OK, I know you are sick to the point of nausea of hearing that the solution to America’s fiscal problems lies in controlling health expenditures. Unfortunately it’s true as this graph from John Hempton makes strikingly clear.

As John points out there is one hell of a lot of room to squeeze down expenditures without impacting outcomes. He also notes that doing so requires stomping on a lot of very influential toes, so it’s not an easy task to bring things back to reality.

I suggest you read his blog post and more importantly follow the link he provides to a longer discussion he had regarding the Australian medical insurance system and its implications for our problem. Among other things you will find out how the Australians manage to have a thriving private insurance market integrated into a basically socialist system of delivering medical care.

I’ve highlighted these posts by John before and still believe that they represent some of the most honest analysis of the issues I’ve run across. It pains me to say this but until you take a lot of the profit out of the health care system you will not solve our problem.

Which is probably the end game of Obamacare. There are enough twists and turns and regulatory discretion in that piece of legislation to eventually allow the federal government to dictate the price at which health care in its many forms will be delivered. Ultimately, some HHS secretary is going to have it in her power to fix the price for services and a Congress faced with a full blown fiscal crisis will amid much hand wringing declare that there is really no other choice.

I wish there were an alternative but I think that the time at which we might have reformed the system in favor of a market based solution is long passed. The simple fact is that we spend too much on health care (much of it subsidized) and have to get off the juice. Given the entrenched interests there is probably no way of reaching a consensus for reducing the outlays, so subterfuge and government fiat will have to suffice.

I wish there were alternatives, but I don’t see them. So, it’s time to turn the business over to the Feds and start trying to come up with some Australian type solutions that let us put a little bit of the market back into the system.

P.S. For a concurring point of view you might want to take a look at Dave Sculer’s thougts.