Thursday, March 5, 2009

Can we “fix” healthcare and the economy at the same time (assuming we can fix either one)?

On the news this morning, I heard the question asked, “Can we fix both healthcare and the economy?” Some people believe that the government can do little to fix either. But, let’s set that issue aside for the moment.

If we believe that the government has any capacity to fix either, it is critical to address both simultaneously. While the healthcare system is not the direct cause of the current financial crisis, it does account for more than one in every seven dollars in the economy. The system as it exists has been associated with astronomically increasing costs for 40 years. And, the obligations of the federal and state governments to pay for Medicare and Medicaid will only become larger. Even those who do not believe that the government has the capacity to “fix” the health care system have to recognize that the publicly funded obligations that are projected for all levels of government health care financing are not sustainable.

This country needs to make the provision of and payment for care more efficient and cut the growth in costs. Fixing the economy to return to even the rates of growth we had over the past eight years without also finding a way to contain health care costs would only result in delaying the need for dealing with health care. Dealing with both now is incredibly complicated. The present policy response would be shaped by the desire to respond to a combination of problems—a very poor economy and growing health care problems. It would seem better to deal with these in tandem than to deal with the economy now, and later deal with a health care system in greater crisis with less time to correct the incentives that have created problems for decades before the system is truly at a breaking point.

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