus on the private provision of health care and health insurance. Yet the more important difference between the United States and other developed countries is the failure to control government spending. Other countries employ global budgets and control access to expensive drugs and new technology. The United States, by contrast, has very meager spending controls. If current trends continue, U.S. government health care spending will consume an ever growing portion of national income — far more so than any other developed country.
In the United States, government health care spending now totals about 6.6 percent of GDP. But if it continues to let benefits grow for the next five decades at past rates, it will end up spending 32.7 percent of its GDP on health care.
No country can spend an ever-rising share of its output on health care, indefinitely. There is a limit to how much a government can extract from the young to accommodate the old. When that limit is reached, governments go broke. Of the 10 countries considered here, the United States appears most likely to hit this limit.
[Stephen Moses, "It's time to end welfare for the well-to-do," The Kansas City Kansan, 26 April 2006.
Matthew Hisrich, "Medicaid Could Swamp State Budget," The Wichita Eagle, 26 July 2005.]
The National Center for Policy Analysis just released new data on the growth of government spending in the U.S., and the numbers are sobering:
European critics of the U.S. health care system often focus on the private provision of health care and health insurance. Yet the more important difference between the United States and other developed countries is the failure to control government spending. Other countries employ global budgets and control access to expensive drugs and new technology. The United States, by contrast, has very meager spending controls. If current trends continue, U.S. government health care spending will consume an ever growing portion of national income — far more so than any other developed country.
In the United States, government health care spending now totals about 6.6 percent of GDP. But if it continues to let benefits grow for the next five decades at past rates, it will end up spending 32.7 percent of its GDP on health care.
No country can spend an ever-rising share of its output on health care, indefinitely. There is a limit to how much a government can extract from the young to accommodate the old. When that limit is reached, governments go broke. Of the 10 countries considered here, the United States appears most likely to hit this limit.
[Stephen Moses, "It's time to end welfare for the well-to-do," The Kansas City Kansan, 26 April 2006.
Matthew Hisrich, "Medicaid Could Swamp State Budget," The Wichita Eagle, 26 July 2005.]
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