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145025 1 (1991-01-01)

handle is hein.gao/gaobacwgl0001 and id is 1 raw text is: A System in Crisis r) ,,, - % 145025 THE HIGH COST OF HEALTH Jonathan Ratner SURPRISINGLY BROAD consensus has emerged in Washington that the nation's health-care system is in sore need of repair. Such diverse voices as Office of Management and Budget Director Richard Darman, the editors of the Journal of the American Medical Association, Members of Congress, leaders in business and labor, and health-policy analysts have joined in acknowledging the system's widespread troubles. So today it is a commonplace that our health system is in crisis. But this label is too facile if it suggests imminent collapse. Rather, the painful paradox of our health system-the coexistence of American medicine's continued suc- cesses with its persistent gaps and inefficiencies-is becoming more acute. To understand that paradox better, we must explore the high, and rising, level of our health-care spending. The United States leads the world in health-care expenditures. In 1990, Americans spent more than 12 percent of their nation's Gross National Product (GNP) on health care-$671 billion in all, or $2,660 per person. Should cur- rent trends continue, health care will consume about 15 percent of GNP by the end of the century; by 2030, according to Darman, its share will be more than one-third. Such rapid growth is probably unsustainable and surely undesirable. By contrast, the world's second-biggest health-care spender, Canada, de- votes about 9 percent of its national income to health care. As recently as 1970, the United States and Canada spent roughly equal proportions of their national incomes on health-about 7.4 percent. By 1989, however, U.S. health care re- quired almost 11.6 percent of GNP, whereas Canadian health care absorbed only about 9 percent. If U.S. health-care spending had increased only as fast as Canada's in the past two decades, then the United States could have allocated more than $140 billion this year to other uses. Despite the nation's burgeoning health-care expenditures, millions of Americans lack ready access to regular care. More than 31 million Americans under age 65 are not covered by private or public insurance. Millions more have incomplete coverage, lacking insurance for particular services or protection in case of catastrophic illness. Lack of insurance does not prevent a person from JONATHAN RATNER is Assistant Director for Medicare and Medicaid Issues in GAO's Human Resources Division. / SUMMER/FALL 1991 3

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