David Leonhardt has an insightful article about the implications of rising health care costs. And they're not all bad....
The average cost of a family insurance plan that Americans get through their jobs has risen another 7.7 percent this year, to $11,500, according to the Kaiser Family Foundation. In only seven years, the cost has doubled, while incomes and company revenue, which pay for health insurance, haven’t risen nearly as much. ...Living in a society that spends a lot of money on medical care creates real problems, but it also has something in common with getting old. It’s better than the alternative. ...
Most families in the 1950’s paid their medical bills with ease, but they also didn’t expect much in return. After a century of basic health improvements like indoor plumbing and penicillin, many experts thought that human beings were approaching the limits of longevity. “Modern medicine has little to offer for the prevention or treatment of chronic and degenerative diseases,” the biologist René Dubos wrote in the 1960’s.
But then doctors figured out that high blood pressure and high cholesterol caused heart attacks, and they developed new treatments. Oncologists learned how to attack leukemia, enabling most children who receive a diagnosis of it today to triumph over a disease that was almost inevitably fatal a half-century ago. In the last few years, orphan drugs that combat rare diseases and medical devices like the implantable defibrillator have extended lives. Human longevity still hasn’t hit the wall that was feared 50 years ago.
Instead, a baby born in the United States this year will live to age 78 on average, a decade longer than the average baby born in 1950. People who have already made it to their 40’s can now expect to reach age 80. These gains are probably bigger than the ones the British experienced in the entire millennium leading up to 1800. If you think about this as the return on the investments in medicine, the payoff has been fabulous: Would you prefer spending an extra $5,500 on health care every year — or losing 10 years off your lifespan?
Yet we often imagine that the costs and benefits are unrelated, that we can somehow have 2006 health care at 1950 (or even 1999) prices. We think of health care as if it were gasoline, a product whose price and quality have nothing to do with each other.
We spend a lot on health care because extending one's life and health beyond the average is always going to be cutting edge and will require the use of sparse resources, be them equipment or a doctor's skill. As Mr. Leonhardt says at the end of his piece: despite the rising cost of health care, it's money well-spent.
Actually, this answer is not so clear. To simplify the numbers, consider $10,000/year for health insurance for 50 years. That's half a million bucks after taxes. And those 10 years between 70 and 80 are not the best. So, for many people, that kind of money would be worth 10 years. It could make the difference between life with or without divorce, an extra child, starting one's own business, yearly vacations, early retirement, etc. Frankly, the more I think about it, the more I feel ripped off by the medical industry.
An additional problem is the trend toward prescriptions and pills for everything.. and not big-ticket items like cholesterol and blood pressure.. but stupid things like "restless leg syndrome".
In the last 10 years, the number of kids who have been prescribed anti-psychotic drugs has increased by 400%.. which means that we either have *a lot* more psychotic kids.. or our health care system has become prescription-happy; prescribing a drug for *anything*.. and maybe even making up "diseases" or "syndromes" to perpetuate the process.
I don't think we know what health care costs, because we don't have a functioning market for it. The people who decide what to buy should be the same as the people who have to reach into their pockets and pay for that decision. It's a shame that Medical Savings Accounts haven't caught on.
DD: I don't think your perspective takes into account the fact that the increase in life expectancy won't necessarily be linear. What if that extra 10 years of life let's you survive just long enough to partake in some futuristic fountain of youth?
BB: I agree, and yet people would rather pay higher hidden costs than lower direct costs. What a deal!
Yea but it would be nice if the costs were a little more proportionate. Say... they can charge me twice as much for health insurance when my life expectancy is twice what it is now... I'll settle for dying at 83 instead of 84 if it means I can save $100 a month.
MW: I'm from Florida, also known as America's favorite retirement destination, as well as the supposed location of the infamous "fountain of youth" was searched for yet not found. You rightly appeal to the mythical fountain to describe what people expect from medical intervention, which often stands in contrast to their actual experiences.
Don't get me wrong -- It's wonderful that we have learned to avert most causes of premature death. But that's not what costs half a million bucks. What we're paying for is blood pressure regulators, cholesterol reducers, antibiotics, mood enhancers, hormone replacements, and $250,000 procedures that extend life for an average of 3 to 5 years.
Some medications and procedures are worth the cost, but others are not. As Ben says, the market is dysfunctional, and as Mark says, lots of money is going into treatments of questionable value.
What I would like to hear is some agreement on the limited value of the entire medical industry to humankind in the long run. There are people dying for lack of food and running water. Others are dying for ideas; others for money itself. Many cause their own illness; others are in good health yet they are constantly unhappy. As we grow old, our value to society decreases, slowly at first, then rapidly until we die. And, we all will die.
If you believe in God, then He made us for disease and death, intentionally. If you don't believe in God, then you should recognize the futility of medical interventions that will only weaken the next generation of humans on average.
If I were going to die tomorrow, it might be worth half a million bucks to extend my life by 10 years, since I am in my 20's and hoping to have children in the next few years. But if you ask me whether society should have spent over a million bucks to extend my grandfather's life, as it did, for a couple of years, I would say no.
DD: In America at least, I don't think "society" spends huge amounts of money to keep people alive. People may choose to spend their own money to keep themselves alive if they want... do you think "society" should prevent them from doing so?
MW: All university students in Massachusetts are compelled by law to buy health insurance. Admittedly, the minimum requirement only costs about $2200/year after subsidies, and is probably worth the price.
Socially speaking, businesses around here have to provide health insurance if they expect to hire anyone with more than a high-school education. And, the leading candidate for Governor has health care as a government responsibility in his platform.
Nobody challenged the assumption of the first comment. The cost is not $10,000 per year per person, it is per family. Most policies that means three or more. So $2500 per person might be more in line. Over 50 years that would be $125,000. Cheap!
Personally, I would rather pay my GP and Pharacist as I go. Insurance should only be for catastrophic stuff.
RK: Thanks for the clarification. I mistakenly thought the $11,500/year was for an individual.
David is right about health care and longevity: The two are almost unrelated. Life spans have increased because of factors that most people don't think of as health care, e.g. clean food, product safety, immunizations, and fewer manual-labor jobs.