By several measures, health care spending continues to rise at the fastest rate in our history.

In 2007, total national health expenditures were expected to rise 6.9 percent — two times the rate of inflation.1 Total spending was $2.3 TRILLION in 2007, or $7600 per person. Total health care spending represented 16 percent of the gross domestic product (GDP).

U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.2 TRILLION in 2016, or 20 percent of GDP.

In 2007, employer health insurance premiums increased by 6.1 percent - two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,100. The annual premium for single coverage averaged over $4,400.

Experts agree that our health care system is riddled with inefficiencies, excessive administrative expenses, inflated prices, poor management, and inappropriate care, waste and fraud. These problems significantly increase the cost of medical care and health insurance for employers and workers and affect the security of families.

This is not intended as a slam on everyone working in healthcare. Many nurses and doctors read this site and I know their work is difficult, and often made more difficult by the above-mentioned inefficiencies and excessive administration.

Yet isn't there some similarity between the healthcare complex and the Pentagon, that other famous sinkhole for trillions of dollars wasted in inefficiency, politically mandated pork, and excessive administration? How can we be spending $2.3 trillion a year (and rising) and be getting so little "health" for all that money?

If we're ill, then we all want the finest care; that's understood. But the problem seems to be that much of the "care" isn't making us better; in the case of costly pharmaceuticals, it seems many drugs are giving us new health problems or simply ending our lives. People go into hospitals to get well and instead catch life-threatening bacteria and viruses.

It seems that healthcare has morphed into "the third rail" of American politics: you touch it, you "die." Every effort at reform is stymied by powerful interest groups, and of course there's a positive feedback loop at work: the more people who are employed in the complex, the more powerful their lobbying efforts, and thus there is more resistance to reforms.

Everyone knows the system is hopelessly riddled with corruption, inefficiency and needless procedures, but nobody wants to lose their own piece of the action. This is understandable.

But we as a society have to ask: is this the best place to be spending $2.3 trillion, soon to be $3 trillion, a year? What about energy and food security? How "well" will be be if we run short of food and energy?

It would be nice if we could declare a "peace dividend" so beloved by liberals and slash $100 billion or even $200 billion from Pentagon spending and "solve" the healthcare funding issue "painlessly" (painless unless you're in the military or related industries). But the scale of healthcare spending now dwarfs the Pentagon to such a degree that $200 billion isn't even 10% of what we spend on healthcare; with healthcare costs rising 6% a year, a $200 billion "gift" carved off the Pentagon would only cover about 18 months of the healthcare complex's increased spending.

As I have noted here many times, no program which grows at 6% can be sustained by an economy which grows over the long-term at 2% or 3%. We all know the Baby Boom is starting to retire, putting even more pressure on healthcare spending--but that spending has been growing by leaps and bounds even without the Baby Boom retiring.

Clearly, something has to give.

One alternative is to let healthcare costs spiral out of control until the Federal government becomes insolvent i.e. can no longer pay its expenses with newly printed Treasury bonds (debt/borrowed money) at which point Medicare and everything else freezes up and goes bust. I would say the likelihood of this increases every year, and a 2015-2021 window for such Federal insolvency is already baked in if the various interest groups are able to sustain their deathgrip on serious reforms.

This national bankruptcy won't be pleasant, but it does have the advantage of wiping the slate clean and enabling a fresh start.

Another alternative is to introduce the same global competitive forces which reduced costs in electronics and other industries. This is unpopular with those whose jobs will be at risk, and popular with consumers.