Wednesday, September 16, 2009

Chart of the Day

From James DeLong in The American:


source: August 26th American

DeLong explains:
Think of it this way: From 1990 to 2006, GDP expanded by $7 trillion. If healthcare had retained its 1990 share of 12.1 percent of GDP, it would have grown by $847 billion, leaving an extra $6.153 trillion to be spent on houses, food, video games, etc. Instead, healthcare grew by $1.4 trillion, leaving only an extra $5.6 trillion for other purposes.

From this perspective, during this 16-year period from 1990 to 2006, the nation shifted its collective preferences a bit, deciding to allocate an extra 7 percent of its $7 trillion increase in GDP into health and away from other sectors.

Such a change seems rather minor in the great scheme of things, and indicative not of a crisis but of an assessment that the state of healthcare technology has improved to the point where it is delivering steadily increasing value for the money, and that as people meet more basic wants of food and shelter they move up the chain of desires and spend more on other things.
See also Robert Fogel concluding "the long-term income elasticity of the demand for healthcare is 1.6--for every 1 percent increase in a family’s income, the family wants to increase its expenditures on healthcare by 1.6 percent."

(via Greg Mankiw)

17 comments:

Thai said...

On a personally selfish level, I have no problem with increase health care spending.

What I am unsure about is whether it really is good bang for the buck.

For I will make a VERY misleading statement simply to illustrate a point:

If you look at this report on CRS-page 56, there is evidence that every additional dollar we spend on health care may be reducing median longevity.

I realize you could (and probably should) say "bs" to such a statement, if you think about issues like "what is more likely to kill you, a traffic accident or a poorly treated heart attack (from low funding)?"

You might say the traffic accident.

You still get to the issue of whether YOUR money really is being spent better on more health care, even for you.

Again, I personally would gain if the % GDP going to health care increased, so I do not say this for personal gain.

And that is not part of the discussion right now

Thai said...

Lot's of typos above. Sorry, I did not edit.

And I am sure you read this further down the very same blog?

OBloodyHell said...

> And I am sure you read this further down the very same blog?

Yes, Thai, but did you grasp it even vaguely?

It doesn't say what you appear to think it says, which is to even vaguely refute the first point...

Not only does it not do that, but he even makes the further point that there is a complex issue which ties to the elasticity concept via the fact that the pool of available healthcare options is continually expanding (not just "improving" -- better pain killers, for example, or replacing old techniques with newer ones, but expanding, as in new solutions for old problems which had no solutions before).

In other words, this isn't a classic "elasticity" example because that assumes expanding disposable income but a fixed array of available products. This is an expanding disposable income with an expanding array of available products.

Common sense says this leads inevitably to an expansion of money spent on it, since "health care" is clearly a strongly desirable element of anyone's life, and thus is going to be a primary catchbasin for disposable incomes.

OBloodyHell said...

Oh, and, at the heart of this is the obvious question:

> What I am unsure about is whether it really is good bang for the buck.

Why the F*** should *I* care if YOU think it is "good bang for the buck"?

Oh, because it's partly your money?

Not really yet, which is why it should NEVER be partly your money.

====
And here we get to the crux of the problem:
====
If we give up control over the HCI to the government, then we ARE giving up say in what treatments constitute "good bang for the buck" to people like Thai who WANT to control how we spend our money.

Simply put: Go to hell, Thai.

Stay out of my #$%^$%^$^ health care funding. I don't WANT you telling me how to spend MY money, Or how I must select which treatments I get based on YOUR life priorities.

.

.

It's none of your damned business!!!

.

Thai said...

Said by the person who didn't pay his health bill when he did need care in the first place?

Bizarro world yet again

Thai said...

Mankiw quote: "Beyond a large income elasticity and the effects of incentives Daron describes, there is a third logical possibility to explain a rising healthcare share of GDP:"

Bizarro world still yet again

OBloodyHell said...

> Said by the person who didn't pay his health bill when he did need care in the first place?

Ah, yes, said by the person who also didn't pay that bill.

That's between me and them, isn't it? It's not from your pocket, and should not be. Which is my point.

And I find it hilarious that you attempt to use this blatantly ad hominem attack rather than actually refuting the point.

It's remarkably typical of your shoddy reasoning tactics.

First off, I didn't demand the service in question. I didn't even ask for it. I could've refused it, but did not, I grant. And were it within my capacity to have paid for it, I would have, or I might have refused (yeah, probably not -- but I also would have had insurance in that case).

In fact, it wouldn't have been easy for me to have refused it, as the doctor in question would have literally forced me to sign a waiver saying I was acting against his advice.

I'm not even arguing in favor of the notion that there is no reform which would be a good idea. The system might be able to use such.

I'm just saying that creating a Social Security style slush fund for health care is hardly the way to go about it. It's categorically moronic and flat-out stupid.

IF "insuring the uninsured" is done, it should be done with private insurers, and vouchers to cover those who honestly can't afford it. As opposed to the 57//// no, 47///// no, *30* million Americans who are currently uncovered (a large chunk of those by choice).

In short, if you're going to use a model, the model should at least be that bastion of zero waste and maximum accountability, Food Stamps -- not a blatant Ponzi Scheme like Social Security.

In short, Thai, I repeat: Keep YOUR priorities the @#%$#%#$ out of my life, and everyone else's. Keep your priorities too, and about, yourself and your own life.

Your priorities -- I don't need 'em, I don't want 'em.

And if you can't get that, then we can certainly bang it home for you at some point...

OBloodyHell said...

> eep your priorities too,

"priorities to..."

Thai said...

Except we did all pay for you now didn't we?

OBloodyHell said...

> Except we did all pay for you now didn't we?

No, you didn't you arrogant jackass.

THAT hospital, THAT doctor, THIS community, yeah, you can argue that THEY paid.

YOU provided not one single whit, not one penny, not one jot, not one tittle or iota, so stop trying to claim any sort of higher ground...

AND DEAL WITH THE POINT WE BOTH KNOW YOU CAN'T DEFEND INSTEAD OF DEFLECTING it into personal territory with what is, once more, an irrelevant ad hominem matter.

I don't argue against the notion the system should be able to pay for individuals who, like me at the time, did not have the funds for insurance (though I qualified as a borderline case, as even *I* would ack that I might have diverted other funds towards having health insurance. I bet otherwise, and, if the treatment had not been offered, I would not have whined. In actuality, it was limited to defining the problem, not treating it... and I wasn't out demanding that someone else pay for my treatment...

In actual fact, the model that should exist is probably the automotive one, in which The State has a vested interest in people maintaining a minimum level of insurance, generally to deal with unpredictable semi-catastrophic matters such as my own, not "basic coverage for boo-boos". The cost of such to the state would be marginal, since something like a $1k or $2k deductible, with no coverage of basic issues would be called for.

But you don't want to TALK about anything like THAT... Do You???

======================================================
People might grasp that YET ANOTHER giant government PONZI scheme isn't a GOOD IDEA as a model for Health Care.
======================================================

I mean, huge trillion dollar SLUSH FUNDS do so WELL in the hands of government bureaucrats, don't they?

Thai said...

OBH, I am not interested in a long chat with you over what the health system should look like. To say I find you rude is an understatement.

But understand this: I staff 6 hospitals, over 100 physicians and mid-level's work for me, I know where the money goes and how things are funded.

If you do not pay for your care, whether you trust me or not, someone else will pay for your care.

The providers who took care of you do not provide that care for free- of this I am certain.

That you do not see your own cognitive dissonance on this issue (or apparently only partially see it) does not lend itself to my respecting your opinion.

OBloodyHell said...

> To say I find you rude is an understatement.

And to say you contribute nothing but hot air to any discussion is hardly news. That would be why I'm rude. I hate timewasting idiots like you who contribute nothing of any value. You continually throw out bald-faced assertions without supporting them in any way, and constantly try and redirect argument/discussion to side points of no relevance to the argument or value to it.

> But understand this: I staff 6 hospitals, over 100 physicians and mid-level's work for me, I know where the money goes and how things are funded.

Which means what? Since you're clearly in favor of setting up a giant Ponzi scheme, you apparently imagine you'll be better off under it somehow? Maybe so, in which case, you've got a clear conflict of interest.

> The providers who took care of you do not provide that care for free- of this I am certain.

> someone else will pay for your care.

No, they won't. Because, for the most part, I won't be asking.

And I damned sure won't be demanding someone else provide it.

And that's the difference, among other things. I don't claim the right to enslave someone else for my own benefit. You, however, think that's A-OK. You just want to be one of the ones in charge of the enslavement... No surprise there, you're one of Truman's "professional liberals".


...(continued)...

OBloodyHell said...

> That you do not see your own cognitive dissonance on this issue (or apparently only partially see it) does not lend itself to my respecting your opinion.

First, don't presume you have any clue as to my thought processes. My reasoning faculties are orders of magnitude better than yours, and my own self-observation and the associated self-analysis is the equal of anyone you've ever met. My holistic grasp of how all the different facets of how some system interact is generally better than most peoples', and it's particularly well developed in any arena in which I've written software for... including hospitals and the medical/research profession in several variant arenas. There are specialty functions which you grasp, at the moment, better than I do (and, unless I make an effort to understand, always will), yes.

But how your job interacts with a thousand others is my entire baliwick.

Understanding how systems work is my talent. How they break is a particularly highly developed skill.

You want to break health care?
Just do it like you want to.

Second, the only cognitive dissonance is yours, in that you can't grasp the difference between accepting, on a low level, some of what a wrong system offers without much resistance to it, and believing that said system should be in play and functioning as it is.

Cutting off my nose to spite my face is stupid. The system (the whole thing, not just health care) screws me enough in too many other ways for me to be stupid enough to refuse whatever trivial benefits it might throw my way on a rare occasion.

This does not mean I am either in favor of said system nor that I would choose said system given the opportunity to reform it in a sensible manner.

Sorry, a "government run Ponzi scheme" is NOT reform in a sensible manner.

To claim it is sensible does not require cognitive dissonance, it demands flat out, bald-faced denial.

And to think that it has any possibility of becoming anything but another complete looming disaster, such as that which Social Security is, also requires flat-out denial.

And I point out, once more -- that you have attempted to make this about ME, once more, rather than dealing with the problem at hand -- which is how the proposed healthcare system is NOT a giant Ponzi scheme, and how it will NOT result in a total disaster. Because any functional, rational analysis will fail to arrive at any other conclusion, and you know it.

So, what will your next attack on me be about, rather than DEALING WITH THE PONZI PROBLEM...?

Because I'm going to keep shoving that problem in your arrogant face, Thai, until you run out of hot air.

Just because I do enjoy knowing that you have no other response to it than ad hominem attacks.


And anyone else reading this will know that, too.

Bob in Los Angeles said...

Is anyone else observant of the correlation between the increase in the 2002 timeframe and the adoption of the Bush drug plan?

OBloodyHell said...

> Is anyone else observant...

What's the reason for the 1993 plateau?

bobn said...

What's the reason for the 1993 plateau?

There was no plateau in expenditures, only in the ratio to GDP - and the GDP was climbing steeply at that point.

That is a tricky little graph to try and draw conclusions from.

Oh, and the rapidly growing GDP was caused by the Clinton tax hike, just as the 80s growth was caused by the Reagan tax cuts, right? ;-)

OBloodyHell said...

> Oh, and the rapidly growing GDP was caused by the Clinton tax hike, just as the 80s growth was caused by the Reagan tax cuts, right? ;-)

Uh, bob, check the M1 for that time frame. There was a surge in investment triggered by a large influx of cheap business credit, creating a bubble (you remember those, right?) particularly in an industry called "electronics".

It does work, short term, but sooner or later the cheap business credit makes for bad investment decisions, which leads to a major contraction... this would be called the recession of 2000-2002.

Bush would make much the same error, along with a lot of idiots pushing bad/cheap loans on people who had no business getting them, thanks to your favorite housing regulation + misleading financial information put forth by your favorite regulatory body (SFC) and its financing agency (GSEs).