Yeah, I think that makes sense. Looking at some of the graphs in that link, the fastest growing category is "Personal Care Aides", ie people who take care of old people in nursing homes and stuff. Which makes sense why that's growing: as people live longer and longer the fraction of old people increases. In some cases, old people would have been taken care of by their families instead of by a paid health care worker. But in many other cases they would have just died.
I suppose from this perspective then, cost disease is largely akin to social security. A bunch of young people pay in more than they take out for their insurance and taxes, and then when they're old they are subsidized by the next generation of young people. Which seems like a massive principal agent problem, but not one with an easy solution unless we want to let all the old poor people die in order for young people to keep more of their own money and get better cheaper healthcare while they're young (but not live as long unless they invest their extra money in a healthcare retirement account for themselves)
Well to be fair I do think there is a cost disease in medicine and a pile of money. It's just that the pile of money consists of payment for actual medical treatments given to non-fraudulent people.
There's no shortage of evidence that marginal medical consumption doesn't improve health at all up to and including 3 RCTs (RAND, Oregon and Karnataka) and one national medical system designed to reduce this waste (Singapore). The basic idea is that if medicine has a low marginal cost, people consume more of it even if they don't need it. It makes them feel better but doesn't improve health.
In contrast, if you make them pay 70-90% of the cost (up to a high cap), they don't spend money unless they really need it.
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Notes -
Yeah, I think that makes sense. Looking at some of the graphs in that link, the fastest growing category is "Personal Care Aides", ie people who take care of old people in nursing homes and stuff. Which makes sense why that's growing: as people live longer and longer the fraction of old people increases. In some cases, old people would have been taken care of by their families instead of by a paid health care worker. But in many other cases they would have just died.
I suppose from this perspective then, cost disease is largely akin to social security. A bunch of young people pay in more than they take out for their insurance and taxes, and then when they're old they are subsidized by the next generation of young people. Which seems like a massive principal agent problem, but not one with an easy solution unless we want to let all the old poor people die in order for young people to keep more of their own money and get better cheaper healthcare while they're young (but not live as long unless they invest their extra money in a healthcare retirement account for themselves)
Well to be fair I do think there is a cost disease in medicine and a pile of money. It's just that the pile of money consists of payment for actual medical treatments given to non-fraudulent people.
There's no shortage of evidence that marginal medical consumption doesn't improve health at all up to and including 3 RCTs (RAND, Oregon and Karnataka) and one national medical system designed to reduce this waste (Singapore). The basic idea is that if medicine has a low marginal cost, people consume more of it even if they don't need it. It makes them feel better but doesn't improve health.
In contrast, if you make them pay 70-90% of the cost (up to a high cap), they don't spend money unless they really need it.
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