For years I have been concerned about the growth of health care spending and it impact on the US national economy and our ability be competitive in the global economy. In this weeks New England Journal of Medicine is an editorial that lays out the problem in a straightforward way that I found interesting.
The Specter of Financial Armageddon — Health Care and Federal Debt in the United States
Posted by NEJM • March 17th, 2010
Michael E. Chernew, Ph.D., Katherine Baicker, Ph.D., and John Hsu, M.D., M.B.A., M.S.C.E.
The most important force shaping the U.S. health care system over the coming decades may well be the federal debt. The government now pays for approximately half of all health care costs in the United States, and projections of growing federal debt largely reflect anticipated increases in health care spending. Because federal debt and health care policy in the United States are so deeply entwined, it is important to understand the basics of deficits and debt and their implications for health care reform.
The deficit is the gap between expenditures and revenues in any given year ($1.4 trillion in the United States in 2009), whereas debt is defined as accumulated past deficits, or the stock of what we owe ($7.5 trillion at the end of 2009).1 Economists distinguish between two types of deficit: cyclical and structural. Read the rest of the article.