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The President's Proposal
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20343 |
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CURRENT ISSUES
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| Issue
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6 / 1992 |
2,781 Words |
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Elise D. Smith
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Health reform is hardly a new issue. Since 1942, when the first national health insurance bill was introduced in the Congress, public attention has focused periodically on expanding access to health care at an acceptable cost, as well as on whether this can best be done through the government(s) or the private sector.
The last national debate on these issue culminated in the 1965 passage if Titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act. Enactment of these two titles gave legislative formality to a political and societal agreement--an implicit social contract--that has lasted a quarter of a century. Under its terms, the federal government, through Medicare, accepted new responsibility for funding acute health care for the elderly. States agreed to continue their responsibility for the indigent and, with new but limited federal support through Medicaid, certain categories of the poor. Working individuals, in large part through risk pooling provided by their employers and subsidized by the tax system, maintained traditional financial responsibilities for their health care and that of their dependents during their working lives.
In general, and for most of the population, the mixed public-private sector health care financing system agreed to in 1965 has worked well. Public programs for the elderly, disabled, and poor and private insurance for the remainder provide health care of the highest quality found anywhere in the world. But over time, issues of access and cost have again forced health care issues to the forefront of national consciousness.
First, costs: For nearly 30 years, while hospital admissions and length of stay have declined and medical visits per capita remained relatively stable, national health care expenditures have increased at nearly twice the inflation rate and significantly faster that the economy. In 1970, 1 dollar in 14, or 7.3 percent of the nations' GNP, was spent on health. In 1980, this had grown to 9.1 percent; by 1990, virtually 1 dollar in every 8 or 12.2 percent of the GNP was consumed by health care. In 1992, health care spending, at roughly $800 billion, will account for 13 percent of the GNP. By the year 2000, health care spending is projected to have risen to more than 16 percent of the GNP--slightly less than 1 in every 6 dollars.
What drives this growth--what are the engines of rising health care costs? There are many culprits: general inflation; population growth; the relative aging of the population; and the explosive growth in the number, scope, and
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