February 4, 2010

Public Health-Care Spending to Hit Milestone - WSJ.com

Public Health-Care Spending to Hit Milestone - WSJ.com

The U.S. Government is on a collision course with finacial disaster, driven mostly by entitlement programs. This cannot continue without serious damage to the country. In fact the damage is already evident.

In health care, the mood of voters is already evident in Senator Scott Brown's election in Massachusetts. TeamObama and Congress seem powerless to fix anything fiscal.

In health care, the only prudent short term course is rationing of services to control costs. That will be a necessary step, but the health care system needs fundamental overhaul and a set of revised incentives for care providers.

It's insane to allow health care to consume 20% of our country's Gross Domestic Product while at the same time running trillion dollar deficits as far as the eye can see... a recipe for disaster
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"Government health programs are a growing burden on the federal budget, which is running annual deficits of more than $1 trillion, and rising health costs continue to batter private industry.

By 2020, according to the new projections, about one in five dollars spent in the U.S. will go to health care, a proportion far beyond any other industrialized nation.

"It's going to be a desperate issue five to 10 years out," said Gail Wilensky, the former top Medicare official in the George H.W. Bush administration. She said the U.S. will have to decide soon between raising revenue to pay for Medicare or reducing benefits.

Public funds accounted for 47% of the $2.34 trillion of national health spending in 2008, the last year for which figures are available. The federal Centers for Medicare and Medicaid Services estimates in a paper to be published Thursday in the journal Health Affairs that the proportion will rise to 50.4% by 2011. Last year, the federal actuaries had predicted the 50% mark wouldn't be reached until around 2016.

The latest estimate assumes Congress will act to prevent a sharp cut in Medicare payments to doctors, which is set to take effect in March under current law. Congress has consistently done so in earlier years."

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