in reality, our budgetary problems stem from our out-of-control health care system

[HM2VikingRN, RN]

There is no entitlement crisis other than health care," Aaron answered. "There is no practical way to deal with public health-care spending other than by general health-care financing reform." The solution is not "entitlement reform" but health-care reform.

Aaron's conclusion rests on two points: First, while Medicare spending is affected by an aging population, most of the growth in Medicare costs arises from the increase in health-care costs per patient, which is many times more important than the increasing number of Medicare recipients. And second, rising health-care costs are not just a Medicare/Medicaid problem but involve the whole health-care system.

Aaron's argument demolishes the "Fiscal Wake-Up Tour's" obsession with blank checks and doomsday machines, but it doesn't offer a clear solution, either. One answer might be a global budget for health care, with certain services rationed or spending in the last year of life limited. McCain argues for "market-based solutions," claiming that putting people "in charge of their health-care dollars" will empower them to reduce costs, ignoring all evidence that it won't.

...

Orszag has embraced the research from Dartmouth Medical School, popularized in Shannon Brownlee's recent book Overtreated, which shows that health-care spending, both public and private, varies wildly across the country and is unrelated to outcomes. Geographic variation in health-care spending has more to do with the habits and assumptions of doctors and hospitals in a particular region: In some areas, patients are more likely to be hospitalized or recommended for surgery, with no difference in outcomes. The opportunity Orszag sees is to reduce health-care spending, improve health outcomes, and resolve the long-term fiscal problem.

at http://www.prospect.org/cs/articles?article=battle_of_the_budget_slideshows .