In this study prepared for Altarum with support from the National Institute for Health Care Reform, C. Eugene Steuerle of the Urban Institute explains that every government health program should operate under the same budget constraint that applies to other government programs.
Steuerle argues that if we do not follow this universal principle of public finance, we risk redistributing income in perverse ways and making health care allocation extremely inefficient.
Yet policymakers and other stakeholders continue to flout this principle, largely out of fear of creating losers, distrust of all decisionmakers, and the search for permanent controls over an ever-evolving sector. But these excuses do not come close to justifying the adverse consequences that result from bad budgeting.
Steuerle identifies these adverse consequences, and explains in detail the seven common excuses of health care advocates and analysts for operating government health programs without true budget constraints and why those excuses don't hold up under scrutiny.