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Return of the health care crisis

Sunday's front-page story in the New York Times on doctors who shun patients with Medicare may have been alarming enough; it seems that recent cuts in Medicare payments are inducing many doctors to avoid treating Medicare recipients at all. But this is just the beginning of a struggle that will soon dominate American politics.

Think of it as the collision between an irresistible force (the growing cost of health care) and an immovable object (the determination of America's conservative movement to downsize government). For the moment the Bush administration and its allies still won't admit that there is any conflict between their promises to retirees and their small-government ideology. But we're already past the stage where this conflict can be hidden with fudged numbers. The effort to live within unrealistically low targets for Medicare expenses has already translated into unrealistically low payments to health care providers. And it gets worse from here.

Why do health care costs keep on rising? It's not because doctors and hospitals are greedy; it's because of medical progress. More and more conditions that once lay beyond doctors' reach can now be treated, adding years to the lives of patients and greatly increasing the quality of those years _ but at ever greater expense. A triple coronary bypass does a lot more for you than a nice bedside manner, but it costs a lot more, too.

During the 1990s the upward trend in health care costs seemed to level off. But it's now clear that this was a one-time cost squeeze due to the shift to HMOs. Now medical costs have resumed their upward march.

If medicine were purely a private matter, medical progress would pose no more of a dilemma than, say, progress in home entertainment systems. But in fact the United States, like every advanced country, treats essential health care as a right, not a privilege. Our Medicare/Medicaid combination provides this right somewhat haphazardly; still, the intent of our system is that nobody should be denied life-saving treatment for lack of funds.

Why don't we just leave medical care up to individuals? Basically, even in the United States there are limits to how much inequality the public is prepared to tolerate. It's one thing if the rich can afford bigger houses or fancier vacations; Americans accept such differences cheerfully. But a society in which rich people get their medical problems solved, while ordinary people die from them, is too harsh even for us.

And so we have Medicare and Medicaid. And the public overwhelmingly supports the extension of Medicare to include prescription drugs, for the same reason: It seems wrong to most Americans that drugs that make a big difference to people's lives should be available only to those wealthy enough to pay for those drugs out of pocket. Including drug coverage in Medicare is not so much a matter of extending the program as of remaining true to its original intent.

But meeting the public's expectations for medical care _ that is, ensuring that every American, and in particular every retired American, gets essential care _ will require a lot of government spending. And the conservative movement in general, and the Bush administration in particular, are not prepared to make the money available; after all, government spending must ultimately be paid for with taxes.

Yet they dare not say that they are prepared to deny essential health care to those who cannot afford it. So what can they do?

The Bush administration is still trying to fake it; the budget proposal it released last month had health care economists rubbing their eyes. It assumed a far lower rate of growth in Medicare expenses than anyone else thinks plausible _ over all, it budgeted $300-billion less over the next decade than the nonpartisan Congressional Budget Office projects will be needed. And it also repeated the implausible claim that we can have prescription drug insurance on the cheap _ setting aside half or less what others think such a program will cost.

But we have already reached the point at which we must either come up with more money or deny health care to retirees. The moral of Sunday's story is that Medicare payments have already been squeezed beyond their limits, to the point where recipients can't find doctors willing to take them. Something will have to give, and soon.

+ Paul Krugman is an economist and a New York Times columnist.+

New York Times News Service