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Page 5 of 5 What this means What this means is that the unrelenting growth in healthcare expenditures is not due to waste and fraud (the usual explanation). It is due to something else. It is due to the rapid increase in the number of individuals who need complex healthcare (the elderly and those with chronic or debilitating diseases that modern medicine is now helping to survive) and the explosion in healthcare technologies and services that can be applied to these people. We cannot control the rate of growth in healthcare expenditures by eliminating waste and fraud, but only by controlling the growth of medical services and technology (which can only be done by rationing), or by controlling the number of people who need those services (which can only be done by completely uncivilized methods). The bottom line on rationing To reiterate, the essential problem is not that a substantial proportion of healthcare spending is wasted due to inefficiencies in the system (though there are plenty of inefficiencies). The essential problem, the one we cannot escape, is that the rate of growth of healthcare spending is too high, is unrelenting, and is unrelated to those systematic inefficiencies. If we are to gain control of healthcare costs, somehow we must deal with this rate of growth. What is responsible for this unrelenting growth in the cost of healthcare? Since it is not due to waste and inefficiency, the only possible answer is that it is due to an increasing volume of actual healthcare being delivered per capita. And this, as we have seen, is due both to advancing technologies (which is potentially controllable, but, practically speaking, only with rationing), and to an ever-aging population (which is not potentially controllable, save by completely uncivilized methods). To cut into that growth rate, then, we have to find ways to reduce not just waste and inefficiency, but more importantly, ways to reduce the volume of healthcare services being delivered per capita – even though many of those healthcare services are apparently useful. In other words, to reduce the rate of increase in healthcare spending, we have to ration care. And as we have seen, we must reduce the growth in healthcare spending, and not just because we have a present-day healthcare crisis. The economic pressures that will predictably occur in the next few decades will dwarf any pressures we are experiencing today. We need to gain control of these costs not just for our own near-term economic health, and not just to be fair to our children and grandchildren. Controlling healthcare costs is what we must do in order to avoid societal chaos. And since rationing is the only way to truly gain that control, rationing is what we must do. It is an economic imperative. It will happen (and is happening) whether we accept its necessity or not. The only real choice we have, then, is whether to ration openly, or whether to do it covertly. In the next section we'll consider why we have chosen the latter method - and what that means.
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