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TMFHelical (99.09)

The Crux of the Healthcare Issue

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March 19, 2010 – Comments (1)

I tend to read an awful lot of commentary in and around the pharma / biotech industry, and healthcare reform is almost always a key consideration in any opinion piece.  The best source I've found for continuing and balanced commentary around the reform measures has been the regular Perspective pieces from the New England Journal of Medicine.  Still, most of these commentaries focus on one aspect or another of the debate.

The best article I've seen to pull back and take the broader view of why this is such a key discussion / decision is this one:

The Specter of Financial Armageddon — Health Care and Federal Debt in the United States

The 3 page commentary doesn't start with healthcare, bu rather the state of the federal budget, the current and future deficit, and ever increasing portion of federal outlays directed to healthcare.  As it stands now, the deficit is large but perhaps not yet out of control.  But, structural components of the federal budget, those future obligations already committed to, almost gaurentee that the situation will indeed get out of control if not addressed now.

To cherrypick.

"Because federal debt and health care policy in the United States are so deeply entwined, it is important to understand the basics of deficits and debt and their implications for health care reform. ... Economists distinguish between two types of deficit: cyclical and structural. Cyclical deficits rise or fall in the short term in response to economic conditions. ...  The United States has a substantial, growing structural deficit, much of which reflects current and projected increases in federal spending on Medicare and Medicaid. This federal health care spending amounted to 5% of the gross domestic product (GDP) and 20% of federal outlays in 2009 and is forecast to reach 12% of the GDP by 2050.1 Health care spending is thus a key driver of long-term debt. This does not mean that we cannot run a structural deficit, but deficits must be small enough that debt grows more slowly than the GDP. ... ..our structural deficits place us on a path of debt growth that is unsustainable, largely because of health care programs. The sooner we start to rein in health care spending, the less painful the changes may be (since slowing spending now will help us avoid drastic cuts in the future), and the more time we will have to find the most effective strategies."

There are indeed programs and considerations in the healthcare proposal designed / intended to reduce spending, and these are highlighted in the piece, but the main focus is expansion of services.  I am in favor of such expansion, but it has to be in a sustainable context, and I'm just not convinced that is what I'm being presented with.  Not having addressed the current issues in the existing program prior to expansion seems a recipe for disaster to me.

In any case, I encourage a reading of the full brief article.  I found it to be one of the better ones I've read.

TMFHelical

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1 Comments – Post Your Own

#1) On March 19, 2010 at 1:49 PM, TMFHelical (99.09) wrote:

This would be the weekend to contact your representative with whatever opinion you may have.

http://www.house.gov/house/MemberWWW_by_State.shtml

TMFHelical

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