Adult Questions and Government Answers

The Wall Street Journal recently wrote an article on health care cost, centering on an unfortunate man who had extensive surgery at Hopkins, was hospitalized for almost a year before dying. They used this story to focus on health care costs. Some results:

In 2009, the top 10% of Medicare beneficiaries who received hospital care accounted for 64% of the program's hospital spending. So individual outliers do a lot of general financial damage to the overall system.

Medicare patients create disproportionate costs in the final year of life. In 2009, 6.6% of the people who received hospital care died. Those 1.6 million people accounted for 22.3% of total hospital expenditures. So, while specific outliers damage the system, the general group of Medicare patients who die, 6.6% of the Medicare group, make a tremendously disproportionate demand on resources. And people over the age of 65 consume 76% of total hospital costs.

Nor is this nightmare static. The program's net expenditures totaled $486 billion last year, according to the Congressional Budget Office, or 13.5% of all federal expenditures. In March, the CBO projected that Medicare expenditures would grow an average of 5.7% per year through 2022 and equal 16.2% of all federal outlays.

Jonathan Blum, deputy administrator and director for Medicare, had some opinions. As for...(the patient in Hopkins)..., "A lot of the costs were driven by complications that could have been avoided." So the program, a program the government volunteered responsibility for, is beset by horrific financial problems and a government representative's answer is a glib, unsubstantiated criticism of one of the world's best medical institutions.

Behind this inane thesis lies a thinking that is more and more apparent in government planning from health care to energy to education: Wishing makes it so.