Wishful Thinking Has No Limits
We have previously reported that the federal government is the primary cause of health care inflation. And every country that has ever adopted national health insurance has experienced higher-than-expected health spending. Yet the Commonwealth Fund thinks that virtually all past proposals for national health insurance in the U.S. would have made costs lower, not higher. Here are their estimates:
Source: The New York Times
What the Commonwealth Fund predicts will happen in theory is much different than what happens in reality.
The Commonwealth Fund is a joke.
If you compare this chart with what was predicted and then what actually happened with Medicare, this chart is really quite funny.
Interesting that the flat part of the curve from 1995-2000 is roughly the same time that Medicaid expenditures (temporarily) flattened out according to the 2008 HHS Medicaid Actuarial Report.
Medicaid expenditures grew at an average rate of 6.2 percent per year FY 1994-1999. But states spent the period of slower growth and economic epansion expanding eligibility. So, from FY 2000 through FY 2005, Medicaid expenditure growth increased at an average rate of 8.9 percent per year. It peaked at 9.3 percent in FY 2002.
Keep in mind that using the benchmark OECD expenditures (as percent of GDP) for 30 countries biases the median by using many less-developed countries with standards of living far below ours. I also don’t believe anything proposed during the Clinton Administration could possibly have reduced spending by 3.5 percentage points. I certainly don’t know of any serious proposals during the Carter and Nixon Administrations that would have resulted in spending curves of 10.5% to 11.5%.
It’s easy to have 20/20 hindsight when there is no way to be proven wrong.
I wonder if the flat part merely reflects the dot-com boom. It may just mean that GDP grew at an unusually fast rate, matching the growth in health spending.
More interesting than total spending would be price inflation for a basket of health-related goods and services.