>> Post WW2 wage controls forced employers to compete on benefits, and most especially health insurance.
This is absolutely true; however, the real trouble started in 1965. The government imposed wage controls are responsible for development of a system where people weren't responsible for any part of their own health care costs. This is an important element, but not the most important element of the problem.
>> Medicare/caid lower costs... about the only thing that has over the last 50 years.
I'm not sure where you got that idea.
In 1965, Ways & Means projected Medicare HI at $9 Billion by 1990 (using the 25-year planning horizon from 1965). The actual cost came in at more than $60 Billion. This was based on a 3.5% cost inflation rate, which at the time the committee was a "conservative" estimate and actually said it was "inconceivable" that costs would rise faster than the rate of wage inflation.
But it was conceivable.
People can argue from now on about it, but it seems pretty strange to me that costs were fairly stable right up until 1965, then overnight, the cost of health care skyrocketed. And for the ensuing 45 years, one study after another has blamed cost-shifting in substantial part for these cost increases. Given that it is intuitive that cost-shifting would have this effect, I'm not sure what the basis for arguing otherwise might be.
Certainly, technological improvements carry some blame. But a 6 or 7 to 1 cost overrun in 25 years? There is something much, much bigger at work. Also, it is worth noting that costs were not a problem in 1964; my dad could have easily afforded health insurance at that time, but there just wasn't any value in it. A hospital stay wasn't so expensive that health insurance was a necessity.
In 1963, only 1 in 4 Americans over the age of 65 were covered by insurance. Overnight, in 1965, this figure went from 25% to 100%. Between 1965 and 1970, a retroactive RAND Corporation study found that a 5.6% increase in costs would have been expected. Yet, Medicare spending accounted for a 37% increase in hospital spending over that period. Mortality rates were unaffected.
Some of this would be justified by and may even contribute to the development of new technologies that otherwise wouldn't exist. So, it isn't all bad. But it happens every time government money flows into an industry -- there is a rush to suck up those taxpayer dollars and it is always highly inefficient. The $30 Billion kickback for Electronic Medical Records is an excellent, recent example -- a substantial portion of which is total waste, although there is some benefit.
I don't have any idea how one can conclude that Medicare/Medicaid haven't increased the overall cost of health care. |
