That posting on Personal Consumption Expenditures (PCE) is much more important then most people realize. PCE consists of every thing spent on goods and services targeted for individual consumption: food; clothing; flat screen tvs; cars; everything. First, that analysis isn’t original to some blog; I’ve read the same analysis done by the chief economist at one of the major banks. I’m sorry, I don’t recall which bank, but I read the analysis on Bloomberg. What it means is that the all the increases in PCE for the past 40 or 50 years, which could go to increasing our savings or an increased standard of living is being siphoned off by health care expenditures. Remember, we are currently spending 16% of our GDP on healthcare, the next most expensive country, Switzerland, spends some 10 or 11%. Regardless of the arguments about how much better our health care system is or isn’t, you can’t tell me after spending 50% more, we’re 50% healthier or living 50% longer. The fact is that, regardless of how, if we want to survive as an economically competitive nation we have to drastically cut down on our health care expenditures. Everyone in the system will have to get a haircut, everyone. That means that the health insurance companies instead of paying out 75 cents in medical care for every dollar they take in premiums will have to figure out how to pay 90 cents; that means that surgeons whose current median income is some $450,000 a year will have to figure out how they can live on $300,000 a year; that mean that hospitals that currently have 1.5 billing clerks for every bed will have to figure out how to get by on one billing clerk for every bed.
I’m not sure I agree that the US spends a lot more than other countries. (See the NCPA international paper on this and other comparisons.) But however measured, health care growth per capita is growing at about twice the rate of growth of income here and all over the developed world. In fact, our growth rate for the past 40 years is right at the OECD average.
So, yes I agree with artk that health care is eating into other consumption. It couldn’t be otherwise. But the same thing is happening all over the developed world.
The consumption article resorts to the same tired misnomers used to bash our healthcare system–infant mortality, life expectancy statistics are based upon flawed methodology used by supporters of socialized healthcare systems such as the WHO but regardless, these variables are not qualitative proxy measurements of a healthcare system. Yes, we have higher rates of obesity but again, not a good qualitative measure of a healthcare system. Why don’t these “studies” ever mention our lower rate of smoking and alcohol abuse and equate that to our healthcare system?
Interesting charts on consumption. I’m not sure what conclusion to draw from it.
I think there is a lot of conflicting information about antidepressants. It looks like the drugs are no better than sugar pills if your case is mild.
That posting on Personal Consumption Expenditures (PCE) is much more important then most people realize. PCE consists of every thing spent on goods and services targeted for individual consumption: food; clothing; flat screen tvs; cars; everything. First, that analysis isn’t original to some blog; I’ve read the same analysis done by the chief economist at one of the major banks. I’m sorry, I don’t recall which bank, but I read the analysis on Bloomberg. What it means is that the all the increases in PCE for the past 40 or 50 years, which could go to increasing our savings or an increased standard of living is being siphoned off by health care expenditures. Remember, we are currently spending 16% of our GDP on healthcare, the next most expensive country, Switzerland, spends some 10 or 11%. Regardless of the arguments about how much better our health care system is or isn’t, you can’t tell me after spending 50% more, we’re 50% healthier or living 50% longer. The fact is that, regardless of how, if we want to survive as an economically competitive nation we have to drastically cut down on our health care expenditures. Everyone in the system will have to get a haircut, everyone. That means that the health insurance companies instead of paying out 75 cents in medical care for every dollar they take in premiums will have to figure out how to pay 90 cents; that means that surgeons whose current median income is some $450,000 a year will have to figure out how they can live on $300,000 a year; that mean that hospitals that currently have 1.5 billing clerks for every bed will have to figure out how to get by on one billing clerk for every bed.
If we don’t, we’re done as a country.
I’m not sure I agree that the US spends a lot more than other countries. (See the NCPA international paper on this and other comparisons.) But however measured, health care growth per capita is growing at about twice the rate of growth of income here and all over the developed world. In fact, our growth rate for the past 40 years is right at the OECD average.
So, yes I agree with artk that health care is eating into other consumption. It couldn’t be otherwise. But the same thing is happening all over the developed world.
Good point Bruce.
The consumption article resorts to the same tired misnomers used to bash our healthcare system–infant mortality, life expectancy statistics are based upon flawed methodology used by supporters of socialized healthcare systems such as the WHO but regardless, these variables are not qualitative proxy measurements of a healthcare system. Yes, we have higher rates of obesity but again, not a good qualitative measure of a healthcare system. Why don’t these “studies” ever mention our lower rate of smoking and alcohol abuse and equate that to our healthcare system?
alcohol abuse is difficult to treat, i have an alcoholic girlfriend and she just suffered from liver problems`