Wednesday, October 8, 2008

Health Train Collision

Harry Truman

"I never did give them hell. I just told the truth, and they thought it was hell."

************************************************

The past two weeks have hammered image

all segments of the economy, from the housing markets, banking institutions, small and large businesses, and soon into healthcare.  Unless the credit markets resume functioning very soon we will witness payless paydays in provider groups, elimination of health information technology projects and the abrupt decrease in adoption of EMRs.  The Feds have shot themselves in the foot, quite nicely.

AIG crashed several weeks ago, and we have heard nada from health insurers, their reserves, nor the state of their investments in the market and/or real estate. I am naturally suspicious and it has been eerily quiet from those corners.

Ignoring Crisis has a price  (from the New York Times)

image

After 14 months of crisis, the federal government — meaning you and me — has put serious money on the line. As a point of comparison, the entire annual federal budget is about $3 trillion.

image

Despite everything, the biggest fiscal problem remains, far and away, health care. Based on the rate that medical spending has been rising, the Congressional Budget Office forecasts that Medicare and Medicaid will take up 10 percent of G.D.P. within two decades, up from about 4 percent now. In today’s terms, that would be the equivalent of adding at least $900 billion to the deficit every single year, in perpetuity. It makes the cost of the bailouts look like a rounding error.

When it comes to health care, we have a situation that is blatantly unsustainable. With the right choices, we can prevent that. But so far, we instead seem to be hoping that the situation will magically resolve itself, which is a recipe for big problems and perhaps even a crisis.  Will health care bomb out?

image

Let’s see. That doesn’t sound familiar, does it?

Post a Comment