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The Enemy the Pentagon Should Fear Most: Health Care 


By Harvey M. Sapolsky 

The U.S. military keeps searching the horizon for a peer competitor, the challenger that must be taken seriously. Is it China? What about an oil rich and resurgent Russia?

But the threat that is most likely to hobble U.S. military capabilities is not a peer competitor, rather it is health care. In the 1950s, health care was 4 percent of gross domestic product — about the same percentage that defense spending now holds. Defense back then (during the Korean War) was around 16 percent of GDP. The two lines crossed in the 1970s with health consuming an increasing share of GDP and defense a declining share. Neither the Reagan buildup nor the war on terrorism after 9/11 changed things much. Health care reached the 16 percent mark after the millennium. It is now in striking distance, absorbing 18 percent of an admittedly battered GDP.

The defense spending squeeze is on and will become more constricted by health care reform. It is not apples and oranges. About half of the United States’ health care costs appear on the federal government’s budget, which directly affects revenues and expenditures. European nations plead poverty when it comes to funding their militaries in large part because of the squeeze of social spending (including health care). They spend a smaller, though rising, share of their GDPs on health than does the United States, but more of that spending is direct government expenditure.

Health reform is justified based on the need for controlling spending, and includes a promise that efficiency, regulatory, and patient incentive changes will cover the increases in costs that will come from covering more of the uninsured. For Democrats, closing the gap between the insured and uninsured and giving America a truly national health care insurance system has been a goal whose fulfillment has eluded their best efforts since the New Deal. Presidents Truman, Johnson, Carter and Clinton all tried. The late senator Ted Kennedy had made it a career quest. With the Democrats controlling the executive and legislative branches of government by large margins, the stars seemed aligned for President Obama to be the one to deliver the holiest of political promises. The outcome of the recent Senate election in Massachusetts may have derailed Obama’s opportunity, but not the growing burden that health care expenditures place on government and society.

Health care cost control is an illusion. No one truly can make the health care system efficient. For many illnesses, nobody knows what works and what doesn’t. An aging population assures more medical expenditures.

The demand for medical research and technology is insatiable. Rationing is how costs are controlled. But Americans are unused to rationing, except for the uninsured. Try denying someone care and be prepared to be run over. The Health Maintenance Organizations were invented to do just that. Congress passed legislation encouraging their growth, but as soon as they attempted real cost control — rationing — laws were passed that restricted their ability to do so. Today, HMOs are hated by the public more than car salesmen, members of Congress, or George W. Bush. The hostile reception to the recent panel report that recommended reducing mammogram screening is proof positive.

If heath care can’t be made more efficient and if access to health care can’t be limited, the only alternative is more revenue. Perhaps taxes will be raised. Some will be increased, but not likely enough to cover rising health expenditures. Democrats promise to only tax the rich. But, as the rich know, tax laws have loopholes. Republicans have run for years on a tax-cutting platform. The way to get revenue is to tax the middle class who are many and who are not as fleet of foot as the rich. But both Republicans and Democrats constantly say the middle class is the victim of everything, and surely overtaxed. Running up the deficit is an alternative, but the wars, the stimulus plan and the bailouts have already done that. The cries for controlling spending are already being heard.

The revenue for more health care exists in the form of defense expenditures, which have doubled since 9/11. The billions needed for reforming health will likely come, in one way or another, from cuts in defense spending. Personnel reductions will be hard to make because of the burdens that Iraq and Afghanistan deployments place on U.S. forces. Fewer and fewer aircraft and ships will be bought. There will also be less training and more restrictions on operations with and for allies. America has a powerful military that will take a while to unravel, but unravel it will. The nation’s defense budget is about to tangle with a really dangerous adversary.

Harvey M. Sapolsky is a professor emeritus at the Massachusetts Institute of Technology, where he taught defense and health policy courses and was until recently the director of the MIT Security Studies Program. He also is an occasional consultant to defense firms.

Reader Comments

Re: The Enemy the Pentagon Should Fear Most: Health Care

Perhaps the solution is "Soylent Green".
It's twofer.

DS on 11/03/2010 at 01:09

Re: The Enemy the Pentagon Should Fear Most: Health Care

The DoD entered this threat area by discarding its own healthcare system for that of "socialized" insurance medicine. Had they maintained a health care infrastructure rather than closing down regional hospitals etc then they could control healthcare costs for both active duty and retired. It would have been a great deal less expensive. "Outsourcing" has never proven to be the cost saving move that all the great advocates pushed. Now with an "insurance" program they are stuck with the same sick system that the current administration is trying to expand for American's civilian population.

Jack Slagle on 03/12/2010 at 16:14

Re: The Enemy the Pentagon Should Fear Most: Health Care

Oh please - the military industrial complex has never, never, never, never been threatened by any social program. The contractors and the military are one and the same - they continually lie about the need for weapons, seed congressional districts with production facilities to ensure compliance and whine to sympathetic journalists. The only reason we have an interstate highway system is because Eisenhower sold it as a way to move the military in case of war. It's crumbling now because the military doesn't need it anymore.

I have in my office a 40 year old poster that says, 'Wouldn't it be wonderful if schools were fully funded and the Pentagon had to hold a bake sale." It's probably more accurate today than it was then, at the height of the Vietnam War.

So, Mr. Sapolsky, spare me your crocodile tears.

Kathleen Schultz on 03/10/2010 at 15:09

Re: The Enemy the Pentagon Should Fear Most: Health Care

The article is simplistic and the "laissez faire" response is even more simplistic. As in every other sphere, the answer is not a pure centralized bureaucratic solution nor an unregulated free market solution. It is a reasonable, pragmatic balance of the two. There is much waste in healthcare today that could be harvested if only providers and payers were properly incented and/or required to do so. This will only be accomplished by leaders with the vision and political adeptness to change the game board in this toxic political environment. Many of us are hoping Obama has enough of both to make some progress here, but we'll see.

Bob Mac on 03/05/2010 at 10:55

Re: The Enemy the Pentagon Should Fear Most: Health Care

The solution to health care for a nation of 307 million citizens is not a 1930's style "national program". The attempted adoption of a top-down, command-and-control solution for all where tax money flows from the earner-citizen, first, to Washington D. C. and then back as a payment to a provider all surrounded with laws, regulations, mandates, and penalties is an anachronism. Setting aside the very serious constitutional questions of mandating the purchase of insurance by each citizen the idea that all this can be managed by a central Federal organization is foolhardy. There is no precedence for Federal government success in providing such a personal service to which one can point. The solutions lie in an environment where individuals can join entities that can self-organize to reduce costs. This means backing away from the entrenched control of insurance that has existed in the states for years and to allow free market competition to drive fraud and waste out of the system and drive costs down to affordable levels over time.

Larry G. DeVries on 02/21/2010 at 18:44

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