Healthcare spending in the U.S. accounts for 17.6% of the economy, and is projected to be 20% by the end of this decade. These are not federal budget numbers, this is the whole economy. $1 out of every $6 that’s spent in this country is spent on healthcare.
For context, that’s double the percentage spent in the average OCED country. In absolute dollars, we spend 2.5 times more per capita than average, at $8,650/person. And for all that money, we rank just under the average for life expectancy and infant mortality.
This is a pointless drag on the entire economy. Not only for the government and private employers, but for workers as well. One of the reasons wages have been so flat for the last decade is that money available for employee raises has gone into preserving medical coverage rather than increasing take home pay.
Yet this is also a big issue, perhaps the only issue, for the current budget problems faced by the federal government. Government spending on healthcare (including employee plans, veterans benefits, as well as Medicare and Medicaid) is $1.17 trillion each year. And this is projected to double over the decade. Granted, these numbers are inclusive of state and local government spending as well, but this is still paid for with our tax dollars.
In other words, considering our 2.5x cost premium, there’s $700 billion/year sitting on the table if we manage to get our healthcare costs in line with our global peers. Even assuming the federal portion is only half of that, the numbers dwarf any of the cost savings currently proposed by either party’s budget plans. Couple this with the already planned savings for drawing down the wars, and our deficit goes away by 2020.
This is the only budget problem we need to be addressing. It saves Medicare, Medicaid, Social Security, NASA, Pell Grants, and everyone else currently on the chopping block. Do the math.
So why aren’t we focused on fixing this? Primarily because the proven method of achieving the healthcare cost goals, the one used by pretty much every other OCED country we are benchmarking against, is some form of single-payer model. And for reasons known mostly to powerful corporate lobbies for insurance, pharmaceutical, and medical device companies, single-payer health plans are socialist Nazi plots to kill Grandma. Instead, we are committed to responsible prudent austerity founded on shared sacrifice… because Grandma prefers be bankrupt such that she is forced to choose between food and medicine. After all, it is about having a choice.