The president's health care reform plan includes tools to restrain rising health-care costs, but they may not survive future political battles.
Larry Downing / Reuters / File
The United States spends far more on health care than any other nation. Those high costs pinch American consumers, but they're a boon to providers of those medical goods and services.
General practitioners, for example, made about $161,000 a year in 2004, about twice the average among the 30 democracies in the Paris-based Organization for Economic Cooperation and Development. Registered nurses with two years of college make roughly twice what teachers with a four-year degree make. The US spends roughly twice as much on prescription drugs ($572 per person) as the average OECD nation.
That's one reason Uwe Reinhardt, an expert on health-care economics at Princeton University in New Jersey, sounds so gloomy about prospects for reining in medical costs. "Every dollar of health-care spending is someone's health-care income," he notes.
With so much money sloshing around, the health-care industry has the cash to pay K Street lobbyists "to buy the hearts and minds" of senators and representatives in Congress, he says. To help offset the costs of expanding health insurance to most Americans by 2014, the "Obamacare" law would redeploy $500 billion from Medicare over 10 years, or 6 percent of a total of $3.7 trillion. Professor Reinhardt doubts the provision will survive future partisan battles in Washington.
There are more tools in Obamacare aimed at restraining rising health-care costs. But Reinhardt suspects Washington will "not have the guts to use them," considering the "incredible resistance" from the health-care industry and the politics of such action.