Tuesday, August 18, 2009

And You Thought Medical Care Costs Were High

College tuition and fees in the U.S. have risen 7.74% annually since 1978, which is about twice the inflation rate for all goods and services (3.9% per year), and even higher than the average annual increase in the cost of medical care (6% per year), see chart above.

Originally posted at Carpe Diem.


At 8/18/2009 11:52 PM, Blogger KO said...

I said it in the prior post, but the reason education costs grow so fast is:

Gasoline prices go up and people want lower prices.

Tuition goes up and the media screams for more grants and loans from the government to cover it.

At 8/19/2009 2:17 AM, Blogger jeppen said...

Why don't you compare medical care and tuition to "all services" only? Why include goods?

At 8/19/2009 4:00 AM, Blogger juandos said...

"Why don't you compare medical care and tuition to "all services" only?"...

Why don't YOU define these alledged 'services'?

'Goods' are at least something tangible...

At 8/19/2009 5:34 AM, Blogger Unknown said...

Dennis Kneale may think the "recession" is over, but this graph hints as to why the consumer continues to feel the strain and disconnect from the US economy. Soooo many other factors. Real wages over the last ten years have not keep up with these inflationary contributors. Also makes the inflation/deflation arguments substantially different from a macro view or micro view. This is the "ladder view": If you're on the bottom of the ladder looking up all you see are assholes. If your on the top of the ladder looking down all you see are smiling faces. There is substantial anecdotal if not real evidence that the US consumer seems to be "decoupled" from "official" government/economists statistics.
Just think; the folks on minimum wage have just received huge increase % wise. Additionally, they can take advantage of a $29.00 physical (means the person has some type of blood pressure, is breathing and can walk in and out of the office) Everything else is a la carte. More than aspirin they can't afford it.
Just details mucking up the "pixie dust".

At 8/19/2009 6:13 AM, Anonymous Anonymous said...

Both the cost of medical care and education are a) disconnected from consumers; and b) heavily subsidized by government.

Also, great point OA on the media reaction to the problem.

At 8/19/2009 6:58 AM, Anonymous Anonymous said...

There's a good argument to be made that tuition and fees have been too low for many years, artificially held down by government and not covering resource costs.

That said, widespread availability of student loans, capital expenditures for expansion, overpaid professors, overpaid union staff, and overpaid administrators have contributed to the rise. Administrators are leftist social engineers, professors produce poor research and don't teach or mentor enough, and staff members are typical lazy, ambivalent, bureaucratic government workers.

Go to the jobs website of any university and the plurailty of positions they're looking to fill are FUNDRAISERS.

Student loans are ok, but loan limits should be based on ability to repay after graduation, i.e. based on college major and GPA. By aligning the funding in accordance with performance and expected income, we'll improve the incentive structure. Different majors ought to have different tuition levels. Some departments should be rolled into others and some departments should not exist at all. The world could use a lot fewer sociology professors and no African American Studies professors.

At 8/19/2009 7:40 AM, Blogger Singularity said...

If you combine this post with the Monday's "Bloated University Administrations" post it is like cause and effect.

At 8/19/2009 8:39 AM, Anonymous Anonymous said...

What's missing from the graph is the increase in government subsidies to education. I would bet that every time the fedeeral government increases aid to education, tuition goes up an equal amount if not more. It is a little game the colleges and universities play. It's the Chicago (Socialist) Way...

At 8/19/2009 8:39 AM, Anonymous Anonymous said...

What will it take to get reputable colleges to embrace online education? Seems like that still has the potential to drop costs dramatically if several universities were doing it, especially some of the state run schools. (I'm not sure if some of the existing online universities have grown to a critical size to start putting that kind of pressure on traditional colleges yet...their fees seem quite high already, but probably have huge profit margins)

I have used some of the materials/videos from MIT OpenCourseware, Berkeley, etc. And the quality of instruction was really good.

As someone who is interested in doing graduate work, but financially, the numbers don't make sense for me to forgo a couple of yrs of income to do it, I would sign up for an online school with a solid reputation (and lower fees) in a second.

It's a pipe dream, but I also love the idea of someone putting together a dream team of college professors and doing an online university with pre-recorded materials. Can you imagine getting instructed from the best and brightest from your own living room or the coffee shop?

At 8/19/2009 9:58 AM, Blogger Milo Minderbinder said...

When education costs go up, the education lobby, teachers, college admins, etc (the smart set) demand higher government subsidies.

Shouldn't government examine the barriers that prevent our health care industry from growing to meet the demand for such service government perceives? If it makes no sense to kneecap education, why does it make any more sense to kneecap health care?

At 8/19/2009 10:07 AM, Blogger bix1951 said...

My daughter is just starting college.
Yes, it seems to be too expensive.
College looks like another status symbol.
Parents talk about where they are sending their kids. It is like talking about where you went on vacation.

At 8/19/2009 4:13 PM, Blogger Hamster said...

Here's what physicians in the US make.
No wonder medical costs in the US are high.
I should have been a doctor

At 8/19/2009 4:39 PM, Anonymous Anonymous said...

I would bet that every time the fedeeral government increases aid to education, tuition goes up an equal amount if not more.

Right-o. As you would expect, 100% of the "surplus" created by the subsidy goes to the provider, not the customer the subsidy is claimed to help. The same thing goes on here in Florida with air-conditioning subsidies. The A/C installers run radio ads claiming "up to $4,500 in tax breaks". Care to bet against A/C being $4,500 more expensive than it otherwise would be?

At 8/20/2009 12:19 AM, Anonymous Anonymous said...

"I should have been a doctor"

Who's stopping you?

My doctors are worth every penny I pay them. I can't say the same about my politicians.

At 8/20/2009 9:27 PM, Anonymous Anonymous said...

This reminds me of shadowstats.com.


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