Big Government Health Care

I have been trying to make the point that we cannot magically make health care affordable by having our health care services paid for by the government. I have been trying to use Medicare and Medicaid spending to make that point. Now, Laurence J. Kotlikoff and Christian Hagist have found a good way to make it.

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

…If current trends hold in the United States, by 2050 government health care spending will claim one-third of GDP.

I added the emphasis on the word “government.” The point is that even if we only have government pay for seniors and the poor, our government system will outspend other countries’ government systems that pay for everyone.

What’s different about America, as I argue in Crisis of Abundance, is that we do nothing to constrain the use of premium medicine (specialists and high-tech procedures.)