On Feb. 21, 2007, Health Day News reported that according to the Federal government, spending on health care will double from today’s levels to $4 trillion or 20% of GDP by 2016. The complete in-depth article can be found at http://www.healthday.com/Article.asp?AID=602078

2006 spending on health care is projected to be $2 trillion or about $7,200 per capita, with the government providing almost half. The projection of $4 trillion in 2016 is almost $13,000 per capita with the government again providing almost half.

With the government providing half of the funding, is it any wonder that health care costs have skyrocketed? When demand increases, even artificially, prices respond accordingly. Never mind the impact of disinterested 3rd parties.

Wasn’t there a time when everyone could afford health care? Like before the government got involved maybe?

In 1960, (the earliest year for which the Department of Health and Human Services has records), we spent $153 per person on health care including government spending of $38, (25%). In 3 short years (1965 – 1967) the public share skyrocketed to 38%. In 2005, we spent $6,704 per person (an annual increase of 8.76%) with the government providing $3,044, or about 45%! (source: HHS-CMS)

We are currently spending 2 times more for health care than for food, 3 times more than for clothing and 30% more than for housing! For 45 years now, increases in health care spending have outpaced inflation EVERY YEAR and by an average margin of 2.6:1! Our per capita health care spending for 2005 was 44 times the amount spent in 1960 while spending for food (as an example) increased only 10-fold in the same period. There’s something wrong with this picture.

Actual statistics have not yet been released for 2006 even though we are now into the 4th quarter of 2007. We must wonder if we might be in for an unpleasant surprise.

If the government becomes more involved in health care, i.e. universal coverage or “mandatory insurance”, we’ll WISH it was ONLY $4 trillion.

Chuck Angier is self-employed in agri-business in Virginia.  He can be contacted at chuckangier@gmail.com.

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