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Saturday, November 23, 2013

Irrational Health Exuberance

I hope the picture is large enough. You may go see it at Huffington Post,

The USA is marked by the red arrow, and the x-axis is health spending per capita, the y-axis is life expectancy in years.
Simply put, the USA spends vastly more than anyone else, and the efficiency, or life expectancy based on a level of spending, is not the highest, but is substantially lower than a number of countries. More buck and less bang, in other words.

... "What bothers me most is not that we’re all the way on the right, or even that we are lower than we should be," Aaron Carroll, professor at the Indiana University School of Medicine wrote on his blog of the chart. "It’s that we are all alone. We are spending so, so, so much more than everyone else."

This confirms what we pretty much already knew about the terribleness of U.S. health care. The U.S. ranks 46th among 48 developed economies in health-care efficiency, according to a Bloomberg ranking, below China, Iran, Colombia and, you know, pretty much everybody else.

Why is our system so terrible? Largely because it is built for profit. Unlike many other countries, the government has no role in either providing care or setting prices, and so prices skyrocket. It's also too complex, which is one reason the Affordable Care Act, President Obama's signature reform law, has gotten off to such a bad start...
What bothers me is the resemblance to a bubble, where prices keep climbing higher and higher with little or no correlation to anything else of importance, in this case Life Expectancy.

 The complexity of the system will work to guarantee that it will not quickly nor easily be fixed when it breaks down under the weight of the exponentially rising costs.
When will that occur? I have no idea, but we have a number of extremely important systems that allow our society to run, and many of them are being undermined by an inability to come to grips with the problems we face.


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