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Reinhardt on reform. Interview by Donna Vavala.
1Woodrow Wilson School, Princeton University, NJ.
Physician Executive
|December 9, 1994
Summary
Since 1965, U.S. federal health care policy, including Medicare and Medicaid, has prioritized cost reduction. Despite these efforts, health care expenditures continue to rise significantly, impacting the national economy.
Area of Science:
- Health Economics
- Public Policy
Background:
- Federal health care legislation, initiated with Medicare and Medicaid in 1965, has consistently focused on cost containment.
- Despite legislative aims, U.S. healthcare costs have escalated dramatically, consuming a larger portion of the Gross Domestic Product (GDP).
Discussion:
- The end-stage renal disease (ESRD) coverage stands out as an exception, paradoxically exacerbating rising healthcare expenditures.
- Federal spending on healthcare surged from $3 billion in 1960 to $280.6 billion by 1993, with overall healthcare costs growing from 5.3% to 13.8% of GDP in the same period.
Key Insights:
- The rapid and substantial increase in healthcare costs was unforeseen by the architects of federal healthcare programs.
- Economists project continued growth in healthcare spending, potentially reaching 18% of GDP in the future.
Outlook:
- Uwe E. Reinhardt, a prominent economist, anticipates ongoing increases in healthcare expenditures in the near future.
- Professor Reinhardt's analysis provides insights into the current and projected financial landscape of the U.S. healthcare sector.