Friday, November 18, 2005

2013: "Tipping Point" for U.S. Healthcare according to former Secretary of U.S. Department of Health and Human Services

Eight-year window cited for U.S. to cut health costs:

A "tipping point" in the national debate about health care is likely to arrive in 2013, said Tommy Thompson during a speech Tuesday morning in Scottsdale. The U.S. Department of Health and Human Services, which Thompson led during President Bush’s first term, has predicted the total amount of money spent on health care in this country will nearly double from $1.8 trillion to $3.4 trillion, and take up 18.4 percent of the gross domestic product.

That same year, Congress is supposed to start repaying $289 billion that has been borrowed from the Medicare trust fund to mask yearly deficit spending, Thompson said. Medicare already costs more than the program brings in worker taxes, and Medicare officials have projected the trust fund will run out of money by 2020.

Unless significant steps are taken before those two events collide, Thompson said, the drain on the national treasury will bring such enormous pressure that even a Republican-controlled Congress that embraces a free market will move toward nationwide price limits.

Thompson issued his warning on the final day of a conference meeting for the National Business Coalition on Health, a group that represents employer alliances that negotiate for private health insurance plans. The formal purpose of Thompson’s visit to Scottsdale was to promote the first day of enrollment for the new Medicare prescription drug plan, a trip funded by the drug maker Pfizer.

Thompson was a chief architect of the new plan and said Tuesday he’s still convinced it’s the most important change for improving the quality of life for older Americans since Medicare was established 40 years ago.

But most of Thompson’s 30-minute speech was devoted to dealing with the larger issue of paying for a health care system that continues to grow several times faster than the inflation rate. His points resonated with an audience of private business leaders who constantly struggle to provide employees with reliable, affordable health insurance.

"We just can’t continue on this track," said coalition president Andrew Webber. "We are not competitive when we are spending triple or four times than (businesses in other countries) in benefit costs."

Thompson said one critical issue is providing insurance protection for an estimated 41 million people who currently don’t have any coverage. He proposed Congress should authorize states to create insurance plans that would include everyone without coverage, and invite private insurers to bid for government subsidies. Congress could redirect $8 billion in health care tax credits to pay for those subsidies, he said, and limit the maximum payout per illness at $75,000.


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