There were three excellent articles in the New York Times on Wednesday, August 22. Two were op-ed pieces by Tom Friedman and Maureen Dowd respectively. The third was an article in the business section about medical care costs by Eduardo Porter.
Although each is deserving of comment, I would like to focus on Porter’s article as I believe he raises, in no uncertain terms, a very important but taboo issue facing the country that needs to be discussed.
The cost of providing medical care to seniors and poor people is strangling the country and will continue to do so at an increasing rate as the population ages and inevitably falls prey to the diseases of old age. Per the article, the federal government spends 4.8 percent of the nation’s economic production on health care today and is expected to spend 9.2 percent thereof in 25 years. This is not sustainable absent large tax increases on the middle class or rationing.
Given our lack of investment in education and infrastructure, we are not likely to grow our way out of this problem. So Porter asks the following question: “Does it make sense that older adults in their last year of life consume more than a quarter of Medicare’s expenditures?” Moreover, a substantial portion of that prodigious sum is spent during the last 90 days of life.
Ergo, “are there limits to what Medicare should spend to prolong someone’s life by a month or two” (to the detriment of taxpayers generally and other Medicare/Medicaid recipients)?
The article goes on to discuss how Great Britain, Australia and New Zealand generally addressed the underlying issue, ie how much should be spent to preserve a life for a year, although the question of quality of life was not mentioned in the article.
As any high school grad should understand, you can have guns or butter, but not both. I know where I stand, where do you?
Factoid for the authors of the three articles and this blog: a phenomenon known as "The Baby Boom" occurred between 1946 and 1964. Marked by a population explosion, that event is now bearing what should have been totally expected results: boomers are now maturing, with 10,000 of us turning 65 each and every day from the beginning of last year, and continuing for the next 17 years. By the time the trailing edge of the Baby Boom (people born in 1964) reach the present retirement age of 66, the leading edge of the Baby Boom (those of us born in 1946) will be turning 83, at a rate somewhat less than 10,000 per day, owing to mortality having set in. What is not as apparent is the coming ascendancy of the Boomers as a majority voting bloc, independent of today's presumptive political parties. As a precursor, take a look at Nassau County's voter registration. Across the County and in almost every school district, 44% of the voters were older than 55 two years ago. In another 3-4 years, more than 50% of voters will be older than 55. The vast majority of 55+ aged voters will not have children in K-12 public schools, and in increasing numbers will have real concerns with college tuition, marrying-off their adult children, trying to retire from the workforce, and personal health issues associated with their own aging. NONE OF THIS IS ANY SURPRISE! Governments: deal with this!
Read the article on Newsday.com: http://www.newsday.com/news/nation/ap-gfk-poll-raise-taxes-to-save-social-security-1.3928010 I offer two observations: 1. The easiest way to preserve Social Security is to extend the applicability of FICA to 100% of employee wages, as is presently the case with Medicare contributions. 2, Preserving SS benefits at current levels, or even with the on-again, off-again pittances know as COLA is really not going to cut it in the future. There will actually need to be an enrichment of the standard SS retirement benefits, and more than likely, a lowering of the retirement age. As Baby Boomers age-in to SS benefit eligibility, we will, as an ascending large and powerful voting bloc, demand such changes be made by Congress. Others will agree, if only grudgingly, in order to get us Boomers to retire and open up jobs for younger people to step-into and launch their own careers. I am being deliberately cavalier writing about this, to illustrate and drive home the fact of the looming impact of the aging Baby Boom generation in the context of this important blog.
Politicians are highly predictable. You are correct, there will be little action to save Social Security until the eleventh hour. Then, the only palatable solution will be to extend the FICA tax to 100% of wages without increasing the tax rate; that is a no-brainer. But please note the statistic on the age of registered voters of the Baby Boom generation. Three-to-four years from now the percentage of voters in Nassau County who are aged 55+ will exceed 50%. After that, the age of that fifty percent voting majority will continue to increase toward what should be full retirement age (66). I am guessing that in about ten years, with a 50% voting majority eligible to collect Social Security, that the various levels of government will be focused on helping aged workers retire in order to recycle their jobs to younger workers. Helping older workers retire implies providing better benefits earlier in the eligibility cycle; it certainly militates against increasing the retirement age or decreasing benefits. Check back in nine or ten years and see which politicians are sponsoring bills to enrich Social Security in the manner I am suggesting. Think about this: I am 65, still working. My property taxes make retirement unlikely for the foreseeable future, so a chain of younger people will have to wait that much longer for me to vacate my job, which will become their job...someday, but not soon.
2) Hope I'm around and able to check back.
LOL
Sounds good, but the problem is we don't really have a market system at all. As a society we decided long ago that we would provide health care to the indigent, senior citizens and others unable to care for themselves; in other words, we view health care as an entitlement. I don't think that's bad thing - on the contrary I think that's the mark of a civilized society. The problem is that this is not what markets do. Markets limit access to those who can actually pay and unlike the insurance mandate under "Obamacare", participation in any market is strictly voluntary. So out of this contradiction between an entitlement view and a market-based system what we have is a heavily regulated medical industry, in which companies are required to adhere to a set of rules that make them less efficient. Stated another way, we get none of the efficiency and cost advantages a market system should deliver. More often than not I would be one to say that markets work a lot more effectively than government when it comes to allocating resources. But when it comes to health care that's actually not the case, and we are quite literally paying for it.
- need for tort reform - lack of effective peer review - no regional planning for very high-cost capital equipment (every hospital has to have the same, latest, and greatest machinery with no thought to logistics but rather as a 'marketing' strategy) Finally, I offer an alternative view of the cost of medical care other than as being a problem: we have great medical services and those services cost what they are worth; it is a good value proposition. Look at how well and how long most of us are living, here. That does not come cheaply.