Just a little bit of my opinion on health care and the reform that is trying to be pushed through the government, I don’t plan on covering this because there are far more intelligent and well-read people than myself so I’ll leave it to them for the expert comments.  But I do feel that there are some easily seen problems facing both the attempts at reform and the practice of health care in general, so here are my thoughts.

So far we’ve done a bunch of talking about universal coverage, the public option, and whether health care is a right.  It is unfortunate that none of these has anything to do with the real problem, the level of spending we do on health care.  This is one of my favorite graphs I’ve seen that can give us some insight into a few aspects of the economy of health care. HT to The Enterprise Blog

This graph can give us two very interesting bits of information.  The rates of spending are very similar but the level of spending is far disproportionate.  It is not that our costs are skyrocketing out of control due to ever increasing rates of spending, it is that the total amount we spend will show huge amounts of spending fluctuation even with small growth rates.

Second this graph shows that neither the Dems or GOP has identified any reason for the amount of health care spending.  Megan McArdle states it nicely, “Veterinary spending is subject to few of the perversities that either left or right suppose to be the main problems afflicting health care spending.  Consumers pay full frieght most of the time.  They are price sensitive, and will let the patient die if keeping him alive costs too much.  There is no adverse selection.  There is no free riding on mandatory care.  Government regulation is minimal.  Malpractice suits are minimal, and have low payouts.  So why is vet spending rising along with human spending?”

We are about to spend trillions of dollars and the people in charge have yet to identify why our costs are so high.  Of course they are ignoring a significant portion of policy wonks, hospital administrators and life-long physicians who have made attempts to lay out problems with cost control, but I guess the politicians think they’re better at running this business than the people who run the business.  These two graphs show my biggest fear when dealing with the commitment we’re about to make.

Expenditure per capita by age subgroup

Per Capita Health Care Spending by Age Subgroup

Population Demographics in the US from CIA World Factbook

Population Demographics in the US from CIA World Factbook

Medicare is already straining under the weight of its obligations to the elderly and looking into the future there is a massive portion of the population that will qualify for coverage under the plan in the next 30 years.  Extrapolating the continued rise in cost for the 65+ (from 9,950 to 14,797 in just 8 years!) and the expanded population of eligible medicare recipients should alarm anyone who understands the strain of this.

But it’s not just the elderly who I am worried about.  Another crisis looming on the horizon is diabetes.  From 1997 to 2003 the incidence of diagnosed diabetes in the US rose by 41%, from 4.9 to 6.9 per 1,000 population (p<0.01).  For you non-epidemiological people incidence is a pretty technical term, I encourage you to follow this link to read about it.  The expenditure for those with pre-diabetes in 2007 was $25 billion, or $443 for each adult and these people don’t even have the disease yet! Just the cost of gestational diabetes in 2007 was $636 million and these costs don’t even cover the majority of those with diabetic costs to the system.  In Britain the cases of diabetes are expected to rise 70% by 2020, with the largest rise in rates in the under-5 category.  Extrapolate that prediction to the vast number of children in the US and the prediction of teen diabetes here and you run into another brick well of costs.

So what to do about health care?  Honestly I don’t know but I’m afraid of the blinders that the government has to two of the overwhelming cost associated crises that will have to be dealt with in the near future.

UPDATE: Here’s a much better representation of the vet/med cost graph, HT Uncertain Principles.  The distracting grid lines are gone and with data points added.

If I was making the graph I would have normalized both sets of data to their 1985 values and used a single y-axis.  Maybe I would have done per capita but honestly I don’t even know where this data is coming from, I don’t know what is being counted as vet med cost.

Advertisements