Darkness at the end of the tunnel

We have a several long-term problems, which of course our dysfunctional political system and utterly corrupt and nearly useless corporate media are largely failing even to contemplate, let alone do anything about. If you are reading this, you can probably come up with a list that's pretty similar to my own -- anthropogenic climate change, petroleum depletion, long-term structural unemployment, infrastructure decay, massive unfunded pension liabilities, the permanent war economy, not to mention the dysfunctional political system and corrupt and useless corporate media. Oh, I did mention those.

But long blog posts don't get read very much so I'll concentrate on one problem today. We've discussed this before but we have a strong, specific analysis to rely on today, from Joseph P. Newhouse in Health Affairs. It really frosts my pumpkin that this is subscription only, but I'll do my best to get the gist across. This is really two articles. The first is what the title says -- how various groups of Americans will experience the effects of the Patient Protection and Affordable Care Act in coming years, depending on their current status within the health care non-system the PPACA set out to reform. The basic lesson here is that the legislative factory has built a Rube Goldberg contraption with far too many moving parts that don't really fit together. All sorts of strange outcomes and unnecessary administrative burdens may result, which it may or may not be politically possible to fix. All of these problems would disappear like the flame of a blown out candle if we just had universal, comprehensive, single payer national health care but that can't happen because Aetna (on whose board Newhouse sits and in which he owns stock) would also blow away and well, then, some rich people would no longer be able to suck our blood.

In spite of his blatant conflict of interest, however, Newhouse appears to be a fair analyst. The second half of the article, or the second article really, concerns the future of health care spending with a focus on Medicare. Here's the problem in a pistachio shell: health care costs have been growing at about 2.5% annually above the rate of GDP growth. If that continues, four percent of GDP will shift to Medicare in the next 15 years. Big deal, you say? Yes it is, because Americans are unwilling to pay more in taxes than about 18% of GDP.

Right now, by the way, although nobody will believe it who listens to our dysfunctional politicians and useless corporate media, we're paying the lowest percentage of GDP in federal taxes since 1950, about 15%, so we could conceivably pay more but it seems unlikely to happen. In any event, we'd have to exceed 18% to cover 4% of GDP shifting to Medicare. And of course it just gets worse after that. Newhouse, relying on ME Chernew and no doubt correctly, observes that if this continues, by about 2050 we will actually have less of GDP to spend on everything else, i.e. Medicare will start eating our lunch and burning down our houses.

Of course this won't happen because we won't pass the necessary tax increases. So what will happen? There are a few possibilities but the smash up of universal health care, and of Medicare, seems the only likely alternative. Unless, of course, we can stuff a sock in the idiots who are screaming about death panels and find a way to start making rational choices about medical spending.

I'm not betting on it.