Friday, August 21, 2009

Aug 21 News and Observer Column

Doing nothing is always an option in public policy discussions. My column today focuses on the costs of doing nothing to reduce the rate of cost inflation in Medicare and in employer based health insurance, and the role that patients play in making it hard to actually slow health care cost inflation. The more I have been listening to and talking with people I think the biggest barrier to actually slowing cost inflation and saving $ compared to the current track we are on is us--you and me. We say we want to spend less, but seem repelled if we actually try and do so. To reduce inflation, we actually have to spend less on SOMETHING and it means that someone's income will drop compared to what it will be with no changes. There is no magic fix whereby we do exactly the same thing and somehow save money.

I argue that we have to reduce cost inflation, because we cannot afford our health system and the projected rate of spending growth if we do nothing. If we do nothing, we are just giving more and more debt to my kids and yours to pay for Medicare, and we will eat up most wage growth with premium increases in the private, employment-based health insurance.

Here is the CBO report referenced in the column that reaches the conclusion upon reviewing the evidence that we can spend less without harming health.

Here is a news story from this week on wage and health insurance premium growth in NC the past 10 years.

The link to the right by Gruber in the New England Journal of Medicine describes the economics of ending the tax exclusion of employer paid health insurance premiums.

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