The MA “universal coverage” plan is very similar to what’s being proposed on a much grander scale by the House. Our experimental lab has been up and running for a couple of years now, and the results are not as predicted by the proponents, but rather closely follow the predictions of the nay-sayers. Their cost curve has indeed bent, but not downward. We should be paying attention, no?

For the most part, we have individually and collectively chosen more health care, so that the costs of ever more and better health care have risen faster than many other parts of out budgets.

John Burke is right. Been saying just that for years. Demand for health care is relatively inelastic, and excess cost growth is driven by rising incomes and technological advancement. If we eliminate all the inefficiencies, rationalize the distribution, etc., it will be but a flat spot on the rising curve as the new efficiencies are absorbed, because those are not things that drive the excess cost growth. The only way to stop excess cost growth in the face of inelastic demand and rising income and newer (more expensive) technology is by forced rationing and/or forced restriction of tech advancement. Now, sooner or later supply will inevitably reach the elastic range of demand and the curve will bend and flatten, but that doesn’t look to be on the horizon anytime soon. Given that what is being purchased is quality of life and life itself, it could be a long wait.

To re-emphasize John Burke’s point, consider: overall spending growth rates on veterinary services have almost exactly matched overall spending growth rates on human medical services for the last thirty years. Yet insurance plays almost no role in veterinary services. It’s strictly a function of demand and income and technology. Newer technology costs more than old tech. We pay more because we want more. We spend that much because (collectively) we are willing to.

The way we are now supposed to view health care “reform” begins with statements like, “We must contain the sky-rocketing costs of health care, which have risen at a far faster rate than generall inflation and now make up 16% or more of GDP.”

Few people seem to want to challenge the premise that this is a “problem.” Yet, once the average person — even more, all of us collectively — have paid for food, shelter, clothing and taxes, everything else is a matter of trade-offs. We can have more entertainment, more beer and booze, more lawn care, more vacations, etc. — or we can have more health care. For the most part, we have individually and collectively chosen more health care, so that the costs of ever more and better health care have risen faster than many other parts of out budgets. But not all. We also spend a great deal more on education than we did 40 0r 50 years ago — and that expenditure has risen at a faster-than-inflation rate.

For that matter, what we spend on automobiles has risen faster as well. With a growing economy and more money to spend, the average household has more cars than that of 50 years ago. And cars are more expensive (adjusted for inflation) because they are safer, more fuel efficient, and less polluting. On top of that, the average car has more electronic and computerized gizmos than the average car of 50 years ago. Finally, fewer people fix even minor car problems themselves and repairs and parts are more expensive. Add it al up and the total we spend on cars has risen faster than GDP. But so what? By itself, that’s just a mark of our greater wealth.

Ditto for health care.

Another way to look at health care costs is that it’s money driving one of our fastest-growing, job-producing industries. Over the past year, there has been little recessionary effect in health care, where job demand has continued to be strong.

But isn’t it still a “problem” given that other advanced countries spend less with no loss of life expectancy? Maybe, but this argument glosses over the fact that stats may be misleading. For example, Americans may have more health problems for a wide range of cultural reasons than Swedes, so they need more care. With an open system, Americans demand more health care, which may be foolish but it’s not necessarily a problem. Other nations’ expenditure stats don’t account for de facto rationing. And in any case, life expectancy may not be te only measure of health care benefits (e.g., you may not live longer because you have a hip replaced or a coronary bypass, but you’ll enjo what life you have a lot more).

The problem with US health care is that an unacceptably large number of people do not have insurance. IMHO, all these references to costs are an effort to find political cover for the inevitably higher costs of expanding coverage. We can only have a sensible debate when those higher costs are acknowledged openly.