Government budgets and our own end-of-life discussions are more closely related than many people are willing to acknowledge.
I'm sure there's a flaw in my thinking on this. And I'd be grateful if someone would point it out to me. So here goes:
Healthcare costs are the biggest budget driver.
- Healthcare costs are the biggest and fastest-growing part of the federal budget. Medicare, Medicaid, and CHIP account for 21% of the federal budget. And that doesn't count healthcare spending in other parts of the budget -- e.g., for the military and government employees.
- Federal spending on healthcare is projected to double in the next decade as the aging population joins Medicare and as the Affordable Care Act extends Medicaid and insurance subsidies to more people.
- Overall medical costs are growing faster than the underlying economy and at a higher rate than overall inflation.
Insurance (including Medicare, Medicaid, etc.)
- Health insurance in itself does little to lower healthcare costs, though it's the one element most people see and therefore pay attention to.
- Insurance companies have relatively little purchasing power because the nation's health system is so decentralized.
- Legislation inhibits the purchasing power of the government in some areas, e.g., negotiating drug prices.
- On the other hand, the government tool most often threatened -- unilaterally lowering doctor payments -- will not lower costs, because doctors will opt out of the system, lowering the availability of care and forcing patients into hospital emergency rooms, which are the most expensive
- Lowering the cost of health insurance will do little to lower the cost of healthcare itself. In fact, cheaper insurance could increase the consumption of healthcare services, which is the primary driver of rising costs.
- Americans spend more per capita for healhtcare than any other nation. The principal reason for this is that we consume more healthcare services, not because our healthcare system itself is inherently more expensive.
- The biggest and fastest-growing segment of total healthcare spending is end-of-life care. According to a government study, 70% of healthcare spending is on the elderly and 80% of that is during the last month of life.
- So it seems a no-brainer that that's where we should concentrate our attention.
- The only way to lower healthcare costs is to make tough-minded cost/benefit choices.
- This doesn't require "death panels." But it does require better research into what treatments are effective and therefore worth pursuing. And it could mean basing insurance payments on those findings.
- And that will require the ambidextrous exercise of the thorniest of all disciplines -- ethics and politics.
Finally, I say all this even though I am fast approaching the point when I myself will need end-of-life care. And with full knowledge that my own kids -- who may be making these decisions on my behalf -- occasionally read these musings.