Here is the bottom line: Most health-care inflation is the result of new technologies. Bending the curve enough to help balance the budget means walking away from some of the new technologies and devices that people want when they are sick. It also means improving consumer cost-consciousness through insurance reform and higher deductibles and co-payments. For most of us, that means paying more, not less. Even then, it is unlikely to be enough to get costs under control.
Health-care reform will have to be an incremental process: Try some things now, and try more in a few years. Maybe we will choose to spend a good deal more on health care, but if so, even more will have to be done to fix the rest of the budget. As much as we might wish it were so, creating an expensive plan to expand coverage, with some measures to get us started on bringing down costs, will not be sufficient to improve America's fiscal health anytime soon -- let alone fix the federal budget.
[Via Greg Mankiw.]