Saturday, September 11, 2010

The Real Health Care Problem: Spending Other People's Money; From 50% to 90% in 60 Years

The graph above (Census data here) highlights the #1 reason why medical costs have risen, and will continue to rise: Out-of-pocket payments for medical costs have been falling for the last fifty years, and are projected to continue to decline, and will  fall below 10% by 2017.  By way of comparison, out-of-pocket payments accounted for almost half (46.78%) of total medical costs in 1960.  When we're spending less than 10 percent of our own money on health care costs, one outcome is almost 100% inevitable: health care costs will continue to rise, and there's nothing about Obamacare that will change that. 

13 Comments:

At 9/11/2010 8:54 PM, Blogger cluemeister said...

This comment has been removed by a blog administrator.

 
At 9/11/2010 8:56 PM, Blogger cluemeister said...

Mark, do the private portion numbers reflect the fact that most Americans have their portion taken out of their paycheck, making them even more disconnected from health care costs?

 
At 9/11/2010 9:38 PM, Blogger sethstorm said...

Trying to cut corners in a place where corner-cutting kills or maims, isn't a good idea either.

 
At 9/11/2010 11:50 PM, Blogger Cabodog said...

Compounding problem is the difficulty of even attempting to price-shop for those of us with high deductibles.

Calls to a doctor's office to inquire about rates -- and cash discounts, if any -- are often met with silence at the other end of the line indicating the infrequency of such requests.

Obamacare is doomed to failure due to the exclusion of any type of price controls and even worse, failure to address the high costs imposed on us from torts.

Of course, with trial lawyers being huge campaign contributors, shouldn't be a surprise that they were not targeted for reform.

Hopefully the new congress can turn things around and overturn Obamacare and enact something that has a chance of working.

 
At 9/12/2010 7:07 AM, Blogger rjs said...

i'd be dead today without that "other people's money"

 
At 9/12/2010 9:48 AM, Blogger juandos said...

"i'd be dead today without that "other people's money""...

Did YOU thank those other people who had a portion of their earnings extorted from them on your behalf? Just asking...

"health care costs will continue to rise, and there's nothing about Obamacare that will change that"...

Read all about it...

From Michael Cannon at the Cato Institute: Secretary Sebelius Slips on the Brass Knuckles

 
At 9/12/2010 3:41 PM, Blogger sethstorm said...


From Michael Cannon at the Cato Institute: Secretary Sebelius Slips on the Brass Knuckles

If the insurance companies are gearing for a fight with their politically charged increases, Sebelius is being competitive with the insurance companies.

 
At 9/12/2010 7:43 PM, Blogger juandos said...

"If the insurance companies are gearing for a fight with their politically charged increases, Sebelius is being competitive with the insurance companies"...

Per his usual style sethstorm gets it wrong again...

No Sebelius is being the typical bureaucratic parasite and using extorted tax dollars (not her own dollars) to push the socialist agenda that so many of the abysmally uninformed seem to think is a great way to do things...

Capital Crimes
Political Centers as Parasite Economies

 
At 9/13/2010 6:43 AM, Blogger geoih said...

"When we're spending less than 10 percent of our own money on health care costs, ..."

People are paying 100% of the costs of health care. They just don't see it. That is the illusion that all government programs are built on. That is what the socialists, the progressives, the plutocrats, depend on.

All those wonderfully free government programs, health care, education, roads, mail service, etc., are all built on this principle. Until people realize that there are no free lunches, they will continue to be conned.

 
At 9/13/2010 11:47 AM, Blogger misterjosh said...

I switched to the high deductible health plan this year. I figured I talk the libertarian talk, I should walk the (slightly more) libertarian walk.

It was kind of a pain in the ass, but all in all, I'm pleased. I'm a fairly sickly person, so I didn't actually save any money, but it's been an eye opener to see what some of these people charge. I hope that as these plans become more and more common, the real prices become more apparent to all & we start fighting for competitive prices.

 
At 9/13/2010 3:51 PM, Blogger Ron H. said...

"I switched to the high deductible health plan this year. I figured I talk the libertarian talk, I should walk the (slightly more) libertarian walk."

I'm encouraged to read that your pleased with your choice. I've considered this myself, but it's possible that I'm a better talker than walker. Actually, for me, a high deductible plan isn't cheaper.

Just the shock of being asked about prices might cause providers to consider that consumers might start voting with their dollars.

 
At 9/13/2010 6:27 PM, Blogger Jet Beagle said...

I do not understand why libertarian economists continue to cite private group medical insurance as a contributing cause for rising health care costs. Such economists usually concede that catastrophic health insurance makes economic sense, but offer little indication they understand what that really means.

The lion's share of medical costs have nothing to do with routine treatment which families could pay out of pocket. Rather, it is heart disease, diabetes, Alzheimer's, trauma injury, cancer, and other non-routine causes which account for the overwhelming majority of health care costs.

What is the cause for increases in the other more routine health care costs? Prohibition of interstate insurance
competition, insurance mandates, and other government interventions in the marketplace.

Group health insurance would be the choice of free markets. Insurance companies need groups to overcome adverse selection. Consumers need insurance companies for economies of scale in negotiating with health care providers. Most need insurance companies to reduce shoe leather costs. Consumers absolutely need insurance for non-routine and extremely costly treatment.

Medical insurance makes economic sense. Government intervention distorts that market. Why do so many economists blame the former rather than the latter?

 
At 9/17/2010 10:41 AM, Blogger Christine said...

We should be taking charge of our own health care costs. Check out Whatstherealcost.org

 

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