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Healthcare Will be Unaffordable Everywhere   (March 6, 2006)

The OECD just issued a report concluding that the U.S. is not alone in its healthcare woes. Seeing as how I just reported on Kaiser Permanente as a potential model for a cost-effective national healthcare, it's eye-opening that virtually every nation, developed and developing alike, will face unaffordable government spending as the population ages and medical technologies increase in sophistication and cost. (Note that the graph to the right only charts government expenditures, and does not include private sector spending.)

To quote from the Wall Street Journal's story on the report, U.S. Needs a New Prescription To Slow Health-Care Spending:
Economists at the Organization for Economic Cooperation and Development, a think tank in Paris bankrolled by 30 developed countries from Australia to the U.S., are waving a red flag.

And even if governments somehow find a way to eliminate that extra one percentage point of spending growth, the OECD expects public spending on health care, including long-term care for the elderly, to reach 10% of GDP on average. The projected increases are sharp even in countries that have kept overall spending on health care far below the U.S., which spends more per person and a greater fraction of its GDP on health care than any other country.
What's truly frightening about this report for Americans is that government spending is less than half of our total healthcare costs:
In most OECD countries, including Canada and Britain, health-care systems are financed primarily through taxes. In the U.S., by contrast, about 55% of the health-care bill is paid by individuals and their employers. Yet U.S. government spending on health care -- mainly Medicare and Medicaid -- amounts to an above-average 7.2% of GDP. (Overall U.S. health-care spending, private and public, this year is projected to equal 16.2% of GDP.)
This is a staggering sum, yet we have not even begun to pay the full cost of caring for the 76 million Baby Boomers. The 800-pound gorilla in the room which no one wants to recognize, of course, is that virtually the only way any society can manage to offer equitable healthcare to its citizenry is to ration it. That is, no heart operations offered to those over 72, no artificial hips to those over 70, and so on--unless you can pay for it yourself or have private insurance.

Given the poor health of our citizenry, correcting the ailments caused by smoking, excessive alcohol consumption and poor diet/obesity is increasingly unaffordable. As reported in today's San Francisco Chronicle, We're living longer -- is that a good thing? The benefits of increased lifespans could come at the cost of greater societal burdens, some experts believe that the obesity epidemic is dooming the younger generations to shorter lifespans than those of the Baby Boomers.

Sobering stuff, indeed, especially if you grasp the extreme precariousness of the U.S. government's finances today, never mind in 10 or 20 years.

On a happier note, I recently assembled a page of all the books and films I've recommended here over the past few years--80 titles--and I invite you to browse the list, which has been helpfully broken out into various topics: books and films.


copyright © 2006 Charles Hugh Smith. All rights reserved in all media.

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