Annual health care spending in the U. S. is presently about $10,000 for every man, woman, and child in the country. In 1970 U. S. per capita health care spending was about $355. In inflation-adjusted terms health care spending is something grown something between sixfold and thirty-fold, depending on how you calculated it.
That cannot be attributed to pharmaceutical company profits (drugs are about 8% of expenditures) and it cannot be attributed insurance company profits. The numbers just don’t add up.
What gripes me about the Republicans’ approach to health care reform is their childlike belief in the magical ability of markets to reduce costs. Markets could reduce costs but not without denying care to tens of millions of people and probably not even then.
What gripes me about the Democrats’ approach to health care reform is their childlike belief in the magical ability of a single-payer system to control costs. It’s not magic. It’s commitment. It’s willingness to deny care and raises to people working in the health care sector. If Democrats could demonstrate for me their willingness to cut costs, I’d be willing to vote for a single-payer system. In the absence of such commitment it’s just a ticket to an unpayable bill.
By this time, the idea that a market will function objectively should be tossed upon the trash heap.
Apparently Google and Facebook do not want people with certain views to use their products. According to theory, a new search or social media company should be created for the undesirables.
Rather bemoaning Google, Facebook, Twitter, etc., conservatives should be building an alternative. Of course, there may be an alternative, but Google is suppressing those results.
Just as a technical matter, have the per capital expenditures been adjusted for age as well as inflation? It’s an obvious, probably analytically necessary, adjustment.
In addition, if you are willing to accept rationing, and the world runs on it, would you rather have a government do it or a market?
I’ll throw a recent local medical story out here that might be of interest.
For many years, the university medical school annually altered its affiliation with one of two nearby hospitals for a Level 1 Trauma program. A few years ago, the school decided alternating each year was inconvenient and costly, so it decided to stick at one hospital. As a result, the hospital that “lost out” hired its own staff to operate an independent Level 1 Trauma unit. While the area has lost population, the change has resulted in twice the number of Level 1 trauma patients as before. When asked for explanations, the heads of both trauma programs had any explanation. It’s a mystery.
The market does have the magical ability to lower costs. What we have in Amerika is not a market. If you want a market, look to the Web, where you’ll find that costs are much lower in Argentina, Brazil, Mexico, Costa Rica, Panama, Czech Republic, Hungary, Thailand and India.
The clinics and hospitals there publish prices while Amerikan hospitals busy themselves in hiding the ball. Pharmaceuticals are also cheaper in Mexico, for example. Not to mention the fact that you can get many prescription drugs, like Mebendazole, over-the-counter, which saves paying a doctor for a visit.
A lot to unwrap here. First, in 1970, if your newborn was only a few weeks premature, it was probably going to die. Cataract surgery meant you went from probably being blind to maybe being able to see, after a surgery that required a week for hospitalization. There was no treatment for a stroke, and for coronary artery disease you either died or became a cripple. Bad arthritis meant you couldn’t walk. Etc. So there has been a lot of value added.
PD’s story illustrates nicely what most of the world has found with markets. They don’t always lower prices, they sometimes promote profit seeking and entrepreneurial behavior to the detriment of the patient (people maximize profits). There may be a way for markets to lower costs, but no one has found it yet.
I mostly read health care policy people and economists, and I don’t really sense that they think single payer is the only answer. It would likely be cheaper, in total spending, than what we spend now with just a couple of changes and recognition of potential savings. On the drug issue, let cost be a factor in Medicare decisions. Let Medicare stop paying for procedures and care that we know don’t work. Also, here is the best summation I have seen on administrative costs addressing the usual red herrings. There is a lot to be saved there if we want.
Overall, I think the big problem, which you allude to, is just the willingness to take on the cost issue. It will make some interest group unhappy. Just like the ACA it will be demagogued and the party who seriously takes on the issue probably lose the following election.
https://theincidentaleconomist.com/wordpress/is-medicare-for-all-the-answer-to-sky-high-administrative-costs/
Steve