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Medical inflation
Jul. 10th, 2011 09:36 amWhen inflation is used in the general sense, it refers to the increase or decrease in price of a pre-set basket of goods, selected to reflect what the average American spends money on. It's not perfect- adding or removing items causes discontinuities, and it's harder to select equivalent computers in 2000 and 1990 than to select equivalent grapes- but by and large, it's intended to reflect the price in the cost of *the same set of goods* over time. That is not how the term medical inflation is used. The numbers for medical inflation are simply "how much money what we are spending on health care."
Imagine if we calculated "silicon inflation", and simply counted all the money we spent on electronics. That's gone way up from the 1950s to today. I suspect but can't find the data to demonstrate the total spending on electronics is continuously rising. But the price for any individual thing is going down- my phone is about as powerful as the computer I went to college with, and costs 1/4 the price- we're just taking advantage of that cheapness to buy more awesome stuff. Saying we have silicon inflation would be misleading at best.
Medical inflation is a little more complicated than that, but the same thing is basically true. We're spending more on medical care because we now have new care available. Some of that is awesome kickass lifesaving care. Some of it is "lifestyle" care that is nonetheless valuable.* Some of it looks more expensive but leads to higher quality of life than the cheaper option, even if it doesn't show up in the life expectancy numbers. Most of the care that was really expensive 20 years ago is cheap now, because the patent has expired.
The wrinkle in my cute little story is that most of the care that was cheap 20 years ago is now slightly more expensive now. A doctor's visit for an ear infection doesn't require less labor than it did 20 years ago**, the antibiotics were already off patent so they haven't gotten any cheaper. Meanwhile, other sectors have gotten more efficient, so the earache visit is more expensive by comparison- i.e., it's inflated. On the other hand, if the antibiotics of 20 years ago don't work for you, we have some new ones. They're more expensive, but you'll keep your hearing.***
Which is not to say that modern medicine is perfect or is priced perfectly or that there's not a lot of unnecessary expense. But we should be accurate: If you wanted an 1980s standard of care now, it would cost less than it did in the 80s. If you want a modern standard of care, it will cost more, just like having my Droid 2 costs more than a phone-only phone.
*If if weren't for a constant string of new allergy medicines, I definitely wouldn't have graduated college with my second major, which means I wouldn't have the career I love so much. There's a reasonable chance I wouldn't have gotten into the college I did, and a slight chance I wouldn't have graduated high school. Lifestyle drugs are not the frivolities people sometimes describe them as.
**There's some inroads towards this, with using people like nurse practitioners or physician's assistants for simple things. We'll see how that goes.
***Antibiotics have a certain running-to-stay-in-place aspect because bacteria evolve. I'm pretty sure there's an even better example involving eye glasses, but I don't know the technology as well.
Imagine if we calculated "silicon inflation", and simply counted all the money we spent on electronics. That's gone way up from the 1950s to today. I suspect but can't find the data to demonstrate the total spending on electronics is continuously rising. But the price for any individual thing is going down- my phone is about as powerful as the computer I went to college with, and costs 1/4 the price- we're just taking advantage of that cheapness to buy more awesome stuff. Saying we have silicon inflation would be misleading at best.
Medical inflation is a little more complicated than that, but the same thing is basically true. We're spending more on medical care because we now have new care available. Some of that is awesome kickass lifesaving care. Some of it is "lifestyle" care that is nonetheless valuable.* Some of it looks more expensive but leads to higher quality of life than the cheaper option, even if it doesn't show up in the life expectancy numbers. Most of the care that was really expensive 20 years ago is cheap now, because the patent has expired.
The wrinkle in my cute little story is that most of the care that was cheap 20 years ago is now slightly more expensive now. A doctor's visit for an ear infection doesn't require less labor than it did 20 years ago**, the antibiotics were already off patent so they haven't gotten any cheaper. Meanwhile, other sectors have gotten more efficient, so the earache visit is more expensive by comparison- i.e., it's inflated. On the other hand, if the antibiotics of 20 years ago don't work for you, we have some new ones. They're more expensive, but you'll keep your hearing.***
Which is not to say that modern medicine is perfect or is priced perfectly or that there's not a lot of unnecessary expense. But we should be accurate: If you wanted an 1980s standard of care now, it would cost less than it did in the 80s. If you want a modern standard of care, it will cost more, just like having my Droid 2 costs more than a phone-only phone.
*If if weren't for a constant string of new allergy medicines, I definitely wouldn't have graduated college with my second major, which means I wouldn't have the career I love so much. There's a reasonable chance I wouldn't have gotten into the college I did, and a slight chance I wouldn't have graduated high school. Lifestyle drugs are not the frivolities people sometimes describe them as.
**There's some inroads towards this, with using people like nurse practitioners or physician's assistants for simple things. We'll see how that goes.
***Antibiotics have a certain running-to-stay-in-place aspect because bacteria evolve. I'm pretty sure there's an even better example involving eye glasses, but I don't know the technology as well.
