Who can reform the reform? A deficit issue

OUR FUTURES DEPEND ON CONTINUING THE WORK OF REDUCING RISING HEALTH CARE COSTS
People tell me that you will vote for name recognition or the union's choice or the anti-union choice or to keep another candidate from being elected. I don't believe that. I believe in your good judgment. I believe you recognize the seriousness of our circumstances, and you want someone whose judgment you can trust to fix the problems career politicians have let get out of hand while they were worrying about getting elected. You know time is short and the stakes are high. You will not waste your votes.

To any prudent person, the deficit and our health care system are like a planet and its moon, drifting slowly towards a black hole. They are drifting towards the black hole because the moon keeps growing, pulling the planet closer and closer.

       The government now pays about half of all health care costs. The projected growth of the deficit is largely due to expected increases in health care costs. It must be understood that this projected growth is real deficit, not the cyclical deficits caused by economic conditions such as the recession of 2009. We are being pulled into the black hole because, at its present rate of growth, federal health care spending is forecast to increase from 5% of the gross domestic product in 2009 to 12% of the GDP by 2050 (an average of 17% per year). Even if all other costs remain at their present levels compared with the GDP, that means dramatically increased taxes or dramatically increased federal debt. We create a snowball effect if we finance the increases with debt because we have to pay interest on that debt. The snowball is so dramatic that the same projections forecast that the US debt-to-GDP ratio will increase from 53% in 2009 to over 90% in eleven years. To put that in pespective, if you had income of $60,000 in 2009, your debt would have been around $32,000. If your income by 2020 rose to $80,000, your debt would rise to $72,000. Anyone can see where this is headed.
       You can see that the only way tax revenues will rise 17% per year is if we raise taxes or the economy grows by about 17%. Neither proposition is sustainable in the long term. In 2007, the Congressional Budget Office projected that the top tax bracket would have to be increased 92% to keep pace with health care cost inflation. Higher taxes will reduce growth, generating a vicious cycle.

       We cannot create a more effective and lower cost health care system by turning off the money supply. All that accomplishes is greater competition for the remaining money supply and desperate behaviors such as fraud. Hospitals, doctors, and other health care providers are caught between a rock and a hard place. The payment side is squeezing them while our demands for quality are increasing. We have to stop forcing them to use their good, ole' fashioned American ingenuity to beat the system and start providing incentives for them to use it to improve. We cannot solve the problems as adversaries with the health care system. We must form a strong partnership based on mutual trust. Even if you are opposed to the health care reform act, you should understand that the President showed he realizes a partnership is essential when he reached out to the American Hospital Association last year. The agreement the AHA signed with him to reduce Medicare spending by $155 billion was of far greater significance than the media or the politicians in Congress gave credit. It was the first step in forming a closer partnership between the health care industry and government to implement effective long-term cost controls. We MUST build on that first step.

I will provide more specifics in future posts, but understand this: You have a choice in this race not many congressional districts have. You can vote for a candidate who has spent years and years building the experience and knowledge that matters in reforming the reforms.