Reinhardt on reform. Interview by Donna Vavala

Almost since the federal government took its giant step into health care delivery and financing in 1965 with Medicare and Medicaid, the emphasis in Washington has been on reducing the costs of health care. Almost all federal health law subsequent to those two programs has been aimed at cost control, even when the titles of the bills promised a more noble purpose. The most notable exception is the law establishing end-stage renal disease coverage, but it has become a prime exacerbator of rising costs. Not even the designers of the federal programs envisioned how quickly health care costs would rise and how substantial the increases would be. The federal tab in 1993 was $280.6 billion. In 1960, it was $3 billion and in 1970 it was $17.8 billion. And overall health care costs have followed a similar curve, growing from 5.3 percent of the U.S. GDP in 1960 and 7.4 percent in 1970 to 13.8 percent in 1993. The end is not in sight. Economists are predicting growth to 18 percent of GDP by the next century. Uwe E. Reinhardt, PhD, James Madison Professor of Political Economics in the Woodrow Wilson School at Princeton University, does not believe that the "bite" will become that large, but he does expect increases to continue into the near future. In the interview recorded in this article, Professor Reinhardt assesses both the current and his predicted financial scenario for the health care field.