From a 2015 article by Arnold Kling's Askblog.
from Megan McArdle:
1950s health care isn’t expensive; this same regimen
would be a bargain at today’s prices. What’s expensive is things that
didn’t exist in 1950. You can say that “health care” has gotten more
expensive—or you can say that the declining cost of other things has
allowed us to pour a lot more resources into exciting new health
products that give us both longer and healthier lives.
In Crisis of Abundance, I wrote,
The American middle class can still afford the wonderful
health care that was available in 1975–easily. . .as a thought
experiment, a return to 1975 health care standards would completely
resolve what is commonly described as America’s health care crisis.
My guess is that if you could find a health insurance policy today that
only covered diagnostic procedures and treatments that were available in
1958, the cost of that policy would not be much higher than it was
then. Much of the additional spending goes for MRIs and other advanced
medical equipment, as well as for health care professionals with more
extensive specialization and training than what was available 50 years
ago.
These observations get at the
distinctions between healthcare, health insurance, and health outcomes
which too easily get mashed together.
I'd like to have 1950s or 1975 healthcare costs. But I don't want 1950s or 1975 health care.
I've
been on Medicare and a supplemental plan since 2016. If I add up what
Medicare has paid since then and compare it to what I pay for Medicare
each year plus what I paid in Medicare taxes over the years, the
government is still way ahead on the deal.
It's still true, even
though a year ago today my heart stopped for a bit, I went to another
place momentarily, and ended up transported by ambulance to an ICU in
Tucson, where I spent the next two days and underwent an emergency
procedure. I was informed that most with my condition do not make it to
the hospital. I recovered quickly and completely, but the procedure I
underwent was not invented until about fifteen years ago. Prior to that
time I would have had a lengthier hospital stay and been sent home for
extended bed rest until my condition improved, while remaining at risk
the entire time, and with a much likelier outcome where, if surviving,
I'd have permanent heart damage. The drugs I would have been prescribed
also had major side effects.
Instead, the operation went well, I
was discharged in 48 hours with no permanent damage, and the new
medication for my condition, which only reached the market a decade ago,
has had no side effects.
I like today's medicine and the new medication and wrote about it in December.
When
I got my Medicare statement a few weeks later, the nominal "cost" for
those two days was $194,000 of which Medicare and my supplemental paid
$38,000 and I paid $16. The statement informed me that Medicare had
"saved" me $156,000. I put "cost" and "saved" in quotes because those
words have no meaning in the healthcare lingo we use today. If I go to a
car dealer and see a car with a $50,000 sticker price and the dealer
accepts my $10,000 offer, that 50K price is not real and I did not save
40K by making the purchase. Healthcare pricing is simply crazy.
The pricing may be crazy, but I'm happy to be here.
My thanks to the doctors, nurses, techs, EMTs, and park rangers who got me through the experience.
Twenty years ago on a business trip to Brazil, I arrived in Sao Paolo on a Saturday morning and took a car to spend the weekend in the city of Santos on the coast before beginning my work week in Sao Paolo on Monday.