Cost: The Core Healthcare Problem

The Economist uses John McCain’s healthcare plan to make the magazine’s own point about the U.S. healthcare crisis. According to The Economist, McCain is the only candidate to say the truth: healthcare costs too much and we’ve got to cut costs.

The article notes:

 private health insurance, on average, costs $12,000 a year for a family of four.

 since 1967, American health-care costs have increased faster than the economy by an average of an extra 2.5% a year. Health care now consumes around 16% of America's entire GDP, a much higher proportion than in other industrial economies.

 ever-rising costs of this kind are not sustainable, one reason why the proportion of firms offering health care to employees has been steadily falling, from 69% in 2000 to 60% now.

 for people who must pay for their own insurance, rising costs have far outstripped increases in earnings (see chart). This has helped increase the number of uninsured.

 for the government, the geometrically rising price of coverage is inexorably busting the budget. By 2050, Medicare and Medicaid will together consume 20% of GDP—almost the same share as the entire federal budget now.

Of McCain’s solutions, The Economist says,

The most important is to shake up the insurance market, by, for instance, allowing health- insurance companies to tout for business across state lines. . . McCain also wants to see much greater pooling of national data on best practices. . . He wants to see doctors rewarded according to results, rather than procedures, because he argues that the current system is stacked against preventive medicine. His plans are skimpy. . . But at least he is asking the right question.