Unfortunately, outrage buys fewer tongue depressors than one might hope. The top health insurers averaged 4.1 percent profit in 2017 (per Yahoo Finance). That’s taken on half (at most) of spending for-profit insurers handle. Eliminating those profits would save about 2 percent. Since health care gets 4.5 percent more expensive every year, that would in effect roll prices back to last August.
The UK saw costs risewhen it launched the National Health Service (NHS) in 1948. Health Minister Aneurin Bevan bought doctors off (“stuffed their mouths with gold”) to win support for it. Pent-up demand put it over budget immediately. In the first year, it spent 32 times what it had planned for eyeglasses. It had to raise salaries to attract more nurses. Prime Minister Clement Attlee pleaded over the radio with citizens not to overburden the system.
Jim, great perspective and love the chart about per capita growth rates and the fits & starts with vastly over-budget spending by NHS in the early years. Same holds true for Medicare spending being about 5 – 6x higher in 1995 than it was projected to be.
I do have a criticism of a portion of your analysis. When you talk about 18% of the economy (healthcare spending) you make an assumption that wages in the economy are equally distributed between all jobs. The is not true. I could live with playing a little loose with the comparative math until you imply that reductions in spending will somehow take jobs away from actual healthcare workers. This is not so (or certainly does not need to be so) if we understand, as you appear to know, that there is a huge amount of distortion & siphoning of financial resources away from healthcare and towards non-clinical (and often completely spurious) endeavors which serve to increase costs with no measurable benefit to patients or providers; while rent-seekers and cronies profit. You say as much here,
“Let’s acknowledge that 80 years of experiments have spawned a wretched hive of middlemen, second-guessers, gatekeepers, bureaucratic baggage handlers—individually charming people, no doubt, but collectively a burdensome rabble the middle class can’t afford to support.”
Knowing why & how these price-inflating distortions occur, and how market mechanisms, along with insurance/regulatory reforms can correct those distortions, can cut healthcare cost…probably real cuts…not just slow rate of growth.
Healthcare does not have to be as expensive as we are told it is. The prices we’re paying are a whole different matter; and driven by factors so deeply embedded in the substrate of the system that most people don’t identify them as such. They erroneously attribute them to an intrinsic part of healthcare, when in fact they are a derivative of the manner in which we bill, pay for and get reimbursed for care.