The cost of health services in the United States

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ruveyn
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30 Jun 2012, 11:13 am

The U.S. spends nearly 20 percent of of GDP on health services with is almost twice as high as the next highest.

The U.S. spends the most of health services and we are clearly not getting our money's worth.

Now that the government is in the game fore-square and full the costs will go even higher.

The U.S. government is one of the most incompetent governments on earth (among the advanced industrial countries). It is most skilled at making the implements of war and at nation wrecking and least skilled at governing domestically. By putting medical are in government hands we are virtually guaranteeing a shortage of proper medical care for the bulk of the population. The well off and and government employees will get first rate care, the rest of us will do less well but we will be grateful for the crumbs that are handed to us.

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visagrunt
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30 Jun 2012, 2:58 pm

I'm not sure that I share your expectation here.

Health insurance certainly does create an environment of moral hazard, in which providers are not incentivized to compete on price.

But insurers will increasingly develop monopsonist powers that will enable them to exercise greater controls on price. Furthermore, government will be increasingly incentivized to place restrictions on the marketplace in order to diminish its exposure to the costs of subsidizing health insurance premiums.

There are two ways this can play out in the decade: the insurance industry can take steps to ensure the rationalization and sustainability of the private market; or they can abandon the field, and leave the public sector to take over medically necessary care.

I think the private sector will be interested in ensuring the sustainability of their commercial interest.


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