Why is 16% of GDP too much to spend on health care?

That will be one of my questions tomorrow in the first class in Health Law. I remember, back during the debate over the Clintons' plan, the tongue-in-cheek report that, at the then-current rate of health-care inflation, in 50 years 100% of our GDP would be health care ("every man, woman, and child would be in hospital beds administering IVs to one another"). Now, quite sensible people (e.g., Robert W. Fogel, a Nobel laureate at the University of Chicago's Graduate School of Business) predict that health care will account for 25% of GDP by 2030. It's less than 100%, but it's still the kind of number that makes you sit up and take notice.

It also made Gina Kolata sit up and take notice in Tuesday's New York Times. There is much to think about (and discuss in class) in this article, including this exchange:

Unless the current system is changed, most health care costs will continue to be paid by insurance, especially Medicare, which means that the taxpayers will foot the bill. But Dr. Fogel says he is not alarmed. Americans can afford it, he says, because the nation is so rich.

“It takes so little of household income to satisfy expenditures on food, clothing and shelter,” he explains. “At the end of the 19th century, food, clothing and shelter accounted for 80 percent of the family budget. Today it’s about a third.” Other economists agree. “We have to spend our money on something,” says Robert E. Hall, a Stanford University economist.