IAHCGovernment subsidies for private health care

Mar
19

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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