"Wealth and Health - Any Relationship"
Sydney M. Williams
Someone arguing, syllogistically, that good health and wealth are related would find themselves baffled. On a GDP per capita basis, the U.S. ranks fourth among nations. In terms of health spending as a share of GDP, the U.S. is number one. Yet the United States is fiftieth when it comes to life expectancy.
A report out this week from the University of Washington’s Institute for Health Metrics and Evaluation suggests that while life expectancy in the United States continues its upward trend, there are widening dichotomies between the rich and the poor. For example in Fairfax County, Virginia men had the longest life expectancy in the country – a little over 81 years, equivalent to life expectancies in Canada or Australia. Yet, one hundred and fifteen miles south, in Petersburg, Virginia, life expectancy, at 66.9 years, is one of the lowest in the U.S. for a male, and is equivalent to life expectancy in Guyana or India. Healthcare would not seem to be evenly distributed.
However, a report in the New England Journal of Medicine that was summarized on Bloomberg this morning has a “dog-bites-man” piece affirming that children on private insurance are able to get doctor’s appointments more quickly than those on Medicaid. Money talks, and unfortunately life is never completely fair. The real news would have been if children on Medicaid had found it easier to secure medical treatment than those on private insurance. That report will likely be used by liberals to argue that government (Medicaid) is not doing enough. It should, though, add fuel to the concept that healthcare reform should involve increased competition among insurance companies – the most obvious step would be the permitting and encouragement of cross state border competition.
The social welfare states of Europe, seemingly the model that the Obama administration would prefer to follow, spend less on healthcare than does the United States, yet have longer life expectancies. However, the costs of those programs have been a notable decline in GDP per capita. In 1991, six of the top ten countries ranked by per capita GDP, according to the World Bank, were European. Today, only two European countries make that list – Switzerland, which has gone from two to seven, and Norway that remained at four. In contrast, the U.S. moved up from seven to six. In 1991, Japan was on the list and France was number eleven. Today, Japan is number twenty-two and France is number twenty. The problem with socialism is that economies die a slow death, as incentives to produce are lessened and as capital for investment seeks better returns in other places.
Empirical observation suggests that our relatively low life expectancies are not so much a function of healthcare, or its availability, but are a consequence of bad eating habits and lack of exercise. Both of those factors, in my opinion, reflect poorly on our educational system. An additional cause, again in my opinion, is that the Bureau of Labor Statistics, in changing the factors that measure inflation, has done a disservice to policy makers. While Congress and the Federal Reserve take comfort in low core inflation, rising food costs have sent poorer consumers to fast food outlets.
The relevance of all of this can be seen (and heard) in the rancor in Washington – should the focus be on economic growth, or should government be concerned with healthcare and lifestyles? Or can we do both? Depending on which side prevails will largely determine the type of society in which we will live. The differences between the two political Parties in large part reflects the fact that there is so much at stake; thus the difficulty in coming to a consensus on the budget negotiations. Republicans have resorted to using the deficit card, while Democrats have avoided any sort of a budget proposal. Nevertheless, it is my sense that some sort of reconciliation, in the debt/deficit ceiling talks, is close. Vice President Biden has promised some legislation that can be sent to Congress before the July 4th recess. Any reconciliation may prove ephemeral, but such an event should raise confidence, at least temporarily.
The answer to the question above is that we can do both. We can decrease regulation and simplify the tax code to improve business development. (In spite if President Obama’s comments yesterday about ATMs and airport kiosks adding to unemployment, technology and productivity improvements are a natural factor in a dynamic and expanding economy.) Healthcare would benefit in allowing insurance companies to compete across state borders, in encouraging the growth of in-hospital clinics that can absorb some of the costs of emergency rooms, in reforming Tort laws, in focusing insurance on catastrophic events, and in encouraging the patient to be more involved in choosing doctors and procedures.
A friend of mine used to say, “My mother never said it would be easy.” Life never is, but problems are always most momentous when we are in their midst. In retrospect, most mountains seem like hills. It is a lesson that history teaches.
Thought of the Day
“Wealth and Health – Any Relationship?”
June 16, 2011Someone arguing, syllogistically, that good health and wealth are related would find themselves baffled. On a GDP per capita basis, the U.S. ranks fourth among nations. In terms of health spending as a share of GDP, the U.S. is number one. Yet the United States is fiftieth when it comes to life expectancy.
A report out this week from the University of Washington’s Institute for Health Metrics and Evaluation suggests that while life expectancy in the United States continues its upward trend, there are widening dichotomies between the rich and the poor. For example in Fairfax County, Virginia men had the longest life expectancy in the country – a little over 81 years, equivalent to life expectancies in Canada or Australia. Yet, one hundred and fifteen miles south, in Petersburg, Virginia, life expectancy, at 66.9 years, is one of the lowest in the U.S. for a male, and is equivalent to life expectancy in Guyana or India. Healthcare would not seem to be evenly distributed.
However, a report in the New England Journal of Medicine that was summarized on Bloomberg this morning has a “dog-bites-man” piece affirming that children on private insurance are able to get doctor’s appointments more quickly than those on Medicaid. Money talks, and unfortunately life is never completely fair. The real news would have been if children on Medicaid had found it easier to secure medical treatment than those on private insurance. That report will likely be used by liberals to argue that government (Medicaid) is not doing enough. It should, though, add fuel to the concept that healthcare reform should involve increased competition among insurance companies – the most obvious step would be the permitting and encouragement of cross state border competition.
The social welfare states of Europe, seemingly the model that the Obama administration would prefer to follow, spend less on healthcare than does the United States, yet have longer life expectancies. However, the costs of those programs have been a notable decline in GDP per capita. In 1991, six of the top ten countries ranked by per capita GDP, according to the World Bank, were European. Today, only two European countries make that list – Switzerland, which has gone from two to seven, and Norway that remained at four. In contrast, the U.S. moved up from seven to six. In 1991, Japan was on the list and France was number eleven. Today, Japan is number twenty-two and France is number twenty. The problem with socialism is that economies die a slow death, as incentives to produce are lessened and as capital for investment seeks better returns in other places.
Empirical observation suggests that our relatively low life expectancies are not so much a function of healthcare, or its availability, but are a consequence of bad eating habits and lack of exercise. Both of those factors, in my opinion, reflect poorly on our educational system. An additional cause, again in my opinion, is that the Bureau of Labor Statistics, in changing the factors that measure inflation, has done a disservice to policy makers. While Congress and the Federal Reserve take comfort in low core inflation, rising food costs have sent poorer consumers to fast food outlets.
The relevance of all of this can be seen (and heard) in the rancor in Washington – should the focus be on economic growth, or should government be concerned with healthcare and lifestyles? Or can we do both? Depending on which side prevails will largely determine the type of society in which we will live. The differences between the two political Parties in large part reflects the fact that there is so much at stake; thus the difficulty in coming to a consensus on the budget negotiations. Republicans have resorted to using the deficit card, while Democrats have avoided any sort of a budget proposal. Nevertheless, it is my sense that some sort of reconciliation, in the debt/deficit ceiling talks, is close. Vice President Biden has promised some legislation that can be sent to Congress before the July 4th recess. Any reconciliation may prove ephemeral, but such an event should raise confidence, at least temporarily.
The answer to the question above is that we can do both. We can decrease regulation and simplify the tax code to improve business development. (In spite if President Obama’s comments yesterday about ATMs and airport kiosks adding to unemployment, technology and productivity improvements are a natural factor in a dynamic and expanding economy.) Healthcare would benefit in allowing insurance companies to compete across state borders, in encouraging the growth of in-hospital clinics that can absorb some of the costs of emergency rooms, in reforming Tort laws, in focusing insurance on catastrophic events, and in encouraging the patient to be more involved in choosing doctors and procedures.
A friend of mine used to say, “My mother never said it would be easy.” Life never is, but problems are always most momentous when we are in their midst. In retrospect, most mountains seem like hills. It is a lesson that history teaches.
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