9/10/2009

So where is the health care crisis?

Michael Gerson in the Washington Post points to an argument that I have been making:

The overwhelming majority of Americans, by the definition of denied care, do not face a health-care crisis. Most polls show that about 80 percent are "very" or "somewhat" satisfied with their health plans. Those in the greatest need are often the most satisfied -- 90 percent of insured Americans who suffered serious illnesses are satisfied with their health care. According to a study published by the Cato Institute, a very small percentage -- even of the uninsured -- are "dissatisfied or highly dissatisfied" with the health care they get in other ways. On health care, the American public brims with satisfaction -- though most are concerned about rising costs.

So perhaps this is the crisis: rising costs that will eventually overwhelm state and federal budgets and consume more and more of individual paychecks. But this is precisely the area where current Democratic approaches are least credible. Obama abandoned his pledge to reduce the government's health costs long ago; now he aims only at budget neutrality. But every pending health-reform bill in Congress would increase both short- and long-term deficits, failing even on Obama's modified terms. Americans get the joke. While Obama has made cost control a centerpiece of his public message, only about 20 percent of Americans, in one poll, believe Obama will keep his promise not to increase the deficit with health reform. . . . .

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3 Comments:

Blogger AnonymousDoe said...

Right. Most Americans get their health insurance for "free". It is either paid for by their employer and federal government via tax deductions or via Medicare. What's there not to like about this "free" system.

The issue that Michael Gerson correctly points out can the country afford this arrangement going forward especially as the baby boomers age and need more medical services.

The uninsured problem is of course real, but Obama's plan is simply designed to transfer even more of the economic pie to the medical care industry. It does nothing to address the real issue of exploding medical costs that the country is unlikely to be able to afford in the future.

If everyone in this country had to pay for their own health insurance and these payments were not tax deductible, I think there would be a more honest debate of the problem of health care costs. Right now the massive government subsidies distort the discussion by
hiding the problem of medical care costs.

9/10/2009 5:45 PM  
Blogger Cato said...

While it seems to be almost universally accepted as a fact, I have serious questions about the claim that health costs are rising much faster than other prices and even question the assertion that they're rising at all. The problem is that there seems to be no effort at adjusting for quality, as well as a serious confusion between output costs and input factor costs. If a one day stay in the hospital costs 5 times as much as it did a few years ago, but the typical stay has fallen from 3 weeks to 2 days, does it make sense to claim that costs have increased 5 fold, or is it more accurate to say that they've fallen by 50%? Similarly, consider that a particular condition might be treated in a way that achieves outcomes identical (in terms of mortality, morbidity and rehabilitation) to those available 20 years ago for 1/4 the cost, but that a new treatment is available that achieves markedly superior results at twice the cost. Have costs fallen by 75% or doubled? What if the public would be rather have the previous results at lower costs, but that regulators insist on in newer outcomes? Is the health care system responsible for the increase in cost, or is government?

9/10/2009 8:16 PM  
Blogger AnonymousDoe said...

Cato,

You are making it way too complicated. It's very simple: Health insurance costs are going up significantly faster than wages. Just ask the people who actually pay the bills: employers.

Here's one data point from North Carolina:

http://charlotte.bizjournals.com/charlotte/stories/2009/08/17/daily24.html

Health-insurance premiums for N.C. working families increased nearly 97 percent between 2000 and 2009, while median earnings grew only 18.4 percent during the same period.

In the Tar Heel State, the annual cost to insure a family has increased to $13,083 from $6,649.

Wages haven’t kept pace with the rise in health-insurance costs. In 2009, the median pay in North Carolina was $27,330, up just $4,250 over the past 10 years, from $23,080.

9/10/2009 11:12 PM  

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