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Home Publications Blogs Beat the Press Actually, It Is the Projected Growth of Private Sector Health Care Costs That Is Unsustainable, Not Medicare

Actually, It Is the Projected Growth of Private Sector Health Care Costs That Is Unsustainable, Not Medicare

Monday, 04 April 2011 05:06

That is what a real newspaper would have told readers when it quoted House Budget Committee Chairman Paul Ryan saying:

"There is nobody saying that Medicare can stay in its current path."

However the Rupert Murdoch owned Wall Street Journal did not provide this information. The Center for Medicare and Medicaid Services projects that health care costs will rise rapidly in coming decades. While health care is overwhelmingly provided by the private sector, the rise in costs is projected to lead to large budget deficits because more than half of health care is paid for through public sector programs like Medicare and Medicaid.

If these projections prove accurate then it will have a devastating impact on the economy regardless of what happens to the public sector health care programs. On the other hand, if per person health care costs were brought in line with costs in other wealthy country, the government would be facing large surpluses, not deficits.

This article also tells readers that the debate will cause Congress to debate the role of government in the economy. It is not clear why it would lead to a debate over the role of government, the immediate issue being debating is cutting Medicare. The WSJ may want a debate over the role in government, but politicians in Congress are unlikely to conduct such a debate.

Comments (8)Add Comment
Death Spiral of Job Killing Death Panelists, Low-rated comment [Show]
Medicare ALREADY IS 96% private!.
written by Jack E Lohman, April 04, 2011 12:33
Hey guys... Medicare ALREADY IS 96% private hospitals and clinics. What Ryan does not mention is that Medicare cannot give campaign contributions and the private industry CAN! Get the campaign bribes out of the system and then let's talk.

Jack Lohman
written by D. Pratt, April 04, 2011 12:38
This post is a bit off the track, IMO. I would argue that while health care is a problem for private enterprise, companies (corporate, partnership, sole prop.) can increase revenues via productivity and so is potentially sustainable. Recall that health care costs while high are still a very small part of total costs in the corporate sector, certainly relative to the public sector.

I gather that the blogger does not disagree that in the public sector health care/Medicare and Medicaid ARE unsustainable, growing as they are to dwarf current projected revenues.

Also, while one could argue that the issue of health care is separate from scope and size of governement, I think very few would find that a satisfactory distinction. The issue likely will (IMO) come down to how much should the government do/enable/suppport and that is very much a question of the acceptable role of government in the economy and private affairs.

While the blogger (Dean Baker?) has an arguable point of view (both liberal and conservatives certainlyh can make cogent points) I don't think it matters who the publisher of the WSJ is. As a former newspaper writer, I would say that the news pages of the NY Times and the Washington Times (for two examples) show as much or more basis than the Journal.
So much for democracy.
written by Jack E Lohman, April 04, 2011 1:12
The truth is that we could provide health care to 100% of our population and save $400 billion per year by converting to a Medicare-for-all system. The healthcare and insurance industry gave $125 million in campaign bribes to keep single-payer off the table.

Jack Lohman
Medicare Is Unsustainable in the Same Way That You Can't Keep Your Office in a Building that Is on Fire
written by Dean, April 04, 2011 2:05
D. Pratt,

The issue here is the causation. We have a broken health care system. We pay for a close to a third of our health care through Medicare. The broken health care system will eventually make Medicare unsustainable.

However, it makes as much sense to talk about Medicare being unsustainable as saying that I will have to move my office because the building is on fire, without ever pointing out that the reason that I have to move my office is that the building is on fire.

There is nothing in principle wrong with my office, as long as we put the fire out. It is the same case with Medicare. The program is fine, the problem is that it buys health care from a broken health care system. A serious newspaper would point this fact out. Rupert Murdoch's newspaper did not.
written by RAP77, April 04, 2011 4:35
The only death panel active is in Arizona, where people are actually dying because the state has reneged on promised medical operations because of budgetary concerns.

"Paul Ryan holding back death panel" ???

Paul Ryan has no idea what it takes to run a business or a government. Tea Party activists and their colleagues in Republican party are creating a true Herbert Hoover moment. They will drive the economy back into steep recession.

Look at what's happening in England with their austerity plan.

Stupid izzatso
Government role in economy
written by Spenser, April 04, 2011 4:54
Actually, if Congress (or the WSJ) were serious about controlling healthcare costs, they would be looking very seriously at an expanded role for government in the economy, at least in the healthcare sector. This is the obvious conclusion one must draw from the experience of other countries..
written by urban legend, April 05, 2011 7:07
We have "The Billionaire's Journal," and, of course, "Billionaire's Broadcast News."

So why, pray tell, would anyone making less than, say, $1 million a year think they are getting news that isn't slanted to serve the interests of billionaires -- and that their real interests are utterly irrelevant?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.