The Health Care "Perfect Storm"

Uwe Reinhardt has a brief essay in today's New York Times. He points out that if health care costs keep rising as they've been, with relatively smaller increases in family income, by 2017 health care will take up over 40% of the "wage base" of a hypothetical family with a wage base of $60,000 now ($80,000 in 2017) .

Wage base is an interesting concept. Here is his description:

• It includes the employee’s cash take-home pay, all the income taxes and Social Security taxes and other deductions – for example, the employee’s contributions towards health insurance and pensions — withheld from the employee’s paycheck, as well as the employer’s share of Social Security taxes and the employer’s contributions toward the employee’s health insurance, pension, vacation pay, sick days and so on.
  

Wage base makes explicit  the economists' contention that employer expenditure on employee benefits and wages are  interchangeable.  If employers pay more for health care, they pay less in wages.

Reinhardt concludes we'll either have to tax the rich more to continue to offer the current level of care to all, or we'll have to accept multiple different tiers of medical care. He doesn't mention the option of improving care processes or decreasing provider payment.