This chart about health care costs might actually cheer you up
The amount of money the country spends on health care had been rising slowly during the recession, but the increase last year appears to have been worryingly large. Medical expenses might be rising rapidly again, as they did before the recession.
There is an important difference, however. Previously, the increase in prices was due primarily to the increase in the cost of medical treatment. Now, the increase is due to the fact that people are seeking treatment more often. The chart above, from the Altarum Institute, shows the proportion of the annual increase in spending attributable to rising costs in blue. Costs actually fell relative to inflation last year.
Economists would generally be very pleased if the cost of some product were falling and people were buying more of it. That would suggest that industry had found a way to provide a product cheaply, satisfying more customers as a result and contributing to overall well-being. Health care, however is a special case. The problem is that it’s not clear whether people actually get healthier when more money is spent on their medical care, at least in the U.S. health care system. The United States spends an enormous amount of money in this sector compared to other countries, yet life expectancies here are mediocre.
Also, since there are only so many examination rooms and only 24 hours in a day, costs will probably begin to rise again soon if demand for health care continues to increase. That seems inevitable with more people buying health insurance as a result of Obamacare. For now, we can all enjoy visiting our doctors as much as we like without having to pay much more for the privilege than we did a year ago. |
