IAHCGovernment subsidies for private health care

Mar
19

Root causes of high costs

Government subsidies to private enterprises invariably raise costs. Private health care has been subsidized heavily over many years through…
• Tax advantages for employer-sponsored health insurance that encourage over-spending on healthcare, relative to other commodities
• Programs that subsidize financing for hospitals and other health care facilities. The largest of these was the Hill-Burton hospital construction program, which lasted almost 30 years from 1946 to 1974. A number of states also have subsidy programs to insure hospital construction loans (e.g., California’s Cal-Mortgage program).
• Federal R&D funding through the National Institutes of Health, the National Science Foundation, and various other agencies (e.g., AHRQ)
• Support for graduate medical education, principally by Medicare, but also by the VA Health System, and some state Medicaid programs