The health care crisis and what to do about it.doc

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Volume 53, Number 5 · March 23, 2006
The Health Care Crisis and What to Do About It
By Paul Krugman, Robin Wells
Can We Say No? The Challenge of Rationing Health Care
by Henry J. Aaron and William B. Schwartz, with Melissa Cox
Brookings Institution, 199 pp., $; $ (paper)
The Health Care Mess: How We Got into It and What It Will Take to Get Out
by Julius Richmond and Rashi Fein
Harvard University Press, 320 pp., $
Healthy, Wealthy, and Wise: Five Steps to a Better Health Care System
by John F. Cogan, R. Glenn Hubbard, and Daniel P. Kessler
American Enterprise Institute/Hoover Institution, 130 pp., $
Thirteen years ago Bill Clinton became president partly because he promised to do something about rising health care costs. Although Clinton's chances of reforming the US health care system looked quite good at first, the effort soon ran aground. Since then bination of factors—the unwillingness of other politicians to confront the insurance and other lobbies that so essfully frustrated the Clinton effort, a temporary remission in the growth of health care spending as HMOs briefly managed to limit cost increases, and the general distraction of a nation focused first on the gloriousness of getting rich, then on terrorism—have kept health care off the top of the agenda.
But medical costs are once again rising rapidly, forcing health care back into political prominence. Indeed, the problem of medical costs is so pervasive that it underlies three quite different policy crises. First is the increasingly rapid unraveling of employer- based health insurance. Second is the plight of Medicaid, an increasingly crucial program that is under both fiscal and political attack. Third is the long-term problem of the federal government's solvency, which is, as we'll explain, largely a problem of health care costs.
The good news is