This is written late in March, shortly after President Obama convened a White House conference to discuss what can and must be done about the nation’s health care policy and finance. In his closing remarks, the president said that there was nothing to be gained by postponing health care reform until the nation’s economic crisis has been resolved.
Not since Franklin D. Roosevelt became president in 1933 has a new national leader inherited such an economic crisis as did Barack Obama last winter. For better or worse, the new administration’s efforts are geared up only a few months after the stock market plunged last October. The efforts to devote government subsidies to the preservation of major banks, insurance companies, and investment firms already escalate the federal deficit. That escalation is coming at a time when tax reductions are proposed as another part of economic salvation and federal revenue based on the dwindling profits of many companies and the unemployment of millions of Americans make tax payments shrink, even without any changes.
President Roosevelt encountered almost 4 years of a deep recession, the closure of hundreds of banks, the poverty of millions without jobs, and a broad sense of desperation. His programs relied on government spending to turn the tide. And some pundits observe that it took US involvement in World War II 8 years later to restore the economy.
But health care was not a major factor in that recession. Health care insurance was just getting started. Medical technology was relatively dormant. Hospitals were not growing in size or sophistication. The wonders of modern medicine—antibiotics, organ transplantation, cancer treatments, and of course medical imaging—were still in the future. So were the surge in population growth and the accompanying need for many more doctors and nurses.
This is not the case in 2009. For all of this decade, the total national expenditure for health care has increased yearly by double digits. The spending now amounts to some $2 trillion, or a sixth of the gross domestic product. Regardless of the overall economic crisis, current health care increases soon will reach 20% of national spending.
What causes increased health spending? For one thing, the US population increased by 30% over the past quarter century. And because the average life expectancy has risen with that growth, the spending for elderly people rises more than the population growth fraction.
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