Romney’s Dependence: Health Care?

Photograph by Jay Reiter/MCT via Getty Images

Instead of costly institutional care, Medicaid pays for a nurse's aide, a speech therapist and a registered nurse for home visits.

Mitt Romney’s remarks about the 47 percent of Americans whom he says are dependent on government services revealed a gaping hole in his logic of dependence.

Absent from Romney’s remarks, and from the reaction to them, is an acknowledgement of the degree of reliance among certain business on the federal government for their financial well-being.

A look at health care reveals several facts:

First, according to recently published data from the Census Bureau, one out of every three Americans is enrolled in Medicare or Medicaid. That’s almost 99 million people.

Second, some sectors of the health-care industry are highly dependent on federal funding.

For example, Medicare and Medicaid in 2011 spent about $49 billion on home health care services. That’s out of a $73 billion total spent on all home health services, or 67 percent of the bill. For nursing homes, that figure is 43 percent, and for hospitals it’s 40 percent.

So is this dependence a “good” or a “bad” thing?

From a business perspective, a smartly run company always follows the customers and their money. When federal Medicare and Medicaid spending accounts for one out of every three health-care dollars spent, or more than $800 billion in an annual tab of about $2.6 trillion in 2011, the business logic is clear.

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