Government Healthcare Delivery More Efficient Than Private Sector

blog_medicareAmerica’s safety net, specifically Medicare, is continuously under attack. Many politicians claim that its growth rate makes the budget deficit untenable lest there be substantial changes; in other words, draconian cuts.

An article in the Business Insider by Joe Weisenthal is dispelling that myth. He states:

The conventional wisdom on the deficit is: Right now the deficit doesn’t pose a problem, but thanks to the gigantic growth in healthcare costs, it’s inevitable that the government will get swamped by Medicare spending, ergo we need to tweak the system.

Peter Orszag, who was the head of the Office of Management and Budget under Obama, and who is now at Citi, offers up a chart that could be a Medicare costs game-changer.


“This graph from S&P illustrates two key facts: health-care costs have decelerated over the past few years, and Medicare costs have decelerated more than other health costs. That pattern suggests at least part of the slowdown is structural (since if it were all just a reflection of economic weakness, we wouldn’t expect Medicare to slow down more than other health costs, but if it were partly structural, that’s exactly what we would expect). If this slower growth continues, the impact on our long-term fiscal gap will be much more meaningful than any plausible outcome of the fiscal cliff negotiations.”