Diagnosing the problem

Legislation to overhaul the U.S. healthcare system hasn't emerged from congressional committees, yet it has gained enough momentum for the demonization of the reform effort to start in earnest. For example, Republican strategist Karl Rove called it "President Barack Obama's government-run monstrosity" in an Op-Ed article Thursday in the Wall Street Journal. Other Republicans, hewing to the rhetorical line drawn by consultant Frank Luntz, warn of a trillion-dollar "government takeover" of the healthcare system a la General Motors or American International Group.

The hyperbole reflects not just the political stakes involved, but the economic and personal ones. Healthcare is a $2-trillion industry, and improving its delivery is literally a matter of life and death. That's why the issue deserves a full-throated, no-holds-barred debate. As lawmakers spar over ways to improve the healthcare system, however, it's worth keeping in mind the broad agreement among doctors, hospitals, insurance companies and consumer advocates about what needs to be fixed, and why it needs to be done now.

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Rising costs

There are three fundamental and interrelated problems with healthcare in this country: It's too expensive, the results aren't as good as in other countries, and the insurance provided by government and the private sector leaves too many people uncovered.

The growing cost of care is the most pressing of these issues, despite the fact that it's not even remotely new. President Nixon declared a crisis in healthcare costs 40 years ago, when Medicare and Medicaid were still in their infancy. (Five years later, he proposed national health insurance.) According to the Committee for a Responsible Federal Budget, total healthcare spending has historically grown 2.5 percentage points faster than the economy. Healthcare already makes up 18% of the U.S. gross domestic product; if the trend continues, it will consume more than 30% of the economy in two decades. Such an increase poses a critical problem for government programs, especially Medicare, whose tax revenues are expected to fall short of its expenses within eight years.