PRI: Government-Run Health Care Costs Rise Faster Than Private Sector Care

via: Heritage

Pacific Research Institute Senior Fellow Jeffrey Anderson reports:

The centerpiece of President Obama’s plan is a “public option,” described by Tom Daschle as “a government-run insurance program, modeled after Medicare.” The president asserts that this new Medicare-like program would cut costs.

But there are nearly 40 years of experience to consult, and they offer a resounding rebuttal. Across the years, Medicare’s costs have risen far more than the costs of privately purchased care.

A new study I’ve completed, published by the Pacific Research Institute, takes all health-care spending in the United States and subtracts the costs of the two flagship government-run programs, Medicare and Medicaid. It then takes that remaining spending and compares its cost increases over time with Medicare’s cost increases over time.

The results are clear: Since 1970 — even without the prescription drug benefit — Medicare’s costs have risen 34% more, per patient, than the combined costs of all health care in America apart from Medicare and Medicaid, the vast majority of which is purchased through the private sector.

Since 1970, the per-patient costs of all health care apart from Medicare and Medicaid have risen from $364 to $7,119, while Medicare’s per-patient costs have risen from $368 to $9,634. Medicare’s costs have risen $2,511 more per patient.

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