If you’ve paid attention to American politics over the last two years (real politics, not beauty contest gossip) it’s understandable if you’re sick of hearing about health care reform. It was a daily topic for nearly a year leading up to the historic legislation passed in March 2010, has not receded much since, and will likely be a top issue again in 2011 with Republican efforts to repeal health care reform in both the House and the Supreme Court. If you’re not in the health care industry and don’t know much about its inner workings, all of this may be snooze-inducing, especially since you’ve probably heard that the current round of reforms isn’t very radical and keeps the current system pretty much in place–just expands it to an approximation of the universal coverage other developed nations already have. But health care reform will not go away, and for good reason: like a leech-wielding barber of old, America’s health care industry is slowly bleeding it dry.
Unfortunately, nothing that has been done by the Democrats so far, and nothing that is likely to be done by the Republicans over the next year or two, will make a large dent in the most massive problem created by America’s health care sector today: it costs nearly $1 trillion dollars too much, each year, and the cost is growing at a rate faster than the economy. To put that in perspective, America’s expenditure on the Iraq and Afghanistan wars combined, over nine years, is bit over $1 trillion dollars. To put it another way, an extra $3,000 is spent by the average American every year on health care without, for all we can tell, contributing to a better quality of life or a single day more of it, compared to European and other industrialized nations. (see here, here and here.)
The rate of growth is as much a problem as the absolute cost. The projected increase in health care spending for the Federal government constitutes almost the entire long run projected growth in national debt. Without health care, there is no looming fiscal crisis for the United States, but with health care’s current trajectory, either the US will have a fiscal collapse in the lifetime of most people reading this, or taxes will have to rise to levels higher than the “socialist” nations that Americans are so determined to reject, just to pay for the government portion of health care.