Financing Health Care with Limited Resources

Henry J. Aaron
Henry J. Aaron The Bruce and Virginia MacLaury Chair, Senior Fellow Emeritus - Economic Studies

October 7, 2004

Thank you for inviting me to be part of this event inaugurating the new Center on Health Policy. We at the Brookings Institution wish this fledgling Center a future worthy of this distinguished university and of one of the finest medical schools in the nation. We also hope to be able to work closely with you on topics of shared interest.

Your timing in establishing this institution is splendid. So is your selection of topics for this event. Health care resembles an already over-sized teenager who keeps popping the financial seams on his clothing, is already the largest kid in the class, and gives every sign of continuing to grow until there isn’t any space left in the room for anyone else. A conference that focuses on health care financing is a splendid way to begin.

The presidential candidates clearly agree. Once they heard about this event, it seems that they decided to run on your coat-tails and scheduled their second presidential debate here. Cynics may think that Missouri’s eleven electoral votes and pivotal position in the middle of the nation were what attracted them to this event. We know better.

So, I shall organize my comments around both the theme of this conference and that other event that will take place tomorrow evening. First, I cannot forbear saying a few words about the candidates positions on health care finance. Then, I’ll turn to the longer term issue that the candidates have taken great care not to address—the relentless cost increases that threaten to force the United States to ration health care even for the well insured.