February 6th, 2008
Can medical inflation be controlled?
Everyone talks about medical inflation. But no one does anything about it. (Picture from Majorconflict.com, a liberal blog.)
A quick look at the figures gathered by Watson Wyatt today make that point clearly.
Medical inflation is a global phenomenon. Whether you run it privately or through the government, costs are rising with demand and complexity.
Costs in the U.S. rose 8% last year and will go up another 11% this year. That’s from a higher base than anywhere else, but it’s still in-line with other advanced countries which run their systems differently.
Canada, for instance, is debating whether to allow private health insurance to clear backlogs. Costs there rose 11.5% last year, and will go up 12% this year.
The UK’s National Health Service has been providing the country’s primary care for six decades. Costs there were up 8% last year, and will go up 8% this year.
France, which is often hailed as a paragon of quality and efficiency (by American liberals) saw inflation of 6.6% last year, and will hit 7.3% this year.
Costs are rising even faster in less-developed countries, regardless of their system, due to demand. Costs will rise 25% this year in Venezuela and 19.6% in China.
Medical care will soak up whatever money is offered to it, through whatever means, in whatever system. People don’t want to suffer and die.
My point is that the way we organize our health care system is a political choice, not an economic one. We can cover everyone, or let some die. It’s our choice. Whether we do or not won’t make inflation go away.
The real ceiling on health care costs is, as with mortgages, whether they can be borne. Health care is a huge issue in the U.S. because our national health care mortgage is sub-prime. It’s escalating and we don’t have the money for it.
Think that truth will be spoken in the coming debate? I don’t, either.
Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994. See his full profile and disclosure of his industry affiliations.
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