The Electric Commentary

Tuesday, March 22, 2005

Arnold Kling has a wager:

From TCS:

Instead, I am prepared to make the following bet: ten years from now, it will be objectively clear that the United States provided significantly better health care to its citizens between 1990 and 2005 than did other developed countries. From the vantage point of 2015, the policy blunder of the past fifteen years will not be that the United States spent too much on health care, but that other countries spent too little. The socialized systems, forced to ration health care because tax revenues are not sufficient to pay for state-of-the-art care, are constraining their citizens from being diagnosed and treated as well as Americans.

I am not denying that waste exists. However, I contend that the difference between health care spending in the United States and that in other countries cannot be accounted for by the wasteful items that critics have identified.


This is a fantastic article featuring a lot of useful facts, like:

An urban legend has it that close to half of all health care spending comes in the last year of life. The facts are somewhat different. The most thorough study, by Donald Hoover, et al, finds that 27 percent of Medicare spending takes place during the last year of life.

Overall, 22 percent of health care spending on people over 65 takes place in the last year of life. However, only 1/3 of U.S. health care spending is for people 65 and older. Thus, as a percentage of overall U.S. health care spending, spending on the last year of life amounts to about 7 percent. That is high, but not staggering.


and

Physicians are paid more than twice as much in the United States as in other developed countries. Because physician services are about one fourth of all health care spending, we could eliminate one eighth of our health care spending by reducing doctor salaries to the levels of other countries.

The other big factor is utilization of high-tech procedures, such as MRI's, CT scans, and open-heart surgery. If Americans would cut back on the utilization of these procedures, that would reduce health care spending by hundreds of billions of dollars.


I agree with Tyler Cowen that this could be my favorite Arnold Kling essay.

And while you're over at Marginal Revolution, don't miss this injection of sanity into the Social Security debate:

I agree that Lieberman is confusing an increase in the nominal present value of the debt with an increase in the cost of fixing social security but in correcting Lieberman both DeLong and Krugman meander towards the opposite error - that the costs of fixing social security is not increasing.

2 Comments:

  • I would agree with that possibility, although our waste is staggering. Of course we spend a lot during someone's last year of life, that is when they need it most. What is the alternative, saying, no, even if we do treat you, you could still die, so it would be a waste? If you want that, they'll give it to you for free in Canada. Even when Europe has a health crises they do way little. France lost more of its citizens in a heat wave than he have in Iraq, (where not only is there a way going on, it is also really hot.) Luckily, they are consistent in their ineffectiveness. They pledged modest Tsunamai aid, in the form of forgiving debts. That helps Tsunami victims as much as going on month-long vacations helped their elderly.

    By Anonymous Anonymous, at 2:24 PM  

  • I would agree with that possibility, although our waste is staggering. Of course we spend a lot during someone's last year of life, that is when they need it most. What is the alternative, saying, no, even if we do treat you, you could still die, so it would be a waste? If you want that, they'll give it to you for free in Canada. Even when Europe has a health crises they do way little. France lost more of its citizens in a heat wave than he have in Iraq, (where not only is there a way going on, it is also really hot.) Luckily, they are consistent in their ineffectiveness. They pledged modest Tsunamai aid, in the form of forgiving debts. That helps Tsunami victims as much as going on month-long vacations helped their elderly.

    By Anonymous Anonymous, at 2:24 PM  

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