Wednesday, July 08, 2009

Chart of the Day

I've previously discussed a major factor explaining healthcare cost hikes--the elimination of incentives among patients to be cost-conscious. Here's a striking illustration (read right-to-left):


source: Goldwater Institute, via ABC's John Stossel, via Coyote Blog

As Stossel says:
It's basic economics that the less you have to pay for something, the more of it you'll use. And yet the "reformers" keep pushing for MORE health insurance.
Agreed.

(via Maggie's Farm)

2 comments:

Anonymous said...

i want to contribute my 2 cents. although i dont think that graph is lying, it is only showing association. it is a pretty big jump in logic to go from association to causative effect. medical costs have risen also as technology has developped, and that technology is not cheap. diagnosing appendicitis was practically free in 1960. it now requires a CT scan and diagnosis alone costs over $2,000. however, take into account all the hidden costs that were ignored back then, when people died of missed appendicitis or unnecessary surgeries.


dridel, md

@nooil4pacifists said...

dridel, I agree that correlation isn't necessarily causation. Yet the relationship expressed in the chart naturally would be the product of the elimination of patient incentives to economize. (A rough analogy is the way college tuition costs have risen far faster than inflation--due to the now widespread availability of student loans.) As an MD, would you deny that patients with less "skin in the game" are more likely to authorize potentially unnecessary diagnostic testing?