[ExI] More on US Health Care Costs

Stathis Papaioannou stathisp at gmail.com
Mon May 25 13:23:46 UTC 2009

2009/5/25 Samantha Atkins <sjatkins at mac.com>:
> It is not just a matter of "efficiency".  Under "efficiency" as the
> population ages and the governments eventually run health care it is logical
> to expect major rationing of care from simple economic reality.  This can
> have a very large negative impact on all of us, especially boomers.     I
> have yet to see an "efficient" government program.

You need to take any given government program and run it against the
private enterprise equivalent. That isn't always possible, and in many
cases there is no private enterprise equivalent. Public health is just
one example. Public health means not only that it is publicly funded,
but that it considers the health of the population as a whole rather
than individuals, and is a medical specialty in itself. For example,
mass vaccination programs are a relatively cheap and cost-effective
public health program. Anti-smoking education/propaganda is another
example of this.

> What really needs to
> be the take home message is that only a moon shot level of committment to
> anti-aging medicine can save an aging developed world population from
> utterly blowing out budgets and condemning billions to needless suffering
> and death even at the point in history where many of the old "inevitable"
> sufferings of aging are beginning to be addressable.

At some point, health spending will be rationed since it could
otherwise consume the entire GDP; for example, if the number of
intensive care beds were greatly increased in order to extend the life
of all very old and sick people by a few days.

> We are not getting much longer life spans largely because almost zero energy
> is put into preventative medicine or getting the non-food if not outright
> poison off the grocery shelves.    It not a matter of how many people are
> covered or how efficient the system is or is not.

True, far more good could be done far more cheaply if health spending
emphasised preventive treatment: diet, exercise, smoking, control of
blood pressure and cholesterol, etc.

> The biggest true inefficiencies come when there is no feedback toward
> efficiency.  If I know my care will always be paid for where is the
> incentive for me to push for better prices and more efficient care?   Where
> is the incentive to take better care of one's self if medical care is simply
> a given that "the system" somehow magically makes happen?   Where are the
> drivers to efficiency in that?

Miraculously, it seems that in countries where the government provides
almost free health care, this health care is cheaper in absolute terms
than it is in the US. As a worker in the Australian public health
system, I am in the middle of a constant struggle by hospital
management to, on the one hand, contain costs and, on the other hand,
improve patient care outcome measures. If the hospital goes over
budget or fails to meet targets, the managers are liable to be sacked.

If I travel to the US I have to pay around 50% more for travel
insurance covering me for illness and injury compared to what I would
have to pay for, say, a comparable European country. This applies only
to medical costs: hotels, meals etc. will generally be the same price
or a bit cheaper in the US. Also, the US population tends to suffer
more from lifestyle related health negatives, such as obesity,
compared to those other countries where everyone gets almost free
health care, which is the usual apology given for the lower life
expectancy in the US, and goes against your argument about incentives
to stay well.

Stathis Papaioannou

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