>The GAO has an interesting report on the long-term effects of spending on health care.
Health care is the basic conundrum behind the long-term entitlement spending problem. Social Security is not really that big a problem. It’s about 1.7% of payroll out of whack, which if we had to make up with tax increases would be entirely doable, though I would prefer that we fix the problem in a balanced fashion.
Health care is a completely different story. It’s harder to deny people health care than to deny them money, since a lot of the time their quality of life, and even their life itself is at stake. We keep coming up with new treatments and medicines, and it would be hard to deny these life-improving and extending treatments to people, especially if they vote.
The basic fixes boil down to cold, hard economics. It’s either ration by price, or ration by inconvenience or government decision. The ideal system would provide preventive care cheaply, then figure out the other treatments that are cost effective, and provide them with a reasonable co-pay or co-insurance, then additional treatments would only be funded if medically necessary. All forms of treatment should be treated the same (e.g., fold together Medicare Part A, Part B and Part D) into one plan. There should be a significant deductible for the plan (about $1000-5000) based on income.
For prescription drugs, provide generics cheaply. Other drugs go on a formulary and negotiate heavily with the companies for good prices. Note that anyone who calls for the government to negotiate drug prices is implicitly calling for some drugs not to be provided as part of Medicare, because if the Government is not threatening to take the drug out of Medicare, then the companies don’t have any incentive to grant a discount. This is the reason the VA can get good drug prices compared to Medicare.
Honestly, health care isn’t my strong suit. Go ahead and read the paper and comment to enlighten me.