Why are we spending more on healthcare?

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BigCliff
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Why are we spending more on healthcare?

Post by BigCliff » Fri Sep 04, 2009 3:28 pm

Lets try something:
Instead of the usual "I'm right and you're stupid" shit, how about a little discussion of the causes of our current situation. Below is an answer from another economist put forward by Greg Mankiw, an econ bigwig at Harvard. (who agrees more with Friedman than Krugman, in general)
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.

http://gregmankiw.blogspot.com/2009/09/ ... hcare.html
I can't say that any of the above is wrong, but I think it foolishly neglects the fact that we seem to be receiving less value per dollar spent on healthcare when compared to other countries. I don't know how you can ignore value when looking at the economics (and therefore choices, trade-offs, and incentives) of a given marketplace.

I also think there's something to the idea that the fact that we pay so little for the food we eat (relative to historical percentages of total household purchases) might be part of the cause of healthcare costs rising at their current rate. I think the cheap manufactured food-like substances we consume are making us sick at an increasing rate.

Y'alls thoughts?
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eponymous
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Re: Why are we spending more on healthcare?

Post by eponymous » Fri Sep 04, 2009 3:42 pm

Intersting to play out the fact that we used to work a lot harder and longer for food that was much better for us. It prolly doesn't take me a minute of work to afford a Big Mac which shortens my lifespan by several days....Not that I have actually eaten a big mac since about 1987 but you get the point.

What is also notable is that we now live much much longer than back then even though we ate better food and probably less of it. That makes healthcare more expensive as well.

I hope that the true laws of economics (not the laws of liberal economics or conservative economics) end up winning out over the laws of politics and sociology.
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Upsetter
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Re: Why are we spending more on healthcare?

Post by Upsetter » Fri Sep 04, 2009 6:19 pm

IMO, you either go the public option route or you get rid of this notion of 'healtcare' altogether and reduce health insurance to the likes of life, home, and auto insurance, designed to protect you from catastrophe. Either way, you need to get rid of employer sponsored health insurance designed to cover everything medically related under the sun. This is precisely what has allowed costs to spiral out of control, cause nobody is directly responsible to the consumer, and the consumer is hard pressed to even understand what the hell is going on when they finally receive their bill, four weeks after receiving the services. I should qualify my understanding of the public option route as creating a system by which, via proxy, the consumer has enough bargaining strength to obtain a cost structure from the providers that results in significant savings.

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FlyFish2
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Re: Why are we spending more on healthcare?

Post by FlyFish2 » Fri Sep 04, 2009 7:11 pm

A good reason (one of the few) for moving healthcare to the public sector would be cost saving. Unfortunately the media and the current President are not explaining that to people.

As for healthcare in general we shouldn't compare to other countries. We can compare healthcare systems if we leave out many variables such as diets, taxes, and revenue the respective governments receive.

In short run we will most likely spend more on heath care especially if it is government run. In the long run it will equal out and after that we will actually be saving money compared to before.

We need to improve health care but we need to improve education first. Better education leads to better decisions which leads to healthier decisions.

I wrote a thesis paper about healthcare and cost savings as it effects the long run.

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Re: Why are we spending more on healthcare?

Post by flybug.pa. » Fri Sep 04, 2009 7:53 pm

why are we spending more on healthcare? because people are refusing to let nature take its course :coffee
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ditchdoc
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Re: Why are we spending more on healthcare?

Post by ditchdoc » Fri Sep 04, 2009 10:49 pm

[quote="flybug.pa."]why are we spending more on healthcare? because people are refusing to let nature take its course :coffee[/quote


What? Us dumb bastards just refuse to die when we get sick?
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Salmotrutta
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Re: Why are we spending more on healthcare?

Post by Salmotrutta » Sun Sep 06, 2009 2:20 am

I for one would feel much better if they wouldn't go after all of those Poppies.
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Lenny
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Re: Why are we spending more on healthcare?

Post by Lenny » Sun Sep 06, 2009 7:51 am

1) Lawyers

2) Politicians

3) Greed
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ditchdoc
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Re: Why are we spending more on healthcare?

Post by ditchdoc » Sun Sep 06, 2009 8:18 am

Lenny wrote:1) Lawyers

2) Politicians

3) Greed
Not disagreeing here but--most politicians are Lawyers. Insurance companies are made up of MBA's and Lawyers. Capitalism has become an excuse for greed. Money, religion, politics-bad combination.
Ignorance is curable. Stupidity is forever.

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BigCliff
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Re: Why are we spending more on healthcare?

Post by BigCliff » Sun Sep 06, 2009 11:33 am

Upsetter wrote:IMO, you either go the public option route or you get rid of this notion of 'healtcare' altogether and reduce health insurance to the likes of life, home, and auto insurance, designed to protect you from catastrophe. Either way, you need to get rid of employer sponsored health insurance designed to cover everything medically related under the sun. This is precisely what has allowed costs to spiral out of control, cause nobody is directly responsible to the consumer, and the consumer is hard pressed to even understand what the hell is going on when they finally receive their bill, four weeks after receiving the services.
Quite an interesting idea. I suppose it could be set up to where all healthcare spending is made to be pre-tax via refunds/exemptions whatever. This would get consumers involved in the pursuit of paying for results instead of just processes and would likely achieve optimum results quicker than legislation induced measures seeking that.

The problem with it would likely be a huge dropoff in preventive/check-up visits since that is pure cost to the consumer. (not an expenditure needed to fix something) You'd likely want to set things up so that a certain number of those were free per year so that ailments can get discovered before they are extremely expensive to fix.
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eponymous
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Re: Why are we spending more on healthcare?

Post by eponymous » Sun Sep 06, 2009 6:42 pm

Upsetter:

I like this line of thinking in many ways too. That said the issue would be the issue with most insurance. After you write them a bunch of checks will they pay when the time comes?

"I'm sorry sir, but you were drunk and it was your fault you tripped and broke your fuck knuckle."

"I'm sorry maa'm but you were driving too fast so we've decided we are not going to cover those broken legs."

"I'm sorry scumbag, but you fell off that ladder while robbing someone. We're not going to cover that broken back of yours. You're on your own."
(Actually I think I might applaud that one, but you get the picture.)

I'm really not that smart, but I think the way to go about solving the problem is to lean more laissez faire on it. The system is mos def busted, but don't throw the baby out with the bathwater. I think we need "better" regulation. Less regulation - but better, smarter regulation. I won't pretend to know what that means as I am not involved in this industry but I'll be willing to bet it begins to turn things back in the right direction without costing me more money and giving me poorer service.

It goes without saying that if you make something more affordable, more people can afford it. When you give something away for nothing it costs someone else a whole hell of a lot more.
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SOBF
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Re: Why are we spending more on healthcare?

Post by SOBF » Tue Sep 08, 2009 3:37 pm

Capitalism has become an excuse for greed. Money, religion, politics-bad combination.
Do you have a better system than capitalism ? Greed is every where. Not sure how capitalistic greed is worse than socialistic. There are always going to be those that have and those that have not .There are always going to be douchebags that take advantage of the system.

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