US President, Barack Obama, has identified the cost of health care as the number one threat to the American economy. In a 55-minute speech to the American Medical Association earlier this month, in which he articulated a thorough understanding of the main issues, Obama outlined his proposals for a public health insurance option that would compete alongside private insurers. Obama’s initiative is an effort to provide an affordable insurance option for 47 million uninsured Americans and for others who are struggling with the high costs of their current health plans. Not surprisingly, the plan has met with opposition from the private insurance lobby, which claims that it will drive them out of business.
The cost of American health care is out of control. Currently, it eats up 17% of GDP, a figure that may soon reach 20%. That figure is 50% higher than that of the next country in the high spend league table and is more than double what most European countries spend. To make matters worse, Americans are no healthier for all this expenditure - they have shorter life expectancy and higher infant mortality than many EU countries.
In the AMA speech, Obama referred to an article published in the New Yorker on June 1, by Atul Gawande, a Boston-based endocrine surgeon and former Rhodes scholar who while still a medical student in his mid-twenties became a senior health advisor in the Clinton administration. Gawande’s article illustrates how the blame lies squarely with doctors and for-profit health facilities. The fee-per-item payments have produced a system of perverse incentives.
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