In a nineteen ninety-nine two letter to Senator George Mitchell, Daniel Patrick Moynihan wrote that health care costs suffered from “Baumol’s cost disease.” “Baumol’s cost disease” refers to William Baumol’s description of how labor costs and public services always increase in costs even though they never increase in productivity, since they cannot be measured quantitatively. Moynihan paraphrased Baumol’s point: health care costs are “a class of services plagued by cumulative and persistent rises in costs at a rate which normally exceeds to a significant degree the corresponding rate of increase for commodities generally.”
In his essay “Death and Budgets,” (July 15, 2011) David Brooks argues that the fiscal crisis and fight over raising the debt ceiling “is driven largely by health care costs.” In his piece he takes a narrow and strange turn when he identifies the cause of the current fiscal crisis as a consequence of the expensive costs of providing care for people who are sick and approaching death.
Of course, health care costs overall contribute to our financial ill health. But the blame for the fiscal crisis (“debt ceiling mess”) we are in can be placed on both the Democrats and the Republicans and their unwillingness to deny some of the demands of their constituencies. The Democrats support health care for those who cannot afford their own insurance or care through medicare and medicaid. They pursue this worthy goal, but ignore the reality of how costly it is. And they seem ignorant of Moynihan’s point that no matter what health care costs will always rise and that some cuts in medicare and medicaid are inescapable.
Against the wishes of many liberal Democrats, President Obama, fortunately, has had the courage to confront the obvious and has offered to cut the growth of both plans. However, the obstacle to any reasonable changes in the way health care is delivered in the U. S. are the Republicans. All the Republicans want to do to hold down cost is enact tort reform, and push all Americans into the private insurance market, which would only further enrich big insurance companies while overwhelming the middle class with insurance premiums that they could not afford to pay.
It is clear that our system of free market health care that is driven by corporate interest has little to do with patients’ well being and nothing to do with slowing down the rate of medical costs. Indeed, the opposite is true.
The answer is a single payer system. Yet so far, Obama has done enough to push for such a system and the Republicans have succeeded in scaring too many Americans into believing that they would lose control over all their health care decisions if a single payer system were put in place. Of course, the real motive behind the Republicans' opposition to a government system of health care is it would undermine the existing for profit system that benefits the Republicans. Their corporate backers (pharmaceutical and insurance companies) and wealthy supporters, continue to flood Republican coffers with money to fight against practical and humane changes in the way health care is paid for.
Eliminating the insurance model of paying for health care by switching to a single payer system would not be enough to resolve the growing debt and deficit problems, even if such a system provided for significant savings in medical costs. More revenue from a variety of sources is also needed, something the Republicans refuse to consider.
Given the monomaniacal hatred of all taxes that possesses the minds of politicians such as Michele Bachman and Eric Cantor, who have terrified Republicans such as John Boehner into acceding to their deranged demands, the possibility of compromising on sensible ways to increase revenues as a part of any plan to reduce the deficit and debt has become next to impossible.
President Obama has proposed deep cuts in programs (Medicare, etc) to begin to lower the U. S. debt. He also proposed to close loopholes for corporations that are swimming in profits. Yet, the right has howled against these sensible ways to bring down the debt. They continue to attack Obama’s revenue ideas as “job killing” tax increases.
But this is exactly what needs to be done. In addition, Corporations, businesses, and public employers need to be relieved of the expense of paying for health care insurance for their workers, which is what a single payer system of health care would do. The money saved could be collected as taxes toward the single payer system and could amount to less than what is paid in insurance premiums, since the for profit middle men (insurance companies) would be eliminated.
Individuals could also pay a health tax as part of the payroll tax. Moreover, the ceiling after which income is not taxed as part of the payroll tax should be abolished. Then all would be assessed to the full extent of their income, making this tax progressive and fair. Finally, the uninsured, who mostly work in jobs that don’t provide health benefits and therefore don’t pay insurance premiums, could be covered, since their payroll taxes would be used to help pay for medical coverage.
Sadly, none of this can come to pass, because too many politicians are beholden to the insurance and pharmaceutical corporations and too many politicians are blinded by the myth that unregulated capitalism is the morally pure savior of economic liberty and happiness.