The Wonders Of Health Care

 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.