The Great Healthcare Reform Debates:Key Elements, Complex Causes, Difficult Problems, Policy and Partisan Politics
By Dave Livingston. Dave is a management consultant with almost 30 years of experience with analyzing complex business problems and developing solutions and new businesses. He blogs on public affairs at his blog Parts to Wholes: the Socionomic Systems Nexus ( http://llinlithgow.com/PtW/ ) where he attempts to apply that toolkit to current affairs and public policy. He also brings a background in economics, politics, current affairs, international relations, history and philosophy to the table. The work you read here is the result of applying systems analysis (hence “parts to wholes”) to complex problems in Political Economy and Public Policy.
Introduction
Healthcare is the fastest growing and, by some measures, largest single sector of the economy. It’s the fastestgrowing because it’s the only sector where costs have been growing at an exponential rate for almost twodecades. The implications of that are enormous, for each individual, for every business and for the overall healthof society as well as the long-term viability of government. Despite all these serious challenges, which we’ve beengenerally aware of the issue of Healthcare Reform has been sadly neglected because of the size, complexity,interest group concerns and partisan politics that have swirled around it for decades. Yet, despite of all that weare closer to real and substantive changes than we have been since 1965.Because Reform has been so contentious politically, because it touches so many parts of so many peoples livesand livelihoods and is such a major part of the economy there’s been enormous anxiety and a lot of partisanposturing and positioning over the last several months. In the process very little has been said that has madeclear what is going on simply and clearly enough for either concerned citizens or interested stakeholders to havea clear understanding of all the many moving parts and complex machinery involved. This is our best attempt atsurveying the landscape, collecting reliable information and presenting conceptual and analytical frameworks thatmay help you understand what’s going on and the potential impacts, whether you are a private citizen, aparticipant in the Industry or involved in it as an investor or other interested party.Healthcare is huge, now about 14-17% of the economy. When we first got introduced to these concerns in theearly 90s it was 6% and growing rapidly toward 10%, which worried everyone then. Now it’s likely to grow to 40-50% on current course and speed. Which is of course unsustainable. In fact healthcare premiums have risen sofast that they’ve gone from about $8,000 to $15,000 per family and are headed shortly for $25,000. In the longerterm without deep structural changes out of control costs present a real danger of bankrupting the country.At the same time the US spends 2-3X what the other major developed economies do, appears to get about ½ asmuch value on a wide range of performance measures and is the ONLY developed economy that exposes itscitizenry to catastrophic risk of financial failure. Rising healthcare benefits have also been a primary cause ofstagnant wage growth and have seriously hampered the performance and competitiveness of American business.In short there is no single person or interest group who will not benefit in the long run from putting Healthcare on amore viable and sustainable basis.There are however an enormous number of complex moving parts linked together in a great many relationships.That makes analyzing the challenge very difficult for its own sake. At the same time the debates over Healthcarehave been extremely rancorous and partisan, representing issues of political advantage and leading to majorfabrications and distortions and exaggerations if not outright mis-representation. At a level that is almostirresponsible and a failure of public fiduciary responsibilities. Normally with a major policy challenge of this scope,complexity and magnitude it’s critical to understand the interests and positions of the major stakeholders asidefrom the intrinsic issues. For Healthcare it’s also essential to understand the political issues and the inter-connections to the Economy. Accordingly you will find us starting with a careful consideration of the political and
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