| > That argument is either wrong or tautological. There are two distinct claims here. (1) National health expenditures are overwhelmingly determined by the resources available to households, as measured by consumption or disposable income (not individual income), and these same measures effectively explain why the US spends much more than other countries. (2) The increase in health spending in the US, as in other countries, has overwhelmingly been driven by an increase in the volume or quantity of healthcare consumed. While healthcare prices have risen they have generally not risen much faster than incomes have in the long run (especially not overall, but even when disaggregated somewhat), and thus cannot substantially explain why the share of income or consumption allocated to healthcare has risen overtime (indeed, the indices published by CMS and BEA indicate that had the quantity of health per capita remained constant the share would have actually fallen over time). This is also mirrored by related indicators, such as the vast rise in the health workforce, slow growing wages in healthcare (average healthcare wage approximates national average and hasn't increased for decades), and so on. > The US spends more on health care for worse outcomes So-called health "outcomes" are substantially endogenous (lifestyle, social influences, etc) and these factors vary systematically between countries. Moreover, health expenditure is almost certainly subject to rapidly diminishing returns and there is little to nothing to suggest the broad outcomes people typically cite (e.g., life expectancy) improve systematically with expenditures amongst countries in the developed world. https://i2.wp.com/pbs.twimg.com/media/DUwPBxoXUAEMCxy.jpg The pattern of rising expenditure with little or nothing to show for it on the margins in these broad measures may be regrettable, but my point is largely being driven by increasing disposable income, as opposed to idiosyncratic features of the US healthcare system. It sure seems like people really don't like to cut spending in practice and ultimately reject aggressive rationing conditional on income levels. |
It seems that if we want to fix our satisfaction with our healthcare situation (in the U.S.), we have to fix a couple of issues:
- we have to mitigate the "endogenous factors" that contribute to poor health outcomes (i.e. people have to live healthier lifestyles).
- we have have to find a way to encourage people to self-ration their own medical spending in a way that doesn't adversely affect their own health outcomes.
Do you think a more free-market based approach to healthcare consumption would fix these issues? How do we address lack of information? How do we address the motivational issues that lead us to both live unhealthy lifestyles and to spend money on unhelpful medical care?
edit: fixed formatting