Wednesday, August 19, 2009

Feldstein on health care

In The Wall Street Journal, Martin Feldstein cuts through the rhetoric and slogans about health care to get the heart of the matter: health care reform is about rationing.
Although administration officials are eager to deny it, rationing health care is central to President Barack Obama's health plan. The Obama strategy is to reduce health costs by rationing the services that we and future generations of patients will receive.
The key problem facing the government is the the explosion of costs in Medicare and Medicaid in the future.
There is, of course, no reason why limiting outlays on Medicare and Medicaid requires cutting health services for the rest of the population. The idea that they must be cut in parallel is just an example of misplaced medical egalitarianism.
He then goes on to explain how the present system of tax deductions and credits encourage too much spending on health care.
Like virtually every economist I know, I believe the right approach to limiting health spending is by reforming the tax rules. But if that is not going to happen, let's not destroy the high quality of the best of American health care by government rationing and misplaced egalitarianism.

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