Look, Health care just costs too damn much, and I suspect everyone agrees with that statement. Just where in the hell is all that health care money going?
- Medical doctors typically have a nice income, but they are not getting rich.
- Hospital administrators typically also have a very nice income, but they are not getting rich (no yachts or private jets.)
- Nurses are not getting rich.
- Respiratory therapists are not getting rich.
- X-Ray techs are not getting rich.
- Physical therapists are not getting rich.
- Health insurance companies profits are regulated under Obamacare so they are not getting rich, although senior executives make a lot of money -- but they don't own yachts or private jets.
The cost of health care has about quintupled since 1970. ... The average 1960 worker spent ten days’ worth of their yearly paycheck on health insurance; the average modern worker spends sixty days’ worth of it, a sixth of their entire earnings.
Soooo..... where is all the money going?
Broadly speaking, over the past fifty years in inflation-adjusted dollars, education costs have at least doubled, college costs have dectupled, health insurance costs have dectupled, subway costs have at least dectupled, and housing costs have increased by about fifty percent. US health care costs about four times as much as equivalent health care in other First World countries; US subways cost about eight times as much as equivalent subways in other First World countries.
And this is especially strange because we expect that improving technology and globalization ought to cut costs. In 1983, the first mobile phone cost $4,000 – about $10,000 in today’s dollars. It was also a gigantic piece of crap. Today you can get a much better phone for $100. This is the right and proper way of the universe. It’s why we fund scientists, why startups go public, and why we pay technical innovators the big bucks.
Even with increases in technology, things like college and health care have still had their prices dectuple instead of being cut. Patients can now schedule their appointments online with a smart phone; doctors can send prescriptions through the fax or via a secure email system, pharmacies can keep track of medication histories on centralized computer systems that interface with the cloud, nurses get automatic reminders when they’re giving two drugs with a potential interaction, insurance companies accept payment through credit cards -----
----- and all of this costs ten times as much as it did in the days of IBM punch cards and secretaries who did calculations by hand with a manual crank adding machine.
And it’s actually even worse than this. A lot of these services have decreased in quality, presumably as an attempt to cut costs even further. For women who give birth in the hospital, the standard length of stay was 8 to 14 days in the 1950s but declined to less than 2 days by today. The doctors I talk to say this isn’t because modern women are healthier, it’s because they kick them out as soon as it’s safe in order to cut costs. Historic records of hospital care generally describe leisurely convalescence periods and making sure somebody felt absolutely well before letting them go; this seems bizarre to anyone who has participated in a modern hospital, where the mantra is to kick people out as soon as they’re “stable” i.e. not in acute crisis.
I don’t know why more people don’t just come out and say “LOOK, REALLY OUR MAIN PROBLEM IS THAT ALL THE MOST IMPORTANT THINGS COST TEN TIMES AS MUCH AS THEY USED TO FOR NO REASON, PLUS THEY SEEM TO BE GOING DOWN IN QUALITY, AND NOBODY KNOWS WHY, AND WE’RE MOSTLY JUST DESPERATELY FLAILING AROUND LOOKING FOR SOLUTIONS HERE.” State that clearly, and a lot of political debates take on a different light.
Important things such as health care, education, roads & bridges, subways & other public infrastructure cost 10 times as much, 10 times more than they used to and 10 times more than in other countries.
It's not going to wages.
It's not going to profits.
So where is it going?
The unavoidable answer: The number of people it takes to produce these goods is skyrocketing. Labor productivity -- quality adjusted output per number of people involved in the entire process -- declined by a factor of 10 in these areas. It pretty much has to be that: if the money is not going to profits or to to each employee in the form of higher wages, then it must be going to the number of employees.
It's all about administrative bloat.
There are 2.5 people handling insurance claims for every doctor. And that's just at the medical practices & hospitals; the insurance companies have armies of people working on the claims as well.
So, my bottom line: administrative bloat.
Having a government sponsored single-payer system is a radical idea -- but it does not address the root cause of administrative bloat. Imagine how many people are involved at doctor's offices, hospitals, and other health care providers who do not take care of patients but are employed merely to process the damn paperwork. With a government single payer system, those employees still have jobs. Now, imagine all the employees at insurance companies who process health insurance forms & policies and whatnot. With a government sponsored single-payer system, the Government will need to hire about that number of people -- and then add another 20% to 30% for government inefficiencies.
At the end of the day, government single payer just doesn't solve the problem.
There are some areas that are improving. The for-profit field of LASIK eye surgery is a great example. Except in very rare cases, health insurance does not cover Lasik. So Ophthalmologists who specialize in LASIK just don't have that administrative bloat -- they don't have armies of clerks skilled in how to code insurance forms so as to maximize the payment from the provider. The end result is the quality of LASIK has improved dramatically while the price of LASIK has plummeted. Ditto for many cosmetic surgical procedures such as breast implants, breast reduction, butt lifts & implants, chin lifts & tummy tucks. Quality has gone up while costs have gone down.
It is in the other section of medical care -- the section where insurance companies and the government are involved -- that's where the bloat occurs.
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