The beginning of wisdom on Medicare’s future starts with two things both parties say but which can’t simultaneously be true.
The first is that we spend much more on health care than any other advanced nation yet get no better results. The second claim — implicit in the attacks on Obama’s $716 billion in “cuts” or on Romney/Ryan’s heartless vouchers — is that, if we do much to slow the growth of health-care spending, we’d hurt seniors’ access and quality of care.
As I’ve argued before, no matter how often and how loudly interest groups and politicians scream this second claim, it can’t be true if the first claim is a fact. And U.S. health care’s inefficiency is indisputable.
The United States spends twice per person on health care what most other advanced nations spend without better outcomes to show for it. As a share of the economy, this now translates to an eye-popping 18 percent of GDP; the next closest nations spend 12 or 13 percent, while the OECD average is in the 8s. Mighty Singapore, with comparable results, spends just 4 percent! And these nations perform better under every model — from single-payer (Canada, England) to mandated private insurance (Switzerland, Holland) to creative public/private hybrids (Singapore).
These aren’t just dry numbers. They represent a progressive catastrophe. If we could run our health-care system as cost-effectively as other rich nations — which also manage to insure everyone, while we shamefully still leave 50 million people without basic coverage — we’d free up hundreds of billions of dollars each year to pay for infrastructure, R&D, universal preschool, great teachers for poor kids, a mega-earned income tax credit for the working poor, and higher wages (that’s my starter list, at least).
After Republican intransigence, in other words — and even after we eventually raise taxes to help fund the boomers’ retirement — it’s not an exaggeration to say that health-sector inefficiency is the biggest obstacle to progressive goals in America.
How does this tie to today’s campaign? Take the notorious $716 billion in “cuts,” which both Obama and Ryan have in their 10-year plans (Romney says he’ll repeal them, but then Romney will say anything). Yes, that’s a big, scary-sounding number. But Medicare will still spend $8.4 trillion over the same period — meaning it will increase from $575 billion this year to nearly $1.1 trillion a decade from now as it gets “gutted.” (Part of this is because enrollment is slated to rise from 50 million to 66 million, but even with the “cuts,” per capita costs are expected to soar by another third).