Healthcare Reform?

“Americans will spend a staggering $2.5 trillion on health care in 2009, says the Congressional Budget Office. As a share of national income that is far more than other rich countries spend, despite America’s slightly younger population. To say that Americans do not get value for money is putting it mildly. They live no longer than Europeans and die younger than the Japanese. Meanwhile, 46m of them lack health insurance.

There are many reasons why American health care costs so much. Americans love fancy new medical technology. New drugs, for example, are prescribed a year or two earlier in America than in Europe, and do not come cheap. American doctors pay a fortune to insure themselves against frivolous lawsuits. A study in the New England Journal of Medicine found that even in cases where no medical error was found, plaintiffs received payments a quarter of the time. And half of medical malpractice payments were gobbled up by lawyers and overheads.

But the central problem is that most Americans get their health insurance through their employers. This dates back to the era of post-war wage controls, when firms offered benefits instead of pay rises. Today’s tax code sets it in stone. Employers can buy health insurance with pre-tax dollars. Individuals cannot.”
-The Economist

GCG discusses a baseline understanding of the healthcare industry issues and the key drivers of reform and to what extent reform is necessary.

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