76-15-B7
- Main Page \ Reagan Radio Commentaries \ 1977
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Health Costs[edit]
Transcript[edit]The other day my friend, M. Stanton Evans, wrote a column in which he said; "From start to finish, the current mess in medical pricing is a creation of the government. There will be no hope of remedy until that simple fact is recognized and acted upon". He was commenting on the President's proposal for fixing hospital rates by government order to curtail -- QUOTE -- "the devastating inflationary trend" -- UNQUOTE -- of hospital costs. Stan Evans has properly fixed the blame where it belongs, on the impact of billions and billions of taxpayer dollars pumped into the health care system through Medicare and Medicaid. Now a fair question is why and how does federal spending on health care raise the price? And the answer lies in the increased utilization that takes place when normal restraints are eliminated. If you and I feel a touch miserable on a bleak winter day, chances are we take a couple of aspirin, go to bed early and call the doctor if we don't feel any better the next morning. Likewise, if something does hospitalize us, our first question is, "Doctor, how soon can I go home?" And that question is prompted at least in part by our knowledge of how much the hospital room is costing per day. The increase in health insurance has had some effect on increased costs. With a third party paying the tab -- even though it's out of our insurance premiums -- we all relax a little and don't hurry to leave the hospital quite as soon as we did when we wrote out the check ourselves. But by far, the big impact is government. Total figures can be confusing. The fact that government expenditures for Medicare and Medicaid went from $7 billion to more than $40 billion in 10 years can be laid to more people, inflation and other factors. However, one figure can't be talked away. That is, how much is the cost per person. The startling fact is that from 1965 to 1975 per capita health care spending by government went up 813.6%. The Council on Wage & Price Stability says, "The rapid growth in private third payments is dwarfed by the growth in public expenditures resulting from Medicare and Medicaid". Right now roughly 40% of all health care spending is by government. Government is picking up the tab for 55% of all hospital bills. Thus a lot of those normal restraints I mentioned have been replaced by a "sky's the limit" attitude. You see the government's method of spending is based on cost. To get more, a hospital administrator only has to spend more. So why fight a demand for higher pay by hospital employees? Order that new equipment that looked so good in the medical journal. Relax that close watch on extravagance in ordering supplies. Since three- fourths or more of hospital costs are for staff it is easy for hospital overhead to increase and, of course, it is prorated out on a per room basis. A Frenchman named Bastiat more than a century ago said, "Public funds seemingly belong to no one and the temptation to bestow them on some one is irresistable". This doesn't mean we should blame the hospital administrator. Would we do differently in his place? His task of trying to make each dollar go farther, saying "no" to a pay raise for hard-working nurses and trying to hold the price down for the patient can be frustrating. Then down the chimney comes Uncle Sugar saying, "Just send me the bill". Well, more Uncle Sugar is not the answer. |
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