I keep complaining that this bill doesn’t do enough to control costs. I believe that. But then I see something like this, and I have to accept that maybe I’m over stating things. Or, at least, I need to recognize that something is still better than nothing:
If President Nixon’s health reform plans had been enacted in 1975 and slowed the annual rate of spending by 1.5 percentage points a year, today we would be spending 10.7 percent of GDP on health care. In dollar terms, we would spend only $1.6 trillion on health care in 2010, instead of projected health spending of $2.6 trillion. This savings of $1 trillion in 2010 alone would remove much of the financial burden on families, businesses, and government. Even if Nixon reforms had slowed spending growth by “only” 1 percentage point a year, health spending as a percent of GDP would have been $1.9 trillion in 2010, or 12.7 percent of GDP—a savings of 5 percent of GDP.
If cost containment measures slowing spending by 1.5 percentage points a year had been enacted in 1980 under President Carter, the trends would be similar, with spending rising to $1.7 trillion in 2010, or 11.5 percent of GDP. Even if we had acted as late as 1995 under President Clinton, health spending in 2010 would be $2.1 trillion, or 14.2 percent of GDP.
The federal government would have been a major beneficiary of comprehensive health reform under Presidents Nixon, Carter, or Clinton. Instead of consuming 6.2 percent of GDP in 2010, federal health outlays would have been 3.7 percent in 2010 under Nixon reforms that slowed spending growth by 1.5 percentage points, 4.0 percent under Carter, and 5.0 percent under Clinton.
Hard as it is to believe, had President Nixon’s health care reform proposal been enacted – Nixon! – and costs been slowed by as little as 1.5%, our health spending as a percentage of GDP might be 7% lower than it is today. That’s a massive amount of money.
Maybe incremental reform would do more to contain costs than I thought.
(h/t Ezra Klein)
UPDATE – Language cleaned up to make things more exact.
