Why are we spending more on healthcare?

[phk]

 Why are we spending more on healthcare?

The answer from Nobel Prize winning economic historian Robert Fogel:

    The main factor is that the long-term income elasticity of the demand for healthcare is 1.6—for every 1 percent increase in a family’s income, the family wants to increase its expenditures on healthcare by 1.6 percent. This is not a new trend. Between 1875 and 1995, the share of family income spent on food, clothing, and shelter declined from 87 percent to just 30 percent, despite the fact that we eat more food, own more clothes, and have better and larger homes today than we had in 1875. All of this has been made possible by the growth in the productivity of traditional commodities. In the last quarter of the 19th century, it took 1,700 hours of labor to purchase the annual food supply for a family. Today it requires just 260 hours, and it is likely that by 2040, a family’s food supply will be purchased with about 160 hours of labor.

    Consequently, there is no need to suppress the demand for healthcare. Expenditures on healthcare are driven by demand, which is spurred by income and by advances in biotechnology that make health interventions increasingly effective. Just as electricity and manufacturing were the industries that stimulated the growth of the rest of the economy at the beginning of the 20th century, healthcare is the growth industry of the 21st century. It is a leading sector, which means that expenditures on healthcare will pull forward a wide array of other industries including manufacturing, education, financial services, communications, and construction.

[phk]

Addendum:

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http://www.jstor.org/pss/2118253?cookieSet=1

[opebo]

Beside the point.  The main issue with health care is that it is inaccessible to the poor.

[memphis]

The whole damn system is just so damned inefficient. A simple but true anecdote: my mother has been trying for the last few days to get her mundane cholesterol prescription refilled. For whatever reason, there was a breakdown in communication between the pharmacy and the doctor's office, with the doctor saying they had faxed the prescription and the pharmacy saying they never received it. After a few days of this, my mother finally went to the doctor's office in person and demanded a paper prescription to give to the pharmacy. All this trouble over a drug that millions of people take and has no potential for abuse. I'm not even going to get into all the waste of the insurance companies, advertisements, and salespeople. Most incompentant, wasteful industry ever.

[fezzyfestoon]

The whole damn system is just so damned inefficient.

So...let's give it to the government?  Do you really think that'll improve its efficiency?

These, of course, are the kinds of people we should be listening to, not the politicians.  I don't know much about the inner workings of the industry and I don't expect politicians to either.  They know what sounds good for their side.  I'll listen to these guys.

[Ban my account ffs!]

Beside the point.  The main issue with health care is that it is inaccessible to the poor.

Exactly.  If people want to go above and beyond for experimental treatments, etc. to prolong their lives, that's up to them.

The argument is that everybody gets basic care with an emphasis on preventative measures.

[opebo]

The whole damn system is just so damned inefficient.

So...let's give it to the government?  Do you really think that'll improve its efficiency?

These, of course, are the kinds of people we should be listening to, not the politicians.  I don't know much about the inner workings of the industry and I don't expect politicians to either.  They know what sounds good for their side.  I'll listen to these guys.

'Those guys' never gave me anything for free.  The government might - anyway it does in civilized countries. 

Anyway the idea that the government is 'less efficient' than 'private' corporations is just nonsense.

[memphis]

The whole damn system is just so damned inefficient.

So...let's give it to the government?  Do you really think that'll improve its efficiency?

Government insurance programs like Medicare and the VA have substantially lower admin costs than private insurance. It's why the private companies are so terrified of the public option.

[Southern Senator North Carolina Yankee]

The whole damn system is just so damned inefficient.

So...let's give it to the government?  Do you really think that'll improve its efficiency?

Government insurance programs like Medicare and the VA have substantially lower admin costs than private insurance. It's why the private companies are so terrified of the public option.

Yet there is Hundreds of billions of dollars in fraud in medical and medicaid, so much so, that it can be enough to pay for 60% of the Health Care Reform plan Obama is proposing. You can't have you cake and eat it two.

[memphis]

The whole damn system is just so damned inefficient.

So...let's give it to the government?  Do you really think that'll improve its efficiency?

Government insurance programs like Medicare and the VA have substantially lower admin costs than private insurance. It's why the private companies are so terrified of the public option.

Yet there is Hundreds of billions of dollars in fraud in medical and medicaid, so much so, that it can be enough to pay for 60% of the Health Care Reform plan Obama is proposing. You can't have you cake and eat it two.

Could someone translate this post into standard English so that I could rebut please?

[opebo]

The whole damn system is just so damned inefficient.

So...let's give it to the government?  Do you really think that'll improve its efficiency?

Government insurance programs like Medicare and the VA have substantially lower admin costs than private insurance. It's why the private companies are so terrified of the public option.

Yet there is Hundreds of billions of dollars in fraud in medical and medicaid, so much so, that it can be enough to pay for 60% of the Health Care Reform plan Obama is proposing. You can't have you cake and eat it two.

Could someone translate this post into standard English so that I could rebut please?

He thinks we should 'pay for' health care reform by 'saving money' from 'waste' currently occuring in the existing programs.  Instead of getting it from the bloodsucking class.

[phk]

Now this is an interesting graph I found online.



But be careful though....

This chart shows the average annual change in per capita spending on health between 1990 and 2007 (the last available year for most countries). The U.S. shows up almost exactly in the middle of the pack. This is not an artifact of the years picked—it’s true for 1997-2007 and 2000-2007 as well.

It’s interesting to see that the UK, with its “socialized medicine,” actually had faster health spending growth than the U.S., at least according to these figures. On the other hand, other countries with single-payer systems, such as Canada, had slower growth.

Frankly, it’s not clear to me from these figures that the form of organization of a health care system has that much effect on the growth rate of health spending.

*Countries have different rates of aging and different rates of economic growth, which can affect these results. In addition, the U.S. has a much higher absolute level of health spending than anyone else ($7290 per capita in 2007—the next highest was Norway at $4763).

*The country with the fastest rate of growth, South Korea, still spends less than $1700 per person on health, way below the U.S.

[Sbane]

The whole damn system is just so damned inefficient.

So...let's give it to the government?  Do you really think that'll improve its efficiency?

One of the problems with the system currently is the lack of competition. There have been some good ideas floated around like allowing people to purchase insurance from other states which would address this. But in addition to that, what is wrong with a not for profit public option that has to pay for its cost from its revenues? I think people who genuinely can't afford insurance should get it subsidized (which raises more questions such as at what level of income does health insurance become affordable. A family of 4 making 40k may not be able to purchase insurance in NJ or CA but they sure can in OK). Of course we already do subsidize their care but in an extremely inefficient way and this could lead to cost reductions in the long term. Additionally we need to have a national mandate for health insurance. This way we can force the freeloaders to pay for their fair share. Just like the poor, we end up subsidizing their care at the ER. If they have the right to not buy health insurance, then we should also have the right to let them die in the ER without spending a dime of our money on them. Of course that isn't very practical now is it? This is why we need to make sure everyone purchases insurance.