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Friday, February 23, 2007

One Out of Five?

“Health care is expected to account for $1 of every $5 spent in the United States in another decade.”

That was the leading sentence in a front page Associated Press article is the February 22, 2007 issue of the Yuma (Arizona) Sun. The article was about a report released the day before by the federal Centers for Medicare and Medicaid which predicted that “Over the coming decade, spending on health care will continue to outpace the overall economy.” Currently, Americans are spending about $1 out of $6 on health care.

Concern was expressed by Health and Human Services Secretary Mike Leavitt who said that “There is simply no place on the economic leader board for a nation that spends a fifth of its domestic product on health care.”

What to do? Opinions vary. Secretary Leavitt said that “The only force strong enough to change the course of health care is a marketplace where consumers have the information and the incentive to choose quality and keep costs low.” Economists at the Centers for Medicare and Medicaid predict that government will take over financing from employers.

There is another alternative. The marketplace referred to by Secretary Leavitt could rely on organized purchasers like large employers and health insurance agencies rather than on individual consumers – something like the managed care movement that successfully contained costs during the 1990’s. I predict that is what will happen.

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