For many years I have been concerned about the overemphasis on medical treatment in the maintenance of good health. 1 Medical care was, and remains, inefficient. But what precipitated work on this book was a foreboding that the sustained upward creep in the share of gross national product (GNP) going to the health care industry would erode the living standards of my children's generation. I fear for their future, when in the second decade of the twenty-first century the post-World War II baby-boom generation achieves retirement age. At that time, living standards could experience a sharp drop.
I am concerned about health costs, not over the next few years, but in the next thirty years. With continued growth in technology, in the population over sixty-five years of age, and in medical care costs, this industry, which absorbed 5.3 percent of GNP in 1960 and now takes 14 percent, is projected to absorb nearly one-third of GNP by the year 2030. 2 We could be spending almost as much on other health care issues: environmental health and household and workplace safety. These large increases in share of GNP devoted to health care imply a decreasing share of private income available for other goods and services; they also mean that most government expenditures will be needed for health care, social security, and interest payments on the debt, with little left for anything else. Resources available for private investment and research other than medical research will be reduced, slowing economic growth. Living standards will have to fall if radical change is not implemented fairly soon.
This book examines the varied causes of the rapid increase in the cost of health care over the past three decades and considers the transformation of our health care delivery system that must occur early in the twenty-first century if private standards of living are not to decline and all other government social and economic programs are not to be starved. Proposals under discussion today would not reduce health care costs. They might slow down