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“Big Government” and Our “Private” Healthcare System

August 22, 2008

Just a short comment on the role of government and our healthcare system.

Many people oppose the formation of a national healthcare system based on the fact that they want as little government involvement as possible in medical decisions.

However, let’s not delude ourselves.  The federal government already plays a significant role in the medical world.  A recent article in Health Affairs states the public sector (i.e.–government) accounts for 56.1% of healthcare expenditures.  This is largely composed of spending through Medicare and, to a much lesser degree, Medicaid.  In addition to the 56.1% spent directly by the federal government, private insurers rely on fee schedules set by the federal government to decide how much they will pay doctors.  For example, Medicare may say they are going to pay a doctor x amount of dollars for an appendectomy.  Private insurers will come along and say they are going to pay 125% of what Medicare pays for an appendectomy, instead of developing and setting their own fee schedules.  Thus, the influence of government goes well beyond their direct payments through entitlement programs.

Additionally, much of our medical research is supported through government grants (read: the government supplies the dough for research projects, so they decide what gets researched and what doesn’t).

Thus, our quaint little “private” healthcare system is much more dependent on government than most people would like to believe.

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