A couple of weeks ago, in "The REAL causes of the long-term federal debt crisis", I argued that "The long-term federal debt is basically due to two things: Republican fiscal irresponsibility and the extreme costliness of the American health care system as a whole." And I presented several charts showing (a) how much Medicare & Medicaid costs increases had paralleled general medical costs increases, (b) how much MORE their projected costs increaeses were due to costs themselves, rather than demographics, (c) how much less our debt burden would be in 2050, if we could slow the growth of medical costs and (d) how much higher our costs than other countries many of which have much older populations than we do.
On the flip, I'll republish those charts, just to refresh people's memories. But the purpose of this post is to provide another perspective on what's gone wrong with American health care--a historical perspective showing just how it is that US costs have grown so far out of whack with everyone else in the industrial world. It's this vast departure from the cost structures everywhere else in the world that are at the root of virtually all our long-term public debt problems circa 2050. That's not to say there aren't other important issues--such as the need to repair and rebuild infrastructure--particularly in a much more energy-efficient way. We also need to stop squandering vast sums on the military, and invest heavily in a post-carbon economy. But the overwhelming problem of debt that politicians blame on "entitlements" is actually predominantly a result of our deeply dysfunctional health-care system, which will barely be touched by reforms that have been discussed this past year.
All the figures are from the most recent OECD database of health-related statistics, and are denominated as percentages of GDP. The first chart compares the US to other Anglophone countries--those whose welfare state systems are most similar to ours, as they all derive historically from British culture, and tend to reflect a common attitude that tilts more heavily to reliance on markets and away from government programs. Nonetheless, all the other Anglophone countries eventually accepted that health care was different, and that government needed to play a much more active role in making sure the workforce--as well as the citizenry as a whole--was healthy. This is how their costs changed over time:
As you can see, the US costs began pulling away from the cots levels of the other Anglophone countries around 1970, as our costs continued growing at about the same rate they had been from 1966 onward, while other countries' costs grew at a slower pace.
Charts for other groups of countries compared to the US on the flip, along with a reprise of the charts mentioned above.
For anyone not interested in slogging through the debate on the 500-odd amendments to the Baucus bill, it has become increasingly and painfully apparent that the healthcare legislation soon to emerge from at least the Senate will fall far short in reigning in out of control health care costs.
That lapse is especially ironic in that "affordability" is perhaps the only goal that seems to top everyone's to do list, from President Obama to the "keep the government hands off my (government-financed) Medicare" crowd.
But as long as our policy makers refuse to throw the elephant out of the room, the insurance company pirates and their predatory pricing practices, all their subsidies and tweaking will amount to little more than an umbrella in a hurricane.
Now Paul Krugman has something to say related to that, which should really get you steamed. It seems that the industries running up those costs don't want us to know whether they're doing any good. Knowledge leads to socialism, don'tcha know! (Actually, that's sorta true, but....)
