One of the biggest issues in the US right now is around how to pay for Medicare for the increasingly large cohort of retirees. Projections show spending on healthcare in the US on track to exceed 20% of GDP by mid-century, and other countries are not far behind. The policy debate is focused on how to reduce government spending on healthcare, especially on Medicare for those over 65, but most suggestions seem to involve shifting costs to individuals. That could result in an overall reduction of healthcare costs in one of two ways:
- People will be less wasteful of spending on healthcare when they must pay a larger portion of costs themselves. The idea here is that people are making unnecessary trips to the doctor, having unnecessary tests and procedures done, taking unnecessary medications, or visiting overqualified and thus more expensive doctors than they really need to. All this because there is little or no cost to them for doing so. I haven't seen any estimates of how much of this is going on so I don't know how much of the cost of healthcare could be saved by reducing this overspending but it doesn't feel like a lot.
- Poor and/or unlucky people will suffer more and die earlier since they cannot afford to pay for their own care. This strikes me as the biggest potential cost saving. Most healthcare spending comes in the final six months of life. If we can simply let the poor and sick die six months earlier rather than wasting money treating their diseases it would certainly help keep overall healthcare spending below 20% of GDP.
That's the background, as I see it. The only way to keep spending on healthcare below a level that economists seem to consider reasonable is to just not spend it, and let the poor and/or unlucky suffer more and die earlier. My question then is why is this the case? Why can we as a society not afford to give everybody all the healthcare that they desire and that is technologically possible?
- Does it go all the way back to the most fundamental level; that humanity is still unable to produce enough of a food surplus to support all the specialists we need to provide healthcare? Seems unlikely but I suppose it is a theoretical possibility, especially if we consider the normally uncounted infrastructure needed to provide healthcare: e.g. engineers to design and build engines that power ambulances, laborers to build roads for them to drive on. There is a lot of 'stuff' required to provide the best possible healthcare that is never counted as healthcare spending.
- Is it rather that there aren't enough people with the natural skills required to provide comprehensive healthcare to everyone? In other words there aren't enough people who could train to become cardiologists to provide best possible care to all the people with heart disease. Thus we need some way to ration the skilled cardiologists between those who need them. Somewhat more possible than option one, I think, but is it true?
- Maybe it's just a matter of allocation of resources after all. Despite what the economists say we could spend 20% or 30% or more on healthcare if we really wanted to, but for whatever reason we don't want to. And if we don't want to spend all those resources on healthcare, why not?
So, in the end, what is the fundamental problem with funding healthcare? Is it impossible to give everyone the best care that our technology allows and if so, why?
Part of the explanation for why health care costs are rising, is that general prosperity is rising. People have more money to spend on a whole variety of things, and one of the main things that people like to buy is more and better health care. It is part of an overall trend toward increasing value of human life (and life in general). What strikes me is how terrible our understanding still is about how biological machines work at all. Most medical treatment is still incredibly basic - we lack both knowledge and tools required to fix ourselves.
ReplyDeleteBut at the moment it seems that our lack is not so much in knowledge and tools, as in the ability to properly organise society to pay for what we already know and have. There are medical treatments that are simply unavailable to many people, even in developed countries, and the direction of the policy debate at the moment is not how to increase the amount of treatments available but rather how to decrease the number of treatments performed.
ReplyDeleteThus the more pressing problem for the majority of people seems to be an economic one rather than a technological one.
Your point about rising prosperity resulting in greater demand for healthcare is interesting and perhaps deserving of a post in its own right, but the fact is that we are already past the point of not being able to pay for our own healthcare if we get unlucky. Even we relatively prosperous Europeans would be essentially unable to pay for a disease that would cost us $100k per year, which some do. Financial engineering, in the form of insurance, is the only way to pay for such illnesses in those unfortunate enough to suffer from them. So why is our financial engineering so broken that we (apparently) cannot fund medicare to pay for all the healthcare that we (apparently) want?
I have a feeling that there are several cognitive biases at play here, and I would be interested in trying to tease them out.