health care reform and cost containment

since congress continues to dither with if, when and how they plan on passing the health care reform bill, lets dive back into it. in doing some research i came across some interesting figures in regards to costs of existing programs. this highlights why i believe that any kind of reform to the system needs to have cost controls in place.

united kingdom's national health service
when this program was created in 1946 to provide free health care to all citizens, it was estimated to cost ₤260 million. the actual cost turned out to be ₤358 million.

medicare - hospital insurance
this is the part A portion of medicare and when created in 1965 it was estimated to cost $9 billion in 1990. the actual costs in 1990 turned out to be $67 billion.

medicare - the entire program
in 1967 it was estimated that this entire program would cost the US taxpayer $12 billion. by the time 1990 rolled around, it actually cost $110 billion.

massachusetts commonwealth care
this is the most recent example and has been shown as a model for how health care reform could work on a national level. i say, its an example of how out of control the costs could get on a national level. the program started in 2006 and the estimated cost for 2008 was $472 million. it actually cost $628 million.


and what happens when the actual costs exceed the estimates? either you can increase taxes and continue to find the money to fund the program or certain individuals or services need to be cut. i know it makes some people furious to say this, but the second option is called rationing of care. heres a somewhat chilling quote from the british health minister when faced with this exact situation:

If the present [budget] estimates are not to be exceeded, services must be withheld which the community has proved it urgently needs—dental treatment and spectacles must be refused, beds must be closed, staff dismissed, and waiting lists already appallingly long must grow even longer. I do not think my colleagues will wish this to happen; I hope they will share my view that the additional money must be found to prevent its happening. But if they do not, I shall need their assistance in determining which services should be withheld and which developments cancelled.

how about one more? i will keep it local but use a non-healthcare related example. The Big Dig. this project essentially moved the bridge through downtown boston into a tunnel under the city. it was estimated to cost $2.6 billion. it ended up costing $22 billion. and the ceiling tiles fall down and kill people.


which leads us to todays debate. we are told by the president and congress that this health care reform bill will costs the taxpayer in the neighborhood of $1 trillion over the next 10 years. based on the historical evidence, do you think this reform will cost more or less than $1 trillion? we know the answer already. without cost containment it will cost more than predicted, it will continue to grow and it will never go unfunded.