Health Care: Bookmark this One

Via Ezra Klein. At the end of his post, note the link to the full package of charts. The last chart in that package, in particular — see below — caught my eye, begging many questions.

Bruce McQuain chimes in. H/t casualobserver.

hospital_rev_exp_per_adm.JPG

  

Author: PETE ABEL

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8 Comments

  1. Hey, that's just the free market at work! Either you're with capitalism or you're against it! Isn't regulation just another word for socialism?

    Seriously though, thanks for sharing this info Pete, it's pretty revealing… and shocking.

    I used to think our form of democracy was all about the citizen government, but I guess that all got changed back when folks stopped paying attention.

  2. Q&O provides a more substantive, fact-based response.

  3. Please feel free to elaborate.

  4. An inflation-adjusted one would be handier, but I hope no one missed the fact that the hospitals are not making huge profits here (notice that revenue closely matches expense). Unfortunately, it doesn't say what is the real cost driver. That, in and of itself, is the most amazing part of this controversy: no one can show why the costs are going up, but we know that insurance companies can fix it. I prefer mechanics that look at my car before saying how they'll fix it, doctors that ask questions and run tests before proscribing a cure, and politicians that can investigate and show the root cause before writing their laws. But that's just crazy talk in the political world.

  5. “Please feel free to elaborate.”

    Actually, I was wondering if you could elaborate on your response. I'm not sure how you make the jump from the graph above to the conclusion that we need more regulation of capitalism. The graph is neutral on that question.

  6. “it doesn't say what is the real cost driver. “

    I don't know all of the cost drivers, but a part of it I think is related to our rising income gap, which it seems to me is driven by a shortage of high-skill workers, which goes back to difficult education and cultural issues. (Sorry, let me unwind the chain back to the beginning) Since highly educated workers are in such high demand in our economy, potential doctors have many choices when deciding on their career, one of which is medicine. In order for them to be drawn into medicine they have to be paid much more than their counterparts in other countries (as shown here: http://www.worldsalaries.org/generalphysician.s…, where you can see the same pattern for other high-skill jobs) where there is not the same opportunity-gap between high skill and low skill workers.

    I think that's part of the picture, which means that maybe one of the best things to do to help with health care costs long term is to fix our education system and cultural issues which prevent many people from achieving their potential.

    (the same logic applies to nurses, by the way, which maybe is more relevant to hospital costs. I'm not sure if doctor's fees are included in the graph above.)

  7. You raise a good point, especially since US men are giving up on going to college. But, being one of those high-skill workers (computer programmer), I have to say that there's more to it. A typical professional can consult for about $50 to $300 per hour (end user cost), depending on a number of factors. A typical surgeon earns over 10 times those rates. I have to lay that shortage at the feet of the AMA, which sets unusually high standards for doctors, although, as they are quick to point out, they don't set quotas per se. I just can't believe that good students are always the best professionals.

  8. “I have to lay that shortage at the feet of the AMA”

    With all due respect to your profession (and I mean that because I share it), clearly a surgeon *should* make much more than a computer programmer and most other professionals. A computer programmer is probably more comparable to a nurse in terms of skill level (and even then the nurse has an significant edge at least at the entry level). The pay for nurses is in the same ballpark as the pay for computer programmers, and nurse pay is probably the thing that is most relevant to the graph above anyway.

    But I take your point that the AMA might have a role in overall high cost too when it comes to doctors fees. Like I said I think the shortage of high skill workers is just one part of a problem that is likely to have many contributing factors (very few if any of which are actually addressed by the current legislation).

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