Skip to main content
Friday, October 30, 2026Oct 30
Subscribe
All Sections
Search
More

This story is free to read.

Ruffner: Reducing the cost of Medicare, Medicaid and the VA

In this July 30, 2015, file photo, a sign supporting Medicare is seen on Capitol Hill in Washington. A government report says Medicare beneficiaries can end up with higher hospital bills for some medical services as outpatients than as inpatients. In the topsy-turvy world of Medicare billing, you may pay more for outpatient care. (AP Photo/Jacquelyn Martin, File)
In this July 30, 2015, file photo, a sign supporting Medicare is seen on Capitol Hill in Washington. A government report says Medicare beneficiaries can end up with higher hospital bills for some medical services as outpatients than as inpatients. In the topsy-turvy world of Medicare billing, you may pay more for outpatient care. (AP Photo/Jacquelyn Martin, File) In this July 30, 2015, file photo, a sign supporting Medicare is seen on Capitol Hill in Washington. A government report says Medicare beneficiaries can end up with higher hospital bills for some medical services as outpatients than as inpatients. In the topsy-turvy world of Medicare billing, you may pay more for outpatient care. (AP Photo/Jacquelyn Martin, File)

By B.W. Ruffner 4 min read

Fifty years ago, health care consumed about 5 percent of the gross national product. Now we spend 17.5 percent, and estimates are that by 2025 it will be 19 percent. Those costs take money that patients could have spent on their children’s education or saved for retirement.

With Medicare, Medicaid and the VA, the federal government picks up half the cost. As those costs rise, despite increases in the national debt, the money available for the military, education and needed infrastructure gets squeezed. The American public pays the other half through employee-based insurance, out-of-pocket expenses and, if they can afford them, for purchase of individual policies.

It is easy to see many causes for the increased cost. Each has some value, but the question is whether we could get as good or even better results while spending less. The challenge is always to retain value while discouraging waste and getting our costs close to the level of other countries that usually cover all their citizens. A few thoughts follow.

– Cost of drugs. This issue has been prominent in the media lately. There have been some extreme examples in which an inexpensive drug has been put in a fancy new device, resulting in a $5 drug costing more than $100.

A recent issue has been when a generic drug with a single manufacturer is bought by a new investor, who then increases the cost 20-fold, knowing it may take more than a year for a new manufacturer to bring competition into the system.