Playing Catch-Up

By now we are all well-aware of the infelicitous turn our economy has taken since the later half of 2007. The housing bubble, job losses, bank bailouts, investment firm collapses and accumulation of debt have all turned us upside down. And here, in California, we are clearly no exception. In just one year California has jumped up 4.3% in unemployment to a total of 10.5%. More than 481,000 homes were relegated to foreclosure in 2007. And we have a projected 14 billion dollar deficit to boot.

What this actually means is that we have no money to spare. So how can we afford to pay for all the things we need? Like health care? Technically we can't. As Donald Barr, MD notes in his book Introduction to Health Policy, "state and local governments typically are forbidden by law from engaging in deficit spending." Therefore, there are realistically only two ways to get funds for services like health care:

a) Through increasing taxes, or b) Taking funds from other programs

Programs and services will have to be dropped in order to stay afloat fiscally. "Likely targets for deeper budget cuts include higher education, public schools, transportation, the prisons and health care" notes Eric Bailey of the LA Times. (If you are scratching your head also because you are unsure what else the government is spending our money on, you are not the only one)

That is exactly what is on the upcoming special election ballot on May 19th. Propositions 1D and 1E deal with such issues. According to the California Healthline,

"Proposition 1D would temporarily shift $608 million from First 5 programs to fund services for children, including programs for foster children and kids with developmental disabilities. First 5 was created in 1998 when voters approved Proposition 10 to increase the state tobacco tax to fund early childhood health care and education programs. Proposition 1E would shift $226.7 million from mental health care programs funded by Proposition 63 to the existing Early Periodic Screening, Diagnosis and Treatment Program for low-income children for two years."

Along with 4 other ballot initiatives, Governor Schwarzenegger needs these all to pass in order for our state's budget to stop drowning in debt. But these piecemeal measures aren't going to pull us out of the water. Nationally, health care costs occupy close to 16% of the total GDP in the United States. Barr also notes that "governments at all levels - federal, state and local - are responsible for a combined 46% of all health care expenditures".

The 140 Billion that will go towards health care from the stimulus package is a nice gesture, but its not going to cut it. As Arnold Relman, MD exclaims in his book A Second Opinion, "the average rate of increase in health expenditures since the late 1960's has been between nine and ten percent per year, which is more than twice the rate of general price inflation". 

Do you see the problem yet? Government obtains the money it needs for health care through acquisition of taxes, and taxes generally rise at the same rate as GDP growth. But Barr sagaciously points out "health care expenditures rise faster than GDP". Thus, the government and all purchasers of health care have historically been playing an unachievable game of catch-up. Unless major reform is considered in the financing, organization and delivery of health care we are only going to be running into short sighted dead ends. That is the challenge we face - as patients, doctors, health care practitioners, politions and citizens.

- m.tsang