
Some 40 years after the enactment of Medicare and Medicaid and more than a decade after the Clinton administration failed in its bid to extend coverage to all Americans, the nation's system of funding health care is on the verge of breaking down.
Employers, consumers and governments at every level are straining under the burden of a health care bill that is growing at a pace five or six times the rate of inflation.
Businesses, squeezed by soaring health insurance costs, are passing an increasing share of the price tag to their workers. That's forcing employees to dig ever deeper into their pockets, prompting millions to forgo coverage altogether and gamble that their families will stay healthy.
The public health care system is overwhelmed by the country's 45 million uninsured who turn to hospital emergency rooms for even routine care. And Medicare -- the crown jewel of government health programs -- is projected to run out of funds by 2019 at the current rate of expenditure growth.
The soaring cost of health care has emerged as one of the top issues in the race for the White House. Both President Bush and Sen. John Kerry, D-Mass., are offering programs to make health coverage more affordable and reach more of the uninsured. (See accompanying article.) But experts say the fixes proposed by the two candidates would not fundamentally alter the dynamics that are putting health care costs out of reach.
"When we have faced these so-called crises in health care before -- health care cost spikes, an increase in the uninsured -- there was always a sense that there was some big solution coming," said Drew Altman, president of the Henry J. Kaiser Family Foundation. "What's different now is there is no sense there is a big reform idea out there that might save us."
What's driving medical costs?
-- Medical technology: New medical devices and the latest pharmaceuticals are pushing prices up fast.
-- Litigation: The rising cost of malpractice insurance is also increasing the practice of defensive medicine.
-- Uninsured: The growing number of uninsured is an increasing burden on the medical establishment.
-- Administrative costs: Health bureaucracy consumes money that does not go directly to patient care.


