Ezra Klein says

The problem with health-care costs is that they rise faster than wages, GDP or most anything else. That’s why balancing Medicare and Medicaid’s books through straight cost-shifting, as Ryan does, entails such savage cuts in care, and why balancing their books through straight tax increases, as Egan suggests, would be such a disaster. You wouldn’t just need to raise taxes. You’d need to raise them again and again and again, because every tax increase would soon be outpaced by Medicare’s growth.

So suppose that Health Care right now represents 16% of GDP. Suppose also that GDP is growing at a real rate of 3% per year and health care costs are growing at 6% per year. What does that imply about our future.


We can do the same thing in percentage of GDP terms


Is it possible that Health Care is 160% of GDP?

What this is telling us, is one way or another health care costs will not continue to rise faster than the overall economy.

If no other way then because health will eventually become the economy and the two will thus move in lock step.

This is unlikely. If we left things completely to the free market then the individual budget constraint will constrain growth. People simply won’t be able to afford to buy more health care and cost growth will stop. If we fund medicine publically then eventually the public budget constraint will bight. The government will not be able to raise more money to pay for health care and so cost growth will stop.

In either case, however, you don’t have to do anything in particular to make the cost growth stop. No panels. No better technology. No incentives. No focus on primary care. It will stop on its own.

The question before you is, do you want the world where health care is limited only by our collective ability to pay for it. What many elites don’t face up to is that if you asked this question to the person on the street he or she might very well say yes.

I am constantly aware of this because a persistent source of tension between myself and my family is their feeling that it is not just ok but morally imperative that personal budget constraints be hit in the purchase of medicine.

When I explain that it is better to risk death than to pay money to the doctor the response is outrage. This even happens when it is my life that is at stake.

Thus we are not facing a tragedy of the commons scenario where everyone is trying to get for themselves. People are – in my mind foolishly – attempting to give things away to me and to go into debt to do so.

This is a problem that the old ways of thinking about government and society are not prepared to deal with and at this point are not even thinking about how to deal with.

Making the case for less health care spending is making the case for abandoning the sick and the needy. If you want a world that does not proceed on autopilot you need to be gearing up to make that case. Slight of hand about cost-savings or market efficiencies is not going to do the trick.

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