Reforming Medicare to a Premium Support System
Connor Roberg
ECON 427
Professor Joiner
17 April 2013
Changing Medicare to a Premium Support System
The high and rising cost of the United States health care system is placing a huge burden on families, businesses, and the younger generations who are going to be stuck paying for the national debt that is continually increasing. The fiscal stability of our government and the United States as a whole is at risk due to the current health care system that is in place. Current health care spending in the United States is characterized as being the most costly per person as compared to all other countries, as you can see in Figure 1 at the end of this analysis. Yet, despite this overwhelming spending, the overall quality of health care is low by many measures; in fact, the Commonwealth Fund ranked the United States last in the quality of health care among similar countries. The current debt owed by the United States federal government is approaching $17 billion and the cost problem regarding the U.S. health care system is exponentially increasing this amount. There is wide agreement that we, as a country, must find ways to bend the health care cost curve. The best way to do so is through implementing a premium support system into Medicare in order to shift the health care model from one that is driven by the volume and intensity of services to one that rewards cost-effective and efficient care. The current health care system that we have in place is flawed in several ways. The average U.S. person spends $8,233 per year on health care, two-and-a-half times more than most developed nations in the world, including relatively rich countries such as France, Sweden and the United Kingdom (Kane). Health care expenditures in the United States are currently about 18 percent of GDP, a percentage that continues to increase due to health care costs are projected to continue growing faster than the economy. If health care costs continue to grow at historical rates like
ECON 427
Professor Joiner
17 April 2013
Changing Medicare to a Premium Support System
The high and rising cost of the United States health care system is placing a huge burden on families, businesses, and the younger generations who are going to be stuck paying for the national debt that is continually increasing. The fiscal stability of our government and the United States as a whole is at risk due to the current health care system that is in place. Current health care spending in the United States is characterized as being the most costly per person as compared to all other countries, as you can see in Figure 1 at the end of this analysis. Yet, despite this overwhelming spending, the overall quality of health care is low by many measures; in fact, the Commonwealth Fund ranked the United States last in the quality of health care among similar countries. The current debt owed by the United States federal government is approaching $17 billion and the cost problem regarding the U.S. health care system is exponentially increasing this amount. There is wide agreement that we, as a country, must find ways to bend the health care cost curve. The best way to do so is through implementing a premium support system into Medicare in order to shift the health care model from one that is driven by the volume and intensity of services to one that rewards cost-effective and efficient care. The current health care system that we have in place is flawed in several ways. The average U.S. person spends $8,233 per year on health care, two-and-a-half times more than most developed nations in the world, including relatively rich countries such as France, Sweden and the United Kingdom (Kane). Health care expenditures in the United States are currently about 18 percent of GDP, a percentage that continues to increase due to health care costs are projected to continue growing faster than the economy. If health care costs continue to grow at historical rates like
Cited: "Bending the Cost Curve Through Market-Based Incentives." New England Journal of Medicine. Massachusets Medical Society, 02 Aug 2012. Web. 1 May 2013. "Changing Medicare to a Premium Support System." AARP Public Policy Institute. AARP, 04 Jun 2012. Web. 1 May 2013. <http://www.aarp.org/content/dam/aarp/research/public_policy_institute/health/option-change-medicare-to-a-premium-support-plan-AARP-ppi-health.pdf>. "Designing a Premium Support System for Medicare." Congressional Budget Office. CBO, n.d. Web. 2 May 2013. <http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/76xx/doc7697/12-08- "The Economic Case for Health Care Reform." White House. N.p.. Web. 9 May 2013. <http://www.whitehouse.gov/administration/eop/cea/TheEconomicCaseforHealthCareReform>. Kane, Jason. "Health Costs: How the U.S. Compares With Other Countries ." PBS. PBS, 22 Oct 2012. Web. 2 May 2013. <http://www.pbs.org/newshour/rundown/2012/10/health-costs-how-the-us-compares-with-other-countries.html>. "Transforming Medicare into a premium Support System: Implications for Beneficiary Premiums." Kaiser Family Foundation. N.p., n.d. Web. 1 May 2013. <http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8373.pdf>.