Check-Up on U.S. Healthcare
Squawk on the Street, CNBC
April 21, 2011
Mark Haines: S&P’s latest health care costs report from February 2010 through February of this year shows health care costs rose 6.2%. That’s good in a sense that it’s down slightly from 6.3% in the previous 12-month period, but obviously way above the rate of inflation for everything else. Here first on CNBC, David Blitzer, chairman of the S&P 500 index committee. David, good morning. Thanks for being with us.
David Blitzer: Good morning, Mark. How are you?
Haines: Pretty good. What do you have for us?
Blitzer: Health care costs continue to rise, however the rate of increase continues to creep down a little bit. So the news isn’t good, but it’s not getting worse. It’s getting maybe a touch better.
Haines: Why are these costs escalating at – I don’t know – three or four times the rate of overall inflation? What’s going on here?
Blitzer: Health care – despite all the excitement about technology and drugs – health care is a very labor intensive activity, and people – labor – costs a lot of money, which seems to be the key factor driving it up.
Haines: So, if I may, logically then you would find the worst or the most inflation occurring in hospitals.
Blitzer: You would, and, indeed, on the commercial side you do. On the Medicare side, you don’t, and I think that brings up a different aspect. Over the last few years we have heard a lot of arguments about single payer plans versus other kinds of plans. Single payer means Uncle Sam pays for all the health care. We pay him.
Blitzer: Medicare for people over 65 is a single payer plan, and, indeed, we consistently see smaller rates of increase in Medicare items than we do in commercial insurance, the kind of insurance that employers provide for their employees.
Haines: Okay. I’m going to leave that lying there because some of our viewers right now are going apoplectic thinking you have just endorsed single payer health care.
Blitzer: I haven’t. I’ve only reported the numbers. I’m not endorsing anything.
Haines: Believe me, I understand. You’re quoting the facts. Some people think facts are partisan. I don’t know how they get there, but they do. David, thank you very much. Appreciate your input.
Blitzer: Thank you. Have a good day.
By Don McCanne, MD
Facts are not partisan. Standard and Poor’s David Blitzer reports only the facts on single payer – and Wall Street needs to hear them.
Re-posted with permission from pnhp.org.