Fed Wary Of Health Care Costs

Future Of Nation's Economy Could Hinge On Improvements To Health Care System

(AP)  Bolstering the performance of the U.S. health care system is one of the biggest challenges facing the country, Federal Reserve Chairman Ben Bernanke said Monday.

New medical technologies and treatments are allowing people to live healthier, longer and more productive lives. However, the aging of millions of baby boomers coupled with rapidly rising heath care costs are accounting for an ever-growing share of both personal and government budgets - strains that will become increasingly burdensome unless changes are made, the Fed chief said.

Challenges, he said, fall into three major areas: improving access to health care for the 47 million Americans - or about 16 percent of the population - who lack health insurance; bolstering the quality of care; and controlling costs.

"Improving the performance of our health care system is without a doubt one of the most important challenges our nation faces," Bernanke said in remarks to summit on health care reform organized by a Senate panel on Capitol Hill.

On his remarks, the Fed chief didn't talk about the Fed's next move on interest rates or the state of the U.S. economy.

Many economists believe the Fed will hold a key interest rate steady at 2 percent, a four-year low, when it meets next week. Bernanke and other Fed officials have sent strong signals that the Fed's rate-cutting campaign, started last September to shore up the ailing economy, was probably over because of mounting concerns about inflation.

Wall Street investors and some others believe that the Fed might be forced to raise rates later this year to thwart a dangerous inflation flare-up. Others, however, still think the Fed will be able to hold rates steady through the rest of this year.

It's a difficult spot for Fed policymakers. They are trying to aid an economy that has been badly bruised by the blows of a housing, credit and financial debacles. At the same time, they don't want inflation to take off. If the Fed were to start boosting rates too soon to fend off inflation, that could deal a set back to already fragile economic growth.

On the health care front, Bernanke didn't recommend specific solutions, saying the difficult choices involved with improving access and quality and controlling costs were best left to policymakers in Congress, the White House and elsewhere.

"Taking on these challenges will be daunting," he said. Given the complexity of health care matters, he suggested that it might be better for policymakers to consider an "eclectic approach," rather than one single set of reforms to address all concerns.

"We may need to first address the problems that seem more easily managed rather than waiting for a solution that will address all problems at once," Bernanke offered.

When policymakers contemplate changes, Bernanke urged them to "not lose what is good about our system." The system has produced innovations in basic science, in the understanding and diagnosing of disease and in advancements in medical technology, he pointed out. These advances have produced more effective treatments and significant reductions in mortality across a wide spectrum of diseases, he added.

Bernanke, once again, warned high health care costs will put an increasing strain on people's and government's budgets, unless those costs are curbed.

Spending on health care is the single-largest component of overall consumer spending - larger than spending on either housing or food, Bernanke said. For the federal government, spending on health care accounts for about one-quarter of total spending. By 2050, it will account for almost one half, Bernanke said.

"Per capita health care spending in the United States has increased at a faster rate than per capita income for a number of decades," he said. "Should that trend continue, as many economists predict it will, the share of income devoted to paying for health care will rise relentlessly," he warned.

[faith_in_w]

I say we have health accounts that are tax free say like $3,000 a year. Then when you have a heart attack and they send you the bill you can pay the $400,000 bill from your health savings account. The best thing is that the accounts are tax free and can earn interest.

[darnedsocks]

HEALTH CARE COSTS CAN BE REDUCED UP TO 70% VIA PREVENTION PROGRAMS, SUCH AS WELLNESS PROGRAMS, WHICH PREVENT PEOPLE FROM HAVING STROKES & HEART ATTACKS OR DEVELOPING DIABETES II.

[darnedsocks]

PREVENTION PROGRAMS ALSO FOCUS ON CATCHING CANCER WHILE IT IS STILL IN SOFT TISSUE AND CAN BE ISOLATED AND QUICKLY REMOVED BEFORE IT SPREADS. COSTS CAN GREATLY BE REDUCED VIA PREVENTION.

[missingamerica]

What is this?

Divert the public''s attention to health care, so that nobody dwells upon how they have spent the last 30 years attempting to make "trickle down" economics look like a success by bankrupting our nation across the board?

[wogerwabbit]

It''s great that we have all these improvements in health care, but who can afford it but the very rich.

My health insurance just went up to $788/mo. (my annual 20% rate increase) which is $9,456/yr. plus my $2,000 deductible plus the prescription deductible. Add on top of that my wife''s $385/mo. ($4,520/yr.) and here $2,000 deductible and our out of pocket expense is over $18,076 per year. I know people who don''t even make that much money in a year. What they need to do is get the greed out of the system.

[strokesurv1]

I am a stroke survivor and darnedsocks has an overly simplistic view of prevention, Only one test would have found the cause prior to the event and since I was in excellent health there was no reason to have the test. Faith_in_w, I hope you have been putting away 3000 for the past 50 years in your HSA to cover your hospice care, Insurance is supposed to be a pool of people being covered for the same possible occurences so why doesn''t someone work on fixing the insurance problem instead of just reducing costs by shoving them onto patients

[lochlan-2009]

If they stole all the moeny already, where do you think they are going to get the cash from? Less and less coverage for more and more cost.

[lorinkundert]

Instead of wasting our time how about explaining your existence when there is no evidence that the 17th Amendment was ever ratified.

[antoniof123]

I say we have health accounts that are tax free say like $3,000 a year. Then when you have a heart attack and they send you the bill you can pay the $400,000 bill from your health savings account. The best thing is that the accounts are tax free and can earn interest.

Posted by faith_in_w at 11:07 AM : Jun 16, 2008

I wouldn''t mind it but I don''t thing the doctors and hosptials will wait 130 years that right 130 plus years to get there money.

Next anyone else want to try.

[noloyalisti]

Our health care system is a sad cruel joke. We pay far more for far less that many other countries. Health care is a right that should be put into the Constitution. It is also our right to revoke the charters of the insurance companies that take far too much money out of the system for greedy CEOs.

[gs4-484]

Congress could greatly lower the cost of health by taking one step -- prohibit the advertising of prescription-only drugs on television. Advertising time is pricy, so the money saved on those endless ads that always say "Ask your doctor about XYZ" could be put toward new pharmaceutical research, rather than extracting same from folks who desperately need these medicines.

[usbrit-2009]

Congress could greatly lower the cost of health by taking one step -- prohibit the advertising of prescription-only drugs on television.

Posted by gs4-484

It WAS illegal until about 5 years ago when the GOPig Congress buckled to it''s owners in the Pharmaceutical industry and allowed it.

Maybe, just maybe Congress should cap prices on these clowns, it is getting totality out of hand. Yes we all need quality health care and something has to be done. The way Big Pharma is in all of Congress pocket I have my doubts.

[payasyougo]

Look at the costs of elective treatments vs. those covered under health care plans and you''ll see that elective treatments (i.e. Lasik, cosmetic surgeries, etc.) have dropped in price over the same period.

What that tells us is that if all health insurance were dropped forcing everyone to shop for the best rates prices would come down.

[darnedsocks]

THEY COULD SAVE MILLIONS OR PERHAPS BILLIONS BY PROMOTING PREVENTION AND WELLNESS PROGRAMS. IT COSTS A LOT LESS TO TREAT A CANCER PATIENT, IF THEY GO IN FOR TREATMENT RIGHT AT THE BEGINNING BEFORE IT SPREADS THROUGHOUT THEIR BODY. AND, OF COURSE, YOU WON''T HAVE PEOPLE NEEDING SURGERIES FOR HEART PROBLEMS, IF PEOPLE WOULD JUST EAT THE RIGHT THINGS! AND PEOPLE WOULD NOT GET DIABETES II, EITHER IF THEY ATE THE RIGHT THINGS!

JUST IMAGINE HOW MUCH COULD BE SAVED....INCLUDING THE PERSON''S LIFE....THROUGH PREVENTION!

[brugs2]

Hospitals scream they cannot afford to work properly.
Drs. screaming they don''t make enough money.
Patients screaming they can''t afford to go to see a dr.
No dental which is a big problem and bad teeth cause a lot of heart problems. Hearing aids are never covered, neither are eye glasses.
Our company pays $8737.97 dollars a month for 6 people in a small business. Yes we have nice coverage. Our insurance premimum could be the reason why we go out of business in the future!

[lonestartnow]

Yes, people are living longer--but I take issue with healthier. When one out of every 3 Americans is either overweight or obese, and when obesity is associated with the equivalent of 20 years of aging and 53 health conditions--we all pay for the chronic care required. I''m co-founder of the LoneStart Wellness Initiative which began as a grassroots initiative to urge people to take responsibility for making better nutritional choices and incorporating at least some physical activity into their lives. We know there''s a lot of information out there, but we know too, that just putting out information isn''t enough. We are proving that most people want to be healthy, and after more than 3 years, we are proving that an organized individual or employee wellness program can be effective when it comes to making this happen. Employee wellness programs are a double-win, for both employers and their employees. A wellness initiative won''t solve all health care issues, but if each of us takes individual responsibility for what we can do, we''ll take a huge strain out of the system. And, while we''re at it, we''ll all get healthier.

[jon2012-2009]

What that tells us is that if all health insurance were dropped forcing everyone to shop for the best rates prices would come down.

Posted by payasyougo at 09:18 PM : Jun 16, 2008

I''m with you.

[jon2012-2009]

Universal health care for all Americans is the only way that Corporate America will stop sending jobs out of the country.
Posted by neoconism at 07:14 PM : Jun 16, 2008

Yes. This will also mean, I think, we get rid of the health insurance companies that have helped fuel health care costs.