When you look at the average it is bad enough. When you look at the
total it is even worse - and how much of it is waste and fraud and also
the cost of living differences between the two areas. San Francisco is
bad enough. New York is even worse.
*Worth Study: *This long piece from Fodeman and Book of the Heritage
Foundation on controlling health care costs
<http://online.wsj.com/article/SB10001424052748703787304575075843971534082.html?mod=WSJ_Opinion_LEFTSecondBucket>.
Three samples:
For overall health spending, [David] Cutler traces 51 percent of the
increase to quantifiable factors, such as demographics, income,
insurance, relative price increase, administrative expenses, and
increases in capital and labor costs. He attributes the remaining
49 percent to technology.[27] Other prominent economists and
health policy analysts, including Joseph Newhouse,[28] Paul
Ginsburg,[29] and the Congressional Budget Office,[30] have also
attributed about half the increase to technological change.
. . .
To look at it another way, in 1992, the referral regions of San
Francisco and eastern Long Island had similar per capita Medicare
spending, but their subsequent average annual growth rates were 2.4
percent and 4 percent, respectively. Over time, these seemingly
small differences add up. By 2006, Medicare spent almost $2,500
more per person in eastern Long Island than in San Francisco. This
difference alone accounts for $1 billion in annual Medicare
spending. Overall, if the national average annual growth rate (3.5
percent) could be reduced to the growth rate in the San Francisco
referral region, cumulative Medicare spending would be reduced by
more than $1.4 trillion over 15 years.
. . .
It is entirely possible that all four proposed causes--increased
prevalence of disease, the third-party payment system, technological
improvements, and waste and fraud--are contributing to increased
health care spending. Indeed, they may be interconnected. Today's
health care system is fraught with perverse economic incentives that
generate artificially high and rapidly increasing spending.
The Democratic bills, Fodeman and Book believe, would make those
incentives even more perverse.
- 5:20 PM, 22 February 2010 [link]
<http://www.seanet.com/%7Ejimxc/Politics/February2010_3.html#jrm8412>
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