13 ms·

Which nation had a better model at that point in history?

keenmaster 7y ago
We spend 17.4% of GDP on healthcare. The OECD average is 9.5%, and we don't have better outcomes to show for it. That's ~$1.2-1.7 trillion of waste annually that could be used to improve our society instead of lining crony pockets. Employer-provided healthcare is one layer of the Kafka baklava that obscures the cost of healthcare and prevents better cost controls and price discovery in America. It also makes employees more reliant on their company, literally for their wellbeing. Our economy is less dynamic as a result, so my $1.2-1.7 trillon estimate might understate the problem. I got the OECD data directly from the OECD's website: https://www.oecd.org/media/oecdorg/satellitesites/newsroom/48294761hd2011fr.png https://www.oecd.org/media/oecdorg/satellitesites/newsroom/4...
- squish78 7y ago
  Thank you for the data. Which nation had a better model for health insurance that point in history?
  - Matticus_Rex 7y ago
    The US, before it implemented that bad idea.
  - keenmaster 7y ago
    The NHS/universal healthcare was introduced in Britain in 1948, after WWII. The NHS isn't perfect, but it's much better than the American system. If we want a more flexible healthcare model, we can have universal healthcare to cover necessary + preventative care, with the option to purchase supplemental insurance for expedited and/or non-medically necessary care. Several other countries have that model.
    - squish78 7y ago
      Do you think high-paying healthcare sector and patent R&D in the US creates more incentive for research and development of new medicine & healthcare technology?
    - keenmaster 7y ago
      >"Do you think high-paying healthcare sector and patent R&D in the US creates more incentive for research and development of new medicine & healthcare technology?" Yes, but there's a limit. Incentives have diminishing marginal returns. At the end of the day, a $2B pharma company is still going to doggedly pursue a 20 year monopoly on a potential $1B drug, even if it otherwise would have been a $1.5B drug if there was no Medicare for All. Moreover, the vast majority of waste in healthcare is with hospitals, administrators, surgeons, insurance companies, and doctors, not the pharmaceutical industry. Pharma is closer to software in that one company can produce one product with zero marginal cost that can trivially serve everyone on Earth with a given condition. We can even leave Big Pharma as is and still realize hundreds of billions in savings, though I still believe that there should be some single-buyer negotiation for drugs. We can use empirical evidence to negotiate on drug prices without drastically changing the incentive scheme. Ultimately, I believe pharma companies would increase prices abroad if we implement price controls in the U.S. The U.S. is subsidizing the world's healthcare.
      - squish78 7y ago
        Every hospital I've been to seemed horribly understaffed.. and I'd be afraid of an underpaid surgeon. Not sure what waste you're referring to
      - keenmaster 7y ago
        >"Every hospital I've been to seemed horribly understaffed.. and I'd be afraid of an underpaid surgeon. Not sure what waste you're referring to" Doctor/surgeon labor scarcity exists for the following reasons: - Medical associations lobbied the government to restrict residency positions a long time ago, and continually lobbied to keep them down until just recently when the shortages have become too obvious. They were even warning of an impending doctor surplus in the 90's. Ya, right. - Medical associations and med schools have been smart about restricting the supply of doctors through our med school network and excessively tedious licensing system. Additionally, the other OECD countries I've referred to have similar health outcomes for a much lower % of GDP. Clearly, universal healthcare did not worsen their population's health. If someone wants quicker healthcare, I'm almost certain the U.S. would allow supplemental insurance to get that hip transplant in 2 weeks instead of 6 months.
- sp332 7y ago
  squish78 is asking about the late 40's to early 50's when businesses started offering health insurance as a benefit.
  - deleted 7y ago
    [deleted]
- Reedx 7y ago
  There's certainly a lot of waste, but that data point about cost and outcomes is a dubious one for a number of reasons (e.g., obesity). See here for an in-depth analysis: https://randomcriticalanalysis.com/2019/11/07/a-tale-of-two-covariates-why-owid-and-company-are-wrong-about-us-healthcare/ https://randomcriticalanalysis.com/2019/11/07/a-tale-of-two-...
  - keenmaster 7y ago
    The obesity explanation doesn't pass the sniff test. Canada is 12% less obese than the U.S., but it spends 6% less of its GDP on healthcare. Put differently, if obesity was the reason for excess spending, the U.S. would save $1.1 trillion for every 12% of its population that is cured of obesity. If true, that would peg the marginal cost of obesity at $27,777 per person per year (1.1 trillion/.12*330 million), or 9x the annual salary of a doctor in Cuba. That is beyond the realm of believability, even if I introduce the other population-induced causal factors which you implied but didn't specify. Additionally, the government would be more invested in the population's health under a single-payer model. It would actively work to reduce the prevalence of obesity and lower its costs. That would include taxing consumable goods with a negative health externality, commensurate with the magnitude of that externality. That would also include incentivizing the consumption and production of goods with positive health externalities and investing in pro-health infrastructure. Imagine if a city faced the following math: "A network of bike lanes would cost us $40 million and $10 million to maintain over the next 10 years. It would also save around $50 million in health expenditures every 10 years. After one decade, it will cost $10 million and continue to save us $50 million." All the bike lanes you could dream of would be built overnight, assuming there would be subsidies by a M4A healthcare program. I'm more excited at the prospect of converting roads into pedestrian walkways and scooter highways. That wouldn't seem like such an expensive proposition if the government would recoup the cost in healthcare savings.
    - rcafdm 7y ago
      > The obesity explanation doesn't pass the sniff test. Canada is 12% less obese than the U.S., but it spends 6% less of its GDP on healthcare. It's my blog (RCA). My argument is that obesity substantially explains US health outcomes in relation to other countries. I never claimed obesity is the cause of high national health spending (as in, "inputs"). To the contrary, I have consistently argued US health spending is well explained by its wealth (technically income levels). https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/ https://randomcriticalanalysis.com/2018/11/19/why-everything... To a first approximation, national health spending is entirely explained by the average house income level in the long run. While time, healthcare technology, and other factors are assocatied with rising spending, these changes are ultimately very well explained by changing income levels. Amongst high-income countries, a 1% increase in income is robustly associated with a long run increase of about 1.8% (it's highly elastic). https://i0.wp.com/randomcriticalanalysis.com/wp-content/uploads/2019/11/rcafdm_oecd_income_health_elasticity_2017.png https://i0.wp.com/randomcriticalanalysis.com/wp-content/uplo... The US spends more than Canada because it's still a much richer country (which isn't to say Canada isn't a nice place!). > That is beyond the realm of believability, even if I introduce the other population-induced causal factors which you implied but didn't specify. Again, I never said this, but other population health risk factors such as age structure, disease rates, and the like are of negligible significance when it comes to long run aggregate spending. Such factors may be highly predictive within countries and may have some say in the short run (within budgetary constraints), but in the long run national picture the evidence suggests these factors amount to little more than noise. National household income levels trumps everything. > Additionally, the government would be more invested in the population's health under a single-payer model. US government programs, namely Medicare and Medicaid, spend more on healthcare than most other high-income countries do in total (even more so comparing public-to-public). Just how much more incentive do we need before these magical effects kick in? Higher health spending predicts higher obesity rates in time series and cross-sectionally (though this is likely ultimately mediated by long-run income levels and by time). https://i0.wp.com/randomcriticalanalysis.com/wp-content/uploads/2019/11/rcafdm_health_spending_and_obesity_owid_style.png https://i0.wp.com/randomcriticalanalysis.com/wp-content/uplo... Where is the evidence that these programs have large, sustained effects and are cost effective? Most data indicate these programs have negligible effects in the long run and they almost always cost more than they save (which isn't to say we shouldn't necessarily do it, but the economic rationale is v. weak). ~ RCA
- AnthonyMouse 7y ago
  > We spend 17.4% of GDP on healthcare. The OECD average is 9.5%, and we don't have better outcomes to show for it. The problem is we do have "allowing drug companies to keep researching new drugs" to show for it. We're subsidizing the rest of the world because they impose price controls on patented medications. We could do the same thing, but then where does the money to do the R&D come from? People like to point out that they spend more on advertising than research, but the advertising generates more revenue than it costs or they wouldn't do it, which means without the advertising they would have less money for research. It should come from other countries who have been free riding with price controls, but how do you get them to do that? The status quo is giving them a trillion dollar a year subsidy.
  - keenmaster 7y ago
    Pharma companies explain a relatively small amount of excess spending in the U.S. We can even change nothing about how we pay for drugs and still reduce a majority of the $1.2-1.7 trillion in healthcare waste (though we should still try, and let drug companies increase prices elsewhere). I discuss this a bit more below, ctrl+f monopoly
    - AnthonyMouse 7y ago
      I'll address it there then.
      - keenmaster 7y ago
        I saw your comment. Clearly, there is a lot of waste, and we both agree on that front. As for exogenous costs, the U.S. isn't the only country with expensive real estate. Almost all of the other OECD countries have a modest degree of real estate cost inflation. Similarly, most should exhibit a similar degree of adherence to the Baumol Cost Disease phenomenon. There is no reason that the U.S. healthcare industry should have a 50-70% higher magnitude of exogenous cost disease. Lastly, I already addressed direct R&D funding (my analogy was simplified, but it could be extended to a portfolio of drugs). However, you mentioned that U.S. purchasing of equipment and drugs disproportionately funds R&D activity. I'm sure that's true, but I see it as a problem to be solved rather than a fact of life. We should adopt universal healthcare just like almost every other developed nation, implement measures to mitigate incentive loss, wait for U.S. medical companies to renegotiate pricing with other countries, and, if incentives are still lacking, we can deal with that then. Surely there's enough money among all developed nations to more than pay for an adequate level of medical R&D. Somewhat related, but Jennifer Doudna, a government employee, co-discovered CRISPR. CRISPR will prove to be one of the biggest step changes in health outcomes in the history of mankind, or, at some point, supermankind. Now hundreds of pharma companies will try to monetize on the government’s discovery: CRISPR for sickle-cell anemia, CRISPR for congenital retinal defects, CRISPR for lactose intolerance, etc... Should we have to reimburse drug companies for the value of the drug, or should we, recognizing the government’s contribution and the immense value of life, put a reasonable cap on reimbursement? I say the latter. A company developing CRISPR drugs is on record saying they plan to charge over $100,000 for their treatment. I’m not convinced that the drug would not have been developed if they stood to make much less than that per person. We trust the government to grant 20 year monopolies on drugs, and I believe we can also trust the government to reasonably modulate drug reimbursement without ruining incentives for development.
- rcafdm 7y ago
  > We spend 17.4% of GDP on healthcare. The OECD average is 9.5% Health spending is almost entirley explained by income levels, especially in the long-run. The US spends much more because the US is much richer than most and because health spending is highly elastic at a national level. # TL;DR https://i0.wp.com/randomcriticalanalysis.com/wp-content/uploads/2019/11/rcafdm_oecd_income_health_elasticity_2017.png https://i0.wp.com/randomcriticalanalysis.com/wp-content/uplo... # Long explanation https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/ https://randomcriticalanalysis.com/2018/11/19/why-everything... > and we don't have better outcomes to show for it Norway and Luxembourg also spend 2x Spain and Italy and don't have more to show for it either despite the fact that they're also much richer, have larger welfare states, etc. https://i1.wp.com/randomcriticalanalysis.com/wp-content/uploads/2019/05/rcafdm_owid2_health_exp_life_exp_loess.png https://i1.wp.com/randomcriticalanalysis.com/wp-content/uplo... Countries increase health spending because they can, not necessarily because they need to. Evidence strongly suggests returns to health spending are falling everywhere and the US isn't particularly unique in this regard. https://randomcriticalanalysis.com/2019/11/07/a-tale-of-two-covariates-why-owid-and-company-are-wrong-about-us-healthcare/ https://randomcriticalanalysis.com/2019/11/07/a-tale-of-two-...
  - keenmaster 7y ago
    Your findings are not mutually exclusive with other theories about the underlying causes of high U.S. healthcare expenditure, such as a chronic lack of price transparency. The more money is in the pot, the greater the incentives to pilfer it, and, in lieu of adequate controls, the more it will be pilfered. The way I see it, your linear regression is between income and aggregate pilferage across all layers of the healthcare establishment (Kafka baklava :) ). I surmise that the accelerating nature of health expenditures (1.8% increase for every 1% increase in income) is due to the rapid inflation of disposable income relative to overall income at the higher levels. Disposable income and the saved wealth accrued from higher disposable income over time are more readily pilfered. I should say “otherwise disposable,” because the healthcare industry takes a progressively larger chunk of that and makes it de facto indisposable. I say this with no irony: a linear regression between income and amounts extorted during kidnapping, controlling for other variables, would show similar results.
alistairSH 7y ago
The UK's NHS was created in the late-1940s, so in the same general timeframe. At roughly the same time, Harry Truman had a (possibly) better model, but business groups and the AMA prevented adoption (because "socialism").
spamizbad 7y ago
There wasn't much to model. Complex health insurance systems were in their infancy during that period. People would sometimes pre-pay a local hospital to reduce costs, etc. The employer-sponsored model of the US wasn't that bad during the 1940s, but I was clearly obsolete by the 1960s. What keeps it alive, ironically, may be Medicare: it removed the most expensive pool of patients (seniors) from the risk pool. This staved off the government needing to come in and heavily subsidize private insurance and set up nation-wide care provider networks. Countries with private insurance industries that didn't bifurcate the risk pool in this manner ultimately did a better job of controlling costs for everyone Medicare itself is a bit of compromise: it was suppose to be for everyone, but it ultimately just became for seniors. And while Medicare for All is back in the zeitgeist today, it was a consistent policy plank until the 80s, with the more conservative position being an approach where private companies would just sell medicare coverage (effectively creating a system like Switzerland or Germany, minus the public care providers).

We spend 17.4% of GDP on healthcare. The OECD average is 9.5%, and we don't have better outcomes to show for it. That's ~$1.2-1.7 trillion of waste annually that could be used to improve our society instead of lining crony pockets. Employer-provided healthcare is one layer of the Kafka baklava that obscures the cost of healthcare and prevents better cost controls and price discovery in America. It also makes employees more reliant on their company, literally for their wellbeing. Our economy is less dynamic as a result, so my $1.2-1.7 trillon estimate might understate the problem. I got the OECD data directly from the OECD's website: https://www.oecd.org/media/oecdorg/satellitesites/newsroom/48294761hd2011fr.png https://www.oecd.org/media/oecdorg/satellitesites/newsroom/4...

squish78 7y ago
Thank you for the data. Which nation had a better model for health insurance that point in history?
- Matticus_Rex 7y ago
  The US, before it implemented that bad idea.
- keenmaster 7y ago
  The NHS/universal healthcare was introduced in Britain in 1948, after WWII. The NHS isn't perfect, but it's much better than the American system. If we want a more flexible healthcare model, we can have universal healthcare to cover necessary + preventative care, with the option to purchase supplemental insurance for expedited and/or non-medically necessary care. Several other countries have that model.
  - squish78 7y ago
    Do you think high-paying healthcare sector and patent R&D in the US creates more incentive for research and development of new medicine & healthcare technology?
  - keenmaster 7y ago
    >"Do you think high-paying healthcare sector and patent R&D in the US creates more incentive for research and development of new medicine & healthcare technology?" Yes, but there's a limit. Incentives have diminishing marginal returns. At the end of the day, a $2B pharma company is still going to doggedly pursue a 20 year monopoly on a potential $1B drug, even if it otherwise would have been a $1.5B drug if there was no Medicare for All. Moreover, the vast majority of waste in healthcare is with hospitals, administrators, surgeons, insurance companies, and doctors, not the pharmaceutical industry. Pharma is closer to software in that one company can produce one product with zero marginal cost that can trivially serve everyone on Earth with a given condition. We can even leave Big Pharma as is and still realize hundreds of billions in savings, though I still believe that there should be some single-buyer negotiation for drugs. We can use empirical evidence to negotiate on drug prices without drastically changing the incentive scheme. Ultimately, I believe pharma companies would increase prices abroad if we implement price controls in the U.S. The U.S. is subsidizing the world's healthcare.
    - squish78 7y ago
      Every hospital I've been to seemed horribly understaffed.. and I'd be afraid of an underpaid surgeon. Not sure what waste you're referring to
    - keenmaster 7y ago
      >"Every hospital I've been to seemed horribly understaffed.. and I'd be afraid of an underpaid surgeon. Not sure what waste you're referring to" Doctor/surgeon labor scarcity exists for the following reasons: - Medical associations lobbied the government to restrict residency positions a long time ago, and continually lobbied to keep them down until just recently when the shortages have become too obvious. They were even warning of an impending doctor surplus in the 90's. Ya, right. - Medical associations and med schools have been smart about restricting the supply of doctors through our med school network and excessively tedious licensing system. Additionally, the other OECD countries I've referred to have similar health outcomes for a much lower % of GDP. Clearly, universal healthcare did not worsen their population's health. If someone wants quicker healthcare, I'm almost certain the U.S. would allow supplemental insurance to get that hip transplant in 2 weeks instead of 6 months.
sp332 7y ago
squish78 is asking about the late 40's to early 50's when businesses started offering health insurance as a benefit.
- deleted 7y ago
  [deleted]
Reedx 7y ago
There's certainly a lot of waste, but that data point about cost and outcomes is a dubious one for a number of reasons (e.g., obesity). See here for an in-depth analysis: https://randomcriticalanalysis.com/2019/11/07/a-tale-of-two-covariates-why-owid-and-company-are-wrong-about-us-healthcare/ https://randomcriticalanalysis.com/2019/11/07/a-tale-of-two-...
- keenmaster 7y ago
  The obesity explanation doesn't pass the sniff test. Canada is 12% less obese than the U.S., but it spends 6% less of its GDP on healthcare. Put differently, if obesity was the reason for excess spending, the U.S. would save $1.1 trillion for every 12% of its population that is cured of obesity. If true, that would peg the marginal cost of obesity at $27,777 per person per year (1.1 trillion/.12*330 million), or 9x the annual salary of a doctor in Cuba. That is beyond the realm of believability, even if I introduce the other population-induced causal factors which you implied but didn't specify. Additionally, the government would be more invested in the population's health under a single-payer model. It would actively work to reduce the prevalence of obesity and lower its costs. That would include taxing consumable goods with a negative health externality, commensurate with the magnitude of that externality. That would also include incentivizing the consumption and production of goods with positive health externalities and investing in pro-health infrastructure. Imagine if a city faced the following math: "A network of bike lanes would cost us $40 million and $10 million to maintain over the next 10 years. It would also save around $50 million in health expenditures every 10 years. After one decade, it will cost $10 million and continue to save us $50 million." All the bike lanes you could dream of would be built overnight, assuming there would be subsidies by a M4A healthcare program. I'm more excited at the prospect of converting roads into pedestrian walkways and scooter highways. That wouldn't seem like such an expensive proposition if the government would recoup the cost in healthcare savings.
  - rcafdm 7y ago
    > The obesity explanation doesn't pass the sniff test. Canada is 12% less obese than the U.S., but it spends 6% less of its GDP on healthcare. It's my blog (RCA). My argument is that obesity substantially explains US health outcomes in relation to other countries. I never claimed obesity is the cause of high national health spending (as in, "inputs"). To the contrary, I have consistently argued US health spending is well explained by its wealth (technically income levels). https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/ https://randomcriticalanalysis.com/2018/11/19/why-everything... To a first approximation, national health spending is entirely explained by the average house income level in the long run. While time, healthcare technology, and other factors are assocatied with rising spending, these changes are ultimately very well explained by changing income levels. Amongst high-income countries, a 1% increase in income is robustly associated with a long run increase of about 1.8% (it's highly elastic). https://i0.wp.com/randomcriticalanalysis.com/wp-content/uploads/2019/11/rcafdm_oecd_income_health_elasticity_2017.png https://i0.wp.com/randomcriticalanalysis.com/wp-content/uplo... The US spends more than Canada because it's still a much richer country (which isn't to say Canada isn't a nice place!). > That is beyond the realm of believability, even if I introduce the other population-induced causal factors which you implied but didn't specify. Again, I never said this, but other population health risk factors such as age structure, disease rates, and the like are of negligible significance when it comes to long run aggregate spending. Such factors may be highly predictive within countries and may have some say in the short run (within budgetary constraints), but in the long run national picture the evidence suggests these factors amount to little more than noise. National household income levels trumps everything. > Additionally, the government would be more invested in the population's health under a single-payer model. US government programs, namely Medicare and Medicaid, spend more on healthcare than most other high-income countries do in total (even more so comparing public-to-public). Just how much more incentive do we need before these magical effects kick in? Higher health spending predicts higher obesity rates in time series and cross-sectionally (though this is likely ultimately mediated by long-run income levels and by time). https://i0.wp.com/randomcriticalanalysis.com/wp-content/uploads/2019/11/rcafdm_health_spending_and_obesity_owid_style.png https://i0.wp.com/randomcriticalanalysis.com/wp-content/uplo... Where is the evidence that these programs have large, sustained effects and are cost effective? Most data indicate these programs have negligible effects in the long run and they almost always cost more than they save (which isn't to say we shouldn't necessarily do it, but the economic rationale is v. weak). ~ RCA
AnthonyMouse 7y ago
> We spend 17.4% of GDP on healthcare. The OECD average is 9.5%, and we don't have better outcomes to show for it. The problem is we do have "allowing drug companies to keep researching new drugs" to show for it. We're subsidizing the rest of the world because they impose price controls on patented medications. We could do the same thing, but then where does the money to do the R&D come from? People like to point out that they spend more on advertising than research, but the advertising generates more revenue than it costs or they wouldn't do it, which means without the advertising they would have less money for research. It should come from other countries who have been free riding with price controls, but how do you get them to do that? The status quo is giving them a trillion dollar a year subsidy.
- keenmaster 7y ago
  Pharma companies explain a relatively small amount of excess spending in the U.S. We can even change nothing about how we pay for drugs and still reduce a majority of the $1.2-1.7 trillion in healthcare waste (though we should still try, and let drug companies increase prices elsewhere). I discuss this a bit more below, ctrl+f monopoly
  - AnthonyMouse 7y ago
    I'll address it there then.
    - keenmaster 7y ago
      I saw your comment. Clearly, there is a lot of waste, and we both agree on that front. As for exogenous costs, the U.S. isn't the only country with expensive real estate. Almost all of the other OECD countries have a modest degree of real estate cost inflation. Similarly, most should exhibit a similar degree of adherence to the Baumol Cost Disease phenomenon. There is no reason that the U.S. healthcare industry should have a 50-70% higher magnitude of exogenous cost disease. Lastly, I already addressed direct R&D funding (my analogy was simplified, but it could be extended to a portfolio of drugs). However, you mentioned that U.S. purchasing of equipment and drugs disproportionately funds R&D activity. I'm sure that's true, but I see it as a problem to be solved rather than a fact of life. We should adopt universal healthcare just like almost every other developed nation, implement measures to mitigate incentive loss, wait for U.S. medical companies to renegotiate pricing with other countries, and, if incentives are still lacking, we can deal with that then. Surely there's enough money among all developed nations to more than pay for an adequate level of medical R&D. Somewhat related, but Jennifer Doudna, a government employee, co-discovered CRISPR. CRISPR will prove to be one of the biggest step changes in health outcomes in the history of mankind, or, at some point, supermankind. Now hundreds of pharma companies will try to monetize on the government’s discovery: CRISPR for sickle-cell anemia, CRISPR for congenital retinal defects, CRISPR for lactose intolerance, etc... Should we have to reimburse drug companies for the value of the drug, or should we, recognizing the government’s contribution and the immense value of life, put a reasonable cap on reimbursement? I say the latter. A company developing CRISPR drugs is on record saying they plan to charge over $100,000 for their treatment. I’m not convinced that the drug would not have been developed if they stood to make much less than that per person. We trust the government to grant 20 year monopolies on drugs, and I believe we can also trust the government to reasonably modulate drug reimbursement without ruining incentives for development.
rcafdm 7y ago
> We spend 17.4% of GDP on healthcare. The OECD average is 9.5% Health spending is almost entirley explained by income levels, especially in the long-run. The US spends much more because the US is much richer than most and because health spending is highly elastic at a national level. # TL;DR https://i0.wp.com/randomcriticalanalysis.com/wp-content/uploads/2019/11/rcafdm_oecd_income_health_elasticity_2017.png https://i0.wp.com/randomcriticalanalysis.com/wp-content/uplo... # Long explanation https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/ https://randomcriticalanalysis.com/2018/11/19/why-everything... > and we don't have better outcomes to show for it Norway and Luxembourg also spend 2x Spain and Italy and don't have more to show for it either despite the fact that they're also much richer, have larger welfare states, etc. https://i1.wp.com/randomcriticalanalysis.com/wp-content/uploads/2019/05/rcafdm_owid2_health_exp_life_exp_loess.png https://i1.wp.com/randomcriticalanalysis.com/wp-content/uplo... Countries increase health spending because they can, not necessarily because they need to. Evidence strongly suggests returns to health spending are falling everywhere and the US isn't particularly unique in this regard. https://randomcriticalanalysis.com/2019/11/07/a-tale-of-two-covariates-why-owid-and-company-are-wrong-about-us-healthcare/ https://randomcriticalanalysis.com/2019/11/07/a-tale-of-two-...
- keenmaster 7y ago
  Your findings are not mutually exclusive with other theories about the underlying causes of high U.S. healthcare expenditure, such as a chronic lack of price transparency. The more money is in the pot, the greater the incentives to pilfer it, and, in lieu of adequate controls, the more it will be pilfered. The way I see it, your linear regression is between income and aggregate pilferage across all layers of the healthcare establishment (Kafka baklava :) ). I surmise that the accelerating nature of health expenditures (1.8% increase for every 1% increase in income) is due to the rapid inflation of disposable income relative to overall income at the higher levels. Disposable income and the saved wealth accrued from higher disposable income over time are more readily pilfered. I should say “otherwise disposable,” because the healthcare industry takes a progressively larger chunk of that and makes it de facto indisposable. I say this with no irony: a linear regression between income and amounts extorted during kidnapping, controlling for other variables, would show similar results.

alistairSH 7y ago

The UK's NHS was created in the late-1940s, so in the same general timeframe. At roughly the same time, Harry Truman had a (possibly) better model, but business groups and the AMA prevented adoption (because "socialism").

spamizbad 7y ago

There wasn't much to model. Complex health insurance systems were in their infancy during that period. People would sometimes pre-pay a local hospital to reduce costs, etc. The employer-sponsored model of the US wasn't that bad during the 1940s, but I was clearly obsolete by the 1960s. What keeps it alive, ironically, may be Medicare: it removed the most expensive pool of patients (seniors) from the risk pool. This staved off the government needing to come in and heavily subsidize private insurance and set up nation-wide care provider networks. Countries with private insurance industries that didn't bifurcate the risk pool in this manner ultimately did a better job of controlling costs for everyone Medicare itself is a bit of compromise: it was suppose to be for everyone, but it ultimately just became for seniors. And while Medicare for All is back in the zeitgeist today, it was a consistent policy plank until the 80s, with the more conservative position being an approach where private companies would just sell medicare coverage (effectively creating a system like Switzerland or Germany, minus the public care providers).