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We pay a lot for a lot.
Other countries manage to pay less.
A lot of our higher costs has to do with how we practice medicine these days, and what our people seem to want. And that is specialty centered vs primary centered medical care. The HC costs in the USA began to diverge from the rest of the world in the early '80's, when this type of medical practice began to take hold.
IMO our medical care is not going to get cheaper moving forward. Too many oldsters, along with new expensive technologies coming on board. Our aging demographics will make our costs rise.
Central controls can only help so much. Single payer and more people get more stuff done.
Say we borrow 1.5 TRILLION like we just did. We hand out all that money and people spend a good percentage of it on health care.
Doesn't GDP increase.
I see what you are saying - but that is only if the money supply stayed equal. When we give away new money and that is spent, GDP would seem to increase.
Conversely, if we spent 1/2 of what we do on health care and didn't steal 1.5 T from our children, it might go down.
If there is demand not being met, then fulfilled with the new money, then of course GDP rises. Like in early WW2, we first needed huge amounts of new money created to then raise our GDP so that we could fight the War and service the civilian side at the same time.
'Wasteful' GDP is still GDP. It is ineffective GDP, and why standard of living is a better notion.
If we create 1M useful tools that might be effective GDP. 1M toys might be ineffective GDP. If we immediately burn or bury the toys, even less effective. But still part of GDP.
If we reformed out health care system, people would be healthier, live longer, have money to spend on other things AND our GDP would suffer. Of course, we won't do that...because the whole idea of our economy is to move the costs onto someone else (our kids, debt, deficit, etc.).
Intuitively, "good" increase in GDP is a worthwhile investment, where the spending generates new ideas, new methods, new vistas. "Good" healthcare spending restores the health of productive workers who have fallen ill, or brings back to health those who are afflicted by disease, making them more productive... and t thus going on to increase GDP down the line. "Bad" healthcare spending would include tests that have no bearing on the treatment, but are necessary to forestall possible law-suits; or expensive intervention in terminal cases, where the patient lives incrementally longer - in considerable suffering - but does not in turn continue to contribute to the economy through his/her labor.
Quote:
Originally Posted by Hoonose
We talk about GDP, growth and all, but few ever discuss or try to place value on production, what we do in medicine. We can measure spending, but output in so many cases is better health, happiness, contentment and security. Better quality of life and longer life. Personal and family. Not easy to place a dollar number on that sort of production.
That is a broader issue, really along the lines of whether money buys happiness. Indeed, so much of spending is useless, not because it buys material objects that are faulty or fraudulent, but because they don't particularly enhance our lives. And yet, there is always the counter-argument, that life-enhancement is subjective. The other guy might be happier in a smaller house, with lower utility bills, in a space that's easier to clean and to maintain and so forth, but my identity is wrapped up in the prestige of a larger house.
Quote:
Originally Posted by craigiri
Say we borrow 1.5 TRILLION like we just did. We hand out all that money and people spend a good percentage of it on health care.
Doesn't GDP increase.
I see what you are saying - but that is only if the money supply stayed equal. When we give away new money and that is spent, GDP would seem to increase.
Conversely, if we spent 1/2 of what we do on health care and didn't steal 1.5 T from our children, it might go down.
The overarching point, I think, is that "good" GDP spending is such, that it leads to more investment, more productivity and so forth. "Bad" GDP spending is just a redundancy; it creates costly problems and then finds costly solutions, spending money coming and going, but ultimately achieving nothing.
One particular issue with healthcare, is that the industry supports so many jobs that are ancillary to the delivery of care itself... insurance, record-keeping, litigation, writing of regulations and so forth. But these jobs are, after all, jobs; they generate a livelihood for millions of people. This is back to the Keynesian (or attributed to Keynes) public-sector make-work idea, where one team of workers digs ditches, and another fills them back up. The difference is that the healthcare case is (mostly) in the private sector.
Quote:
Originally Posted by Hoonose
We pay a lot for a lot.
Other countries manage to pay less.
A lot of our higher costs has to do with how we practice medicine these days, and what our people seem to want. And that is specialty centered vs primary centered medical care.
Good point. If an 80-year-old gets diagnosed with stage-III pancreatic cancer, there's not much to be done. Aggressive medical intervention can prolong life by perhaps another year or two, at a cost of maybe $200K/year, in chemotherapy and diagnostics alone (no surgery). But if we tell Grandma that she can't have her chemo, unless she pays for it out-of-pocket, then in the popular imagination, that's tantamount to "death panels".
Say we borrow 1.5 TRILLION like we just did. We hand out all that money and people spend a good percentage of it on health care.
Doesn't GDP increase.
I see what you are saying - but that is only if the money supply stayed equal. When we give away new money and that is spent, GDP would seem to increase.
Conversely, if we spent 1/2 of what we do on health care and didn't steal 1.5 T from our children, it might go down.
Craigiri, annual GDP is expressed in U.S. dollars valued at the particular year, (unless otherwise stated). The value of goods produced that year were traded based upon that same value of the U.S. dollar.
Loans and congressional appropriations are transfers of wealth that are not reflected within GDP; but healthcare goods and services delivered all contribute to GDP.
Yes, if we spent 1/2 of what we do on health care and didn't produce any other additional goods or services, GDP would go down. Theoretically, if we did that and reduced our deficit spending. we could reduce our accumulated deficit and reduce our annual debt service costs.
I see what you are saying - but that is only if the money supply stayed equal. When we give away new money and that is spent, GDP would seem to increase.
The nature of federal debt and money is a side issue that will just confuse things further, so let's not go there. OK?
GDP is the sum of all goods and services produced. The end product of people's labor. The US$ value is only used for convenience. It isn't "money", it's real stuff. Usually it's put in real US$ terms to account for inflation, and if you want to use it as a proxy for living standard it's divided by population. And if you want to compare one country to another, there is a PPP adjustment.
One thing that might be helpful to realize that the cost of every item is the sum total of time x compensation of everyone who had a hand in producing it. Even for a very simple item, millions or even billions of people had some fraction of a millisecond input. One person's cost is another's income. The only way we can improve living standards is if we reduce the time it takes to produce something. That's productivity. What naturally happens is that we reduce the real cost of X (hours), which frees up time to produce other things.
The fact that something like healthcare runs in the opposite direction, with real costs rising rather than declining, is not favorable to our GDP in any way. It just means productivity needs to rise even more in other areas to keep our living standard from dropping.
One thing that might be helpful to realize that the cost of every item is the sum total of time x compensation of everyone who had a hand in producing it.
That's so simplified as to be meaningless. A jobber who spends three seconds on a routine order of widgets but collects 20% for the pass-through adds nothing to the value of the widgets.
In some sort of closed village econ loop of farmers and craftsmen, maybe. But we kind of outgrew that model kind of a long time ago. Most goods have vast amounts of "non productive value" added to their cost.
How could including everything be "simplified". The guy who collects 20% must add something, else why are they there? And it doesn't matter if they are "adding value"; they are being compensated and adding to the cost.
How could including everything be "simplified". The guy who collects 20% must add something, else why are they there? And it doesn't matter if they are "adding value"; they are being compensated and adding to the cost.
You specifically said "producing it." Unless you include that in the sense a magician produces a rabbit, an awful lot of the folks in the middle of the chain "produce" very little of value relative to their added costs.
Your statement applies to a chain of people who have something material to do with getting the item from raw materials to a consumer's hand. But in many cases that chain is loaded with... deadwood from a production standpoint. It's simplified to say all those people contribute to "producing" something, although you are completely correct in that they add to the "cost."
That's WalMart's contribution to consumer economics: they've wiped out whole nations of middlemen.
How could including everything be "simplified". The guy who collects 20% must add something, else why are they there? And it doesn't matter if they are "adding value"; they are being compensated and adding to the cost.
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