Obama's Quest For $634 Billion

WASHINGTON (Reuters) Feb 24 - Health spending will hit $2.5 trillion this year, devouring 17.6% of the economy, as the White House and Congress consider major changes to the health care system, U.S. government economists said on Tuesday.

Reuters reported a forecast by The Centers for Medicare and Medicaid Services predicting an increase in health care's percentage of the gross domestic product by one percentage point (to 17.6% of the gross domestic product) in 2009 as compared with 2008.

For my earlier discussion of this issue see the "Avalanche" blog: http://www.blogger.com/posts.g?blogID=1547787506785837911&searchType=ALL&txtKeywords=&label=Health+Care+Inflation.


Reuters quoted CMS economist Christopher Truffer: "We project that the health share of the economy will increase steadily through 2018." The increase in health care percent of the gross domestic product not only reflects the subject of my earlier analysis, but also increased costs of technology, population growth, an aging population, pent-up unmet demand (i.e., from those receiving insurance for the first time (i.e., through Medicaid) and immigrants who may not have had access to advanced health care before arriving in the U.S.), time spent with patients, prescription drug costs, and the failure of providers to provide efficient systems of care (as patients move into hospital emergency departments where extensive testing and high costs of care waste enormous financial resources.

If Obama's rationalization of health care reflects the excesses and lack of corporate responsibility that we have already seen in the financial industry, we will have a big, expensive, inefficient health care system which increasingly fails to provide care as predatory unethical and wasteful behavior flourishes. Even if Obama gets the $634B over 10 years for health care that he seeks, without a program grounded on an ethical framework which reflects American consensus, health care will not improve. We will move to a 20% of gross domestic product health care system with lots of money for corporate entities and no significant benefit for our citizens.