All roads lead to health reform

As a health care consultant, blogger and board member it’s pretty much all health care all the time for me. But it’s starting to turn out that way for the country as a whole. For example:

  • Federal budget deficit? Main cause is Medicare spending.
  • States can’t balance their budgets? Medicaid and state employee costs.
  • Towns can’t afford to hire teachers and cops? Retiree health benefits.
  • Employers can’t afford to hire staff to grow? Health care premiums.
  • Tuition rising fast? Health care premiums for staff.
  • Consumer spending slow? Too much money spent on health insurance or out-of-pocket payments.
  • Doctors giving up private practice to work as hospital employees? Can’t afford to pay health care benefits to their staff (seriously).

But the area that may ultimately get the most attention ultimately is the defense budget. Active duty military, retirees and dependents cost the Defense Department a lot of money: about $50 billion today rising to $65 billion in five years. That’s about 10 percent of the military budget and as Defense Secretary Robert Gates says, “Health care costs are eating the Defense Department alive.”

Defense budget analyst Todd Harrison from the Center for Strategic and Budgetary Assessments says, “In the long run it could actually limit our ability to field a military of sufficient size.”

To put things in perspective, the US Defense Department’s health care spending will be larger than the entire military budget of every country but China, the UK and France. Actually, the UK and France are likely to shrink their military budgets over the next five years so only China will spend more in total than what the US spends on health care for defense.

As analysts and politicians grapple with the long-term budget deficit, health care spending considerations will seep into every area. The good news about that is it may force the country to finally grapple with health care costs in a serious way.

November 29, 2010

6 thoughts on “All roads lead to health reform”

  1. I stopped over here from Grand Rounds, and you bring up a point I haven’t seen anyone else make regarding health care drag on the budget. I often see the right/left comment wars when health reform is discussed, in which someone will suggest trimming defence spending to help the budget (as opposed to the right’s call to trim entitlement spending). How interesting to see that the two are actually interconnected: issues are rarely as transparent as we want them to be.

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