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Our Health Spending Is an Asset?

By April 27, 2016Commentary

A new brief from the National Center for Policy Analysis tackles the issue of international comparisons of health spending and outcomes.    (NCPA Brief)    The brief basically takes the point of view that our high spending reflects very high per capita income and is a choice citizens make because they value good health.  A number of valid statistics are cited, including that our high spending has not slowed our economic growth or per capita GDP and income growth relative to other developed countries.  Our total spending on health and other social services is actually lower than most other developed countries.  And individuals in other countries, with only a couple of exceptions, have as much or more out-of-pocket health spending in relation to their income.  Even after our high spending on health care, consumers have much more income to spend on other items than do people in most other developed nations.  The authors further point out that the primary factor in our higher spending is higher physician and other clinician incomes, which are beneficial to overall economic activity.  So it is fair to argue that our high spending is derived from our high national wealth, but that doesn’t mean it isn’t a problem.

I have been a frequent critic of the practice of using international comparisons to demonize our health system and spending.  Those who engage in this practice are generally big fans of more government directed “solutions” which are how we got here in the first place and a recipe for bigger problems.  And I tend to agree that spending our national output and income on health care in many ways is no worse than spending it on movies, sports, travel, eating out, cars, widgets, etc.  People should be free to spend their money on what they believe will give them the most satisfaction or most heighten the quality of their lives.  The problem is that increasingly health care is being paid for by the government, which means it will be very inefficient.  It also means a higher tax burden, a burden that increasingly is borne only by our most productive citizens and that is often used to pay for health care for people who aren’t productive and who don’t care about their health.  It also means increasing financial pain for employees who are asked to pick up increasing amounts of the cost of private coverage.  So there is a serious problem, if not in the size of our health spending, then in how it is structured and paid for.  We have to have a system that forces people to take responsibility for their health and not expect other people to pay for their bad decisions.  And people who rely on government (i.e., the taxpayers) to pay for their health care must then a receive care in the lowest possible cost setting and must accept other restrictions on where and what kind of health care they receive.  If we don’t start being more rational about people being responsible for their own health and the cost of their own health care, our health care spending problem will just get bigger and bigger.

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