American health care: What a waste | The Economist

From the Economist Print Edition

Barack Obama’s reforms should avoid squandering a rare opportunity, but probably won’t

LAST year, when he was still the head of the independent Congressional Budget Office, Peter Orszag used to warn bleakly that the rising costs of health care would, if not subjected to radical reform, one day bankrupt the government. Over the past few decades, these costs have risen at a consistent 2.5 percentage points above the growth rate of the economy. Projected out to 2050, he reckoned, Medicare and Medicaid (the government schemes that insure the elderly and the poor) would together consume some 20% of America’s GDP, almost as much as the entire federal budget of today.

Perhaps Mr Orszag, now the budget director in Barack Obama’s White House, is about to storm out of his grand new office. For the health bill that this week moved a big step closer to Mr Obama’s desk (see article) fails—not completely, but very largely—to address the government-exploding problem of cost inflation. Instead, its focus rests squarely on the long-cherished Democratic Party goal of making sure that virtually everyone in America has some form of health coverage; at the moment, over 46m people have none. Even on this score, the plan that finally emerged from the Senate Finance Committee on October 13th looks incomplete . . .

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