[osterwood]

Exactly. Putting health care in GDP also puts a positive light on rising health care costs -- and in the US there is nominally zero consumer power against rising health care costs. Most of the time it's impossible to know how much something will cost prior to the appointment, procedure, etc -- so people cannot "vote with their wallet" like they can with other spending.

[Retric]

It doesn’t put healthcare costs in a positive light, it puts the economic surplus to support healthcare spending in a positive light.

There’s a subtle but critical difference between them. Namely you can simply increase healthcare spending by 100x in the US without dramatic improvements in other parts of the economy.

[osterwood]

This would be true if health care costs were discretionary, but they are not.

Your bank account going to zero due to breaking a leg, or medication needs, or X is not a sign of a a healthy economy. If that health care demand hadn't occurred, you could have spent your "economic surplus" in a way of your choosing -- perhaps frivolously or perhaps on something that provides longer term financial upside to you, your family, your community, whatever.

The problem with counting health care costs as part of GDP in the US is that it is a cost which is not distributed in any rational way -- local markets have vastly different service costs, employers have vastly different bargaining power with insurance companies, and individuals have vastly different health care needs with vastly different costs associated.

If health care were normalized and distributed across a population (instead of cost burden ultimately falling to individuals) then I can see the reason to count it as part of GDP. Then it's somewhat analogous to physical infrastructure -- a healthy economy can support spending money on infrastructure.

But, no one goes bankrupt because the town voted to increase taxes slightly to pay for a new road or renovating the local library. Health care cost is the number one cause of bankruptcy in the US -- health care cost increasing does not necessarily mean there is "economic surplus" to support it, instead more people could be driven to bankruptcy.

[Retric]

Those regional differences are hardly limited to healthcare just look at a 1,500 SF apartment in Memphis TN, vs NYC. The important bit isn’t a question of bargaining power it’s choice. Someone with a broken leg would very much like medical treatment, and had a surplus or leverage with an insurance contract to pay for it. The fact they got ripped off is no more relevant than someone paying full price for a designer handbag or whatever.

As to bankruptcy, unpaid medical bills aren’t part of the GDP. It’s a measure of output so they also exclude things like buying a house for 1 million and then selling it for 1 million.