First Aid

When I was a Boy Scout, I earned the First Aid merit badge. In an emergency I learned that one of the first things to do is stop the bleeding. And one of the best ways to stop the bleeding is to apply pressure directly to the wound.

That’s why there’s no imperative to fix health care right now. There’s no pressure on consumers, providers, or the government to change things. Even though it’s been estimated that Medicare as currently configured amounts to a $100 trillion unfunded mandate, no one seems worried except green eyeshade types and policy bores. We always assume that Uncle Sam will somehow have the cash when we need it.

But it’s been my experience that when the accountants say something is broke, it’s broke. And wishing won’t fix it. So any solution to health care costs has to make consumers and providers feel pressure every time they spend money on health care. If we let up on that pressure, the bleeding will just continue.

If a patient keeps losing blood, he weakens and dies. Applying pressure now might help us avoid having to use more severe measures later on.

Douglas R. Tengdin, CFA
Chief Investment Officer
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