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Restoring Fiscal Sanity 2007

Restoring Fiscal Sanity 2007: The Health Spending Challenge

Copyright Date: 2007
Pages: 233
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  • Book Info
    Restoring Fiscal Sanity 2007
    Book Description:

    Exceeding $2 trillion annually, health care spending in the United States is growing significantly faster than the national economy. If left unchecked, this health spending crisis will threaten Americans' ability to pay for other essential services. Driven primarily by the cost of benefits promised to seniors under Medicare and Medicaid, federal health expenditures will force lawmakers to make stark policy decisions. In this third volume of Restoring Fiscal Sanity, policy experts suggest ways to slow the growth of federal spending on health care. Unless federal health spending can be brought under control, Americans will face substantially higher taxes, sharp reductions in other government programs, and cuts in benefits to the elderly. Families, businesses, and communities will be forced to make agonizing choices between health care and other needs. Focusing on policies that do not shift costs to the states or the private sector, the authors of Restoring Fiscal Sanity 2007 suggest reforms in federal programs that have the potential to reduce the growth of spending for the entire health system, increase the efficiency and effectiveness of the care provided, and enhance health outcomes. Drawing on years of government and public policy experience, they stress the need for innovative approaches and cooperation between the private and public sectors.

    eISBN: 978-0-8157-7492-1
    Subjects: Political Science, Health Sciences, Finance

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Foreword
    (pp. vii-x)
    Strobe Talbott

    Our ongoing search for ways to restore fiscal sanity to the federal budget is a Brookings project that does the Institution proud. It meets the highest standards of quality research and constructive policy prescriptions. This volume, the third in the series, could not be timelier: first, because health care reform is very much on the minds of Americans and their elected leaders and, second, because it is particularly on our minds at Brookings. We are going to be making the subject a priority for at least the next decade.

    While there are many dimensions to the issue, economics is at...

  4. Acknowledgments
    (pp. xi-xiv)
  5. Overview
    (pp. 1-12)

    Over the past half century, most Americans have experienced increased prosperity and improved quality of life. We are living longer, and advances in knowledge and technology have made medical care increasingly effective and are likely to continue to do so. But these triumphs pose serious challenges. As health care improves, Americans are spending higher proportions of their income to obtain it. Health care is crowding out other spending by individuals, businesses, and government. Moreover, our complex, fragmented health care system is demonstrably inefficient and unnecessarily costly. Americans are increasingly concerned that they are spending a great deal on medical care...

  6. 1 Rising Health Care Spending—Federal and National
    (pp. 13-28)

    The fact that Americans are spending a growing portion of their income for health care and will spend even more in the future is not necessarily alarming. However, it forces us to face two important questions: How can we be sure we are getting our money’s worth? And how will we pay the health care bill? Before we tackle those questions we must understand health care spending trends as well as possible. In this chapter we focus on the growth of the federal government’s spending for health care and why we believe it to be unsustainable. We also show that...

  7. 2 Strategies for Slowing the Growth of Health Spending
    (pp. 29-80)

    Health spending in the United States is high relative to other countries and rising rapidly, but many Americans perceive they are not getting their money’s worth, and tens of millions are not covered by health insurance of any kind. As chapter 1 illustrated, federal health spending, especially spending on Medicare and Medicaid, is clearly on an unsustainable track. But cutting Medicare and Medicaid benefits and restricting eligibility will shift the financial burden of health care to other payers and increase the ranks of the uninsured without improving the effectiveness of care or slowing the growth of total health spending significantly....

  8. 3 The Challenge of Medicare
    (pp. 81-104)

    The Medicare program is central to efforts to slow the rate of growth of health care spending. As discussed in chapter 1, the rate at which Medicare grows (along with Medicaid) will largely determine how fast total federal spending grows in the future and how prodigious an effort is required to keep the federal deficit under control. At the same time, as I shall discuss in this chapter, it is politically unlikely that the growth of Medicare spending will be allowed to fall behind the growth in total health care spending. Hence, the future growth in Medicare spending will attest...

  9. 4 The Role of Medicaid
    (pp. 105-130)

    Any serious efforts to control the federal budget must include Medicaid. Although the share of the federal budget devoted to Medicaid is substantially smaller than that for Medicare, the anticipated rate of growth in Medicaid is slightly higher than that for Medicare and substantially above anticipated growth in federal revenues. Medicaid dominates the markets for some services and can help move the health system toward greater efficiency by serving as a model for effective delivery.

    Medicaid spending is expected to grow for the same reasons health care spending is expected to grow—advances in medical technology and increasing needs of...

  10. 5 Leveraging Other Federal Health Systems
    (pp. 131-152)

    The Veterans Health Administration (VHA) and Military Health System (MHS) are the two largest federal health programs directly providing health care in federally owned and operated hospitals and clinics.¹ In fiscal year 2006, they will spend about $70 billion on health care for approximately 16 million enrolled veterans and active duty and retired military personnel and their beneficiaries.² With about one-tenth of the budget of Medicaid and Medicare, the health systems for veterans and the military are small compared to those programs. Controlling their future costs will have little effect on the total federal health care budget.

    Nevertheless, these federal...

  11. 6 Private Payer Roles in Moving to More Efficient Health Spending
    (pp. 153-172)

    Developments in private insurance have direct and indirect effects on the federal budget and therefore strongly influence the degree to which measures to slow the growth of federal health spending can be successful. The private sector is even more important with respect to the broader goal of slowing the growth of total national health spending.

    The direct interactions between private payers and the federal budget are mostly on the revenue side. The exclusion from taxation of employer contributions to employment-based health insurance is one of the largest tax expenditures in the federal budget. For fiscal year 2007, this expenditure is...

  12. 7 Cost Containment and the Politics of Health Care Reform
    (pp. 173-192)

    As the diverse array of viewpoints expressed in the foregoing chapters makes clear, “health care reform”—even with the more specific goal of cost containment—means different things to different people. As a political catchphrase, health care reform garners nearly universal support, since individual observers view the issue through the lens of their own policy preferences. In virtually every federal election since the 1960s, the “health care issue” has polled near the top of the public’s concerns.

    Despite this fact, precious little that most serious analysts would consider reform actually seems to get done. While our political system has shown...

  13. 8 Building Public Support for Slowing the Growth of Health Care Spending
    (pp. 193-218)

    The task of moving from policy proposal to successful legislation means navigating the waters of public opinion that influences practical politics. This is true of all areas of policy, of course, but health care waters are especially turbulent. Health care is intensely personal and costly for families, and even small policy changes have potentially huge financial implications for them as well as other stakeholders. If successful ways of addressing the health spending challenge are to be devised, it is critical to reflect on the underlying values and moral choices associated with any policy approach. The wise policymaker will thus consider...

  14. Contributors
    (pp. 219-220)
  15. Index
    (pp. 221-234)
  16. Back Matter
    (pp. 235-237)