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Debates Forum

Debates Forum

  1. Standard member sh76
    Civis Americanus Sum
    27 Nov '09 18:42 / 1 edit
    Okay, I'm looking for some information, not to pick a fight with anyone. So, FMF, you can sit this thread out if you like. (just kidding )

    Anyway, in 1960, healthcare costs in the US were a mere 5% of GDP (as opposed to 16% today). Doctors were rich (or at least richer relative to the rest of society than they are now). There were health insurance companies then as well; and they really paid what the providers billed (or almost what they billed), rather than 10% of what the providers bill as they often do today.

    In 1960, there was no single payer system or nationalized insurance.

    So, what changed? Why did costs skyrocket while the number of uninsureds increased and people's satisfaction of their healthcare decreased? Is there any inherent reason the clock can't be turned back so that healthcare operates as it did in the 60s?
  2. Standard member Palynka
    Upward Spiral
    27 Nov '09 18:45
    Originally posted by sh76
    Okay, I'm looking for some information, not to pick a fight with anyone. So, FMF, you can sit this thread out if you like. (just kidding )

    Anyway, in 1960, healthcare costs in the US were a mere 5% of GDP (as opposed to 16% today). Doctors were rich (or at least richer relative to the rest of society than they are now). There were health insurance companie ...[text shortened]... erent reason the clock can't be turned back so that healthcare operates as it did in the 60s?
    Do you have a time-series with this data?
  3. Standard member sh76
    Civis Americanus Sum
    27 Nov '09 18:57 / 1 edit
    Originally posted by Palynka
    Do you have a time-series with this data?
    No. The 5% figure I just read in Super Freakonomics. The other assertions are just based on personal experience and what my parents have told me about what the healthcare system was like when they were young.

    You certainly didn't see the type of complaining about the healthcare system even as recently as 15 years ago as you do today.

    I'm sure I could find all this data on the net if I invested a little time... maybe tomorrow.
  4. Standard member Palynka
    Upward Spiral
    27 Nov '09 19:03
    Originally posted by sh76
    No. The 5% figure I just read in Super Freakonomics. The other assertions are just based on personal experience and what my parents have told me about what the healthcare system was like when they were young.

    You certainly didn't see the type of complaining about the healthcare system even as recently as 15 years ago as you do today.

    I'm sure I could find all this data on the net if I invested a little time... maybe tomorrow.
    Found this:
    http://upload.wikimedia.org/wikipedia/commons/5/55/Health_care_cost_rise.PNG
    OECD data.
  5. 27 Nov '09 19:09
    That's an interesting question. I have to think about this one for a bit.
  6. 27 Nov '09 19:09
    I would suspect the advances in medicine might have something to do with it. Costly technology and treatments we have now didn't exist in the 50's, and life expectancy was about 60 instead of 80. Medical expenses skyrocket after 60.

    Just a guess.
  7. Standard member Palynka
    Upward Spiral
    27 Nov '09 19:18
    My first thoughts.

    It seems health care is a superior good. My first instinct from 101 economics is to say that marginal utility of health care consumption diminishes less than other types of consumption. If I get utility out of HC today, but it also increases my life expectancy, then my utility increases across two dimensions. This may lead to constant (or even increasing) marginal utility of consumption of HC. So as people get richer, it is then natural to expect a higher proportion of spending to go for health-care.
  8. 27 Nov '09 19:19
    One of the reasons could be that as the demand for health care increased, and med school remained relatively inaccessible, the salaries of doctors increased more than in other countries, because those other countries could simply choose to not pay doctors as much as their market value.
  9. Standard member sh76
    Civis Americanus Sum
    27 Nov '09 19:22 / 2 edits
    Originally posted by Sam The Sham
    I would suspect the advances in medicine might have something to do with it. Costly technology and treatments we have now didn't exist in the 50's, and life expectancy was about 60 instead of 80. Medical expenses skyrocket after 60.

    Just a guess.
    I don't think life expectancy was THAT low in 1960, but that idea may certainly be part of the issue; especially because Medicare and Medicaid account for close to half of all healthcare spending. Medicare is spent only on the elderly and Medicaid is disproportionately spent on the elderly.

    Edit:

    http://www.google.com/publicdata?ds=wb-wdi&met=sp_dyn_le00_in&idim=country:USA&q=life+expectancy

    It was about 70 in 1960, though you're right that it's increased dramatically.
  10. Standard member Palynka
    Upward Spiral
    27 Nov '09 19:24
    Originally posted by KazetNagorra
    One of the reasons could be that as the demand for health care increased, and med school remained relatively inaccessible, the salaries of doctors increased more than in other countries, because those other countries could simply choose to not pay doctors as much as their market value.
    The tough question is that these values are in proportion of GDP. You not only need to have it increasing in absolute, you need to have it increase relatively. Since this pattern is seen in most countries, I think there's more to it than just that (although that could explain why it's even larger in the US).
  11. 27 Nov '09 19:26 / 1 edit
    Originally posted by Palynka
    The tough question is that these values are in proportion of GDP. You not only need to have it increasing in absolute, you need to have it increase relatively. Since this pattern is seen in most countries, I think there's more to it than just that (although that could explain why it's even larger in the US).
    Yes, it would be interesting to see what the relative increase of salaries in the US were in comparison to say the UK or Germany.