Thursday, January 22, 2009

The Costs Of Health Care. Part I

Barack Obama mentioned the high expense of health care in his speech as one of the things his administration will address. It's a Herculean task, to be honest, and something researchers and policy-makers have tried to address for decades now.

This is a good time to discuss some of those issues and why they are so very difficult to address. My plan is to write a series of posts on this topic, long enough to make you know more about the topic than you ever wanted! This post sets out the bones of the series.

To bones we move! Or the skeleton of the problem which goes like this:

Health care is expensive in all countries of the world but especially expensive in the United States. Indeed, the U.S. always wins the International Competition Of Highest Health Care Expenditure Per Person! Congratulations to the winners.

So why is this a problem? After all, the U.S. also spends most in almost all other consumer categories, and if you want to pick one good predictor of a country's health care spending per capita (person) it would be that country's income. Perhaps we should just regard high health care expenditure the same way as we regard high expenditure on cars or houses or clothes: a good way for the American industries to make a living?

The answer to this is that Americans don't appear to get the bang for their buck in health care. The U.S. is not leading the statistics on longest life expectancy, lowest mortality rates in general or lowest infant mortality in particular. In short, the money spent on health care may not be spent efficiently or effectively. Or perhaps it is spent on quality of life rather than on its length? Perhaps the reasons why Americans live shorter lives has nothing to do with health care spending but much more to do with reckless driving, violence, poverty or bad eating habits? But if that is the case, what are we really getting with all that money spent on medicine? Especially given the forty million or so Americans who have no health coverage at all?

The skeleton I'm building here appears to have two parts to its spine: The high medical expenditure on the one hand and the way that money is spent on the other, both in terms of its effectiveness and possibly unequal distribution. It's not really feasible to address the former problem without addressing the latter. But addressing both of these at the same time brings up lots of additional problems and the need to look more carefully at what differentiates the American medical system, culture, demographics and economic rules from those of other similarly affluent countries.

This is what I plan to do in this series.