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Wednesday, August 30th 2006

We Have To Spend It On Something…

Medrants has linked to a very, very interesting New York Times piece (subscription required).

By 2030, predicts Robert W. Fogel, a Nobel laureate at the University of Chicago Graduate School of Business, about 25 percent of the G.D.P. will be spent on health care, making it “the driving force in the economy,” just as railroads drove the economy at the start of the 20th century.

Unless the current system is changed, most health care costs will continue to be paid by insurance, especially Medicare, which means that the taxpayers will foot the bill. But Dr. Fogel says he is not alarmed. Americans can afford it, he says, because the nation is so rich.

“It takes so little of household income to satisfy expenditures on food, clothing and shelter,” he explains. “At the end of the 19th century, food, clothing and shelter accounted for 80 percent of the family budget. Today it’s about a third.”

Other economists agree.

“We have to spend our money on something,” says Robert E. Hall, a Stanford University economist.

In a paper published in The Quarterly Journal of Economics, Dr. Hall and Charles I. Jones of the University of California, Berkeley, write: “As we get older and richer, which is more valuable: a third car, yet another television, more clothing — or an extra year of life?”

David Cutler, an economist at Harvard, calculated the value of extra spending on medicine. “Take a typical person aged 45,” he said. “They will spend $30,000 more over their lifetime caring for cardiovascular disease than they would have spent in 1950. And they will live maybe three more years because of it.”

Is this part of the “Give A Mouse A Cookie…” phenomena. Probably. The economists cited in this article make some interesting points. Now the argument against liberals who chide the healthcare industry for being “greedy” and bemoan the rises in the cost of healthcare becomes, “So?”

Okay, that isn’t really true. Their real concern is that rising costs are driving down healthcare access.

But, beyond and independent of that very real problem, plenty opposing physicians and calling for healthcare change are getting vindictive. In so many of their voices you can hear a growing belief that healthcare is somehow overpriced (as if you can put a cost on three more years…or your life), and not just because so many can “no longer” afford it but because providers or hospitals or pharmacutical companies are greedy. Basically, snippets of the Time article say, “shut up” to that.

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