The early 1990s brought about a few economic changes, most notably the newfound economic prosperity which led to the largest government surplus in 30 years by 1998. Economic growth shrank the U.S. government’s budget ledger, and unemployment was at an all-time low. The character of the healthcare economy during the era of HillaryCare and its failure to get off the ground remained one delineated by an increased rate of spending, as this sector had to keep pace with its tremendous job growth.

At the time, Medicare policy under HCFA^[1] went through policy changes as the government’s effort to trim the cost of healthcare began to pick up steam. The utilization of the program’s Relative Value Scale, still in use today, was an effort to standardize costs across medical specialties. Many physicians today assert that this historic policy move by the government is one of the reasons healthcare costs have continued to climb, leading the AMA to cautiously (well, almost reluctantly) endorse the recent House reform bill passage.

And it’s just another reason Blue Dogs and Republicans in the Senate in their rhetorical war against a massive public option will have the upperhand in the next phase of the healthcare debate, which could be delayed until 2010. Don’t believe me? Just ask Joe Lieberman (I-CT).

1. Healthcare Financing Admin., now CMS [↩]

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