Health Care: Who Is Going Broke

Pretty much everyone. Laurence Kotlikoff and Christian Hagist have looked at OECD data for 10 countries and the picture is pretty grim.

Although healthcare spending is growing at unsustainable rates in most, if not all, OECD countries, the U.S. appears least able to control its benefit growth due to the nature of its fee-for-service healthcare payment system. Consequently, the U.S. may well be in the worst long-term fiscal shape of any OECD country even though it is now and will remain very young compared to the majority of its fellow OECD members.

There is also an NBER Digest which provides further information,

In recent decades, government healthcare spending in industrialized countries has grown much faster than GDP. Although researchers have investigated a number of contributing factors, including improvements in medical technology, population aging, medical inefficiency, waste, and unhealthy behavior, relatively little is known about how much each factor contributes to overall cost growth. In Who’s Going Broke? Comparing Healthcare Costs in Ten OECD Countries (NBER Working Paper No. 11833), coauthors Laurence Kotlikoff and Christian Hagist conclude that the expansion of government benefit levels — defined as average inflation-adjusted government healthcare expenditures on people at a given age — explains three quarters of the growth in public healthcare expenditures since 1970.

[…]

The data on benefit growth suggest that healthcare is a “luxury good.” As income rises, governments, acting on behalf of the public, spend proportionately more on healthcare. The authors estimate the percentage change in government healthcare spending for a given percentage change in per capita GDP growth: they find that rates range from 1.1 in Canada to 2.3 in the United States, with a ten-country average of 1.7.

Profiles of government health spending by age show significant variability across countries. Per capita government healthcare expenditures on those over age 74 are twice as high as on people 50-to-64-years old in Austria, Germany, Spain, and Sweden. In the United States, government expenditures on the elderly are 8 to 12 times higher than on those aged 50 to 64. In Japan, Norway, the United Kingdom, Canada, and Australia, the relative spending factors range from 4 to 8.

[…]
Because “American’s elderly are politically very well organized, and each cohort of retirees has, since the 1950s, used its political power to extract ever greater transfers from contemporaneous workers,” the authors conclude that the fiscal fallout of expanding healthcare benefits is likely to be “particularly severe” for the United States, imposing “a huge additional fiscal burden on the American public. Norway is in similar shape in terms of its healthcare costs, but Norway does not have to bear the burden of paying for a large military. In addition, it has significant oil wealth to help cover its costs.

Keep in mind that Kotlikoff and Hagist are looking mainly at government level benefits. And note that the U.S. spends 8 to 12 times as much on the elderly as on those aged 50 – 64 on a per capita basis.

FILED UNDER: Economics and Business, Government, Health, US Politics, , , , , ,
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. Dave Schuler says:

    And note that the U.S. spends 8 to 12 times as much on the elderly as on those aged 50 – 64 on a per capita basis.

    That’s certainly true but I think it’s important to understand why that is. In my view it’s an artifact. If Medicare and Medicaid were restricted to those between age 20 and 25, we’d be spending 8 to 12 times as much on that group as we did on any other age cohort.

    Unless we plan on making a major change in the way our economy and society work to reverse the trends of the last 80 years, that we’re subsidizing the healthcare of the elderly makes sense. They are the group least able to respond to increased costs (the very young are insulated from change by their parents).

    Don’t get me wrong. I know we need to make changes and I favor a host of ’em including means testing Medicare and capping the deductability of employee health insurance in some form (I prefer requiring it to be declared as income). However, I continue to believe that nothing else we do will make a darned bit of difference unless we fix the supply bottleneck in health care.

  2. Dave Schuler says:

    I think it’s also important to recognize that our perverse healthcare system raises the cost of healthcare worldwide. How that balances out against the free rider problem I have no idea. I suspect that the increased costs worldwide caused by our system overwhelm the free rider issue but I’m open to being persuaded.

  3. Steve Verdon says:

    Dave,

    Compare that 8 – 12 times to other countries. If we emulate other countries they will get a haircut.

  4. Dave Schuler says:

    Compare that 8 – 12 times to other countries.

    ??? We’re the only OECD country that subsidizes health care the way we do. I’m not sure I understand your response.

  5. Steve Verdon says:

    Dave its pretty simple:

    Austria, Germany, Spain and Sweden spend 2x on the elderly than on those 50 – 64.

    Japan, Norway, the U.K. Canada and Australia spend 4 – 8x on the elderly than on those 50 – 64.

    The U.S. spends 8 – 12x on the elderly than on those 50 – 64.

    So yes, we subsidize the consumption of health care for th elderly at level that far exceed other OECD countries.

    In other words, other countries spend less on the elderly. We can too. Problem is that given our political system it is going to be very hard to do if not impossible. The idea we can solve the problem via removing supply bottlenecks isn’t going to work. You still leave in place the unsustainable growth rates. We need to look at both demand and supply.

  6. anjin-san says:

    Interesting stuff, especially when you consider that the right has been telling us for 25 years that health care in Canada England and France is “on the verge of collapse”

  7. Dave Schuler says:

    Steve, I don’t think you can draw the conclusions you’re drawing from the figures that are being presented. The other OECD countries’ systems are more like each other than any of them is like ours. It’s comparing apples and oranges.

    Problem is that given our political system it is going to be very hard to do if not impossible. The idea we can solve the problem via removing supply bottlenecks isn’t going to work

    I didn’t say that. What I said is that there are some commonsense reforms that I support but they aren’t going to do anything unless we rationalize our market.

  8. Steve Verdon says:

    anjin-san,

    Interesting stuff, especially when you consider that the right has been telling us for 25 years that health care in Canada England and France is “on the verge of collapse”

    They are having some serious fiscal issues related to health care, so in that sense they are having worse problems than us. Our outlook though is likely worse.

    Dave,

    I’m not sure why you say that. Yes there are different systems, but we still spend at least 50% than the second most spendthrift OECD country. And the issue is should we change our health care system. Spending on the part of the elderly seems to be where the rubber meets the pavement.

    I didn’t say that. What I said is that there are some commonsense reforms that I support but they aren’t going to do anything unless we rationalize our market.

    I agree, but to me that means moving towards letting prices play a larger role in allocating resources. We don’t have that right now. Now resources are allocated irrespective of price/ability to pay.

  9. Zelsdorf Ragshaft III says:

    In a non socialist society, we take good care of those who took care of us. That is a obligation many hold. However in a socialist society, the aged have little or any use and are a drain on the economy of the state.

  10. Zelsdorf Ragshaft III says:

    Anjin, I am curious to see how willing you are to turn yourself in to the soy-lent green factory when you reach the age government decides you have no further use to society. I suppose if you have your way, no one will have the ability resist the oppression of a government driven by a desire for control. For whatever twisted reason, you think that is a good idea. I just would like to observe how you react when that imposed upon you. Unlike you, I hold several of our items in the bill of rights as tripwires. Cross them and you lose the legitimate right to govern. At that point, citizens who hold to the rule of law as laid down by the U.S. Constitution as it is written have the obligation to remove, by what ever mean necessary, the tyrant. When the President of the United States thinks he has the authority to remove the CEO of a publicly held corporation, we are coming dangerously close to those tripwires.

  11. Grewgills says:

    Steve,
    Dave’s point if I am not mistaken is that other OECD countries begin paying for health care at an earlier age than we do so of course the change in ratio of government paid care to the older cohort will be higher in the US.
    Ex/ (with made up numbers)
    The German government pays 80% of the $1000/cap yearly cost of health care for the 50-64yo cohort.
    They also pay 80% of the $2000/cap yearly cost of health care for the 65+ cohort.
    The US gov pays 20% of the $1000/cap yearly cost of health care for the 50-64yo cohort.
    They also pay 80% of the $2000/cap yearly cost of health care for the 65+ cohort.
    In this example the German gov pays double for the 65+ cohort and the US gov pays 8x for the 65+ cohort.
    Given only the ratios on gov expenditures for the different age cohorts absent percent of total health care for each cohort paid for by government you cannot draw useful conclusions.

  12. anjin-san says:

    They are having some serious fiscal issues related to health care, so in that sense they are having worse problems than us. Our outlook though is likely worse.

    This seems like a contradictory statement, and it does not really address my original comment. The right has been telling us for decades that the “socialist” health care systems in western Europe are about to collapse. I have no doubt that they have faced, and will continue to face significant fiscal issues. But the “verge of collapse” thing is clearly a red herring (read lie) designed to prevent meaningful health care reform in this country.

    I do not pretend to know what the answers are, but I do know that EVERY health care professional I have spoken to on the subject has essentially said that the current for-profit insurance system blows and we need to make some changes or we will find ourselves on a very slippery slope.

  13. Bithead says:

    This seems like a contradictory statement, and it does not really address my original comment. The right has been telling us for decades that the “socialist” health care systems in western Europe are about to collapse. I have no doubt that they have faced, and will continue to face significant fiscal issues. But the “verge of collapse” thing is clearly a red herring (read lie) designed to prevent meaningful health care reform in this country.

    Well, certainly, absent added government funding every time the alarm bells go out, they WOULD in fact collapse.

    And nice sleight of hand, there, Anjin… the only real healthcare reform is government takeover? Please.

  14. steve says:

    Need to normalize the study to compare apples to apples. Factor in obesity rates, length of life and (maybe) number of procedures.

    I ask this pretty often on conservative blogs. Have you read a decent plan emphasizing free market reforms that could control costs. Something realistic please. Physician/hospital incentives do not naturally line up with patient incentives.

    Steve

  15. Dave Schuler says:

    I agree, but to me that means moving towards letting prices play a larger role in allocating resources.

    I don’t think our disagreement is too large. I’m in favor of rationalizing our market for healthcare services both on the demand and the supply side. Demand side reforms only won’t have the desired effect, at least not in a way consistent with acceptable levels of public health or other policy.

  16. Zelsdorf Ragshaft III says:

    Anjin, you genius, what are the trial lawyers going to do when they find out you will not be able to sue for malpractice in a single payer system?? After all, if the government is paying for the health care, you cannot sue the government. If you want to reform health care costs. Tort reform is the answer.

  17. Steve Verdon says:

    Dave’s point if I am not mistaken is that other OECD countries begin paying for health care at an earlier age than we do so of course the change in ratio of government paid care to the older cohort will be higher in the US.

    Ahhh yes, now I see it. Hmmm, interesting in that it suggests that switching to the other systems in the OECD may not help, and possibly make matters worse. We’d end up paying the same for the elderly and even more for the non-elderly. The fiscal picture looks even worse without offsetting changes elsewhere.

    This seems like a contradictory statement, and it does not really address my original comment. The right has been telling us for decades that the “socialist” health care systems in western Europe are about to collapse.

    Right now the red ink is flowing quite freeling in places like the U.K. and Canada. However, soon the U.S. will have the baby boomers retiring and we’ll likely not only catch up, but pass them. So right now those systems have serious problems, our’s not so much right now, but give it a few more years.

    I do not pretend to know what the answers are, but I do know that EVERY health care professional I have spoken to on the subject has essentially said that the current for-profit insurance system blows and we need to make some changes or we will find ourselves on a very slippery slope.

    Everywhere I’ve looked every country is having problems. And it isn’t just “for-profit”, but also top-to-bottom government run systems like in the U.K. This notion of “profits evil:government good” just isn’t helpful, IMO.

    Need to normalize the study to compare apples to apples. Factor in obesity rates, length of life and (maybe) number of procedures.

    I’ve argued for this as well. Americans are more likely to be over-weight, shoot each other, and we drive more (do auto accidents contribute to the disparity in spending patterns–IDK, something to look at).

    I ask this pretty often on conservative blogs. Have you read a decent plan emphasizing free market reforms that could control costs. Something realistic please. Physician/hospital incentives do not naturally line up with patient incentives.

    A free market plan would control costs, problem is most people wouldn’t like it. They’d likely lose coverage for things like child birth, glasses, and other things that rightfully wouldn’t be covered under insurance plans. Also, people who couldn’t pay would face the prospect of not getting treatment without charity or some other form of financial assistance. In other words, a market based approach wouldn’t be nice and warm and fuzzy like what we see candidates proposing while hauling up some little old lady from Akron onto the stage and telling her sob story.

    This is why the best option is likely to be some sort of mixed approach where catastrophic coverage is subsidized, but plans are provided by for profit companies. To really outline it completely would take a big post.

  18. anjin-san says:

    And nice sleight of hand, there, Anjin… the only real healthcare reform is government takeover?

    Could you please show where I mentioned a “government takeover” or even just “government” in my post for that matter?

    I realize that anti-union rants and dogwhistles are all you have in the absence of any coherent or meaningful contribution to the discussion, but even you can do better…

  19. anjin-san says:

    Everywhere I’ve looked every country is having problems.

    Quite true. And most of the folks I know feel that the UK model is a poor one.

    This notion of “profits evil:government good” just isn’t helpful

    Well, I am pretty sure that I have not put forward that notion as of yet. I do feel that insurance companies making billions of dollars from health care is a large slice of the problem.

    If anyone knows of any insurance company that does not try to stick it to you when it is time to make a claim, please, oh please send me their contact info. I certainly am not making a “government good” case, though I might throw it out on the table that government may be less bad than Wellpoint.

  20. anjin-san says:

    while hauling up some little old lady from Akron onto the stage and telling her sob story.

    Hmmm. Very glib, if rather cold-hearted. Tell me, what if, God forbid, you or a spouse or dependent has a catastrophic illness or accident? How long before you are bankrupt and dependent on the charity of others?

    Christopher Reeve was a movie star, but the costs related to his injury exhausted his bank account in a few years, He was fortunate to have (very) wealthy friends who helped to keep his family afloat.

    So Steve, unless you have enough money in the bank to pay for a retrofit of your house, major surgeries and 24 hour nursing care if they were ever needed, you might want to find just a tad more compassion in your heart for folks who have “sob stories”. There but for the grace of God go you and I.

  21. Eric Florack says:

    Could you please show where I mentioned a “government takeover” or even just “government” in my post for that matter?

    Well, let’s see, here.

    I do not pretend to know what the answers are, but I do know that EVERY health care professional I have spoken to on the subject has essentially said that the current for-profit insurance system blows

    You’re talking about taking it all from private control and into, what exactly? And, by what means, exactly?

    Face it, Anjin, You’re talking about using the force of government.

    Christopher Reeve was a movie star, but the costs related to his injury exhausted his bank account in a few years, He was fortunate to have (very) wealthy friends who helped to keep his family afloat.

    Yep. And given that every discussion on the subject of government healthcare is centered not around quality of care, but on price, as measured by how much the government pays, do you really think that He’d have lived longer under a government run system?

  22. Drew says:

    “In other words, a market based approach wouldn’t be nice and warm and fuzzy like what we see candidates proposing while hauling up some little old lady from Akron onto the stage and telling her sob story.”

    Anjin calls it “glib.” I call it “perfect.” This is just the sort of sophistry used to support bastardization of a health care “insurance ” system and turn it into a full blown third party payer system…………….that is unsustainable, as all economies are experiencing.

    Anjin. Don’t pat youself on the back and feel you have some moral superiority because you feel you have compassion. It is policies such as you advocate that have created these monstrosities.

    Everyone, including Chris Reeves, needs catastrophe insurance. No different than your house getting hit by a tornado. But because these catastrophies are rare, such an insurance system is affordable. But just as if homeowners insurance paid for mowing the lawn, painting the house and putting on a new deck it would soon mushroom into a finacial mess, so has health “insurance.”

    If you really cared, you would advocate a real insurance system, not mommy government covers all whims. What’s next, food, clothing, shelter, wellness, herbs, vitamins, chiropractic, self image, …………….cell phones……….how ’bout Blackhawk tickets? Don’t want to deprive anyone of life experience you know……

  23. Steve Verdon says:

    Well, I am pretty sure that I have not put forward that notion as of yet. I do feel that insurance companies making billions of dollars from health care is a large slice of the problem.

    Why? It seems you simply object to profits for no reason other than that they are profits.

    If anyone knows of any insurance company that does not try to stick it to you when it is time to make a claim, please, oh please send me their contact info.

    The opposite extreme is massive fraud, which is also a bad thing as it will push up your premiums.

    I certainly am not making a “government good” case, though I might throw it out on the table that government may be less bad than Wellpoint.

    There is quite a bit of fraud in Medicare and since part of your taxes will become your premium, are you sure?

    Hmmm. Very glib, if rather cold-hearted. Tell me, what if, God forbid, you or a spouse or dependent has a catastrophic illness or accident? How long before you are bankrupt and dependent on the charity of others?

    You missed the point completely here. The point is that “warm fuzzy, little old lady from Akron” approach while touching and…well…warm and fuzzy it also doesn’t provide a very good method of allocating scarce resources. That is the problem, when you get right down to it, we have limited resources and we’ve divorced the allocation of those resources from their price. Then when this is pointed out the good ol’ appeal to emotion is trotted out: what if it was your spouse, child, grandmother?!

    So Steve, unless you have enough money in the bank to pay for a retrofit of your house, major surgeries and 24 hour nursing care if they were ever needed, you might want to find just a tad more compassion in your heart for folks who have “sob stories”. There but for the grace of God go you and I.

    This doesn’t help at all. Quite frankly its Bravo Sierra. Its Bravo Sierra because we can’t give everyone everything the need all the time. There is no magic elixir that will cure all health problems. In the end, resources will be allocated one way or another and some people are going to be on the end of the stick that means suffering, loss, and pain.

    Yep. And given that every discussion on the subject of government healthcare is centered not around quality of care, but on price, as measured by how much the government pays, do you really think that He’d have lived longer under a government run system?

    Given the seriousness of his injuries, if he were a regular guy, they might not have given him the level of care he did get (assuming a government run system), and in which he’d probably have died sooner.

    The bottomline is that eventually this discussion always boils down to dollars and cents. And it is going to be either an insurance company trying to contain costs or the government. No matter what. To then point the finger at one side and say, “You mean son of a bitch what if it were your kid?!?!” is a cop out. Instead of putting forward a rational argument an emotional one is put forward that is designed solely to stop all debate. This is why the democratic process will likely not give us a solution, but lead right into seeing what happens when an unsustainable path is followed to is very end.

  24. ken says:

    The solution is simple. I think we all want decent health care provided to every American. We already have this kind of universal health care for everyone over age 65 through Medicare. So if we extend Medicare to cover all Americans then we have the problem solved.

    Private company health premiums would decline by 90% and cover the private luxury rooms, private nurses, gourmet meals, etc that Medicare does not pick up.

    All and all we would save money by doing this, and everyone would be covered and not have to worry any more about losing a job and losing health care.

  25. anjin-san says:

    Why? It seems you simply object to profits for no reason other than that they are profits.

    I have nothing against corporate profits, after all, they enable me to get a pretty decent paycheck every two weeks.

    But I have a hard time getting past the fact that the billions in profits that insurance companies are extracting from our health care dollars could be going to, you know, health care.

    There is no magic elixir that will cure all health problems. In the end, resources will be allocated one way or another and some people are going to be on the end of the stick that means suffering, loss, and pain.

    Quite true. Still my guess is that if you or someone you love ever needs government assistance with health care costs, your response is not going to be “no thanks, we carry our own water around here”.

    There is quite a bit of fraud in Medicare and since part of your taxes will become your premium, are you sure?

    Not sure at all. But its worth looking into. Maybe we ought to quit putting people in jail for smoking pot and start putting them in for fraud.

  26. anjin-san says:

    If you really cared, you would advocate a real insurance system, not mommy government covers all whims. What’s next, food, clothing, shelter, wellness, herbs, vitamins, chiropractic, self image, …………….cell phones……….how ’bout Blackhawk tickets? Don’t want to deprive anyone of life experience you know…..

    I would expect this from from bit, who’s world view is so simplistic that “black & white” is too complicated a concept by far for him to grasp, but you can do better.

    The amount my wife and I put out every year to help with the costs of 2 relatives who have suffered catastrophic illnesses is about what the average working guy in this country makes annually , so I am pretty sure my nickname is not “Freddy Freeloader”. Try harder.

    It is policies such as you advocate

    What exactly have I advocated? I am just looking for answers here. We need to take a look at everything. How about a pilot non governement, non-profit plan to try and do a lot of what private insurance does but takes making money for shareholders and 50 million dollar CEO salaries out of the equation? Make Jack Welch CEO and Howard Dean COO.

    Come on dude. You keep telling us you are a wheeler dealer. Do you have any actual game, or are you just Limbaugh lite?

  27. anjin-san says:

    You’re talking about taking it all from private control and into, what exactly? And, by what means, exactly?

    Face it, Anjin, You’re talking about using the force of government

    Good lord bit, how old were you when you learned to tie your shoes, 20?

  28. Our Paul says:

    I, for one, just love it. Steve Verdon is on a tear, demonstrating his grasp of health care and finances. Two days ago he quoted a Megan McArdle post on Medicare, and as substantiating evidence he presented a paper by The Council of Affordable Health Insurance (CAHI). Turns out this organization is an advocacy group for insurance carriers and bills itself as an advocate for market-oriented solutions to the problems in America’s health care system. The quoted paper was garbage, a rehash of somebody else’s work whose primary qualifications are that he works as an actuary consulting for Insurance Companies.

    This time around, brother Steve presents an abstract of a paper that purports to analyze Health Care data from 10 OECD countries as published in the National Bureau of Economic Research (NBER) Digest. Guess what, the quoted paper cannot be accessed without a fee, and as such it is useless for this discussion. As I said, I just love it.

    I mean, if one does a web search on the authors of the quoted abstract, what one finds is a series “working papers” on health care expenditures, but not much in peer reviewed journals where data integrity and analysis is expected.

    It turns out I do not enjoy the role of a curmudgeon, but somebody has to point out that you do not build your case on an abstract of a paper that cannot be accessed, and for which you have to pay a fee. Intellectual honesty dictates reference to primary sources. The latest OECD (by the way, 30 countries) can be found here. Print it out, and read it — it contains a wealth of information.

  29. sam says:

    @Dave

    However, I continue to believe that nothing else we do will make a darned bit of difference unless we fix the supply bottleneck in health care.

    I think when this issue comes up, folks focus on increasing the supply of physicians. However, this might be misplaced. Old rocking chair is beckoning, and my knee was signaling. So I called my health care group and made an appointment to have the damn knee looked at by an orthopedist. The nice lady who made my appointment told me I would be seeing so-and-so who is a PA (physician’s assistant). I was little taken aback by that. But she told me that the PAs can do everything except surgery. When I saw him, it was perfectly satisfactory visit. I was x-rayed prior to the visit, and he read the x-rays as professionally as a physician. (Fortunately, the problem was minor–and age-related–and the condition has cleared up.)

    Now it ocurred to me that, well, yeah, why did I need a fully vetted physician for that visit? I didn’t. After all, with a couple of years of training, someone can learn to read x-rays pretty well. And do any necessary prescribing, etc.

    My point is, many of the things (maybe many, many) that physicians have done in the past can be done just as well by PAs–and it takes a hell of lot less time and money to train a PA than it does to train a physician. Perhaps we should concentrate more on turning out PAs. (I do acknowledge that the PA route might not be appropriate for all medical specialities.) Maybe Paul can give us his opinion on this.

  30. Grewgills says:

    Ahhh yes, now I see it. Hmmm, interesting in that it suggests that switching to the other systems in the OECD may not help, and possibly make matters worse. We’d end up paying the same for the elderly and even more for the non-elderly.

    If we switched to one of the universal care systems offered by one of the other OECD nations then the government could end up paying more than it currently does for younger cohorts (at least in the short term). That is not the same as saying that we’d end up paying more for the younger cohorts. We would be changing who pays. It does not necessarily follow that the price would be higher.
    BTW if your chart is taken at face value then it is a relatively trivial additional cost to add the younger uncovered population with Medicare. With lower volume and 1/8th the price per participant we are looking at less than a 10% increase not including any savings that may offset it.

    Right now the red ink is flowing quite freeling in places like the U.K. and Canada. However, soon the U.S. will have the baby boomers retiring and we’ll likely not only catch up, but pass them.

    We caught up and passed them on cost per and rate of increase a while back. In most OECD nations an all of them we are seriously considering emulating to some degree on health care the financial problems are not in much more trouble than SS is here.

    The opposite extreme is massive fraud, which is also a bad thing as it will push up your premiums.

    Are the only two options frequent and capricious denial of coverage or rampant fraud?

    There is quite a bit of fraud in Medicare and since part of your taxes will become your premium, are you sure?

    and HMOs spend more on administration and advertising, divert money from care to profits, and are more likely to deny needed services than Medicare.

    it also doesn’t provide a very good method of allocating scarce resources.

    No. It provides a different method of allocating resources. Just because that allocation is not based on ability to pay does not make it necessarily inferior.

    That is the problem, when you get right down to it, we have limited resources and we’ve divorced the allocation of those resources from their price.

    No. Price is one factor in determining allocation of resources rather than the primary or the only factor.

    some people are going to be on the end of the stick that means suffering, loss, and pain.

    Yes and how will we as a society decide how to minimize this cost? Is it more ethical to base this purely on wealth?

    Drew,

    Blackhawk tickets? Don’t want to deprive anyone of life experience you know……

    Really Drew? You want to trivialize this to that degree? I understand your disagreement, but this is not a trivial issue.

  31. Eric Florack says:

    Good lord bit, how old were you when you learned to tie your shoes, 20?

    This, apparently is what Anjin considers a substansive comment. So married to the power of government is he, that he cannot envision how such would be harmful, or indeed anything but desirable.

  32. anjin-san says:

    This, apparently is what Anjin considers a substansive comment. So married to the power of government is he, that he cannot envision how such would be harmful, or indeed anything but desirable.

    How on earth do you figure you merit a substantive comment? All you have done here is try to put words in my mouth, and that is pretty plain for everyone to see.

    Listen up assface, I have an close member of my family who is mentally ill. Some of the government policies/laws we have to deal with make it much harder to properly care for him and keep him safe. With his condition, there is a 25% chance he will kill himself in the next five years.

    So I think I know a few things about the downside of government, as I am the one who gets to listen to his mother cry her eyes out.

    Bit, try for one day not to be a prick. Don’t put words in my mouth.

  33. Keep in mind that Kotlikoff and Hagist are looking mainly at government level benefits. And note that the U.S. spends 8 to 12 times as much on the elderly as on those aged 50 – 64 on a per capita basis.

    I apologize for not being able to find and provide the reference, but recently, and for the first time in history, we are spending more on the elderly than on our children. What does that say about the future?

  34. Eric Florack says:

    How on earth do you figure you merit a substantive comment?

    Don’t worry about it. I don’t expect one from you, having so very seldom seen one.

    Bit, try for one day not to be a prick. Don’t put words in my mouth.

    Try for one day to understand basic logic. I know, it’s a strain, but do try. If you’re not going to turn health care over to the free market by removing totally government from the equation, then your plan involves the coercive power of government. You can’t have it both ways.

    Government is the central problem, here. Unless and until we face up to that point, and adjust accordingly, we’re headed for failure. It’s that simple.

    What does that say about the future?

    It says, for one thing, that children can’t vote.

    It also suggests that for all they’ve told us about ‘it’s for the children’ what its really about is votes.

  35. Drew says:

    anjin –

    I notice you chose not to engage the subject. So I must repeat. If you really cared, you would be a staunch advocate of a system that could be financially sustainable and alleviate exactly the hardship and very real issues you cite, and are dealing with. Indeed, the personal situation you relayed is the proverbial poster boy for the need for catastrophe insurance. Insurance programs work just fine in other aspects of life, because they are real insurance programs, not pay-all schemes. Our current system, and just about every one of those I’ve seen proffered are nothing more than the same “somebody else pay for everything” subsidies. They don’t work because they are financially structurally unsound. They won’t work because they are financially structurally unsound. And they are antithetical to the goals you profess. Try harder.

    grewgills –

    Blow me, idiot.

  36. Grewgills says:

    f you’re not going to turn health care over to the free market by removing totally government from the equation, then your plan involves the coercive power of government.

    Then any system that will exist or that any sensible person would propose will involve the ‘coercive power of government’. You have not distinguished any likely system from any other.

    Government is the central problem, here.

    You have in no way shown this to be the case.

    Drew,
    Why be such an ass?

    They don’t work because they are financially structurally unsound. They won’t work because they are financially structurally unsound. And they are antithetical to the goals you profess.

    Yet they have worked for decades and with relatively minor tweaks to various EU systems they will last for decades longer.

  37. Grewgills says:

    Re: costs per capita per age cohort
    HHS posts data up to 2004.

    2004 per capita health care spending

    19-44……….3,370
    45-54……….5,210
    55-64……….7,787
    65-74……….10,778
    75-84……….16,389
    85+………….25,691

    % Health care paid by Government

    0-18……….41%
    19-64……….31%
    65+………….67%

    Per Capita health care spending

    Age……….Total……….Government paid
    0-18……….$2,650……….$1,092
    19-64……….$4,511……….$1,395
    65+………….$14,797……….$9,909

    Growth in spending was slightly slower for 65+ than for <65 (~6% vs. ~6.5%).

  38. anjin-san says:

    Drew… Sure thing dude, just hand me a microscope…

  39. Interesting 2004 data, but do you have any idea how much older the population has become in the last five years on average and how much more their health care costs now than then? Last time I looked, health care was progressing at about 7% per annum. Over five years, that’s a 40% increase — even without considering the aging of the population and having more people pushed into the increasingly more expensive age groupings.

  40. anjin-san says:

    Try for one day to understand basic logic

    Government is the central problem

    So your concept of logic is putting forth your unsupported personal opinion as fact? Alas poor Aristotle. Bit knew him not at all.

    You can’t have it both ways.

    Don’t plan on trying. My plan is to do some original thinking. Afraid you probably won’t be able to contribute to that process.

    I put forth the idea of setting up a non-profit, non-government third wave pilot program to address the issue. I nominate Jack Welch and Howard Dean to run it. Pretty sure Welch does not have a picture of Lenin in his office, and Dean is an MD who understands government and has a very impressive track record as an innovator who gets things done.

    Either tell me why this is not worth trying to do or go back to muttering about Clinton in your darkened room.

  41. anjin-san says:

    Government is the central problem, here

    You are right! Government cannot possibly do medicine well. Just look at the terrible job done by combat docs and medics in the military. Oh, wait…

  42. Eric Florack says:

    Then any system that will exist or that any sensible person would propose will involve the ‘coercive power of government’

    Untrue.
    Is ‘Freedom” so foreign a concept to you?

    So your concept of logic is putting forth your unsupported personal opinion as fact? Alas poor Aristotle. Bit knew him not at all.

    You were toilet trained with a cattle prod, weren’t you?

    Just look at the terrible job done by combat docs and medics in the military

    Watching MASH again, Ajnin?

    I put forth the idea of setting up a non-profit, non-government third wave pilot program to address the issue.

    We had that. We used to call them ‘Catholic hospitals’. You may want to investigate the relationship between these and government.

    And how, pray, do you propose to establish such?

    Oh, right. Government, again, eh?

  43. Grewgills says:

    Interesting 2004 data, but do you have any idea how much older the population has become in the last five years on average and how much more their health care costs now than then?

    According to census estimates we have gone from median age of 34.8 to 35.5 for men and 37.4 to 38.1 for women. A shift, but not a very large one. The high rate of cost growth is a problem and unfortunately one that none of our leaders is brave enough to tackle.

    There is a 2yr wait list for nursing programs in the bay area. I understand that politicians are wary of going up against the AMA about certifying more medical schools but what is preventing our leaders from seriously talking about increasing the responsibilities of nurses at all levels and increasing the number of nursing programs?

  44. Grewgills says:

    Untrue.
    Is ‘Freedom” so foreign a concept to you?

    Explain to me how we will have health care anywhere in the developed world without the “coercive power of government’ as you so loosely defined it?

  45. Grewgills says:

    I got caught up in the comments and failed to address this.

    In recent decades, government healthcare spending in industrialized countries has grown much faster than GDP.

    Isn’t that statement equally true if the word government is removed and isn’t the position of the US worse than almost all of the other OECD countries with the statement thus amended?

    In the United States, government expenditures on the elderly are 8 to 12 times higher than on those aged 50 to 64.

    Yet total spending in the US for the 50-64 cohort is lower than spending for the 65-74, 75-84, and 85+ age cohorts.

    Age Group…..Total…..Total Private…..Total Public
    0-18…………206,025…..121,128……….84,898
    19-44……….368,734…..248,327……….120,407
    45-54……….217,242…..156,756……….60,487
    55-64……….227,792…..157,134……….70,658
    65-74……….197,108…..70,428…………126,680
    75-84……….208,909…..64,580…………144,329
    85+………….125,443…..40,547…………84,896

  46. steve says:


    This is why the best option is likely to be some sort of mixed approach where catastrophic coverage is subsidized, but plans are provided by for profit companies. To really outline it completely would take a big post.”

    Please do. I keep working on this, and as a physician it looks as though once you put insurance into the mix, you cannot control costs if you are letting the market act without intervention. Physician/hospital incentives do not match up with patient incentives. OTOH, I do not se how you can make health care work without insurance.

    Steve

  47. anjin-san says:

    You were toilet trained with a cattle prod, weren’t you?

    Thats your comeback? Right up there with George Costanza’s “The jerk store just called” line. Really bit, no one doubts that you have some strange issues. Keep it to yourself.

    Just look at the terrible job done by combat docs and medics in the military

    Why not paste in my entire comment? There have been advances in battlefieled medicine (govt issue) in the last 20 years that are truly amazing. Are you denying this? Or will you take another opportunity to piss on people serving in uniform when it is politcally expedeint for you to do so?

    And how, pray, do you propose to establish such?

    You pass yourself off as an IT guy, what do you do when something is broken,,, reach for your copy of Adam Smith? Or do you analyze the problem, then think about what you have in your skill set that will help you resolve it, than do some research to fill in gaps in your knowlege, then come up with an approach to attempt to resolve the problem, implement, then test, revise approach as necessary, do a little tweaking…. and so on.

    I know you are a charter member of the “America can’t get it done” club, but I think we have enough brainpower and resolve in this country to innovate and find some new soltions to old problems.

  48. anjin-san says:

    Then any system that will exist or that any sensible person would propose will involve the ‘coercive power of government’

    Untrue.
    Is ‘Freedom” so foreign a concept to you?

    This is an interesting exchange and bears a deeper look. Now bit, in your town there is a group of people called “Police”. They have guns and badges, and they use the coercive power of government to try and keep bad people from braking into your house, stealing all your stuff, and killing you. There are also DA’s Judges, prison guards and so on who use the coercive power of government to take people who have done these sorts of bad things, and stop them from doing it again. You have heard about all this stuff, right?

    So are you advocating eliminating the coercive power of government and letting the bad guys, of which there are quite a few, have at it? I mean all these cops and judges kind of mess with their freedom. Inquiring minds want to know…

  49. Eric Florack says:

    Explain to me how we will have health care anywhere in the developed world without the “coercive power of government’ as you so loosely defined it?

    It’s actually rather simple; No governmental intervention. None.

    I recognize that’s a hard concept to grasp for anyone so used to the idea of law and government entering every facet fof their lives, but there it is.

    This is an interesting exchange and bears a deeper look. Now bit, in your town there is a group of people called “Police”. They have guns and badges, and they use the coercive power of government to try and keep bad people from braking into your house, stealing all your stuff, and killing you

    True. Yet, there was a time in this country when the individual was charge with the majority of that responsibility. Funny thing; Crime rates were lower, including murder.

  50. anjin-san says:

    there was a time in this country when the individual was charge with the majority of that responsibility. Funny thing; Crime rates were lower, including murder.

    Could you provide a bit of detail to support this?

  51. Eric Florack says:

    You pass yourself off as an IT guy, what do you do when something is broken,,, reach for your copy of Adam Smith?

    When the something that’s broken is not my responsibility, I do nothing.

    Healthcare isn’t governent’s responsibilty.

  52. Eric Florack says:

    Could you provide a bit of detail to support this?

    I’m imparting a concept, here. Conceptually, when people are responsible for their own wellbeing, including being amred, they’re safer. Every time a CCW law is pased in an area.. usually a state… crime rates fall, for example.

    I suggest the same applies to healthcare. When people take over the responsiblity for their own healthcare, the situation vastly improves.

  53. anjin-san says:

    I’m imparting a concept, here. Conceptually, when people are responsible for their own wellbeing, including being amred, they’re safer.

    So we should issue handguns to 9 year olds and then they can protect themselves when walking to school? Then we can just fire all those nasty government cops.

    Every time a CCW law is pased in an area.. usually a state… crime rates fall, for example. And remember, you said Every Time

    Document Please.

    I suggest the same applies to health care. When people take over the responsiblity for their own healthcare, the situation vastly improves.

    So your argument is based entirely on an idea you have, with nothing to support it.

    What about people who are too sick to “take responsibility”. Old and easily confused. Not smart enough?

    Last time I was contracting and tried to get individual health care, I got a pretty nasty surprise about how much leverage an individual has in dealing with insurers. None.

  54. anjin-san says:

    When the something that’s broken is not my responsibility, I do nothing

    Ah, a buck passer. You would last about a week where I work.

    Our country’s health care system IS broken. As an American, and as somebody who would like to have decent health care for myself and my family, I figure it is my responsibility.

  55. Eric Florack says:

    Thats your comeback? Right up there with George Costanza’s “The jerk store just called” line.

    Possibly. But also on par with your “Good lord bit, how old were you when you learned to tie your shoes, 20?” line.

    Are we clear on this?

  56. Eric Florack says:

    So we should issue handguns to 9 year olds and then they can protect themselves when walking to school?

    Here’s a concept: Children are the responsibility of the parents.

    What about people who are too sick to “take responsibility”. Old and easily confused. Not smart enough?

    Before we let government take over the role by way of the welfare state, we used to have seomthing called ‘a family’ who rose to deal with such situations.

    Ah, a buck passer. You would last about a week where I work.

    Nope. As an example, if the fire alarm system is broken, that’s not my job. Nor is it my particular talent set. The government has specifically enumerated responsibilties, and talents, and healthcare isn’t one of them.

    Our country’s health care system IS broken

    You’re correct. It is. It’s broken to the exact degree that government is involved.

    Every time a CCW law is pased in an area.. usually a state… crime rates fall, for example. And remember, you said Every Time

    Document Please.

    You;ve been under a rock, I presume?
    http://www.azccw.com/More%20Facts%20&%20Statistics.htm

    http://www.buckeyefirearms.org/modules.php?name=News&file=article&sid=877

    And so on.

  57. anjin-san says:

    Here’s a concept: Children are the responsibility of the parents.

    So the parents should arm themselves, and then quit their jobs so that they can escort their kids to and from school (and everywhere else). Good plan.

    You’re correct. It is. It’s broken to the exact degree that government is involved.

    You keep saying that, and you have not supported your position in any way.

    Possibly. But also on par with your “Good lord bit, how old were you when you learned to tie your shoes, 20?” line.

    Are we clear on this?

    whatever you say Georgie.

    Nope. As an example, if the fire alarm system is broken, that’s not my job. Nor is it my particular talent set.

    As an example, when one discovers the fire alarm is broken, they should contact facilitires, and let them know about the problem, then follow up to make sure the problem is resolved in a timely fashion. Interesting how you are arguing for “responsibility” yet advocating passing the buck in almost the same breath.

    he government has specifically enumerated responsibilties, and talents, and healthcare isn’t one of them.

    Hmm. The military is providing a lot of quality health care. Still going to duck that one.

  58. Eric Florack says:

    So the parents should arm themselves, and then quit their jobs so that they can escort their kids to and from school (and everywhere else). Good plan.

    Well, back in the day, you know… before the welfare state… we used to have “mothers” who stayed at home and took care of the kids. Quiant, I suppose, and sexist, but it did manage to get the job done rather well.

    You keep saying that, and you have not supported your position in any way.

    So, you don’t see the situation getting worse with every governmental ‘solution’?

    As an example, when one discovers the fire alarm is broken, they should contact facilitires, and let them know about the problem, then follow up to make sure the problem is resolved in a timely fashion. Interesting how you are arguing for “responsibility” yet advocating passing the buck in almost the same breath.

    Nice attempt at a dodge. A moment ago, you were telling me I was passing the buck because I didn’t break out my toolkit to take the sitaution in hand, because your postion was that government should be taking the situation in hand, even though it’s not their job. As I say… nice attempt, but it still missed the mark.

    Hmm. The military is providing a lot of quality health care. Still going to duck that one.

    Why do you keep going back to that? Apples and oranges, Anjin. there is no direct comparison between those being injured in the service of their country, being cared for by said country, to a blanket ‘you’re here, your covered’ plan. None.

  59. Grewgills says:

    It’s actually rather simple; No governmental intervention. None.

    and in the case of health care the result of that would be what?
    What would health care look like for the average person?
    Consider that all government aid to hospitals and clinics would be gone. Employers would not be required to cover employees and so less of them would. Where do those people get care? What of the elderly, infirm, and feeble? What about the poor and their children?
    It seems to me that your plan, such as it is, leaves most people with minimal or no primary care or emergency care. How do you propose to deal with this problem or do you not see it as a problem?

    Before we let government take over the role by way of the welfare state, we used to have seomthing called ‘a family’ who rose to deal with such situations.

    generally by locking the offending member in the basement or attic in the case of mental disability. In the case of serious illness it generally meant keeping them as comfortable as possible until they died, unless the family was particularly wealthy.

    You’re correct. It is. It’s broken to the exact degree that government is involved.

    I have yet to see you produce one scintilla of evidence to support your position here.

    I suggest the same applies to healthcare. When people take over the responsiblity for their own healthcare, the situation vastly improves.

    Again no evidence.

    True. Yet, there was a time in this country when the individual was charge with the majority of that responsibility. Funny thing; Crime rates were lower, including murder.

    Do you have any evidence what so ever to back up that claim? A quick look at a graph of murder rate per capita in the US indicates that murder rates did not increase above rates typical in the 1890s until the mid 1980s. Is this Reagan’s fault?
    Do you really think crime in general and murder in particular are lower where there is less government. I give you every lawless area and every well policed area in the world as evidence to the contrary. Some current areas were government is minimal: Somalia, Afghanistan, Myanmar, Ethiopia, Congo, Chad. Some current areas with high level of government control: Sweden, Japan, Norway, Canada, Germany. Which set do you think has higher rates of theft? murder? rape?
    Even within the US, the southern states generally have less government than the northern states yet the murder rates in southern states are higher than those of northern states.

  60. Eric Florack says:

    and in the case of health care the result of that would be what?

    For one thing, the price would fall on an order of scale.

    Consider that all government aid to hospitals and clinics would be gone

    true. Yet, so too would be the majority of the reasons the costs are so high that they require aid.

    generally by locking the offending member in the basement or attic in the case of mental disability

    Which is about as close to a state mental facility as no matter.

    I have yet to see you produce one scintilla of evidence to support your position here.

    Well you tell me, grew… since the HMO act of 73, have the screams about healthcare and it lack of quaity and it’s high costs gotten anything but louder?

    Do you really think crime in general and murder in particular are lower where there is less government.

    Unquestionably. Have you, for example, seen the crime rates in Washington DC of late?

    (Chuckle)
    Pick any major city. If nothing else these are the very living symbols of big govermment. Yet, the per capita murder rates are higher than places where government takes a lower role.

  61. anjin-san says:

    Well, back in the day, you know… before the welfare state… we used to have “mothers” who stayed at home and took care of the kids. Quiant, I suppose, and sexist, but it did manage to get the job done rather well.

    Utter nonsense. The reason so many mothers work now is that one income will not pay for the modern American lifestyle in most cases. You know, the 6000 sq ft home, a tv & computer in every bedrooms, cellphones, iPods, etc. etc. “back in the day, most Americans lived far more frugally, and one income generally did the trick. “Welfare state” is a complete red herring.

    You keep saying that, and you have not supported your position in any way.

    So, you don’t see the situation getting worse with every governmental ‘solution’?

    You keep ducking this question. Obviously you CAN’T support your position.

    because your postion was that government should be taking the situation in hand, even though it’s not their job.

    Please show me where I have said this.

  62. Eric Florack says:

    The reason so many mothers work now is that one income will not pay for the modern American lifestyle in most cases.

    Moder lifestyle has little if anything to do with it. On the other hand, having roughly half the household income going to cover taxes or fees, imposed by government at some level, doesn’t have a thing to do with it, huh?

    Obviously you CAN’T support your position.

    I don’t feel the need, Anjin. The point is manafestly obvious when looking at the timeline of it. Assuming of course you’re not drinking koolaid at the time.

  63. anjin-san says:

    Bit you seem to have your opinions confused with facts. But we have all noted the tinge of meglomania in your personality, so this is not any surprise. There is something of a pathology to the way you think about politics.

    In a debate most adults grasp the concept that they just might be wrong about something, you seem to lack this ability.

  64. anjin-san says:

    On the other hand, having roughly half the household income going to cover taxes or fees, imposed by government at some level, doesn’t have a thing to do with it, huh?

    Fine. Document that the average family pays more in taxes now than they did in say, the Eisenhower years.

    But of course you will not be able to do this, because your universe is centered on how you feel things to be, not on any facts. You are sort of the Mort Liddy of political chat…

  65. Grewgills says:

    For one thing, the price would fall on an order of scale.

    true. Yet, so too would be the majority of the reasons the costs are so high that they require aid.

    and again I ask in vain for any evidence to back up your bald assertions.

    Which is about as close to a state mental facility as no matter.

    Have you actually seen a modern mental health facility?

    Well you tell me, grew… since the HMO act of 73, have the screams about healthcare and it lack of quaity and it’s high costs gotten anything but louder?

    Quality and availability are up along with prices. You have yet to produce item one of evidence to back up any of your assertions.

    Unquestionably. Have you, for example, seen the crime rates in Washington DC of late?

    (Chuckle)
    Pick any major city. If nothing else these are the very living symbols of big govermment. Yet, the per capita murder rates are higher than places where government takes a lower role.

    So your answer is to ignore the mountain of contrary evidence and instead focus on crime in areas of high population density and contrast them with areas of low population density and blame increased crime in high density areas on too much government. That is about as weak as it gets.

    The point is manafestly obvious when looking at the timeline of it.

    If it is indeed manifestly obvious then there should be a mountain of evidence for you to draw from. Please share some of that evidence with us.

  66. Drew says:

    You guys might be interested in some comments on this subject over at DS’s Glittering Eye. Some include links to academic studies.

    BTW – The notion that health care expenditures did not take off just as the Feds entered the game is ludicrous. Look at the links.