Health Care Fiscal Physical

Back in 2002 healthcare experts made it apparent that our healthcare system was unable to serve everyone. Analysis of the situation is outlined below.

Fiscal discipline is a must. Every penny should be accounted for. In 2003 health care spending is projected to be about $1.6 trillion. In 2000 it was about $1.3 trillion (13% of GDP) compared to $73 billion (7% of GDP) in 1970. Health spending costs for 2001 were 37% for hospital outpatient, 28% for physician services,21% for prescriptions, and 14% for hospital inpatient. According to the American Hospital Association (AHA), hospitals provided $21.5 billion in uncompensated care in 2001; however, the government pays for most of health care. About 20 -30% is administrative, much being attributed to redundancy and overhead costs ("Government Share of Health Care Expenditures" by Asaf Bitton, James Kahn, M.D., M.P.H. from University of California, San Francisco - March 5, 2003, msJAMA). The CMS
estimate for 1999 government health spending is 45.2% ($548 billion). The elderly, disabled, low-income children, and some low-income adults are covered by government. Medicare and Social Security gets 7% of this amount. This is expected to double in 10 years. The average monthly health insurance premium for an individual is $255 ($3060/yr.), while that of a family is $663 ($7956/yr.) which represents a 12% increase from 2001 to 2002.

The forecast for 2004 federal budget is a record $2.7 trillion. Payroll taxes comprise 38% of the federal revenue. Taxes collected for 2003 are expected to be about $1.9 trillion (Congressional Budget Office, CBO, current budget projection report, March 7, 2003 - (www.cbo.gov). Projected health spending for 2003 is $1.6 trillion. This is over half of the budget! Furthermore, the Office of Management & Budget forecasts that the federal government will run a deficit of about $316 billion for fiscal year 2003 reaching $385 billion for 2004. This is projected to decrease in 2005 with forward projections of a $10 billion surplus by 2012. The
government debt is actually an estimated $6.4 trillion (about
$70,000/ family).

So where does this leave health costs? The HHS expense alone for 2002 is greater than the deficit ($460 billion). The majority of this ($375 billion) is for the CMS. For 2004 the projected expense for HHS is expected to be $500 billion. Other basic government allotment proposals for 2004 are: $400B for Medicare prescription program (over 10 years); $35B for uninsured (federal and state funds); $5 B for SCHIP; $2B for FDA; $60B to Dept of Defense (about $15B for aid to other nations, $21B for military health care); part of estimated $20B to rebuild Iraq (starting with a $2.5B down payment this year). There is $9 billion of “other”. There is an extra $80B approved for war costs ($62.4B to Pentagon, $4B for domestic security, $2.2B for state and local law enforcement and emergency workers; $7.9 foreign aid; $1.1B for Jordan; $1B for Israel; $1B for Turkey; “and money for Afghanistan, the Philippines and Colombia”). This includes $2.9B for airlines (many have filed for bankruptcy or are on the verge in spite of funds given after 9/11), and "for other projects pushed by lawmakers". This is money for use up to the end of the fiscal year ending 9/30/03. What are these "other" projects ($16M for SARS research and $142 M for smallpox vaccine program are $158M of this $2.9B) ? Not included in this is extra 26 weeks of unemployment for employees which was requested by some lawmakers.

So what attention will health care get if a person is unable to get a stipend to live off of while seeking employment? All of this should be itemized and accounted for with more priority given to health and well being. How much can we expect to get for our ailing health system with these other "priorities"? Perhaps much of it can be put on the backburner, while more monies are allotted for remodeling the American health care system to provide health care for all.

Excerpted from "Building An American Health System" (2003) by J. L. Richardson, M.D.