weinraub’s words

Had a chance to tour the nuclear powered, Nimitz-class aircraft carrier USS Ronald Reagan during its recent visit to Phuket.

Awesome.

In a previous post, I strong lauded an article by David Goldhill in The Atlantic about health care. While my overall opinion is unchanged – the piece is excellent, a clear-eyed, dead-on assessment of what is wrong with America health care – the article does contain one bit which could be improved.

While exploring the growth of the health care payments, the article notes:

Between 1970 and 2006, annual Medicare payments to hospitals grew by roughly 3,800 percent, from $5 billion to $192 billion. Total annual hospital-care costs for all patients grew from $28 billion to almost $650 billion during that same period.

Ok, got it: big numbers, growing by a lot.

But a figure of 3,800% aggregate growth over 36 years is hard to understand. Is that really so large? I imagine so, but who knows what to expect over a 36 year time-frame?

For most people, it is only average annual growth rate that has any meaning. People have a sense of what kind of annual rates to expect on their credit cards, on their mortgages, on their stock portfolios, on company revenues, on their annual salary raises, etc.

The average annual growth rates for the numbers above are approx 14.5% for annual Medicare payments, 17.9% for annual hospital-care costs.

Perhaps it’s less dramatic than quoting billions of dollars and claiming huge multiples over long time frames. But the numbers are more meaningful.

And those are both very scary growth rates.

2009-09-12 Update: It has been pointed out to me that we need to consider not only average annual growth, but rather average annual per capita growth. After all, the population was increasing during that time, so it’s only reasonable that costs would increase somewhat inline with growth. So true. Can’t believe I missed that.

Annual US population growth during that period was less than 2%. So the average annual per capita spending on health costs described above were no more than 12.5% and 15.9%. Still pretty scary.

David Brooks’ piece in today’s NY Times suggesting some fundamental reading material for President Obama as he attempts to push forward with health-care reform contains a reference to an article by David Goldhill in The Atlantic called “How American Health Care Killed My Father”.

The article itself is excellent all the way through, but it contains something that I have long opined. Goldhill says it better than I:

But health insurance is different from every other type of insurance. Health insurance is the primary payment mechanism not just for expenses that are unexpected and large, but for nearly all health-care expenses. We’ve become so used to health insurance that we don’t realize how absurd that is…

We all believe we need comprehensive health insurance because the cost of care – even routine care – appears too high to bear on our own. But the use of insurance to fund virtually all care is itself a major cause of health care’s high expense.

Insurance is probably the most complex, costly, and distortional method of financing any activity; that’s why it is otherwise used to fund only rare, unexpected, and large costs. Imagine sending your weekly grocery bill to an insurance clerk for review, and having the grocer reimbursed by the insurer to whom you’ve paid your share. An expensive and wasteful absurdity, no?

Damn right.

Also:

A more consumer-centered health-care system would not rely on a single form of financing for health-care purchases; it would make use of different sorts of financing for different elements of care – with routine care funded largely out of our incomes; major, predictable expenses (including much end-of-life care) funded by savings and credit; and massive, unpredictable expenses funded by insurance.

The whole article is just right on. And, for an article so critical of insurance as a form of health care financing, it is surprisingly conservative in its basic premise: remove the distortions and moral hazard that are the natural consequence of our current reliance on comprehensive health insurance, and allow the competitive market for health services to function with patients, not insurance companies, private or otherwise, as the true consumers.

Becca still seems to trip over usage of the words “many” and “much”.

Of course, we can see that the issue is enumerability and countability.

So we could say “I ate so much pizza that I gained 10 pounds” or “I ate so many slices of pizza that I gained 10 pounds”. The difference is that I can enumerate and count the slices. [Well, at least in theory. I don't think it's possible to really count the number of slices I ate on my last trip home, hence, the 10 pounds. Groan...]

So, as I dole out crackers to the kids, Becca will say something like “Daddy, Daddy, I want much, please.” Comprehensible, of course, but not quite right.

Still, I have no complaints at all about the one I heard last night as she was falling asleep beside me:

“I love you so many, Daddy.”

Sweet dreams, indeed.

From the Onion:

New Rims, Spoiler Fail To Make Altis Go Faster

Disclosure: I own a 2001 Toyota Soluna (the equivalent of a Tercel) that actually has a rear spoiler.

Excuse: Bought the car used, the spoiler actually came as part of the deal.