Healthcare Costs
The best things in life are generally not free. Take health care.
When I was a boy in the 1940-50s, each small town had two or three family doctors. The hospital in the nearby city of 20,000 (13,000 today) was a small, quiet affair where you went until you got well, or died.
There was no Medicare or Medicaid. Nor much insurance. I recall coming home about third grade with a flyer for my parents about how a new company called Blue Cross-Blue Shield was offering a policy to cover me for a dollar a month. Those were simpler times. Today my friends and I are “doctorin’” all the time, with many specialists. Construction cranes are frequently seen hovering around the latest health complex addition. Hospitals are often the biggest employers in town.
The advances in health care are coming at us in a blinding cavalcade of change, with our individual DNA the focus of the newest therapies.
All this change costs big money. In my youth, health care costs per capita were about 1/20th of a much smaller gross product than today, when costs now soak up close to 1/5th of our annual product.
According to the Centers for Medicare and Medicaid, annual health costs per person topped $10,000 in 2016 (versus $1,000 in 1960, in inflation-adjusted dollars). Oldsters like me consume multiples on average of what youngsters cost.
Though the rate of cost increases has been coming down in recent years, they are still projected to go up faster than our wealth as far into the future as the eye can see. We all demand the best, latest and fastest in care. Many of us, however, do our best to counter the salutary effects of medicine by letting our bodies go to Hell, taking our car to drive across the street, which increases costs for diabetes and other chronic problems. Our health care costs multiples of that in most other developed countries. The dramatic costs are typically paid by your employer. This makes American business less competitive on the world stage, as governments pay health care costs in most other developed nations.
Governments are, however, taking up more of the cost load. In a few years, federal and state governments will pay half the total, primarily through Medicare and Medicaid. This is driving federal and state budget-makers crazy, pushing up taxes and squeezing the slices of the budget pie going to education, public colleges and social services. Health care costs are also driving a nasty wedge in society between the haves and have nots in the U.S.
The present national debate over replacing Obamacare is not about better health care for all, no matter what Trump says. It’s about resistance from the 16 percent of Americans with incomes over $100,000, who pay 80 percent of income taxes, to pay health care costs for many of the 71 percent who contribute less than 6 percent of income tax revenue.
Otherwise, why would all the focus be on reducing Medicaid costs for the low-income and not those of Medicare for all of us in the older set?
We all have to participate in efforts to reduce health care costs. Here are some thoughts, ranging from the radical to the obvious, at least so to me:
• People who take care of themselves would receive preference in health care. The principle is not much different from that of charging smokers more for insurance. • Make comparison shopping for operations and care possible. In the past, when others paid for our care, we had no need to comparison shop. With ever higher deductibles and co-pays today, however, consumers now have good reason to look for the best deals—yet hospital desk clerks laugh you out of the office for daring to ask.
• Get serious about cost-benefit analysis for end-of-life care. Think of the opportunities foregone when we shift tax dollars from education of our kids and grandkids to cover operations that cost six figures in order to extend an elderly life a month or two.
• Shift health care to Medicare for all, as conservative Wall Street Journal columnist Peggy Noonan, among others, has suggested. This would make it appear that we are all paying for our health care. It would take the burden off business. It would cut administrative costs.
You may have better ideas. Whatever, we have to get serious about what ails us—health care costs.
