Per capita health care spending of $10,739 per person sounds like a lot of money. And it is. But it’s not as bad as it might have been as noted by Jessie Hellman at The Hill:
National spending on health care reached $3.5 trillion in 2017, or about $10,739 per person, according to new data released Thursday by the Trump administration.
Overall, health spending grew at a rate of 3.9 percent last year, after increasing by 4.8 percent in 2016 and 5.8 percent in 2015.
It’s the slowest increase in spending since 2013, before most parts of the Affordable Care Act took effect, including the expansion of Medicaid to more low-income adults.
Consider that figure in perspective. the median family income for a family of four last year was $61,372. If health care spending were distributed evenly across the population and if people actually paid for their own health care, it means that family would be spending two-thirds of their income on health care. Subtract another $22,000 (education spending per pupil) and what’s left is…nothing. Is it any wonder that economic growth outside of health care and education is slow?
3.9% sounds like a slow rate of growth. It’s also three times the non-health care rate of inflation. It’s also more than twice as fast as incomes.
Other data. Per capita spending increased by 1.1% and spending as a percent of GDP decreased.
Steve
If people paid for their own health care, they would save the 25 cents of every healthcare dollar that goes to insurance. It’s a good thing we don’t carry insurance to cover food, clothing, travel, entertainment and cellphone expenses! And a good thing that we can often shop overseas instead of in Amerika.
Furthermore, folks spending their own money on health care wouldn’t shop in the USSA, but in Mexico, where it costs 67% less, in Brazil or Argentina, where it costs 50% less or in India or Thailand, where it costs 80% less.
Insurance should be make illegal or at least taxed.
The older I get, the more I get exposed to the healthcare industry, the more I know people exposed to the healthcare industry, the more I realize, as someone in the business of running businesses, how simply godawful healthcare is run. At every turn. I think its worse than brick and mortar retail, and that’s hard to do.
Everyone tells me that exposing the consumer to price won’t help. But no one dares try it, I think for obvious reasons. They just write articles grousing about the state of affairs.
As I think I have mentioned in the past I have worked with companies at every level of the health care industry from individual practices to group practices to laboratories to hospitals, labs, pharmaceutical manufacturers, equipment manufacturers, and insurance companies. Not only do I understand their business processes I’ve had the opportunity of looking at their books. I think it gives me a distinctive vantage point.
As to exposing the consumer to price, experiments have been conducted. Consumers will change their decisions based on price. What no study has found is that consumers make prudent choices based on price. That can lead to short term savings resulting in long term costs.
Additionally, in an oligopoly the oligopolists will act to preserve their revenues and have the power to do it. Barriers to entry mean that there will always be an oligopoly in health care. My assessment is that the costs and benefits of the barriers are such that the barriers should be preserved but the prices regulated.
“But no one dares try it, I think for obvious reasons. ”
Wrong. Many people have tried, you just dont know about it as it won’t penetrate the right wing bubble. Many studies and instances. At my own hospital we have an online Price Checker where people can look up prices for procedures and studies. Prices that are “everything included”. What we find is that it just doesn’t make much difference most of the time, and when it does, it is not clear there are really overall savings when you follow the patient downstream.
“how simply godawful healthcare is run. ”
And every now and then a “real businessman” comes along to show everyone how things could be better, and fails miserably.
How does America compete economically with nations that forego healthcare entirely except pay as you go? You know who I mean, China, India, Indonesia….on and on.
and why wouldn’t their people want to come over in droves?
@steve
At my own hospital we have an online Price Checker where people can look up prices for procedures and studies.
Which price do you list? Full retail, discounted retail, Insurance Company A negotiated price, Insurance Company B negotiated price, etc.
How does this help people with insurance policies that your hospital is out-of-network?