Must Living Standards Decline?
The reader may wonder why there is so little reference in this book to the detailed proposals for health care reform that were a major subject of public debate in 1993 and 1994. The reason is that there is little or no prospect that what needs to be done will be done in this century. In fact, the Clinton administration proposals anticipated an increase, not a decrease, in health care costs, and offered only the very-long-term prospect of slowing down the rate of increase in costs. What needed to be done was considered politically impossible or prohibitively costly. The big losers would be most (not all) of the medical profession, hospitals, and insurance companies, which are wealthy and well organized; whereas the prospective winners were too many and too small and too ignorant to be organized into comparably effective lobbies.
Any honest program to lower costs and slow their rate of increase will cost many jobs, certainly over a million and perhaps more. Most of the insurance companies' 268,000 employees would go, as would a sizable proportion of the administrative employment in hospitals and other providers of health services. There would be losses among health care personnel as well, perhaps substantial losses. A new health care program would also lower many incomes. Is it any wonder that there was all-out resistance?
The share of GNP devoted to health care is certain to rise in the years if not decades ahead, which means the money will not be going to other desired purposes. The Health Care Financing Administration, which is required to make projections, has had to raise its estimates repeatedly. In 1987 the projection for the year 2000 was 15 percent; in 1991, it was 16.4 percent; in 1992 expenditures were projected to reach 18.1 percent of GNP in 2000, and 32 percent in 2030. 1 Projections have been subject to an