The High Cost of Health Care

A great concern to many Americans and businesses is the high cost of health insurance. Some sort of federally sponsored universal health insurance program is all but certain within a short time after the presidential election. For millions of Americans the cost of health insurance is prohibitive and that lays the groundwork for government intervention.

FACTS ON POLICY: National Health-care Expenditures, an article appearing at the Hoover Institution's website, has some revealing information. The amount of money spent on health care increased by more than eight-fold from 1980 to 2005. In 1980 spending on health care within the United States was roughly comparable to that of other industrialized nations. By 2005 we were spending about twice the percentage of gross domestic product on health care compared to other nations.

There are underlying causes pushing up health care costs which are not apparent to many and unfortunately are not discussed by politicians primarily interested in getting elected. A separate post will focus on what the particulars are. For now it is enough to note that government insurance policies do not attack the root of the cost problem. They merely shift the burden of payment and if anything contribute to the soaring costs. Government adminstrative overhead hovers around forty percent of budget as opposed to less than half that for private charities. Profit oriented businesses also tend to be much more efficient.

The free lunch approach to government is experiencing a revival. It is politically expedient to offer now and provide for financing later. Expect the bill for federally funded health care to be a whopper. Health reform is clearly needed and demanded by voters. But reforms should address causes for the health crisis.