AS ELDERLY folks comprise an increasingly large percentage of the American population, health care costs will increase dramatically. Because private health care is less efficient than socialized health care, and because it is prohibitively expensive for many Americans, we must not only protect Medicare but also expand the government's role in providing health care for elderly Americans if we wish for our parents to receive adequate medical care in their old age. The inefficiencies of private, free-market health care are too great to bear for a society in demographic transition.
In this vein, Jonathan Oberlander, associate professor of social medicine at University of North Carolina at Chapel Hill, and Bill Plonk, M.D., with U.Va.'s Department of Internal Medicine, made a presentation called "The Political Life of Medicare" on March 2 in Jordan Hall. They said administrative expenses represent three percent of Medicare costs and ten percent of private health care costs. Additionally, the United States, with the least socialistic health care system in the industrialized world, spends 15 percent of GDP on healthcare, the highest percentage on earth. An Organization for Economic Cooperation and Development study shows that Canada spends 43 percent less money per capita than the United States, though Canadians live longer on average than Americans. Medicare provides health insurance for forty one million Americans today. Oberlander cited a Raleigh News and Observer article that found a healthy sixty-year-old would pay $3,000 per month in premiums to private insurance companies. Without Medicare, that healthy sixty-year-old would face extreme difficulties paying for private health insurance.
Oberlander, who recently published a book called "The Political Life of Medicare," said that the Great Society architects of Medicare intended it to a cornerstone of a national health insurance program. President Lyndon Johnson and the Congressional Democrats intended to expand coverage to include children and eventually all adults. The waste of money on the war in Vietnam and the collapse of the New Deal coalition precluded the expansion of Medicare.Though it has not been joined by a national insurance program for all other Americans, Medicare does a fine job ensuring older Americans. Plonk said, "Medicare is an excellent program and has done a good job of taking care of a lot of people over the years." In the future, Medicare will have to take care of many more people; program costs are expected to double in the next seventy-five years.
Changes in demographics are not the only reason for increasing costs, however. Rising prescription drug prices are pushing overall health costs higher, and President Bush's recent prescription drug bill, by preventing Medicare's negotiation of lowest cost bulk purchases of prescription drugs, is unlikely to slow those cost increases.
Bush's bizarre prohibition on Medicare buying prescription drugs at the lowest price is not an aberration. His genuflection to the capitalist elite is part of a broader trend toward privatization of public goods in the United States, which includes Bush's attempt to eviscerate Social Security. Oberlander suggested that the formerly bipartisan support for Medicare has unraveled after the Gingrich revolution. Since 1994, Republicans, particularly in the House and now joined by the administration, have attempted to dismantle as much of the New Deal and Great Society as possible. Bush chose not to attack Medicare directly, but rather to feign an expansion of benefits while transferring as much money as possible from the pockets of the elderly to the giant pharmaceutical companies.
Rather than create legal mechanisms by which giant corporations can rip off American citizens, we should create a national health insurance program for everyone who wants to use it. We have numerous models from which to learn: Canada, France, and Sweden all have lower infant mortality rates and higher life expectancies than the United States. Alternatively, we could implement a government-funded, incentives-based program like the one proposed by Harvard Prof. David Cutler, as described in Sunday's New York Times. Under the Cutler model, the government gives everyone vouchers with which we could purchase the health insurance of our choice. The government would also provide incentives to doctors to provide high quality treatment.
In either case, the government can and must take a more active role in holding down costs and expanding the availability of health care. Changing demographics demand greater health care availability at lower costs, and the government must step in where the private sector has failed.
Zack Fields' column appears Wednesdays in The Cavalier Daily. He can be reached at zfields@cavalierdaily.com.
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