Monday, January 18, 2010

If our health care system really is more efficient than the Europeans', then why...

We spend about $100 billion per year on medical research, public and private combined (see here).

We spend about $2 trillion per year on health care delivery, the doctors, hospitals, administration, etc. If we adopted a European style system, cutting our spending per person in half, as in European countries (that I think the evidence shows have about as good or better health care and results anyway; see for example here), then we would save about $1 trillion per year.

Now, what if we spent that $1 trillion in savings on medical research? It would increase medical research spending more than 10 fold.

Even if delivery did get a little worse, even if we did get a little bit less of our brightest and best becoming doctors due to lower pay, it seems like this would be totally outweighed over the long run by tremendously more advanced medical understanding and treatments due to the 10 fold increase in medical research spending (or more, as some advanced universal healthcare countries provide comparable health care to the US at about a quarter of the cost per person) .

So it looks like if you want better medical results, better treatment, breakthroughs in rejuvenation, better odds of surviving cancer, you name it, you should support going to a European style system, and using the immense savings to increase medical research more than 10 fold.

So if our health care system really is more efficient than the Europeans, then why is it possible to make such a vastly favorable trade?

If the Republicans really care about our children and grandchildren so much why don't they do this, so in 50 years they could have medicine as advanced as it would take perhaps 150 years to achieve with our current system. I don't care how bad you imagine European health care to be, you cannot think a European medical center of today is less effective than even the Mayo Clinic of 100 years ago, when penicillin and polio vaccines hadn't even been invented.

3 comments:

chrismealy said...

I blame you econ profs and your econ 101 parables of selfishness and market triumphalism for shrinking the acceptable range of policy options. Everyone just knows the market is magic and government is bad. How'd they get that idea?

I'm not really exaggerating. I came into college a flaming liberal interested in economics. I left college with an econ degree (honors to boot), still liberal but fatalistic about solving economic problems. It took me a long time to realize I'd be taught badly.

There might always be the Millian stupid party but we don't need economists to enable them. We need more Serlins and fewer Mankiws.

Min said...

"So it looks like if you want better medical results, better treatment, breakthroughs in rejuvenation, better odds of surviving cancer, you name it, you should support going to a European style system, and using the immense savings to increase medical research more than 10 fold.

"So if our health care system really is more efficient than the Europeans, then why...is it possible to make such a vastly favorable trade?"

Perhaps because markets are not efficient in terms of long term goods, and we worship the market.

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