20 ms·

Why Health Care Costs Exploded After World War II

50 points by clarkmoody 10y ago

hammock 10y ago
The money quote: What were the real reasons for the return of medical price inflation? A: Undoubtedly, moral hazard.... There are two aspects to moral hazard that are at play in health care. [...] The [second, more important] aspect of moral hazard stems from the fact that every single medical encounter or medical act can be said to be ordered toward the preservation of life or toward the well-being of the person.This by itself presents a strong incentive to use medical services, and the behavior should not have the same negative connotation as in the first aspect of moral hazard. In fact, economist John Nyman has argued that the behavior by which insured people would use more health care is a social good. The bottom line is that one does not need to be sick to utilize medical services and that all that is needed is a plausible argument that if a medical action is taken, life may be prolonged or enhanced. Such plausible arguments are not hard to come by, especially in a health care system where doctors and hospitals are largely paid on a fee-for-service basis. There is no objective limit on what can be considered “desirable care,” and if cost is not a consideration, more medical actions will be taken.
- ap3 10y ago
  When we had a $10 copay for in network visits we took the kids in every time they were a little sick. With 3 kids thst could mean 3 visits in one week. My copays are now $35, it adds up - if was paying full price I can see how I would first call the nurse hotline or go to the pharmacy to describe the symptoms and get OTC medication
  - dionidium 10y ago
    we took the kids in every time they were a little sick Why? There's really not a lot a doctor is going to do for your kid's sniffles. Just wait it out. Even if it were free, I wouldn't take a kid in for a minor illness. Hell, even if you paid me a nominal amount, I wouldn't waste the time. This is an education problem. It sounds like you're taking your kids to the doctor too often, regardless of cost.
  - mikestew 10y ago
    I never understood this amongst my cow-orkers when I worked at Microsoft ("co-pay? What co-pay?"). I don't care if a doctor visit is free, I'm not so starved for entertainment or human contact that I'm going to drag kids to a doctor because they have the sniffles.
    - benjohnson 10y ago
      A lot of insurance companies also have a heath-line where you can call a Nurse and give they symptoms - they either tell you wait it out or go to the doctor. Saved us a bunch of time and money - and saved my life: I have a respiratory infection that I refused to see the doctor about. My wife eventually called the nurse, gave the symptoms and duration. Turns out, I was really close to dying.
    - wutbrodo 10y ago
      That's a pretty uncharitable way to look at it. I don't have kids but it's a lot easier to imagine that they're thinking something more like "I'd rather not take chances with my kids' health". It may not be particularly rational when you consider the time cost, but it's a hell of a lot more understandable than insultingly assuming they're "starved for entertainment or human contact". In general, plausible explanations that don't require being a dick tend to be better.
      - mikestew 10y ago
        In general, plausible explanations that don't require being a dick tend to be better. Oops, guess we both failed. I wasn't "explaining" anything, as I clearly stated that I didn't understand it. One will assume what they assume when there is a lack of information, whether you find it insulting or not.
lumberjack 10y ago
Where is the source to support that claim of moral hazard? The US has much less doctor consultations per person per year than other OECD countries which is an indication of the contrary: Page 101: http://www.oecd-ilibrary.org/docserver/download/8115071e.pdf http://www.oecd-ilibrary.org/docserver/download/8115071e.pdf
- alpsgolden 10y ago
  I'm fairly skeptical of claims of moral hazard on the part of the patient. Even if healthcare is free in monetary terms, it still has a big cost in time and annoyance. Going to the doctor is annoying. Seeing a specialist is annoying. Getting surgery is the worst thing ever. Where moral hazard likely plays a bigger role is on the part of the doctor. It is always better to prescribe another test or a pill, or some precautionary treatment. It both makes you money and covers your ass from lawsuits, and you don't feel guilty about making your patient pay for it because insurance will cover it. This is a pretty good case study of how the process can get very dysfunctional: http://www.newyorker.com/magazine/2009/06/01/the-cost-conundrum http://www.newyorker.com/magazine/2009/06/01/the-cost-conund...
  - maxerickson 10y ago
    If the patient had to pay the full cost of the tests, they might take a bigger interest in how necessary they are and whether the prices make sense. So they are participating in whatever moral hazard is there.
    - zepto 10y ago
      The patients qualified to do that are called doctors.
      - maxerickson 10y ago
        Unqualified patients can ask their doctor to explain what the test is for. Like, what risks does it rule out, is there much danger in waiting a week instead, etc. There's a whole line of questions that absolutely don't require an MD. Just asking a few questions is already a big difference from doing whatever the doctor says.
anonymousDan 10y ago
If moral hazard really is the problem (which I doubt), then surely the simplest way to guard against it is to introduce an "excess" charge that must be paid for each consultation?
- georgeecollins 10y ago
  Isn't that what a co-pay is for?
xyzzy4 10y ago
The main issue is that they artificially limit the number of doctors.
- Loughla 10y ago
  Explain yourself, I don't understand how they're artificially limited.
  - xyzzy4 10y ago
    "Medical-school applicants basically need to have near-perfect GPA's and very high MCAT scores to get accepted to an accredited U.S. institution. Even among that much better qualified pool of applicants, only about 50 percent get accepted." http://www.cnbc.com/2015/04/30/doctor-shortages-heres-the-real-culprit-commentary.html http://www.cnbc.com/2015/04/30/doctor-shortages-heres-the-re...
    - maxerickson 10y ago
      There's medical school graduates that can't get into residency programs. The bottleneck in the US right now is residency slots.
      - refurb 10y ago
        And the reason for that is that Medicare (CMS really) pays for all the residency slots. There is pressure to keep the Medicare budget from growing too fast which translates to slow/no growth in residency openings.
        maxerickson 10y ago
        That's an explanation, not a reason. Providers with billions of revenue could easily afford to fund slots. They'd probably even benefit financially from it.
        10y ago
jchrisa 10y ago
No mention of the switch to sedentary lifestyles and processed food, which also happened at the same time.
- gaius 10y ago
  Mass automobile ownership off of manufacturing capacity built for WW2...
  - sn9 10y ago
    And the not unrelated explosion of the interstate highway system, the rise of the suburbs and the corresponding decline of the walkability of many population centers. Declining rates of physical activity, a rise in cheap subsidized processed food, and a TV in every home . . . .
daxorid 10y ago
What's always missing from these discussions is culture. Nobody wants to point out that a century ago, the zeitgeist regarded death as a natural thing, and took only nominally prudent steps to avoid it. Now, we will expend enormous efforts, all available options, just to trivially extend the life of anyone and everyone with health problems.
- hippich 10y ago
  While your argument makes sense from practical short-term standpoint, I think it also should be viewed more long-term. Each effort to extend life / save from immediate death brings experience, technology advancement. And what today might be just a short extension of life, in few years might bring several years of quality life, and in 100 years - even more.
  - hx87 10y ago
    Most of these short-term life extending efforts basically amounts to putting people on chemical and mechanical life support, which isn't going to be a source of significant improvements in life quality.
  - coredog64 10y ago
    That's patently false. If you've got a drooling Alzheimer patient that has given up on their will to live, it's pointless to leave them hooked up to machines, prolonging their last painful days. There's no frontier advancement happening, just rent extraction.
- hammock 10y ago
  But which is the chicken and which is the egg?
- dionidium 10y ago
  Did health care change because our attitudes about death changed or did our attitudes change as health care improved? You seem to think it's the former, but I am almost certain it's the latter.
roymurdock 10y ago
Their explanation of moral hazard [1] is incorrect. A moral hazard occurs when someone who is insured subsequently pays less attention to preventing the deterioration/damage of the ensured object, in this case one's own body, than would otherwise be the case if they did not have insurance. People do not pay less attention to their health because they know they are insured. Nobody wants to be sick or obese, and it is an absurd, academic, and out-of-touch to argument. It makes sense to apply the moral hazard concept to something like a car (driving recklessly if insured) but not something so integral as personal health. Health care costs exploded because people (myself included) are weak-willed and uneducated, and will satiate their cravings for sweet/salty/mind-altering without a strong government to provide adequate health education, curb the bombardment of junk food/tobacco/alcohol/drug advertising, subsidize healthy lunches in school, and keep pharma regulatory capture in check. Does anyone think: "I'll eat McDonalds twice a week, smoke a pack a day, and drink all I want because I'm insured." Come on... [1] "the tendency for insured persons to utilize medical services more than they would if they did not have insurance"
- savanaly 10y ago
  How is their explanation incorrect? Your explanation is simply a rewording of theirs. Of course, apart from that you are disagreeing that it exists at all for health insurance. But the fact that consumers have "skin in the game" as it were in addition to the insurance doesn't mean there's no potential for moral hazard. No doubt, if there were no personal wellbeing implications of treating yourself unhealthily, moral hazard would be even more severe, but it still exists in some non-zero quantity as long as you have insurance. Does it explain all the effects that the article claims it explains? Not necessarily.
  - dionidium 10y ago
    Grandparent is making a distinction between, "I'll engage in less healthy behavior because I'm insured" vs. "I will use more health care because I am insured." The latter doesn't imply the former.
- geodel 10y ago
  > Does anyone think: "I'll eat McDonalds twice a week, smoke a pack a day, and drink all I want because I'm insured." Come on... No, they will think like well I have earned through hard work to enjoy simple pleasures of life. Expectation is government or someone should take care of them with that bazillion dollar healthcare budgets.
HarryHirsch 10y ago
The alternative theory is that modern medicine was born around the time of World War II. That was the time when the pharmaceutical industry really took off and, for the first time in human history, permitted physicians to treat disease. Before that, with the notable exception of surgery, they could only give a prognosis and hope for the best. Now they can prescribe pills that do work. There was a reason that Hitler promoted homoeopathy and all sorts of natural healing stuff - he could claim his Germanic naturopaths did not perform worse than the (traditionally Jewish) medical faculties of the time. [1] [1] Before anyone throws about accusations of antisemitism - this is the thesis that Viktor Klemperer makes in this "Lingua Tertii Imperii". It's recommended reading about the insanity of Nazi Germany.
- rskar 10y ago
  Interestingly, Viktor (Victor?) had doctors in his family, such as Georg Klemperer (see https://translate.google.com/translate?hl=en&sl=de&u=https://de.wikipedia.org/wiki/Georg_Klemperer&prev=search https://translate.google.com/translate?hl=en&sl=de&u=https:/...): [He] was a German internist. ... [He was] a son of the Reform rabbi Wilhelm Klemperer and had seven siblings, four sisters and three brothers. His brothers were the writer and literary scholar Victor Klemperer , the physician Felix Klemperer and the lawyer Berthold Klemperer (1871-1931). The conductor Otto Klemperer (1885-1973) was his cousin. As to Viktor or Victor, this makes me think its the same person: https://translate.googleusercontent.com/translate_c?depth=1&hl=en&prev=search&rurl=translate.google.com&sl=de&u=https://de.wikipedia.org/wiki/Victor_Klemperer&usg=ALkJrhiShmqv93XzDsblN4XoVbTa_MGTRA https://translate.googleusercontent.com/translate_c?depth=1&... . The article there mentions his treatise LTI - notebook of a philologist (LINGUA Tertii Imperii: Language of the Third Reich).
wellbehaved 10y ago
Barking up the wrong tree. Costs are driven down mainly by innovations at the production side not due to consumer behavior. The cost problem is almost entirely due to myth, paranoia, and authority worship, which means innovation that would drive down costs comes very slowly and painfully. These are the wages of refusing to question dogma.
- partiallypro 10y ago
  No on denies that innovations drive down costs, this is from a libertarian blog...which basically worships market innovations and their effect on driving down costs. But, if you ignore bad incentives and human behaviors in terms of driving up costs, you're gonna have a bad time.
  - wellbehaved 10y ago
    You missed my point, which was that factors that influence productivity are more fundamental than those that influence consumption. Nobody (sane) enjoys going the doctor.
    - topspin 10y ago
      No one missed your point. Your point is obvious and terrible. You want the demand side of the equation ignored. Your world view requires that demands for health care be unrestrained and unquestioned and you perform whatever mental contortions you must to allow that view to remain plausible inside your head. You're mentality is common and identified in the story here: "many academics and health care leaders found the idea of health insurance so appealing as to have a bias blinding them to the negative impact of moral hazard" Your point has not been missed. It's just wrong. But don't worry; you have lots of company and you won't be left wanting for support from lots of other wrong people.
      - wellbehaved 10y ago
        Yes, you missed my point, because no, I don't want the demand side of the equation ignored.
AzzieElbab 10y ago
Moral hazard is universal, while US health care costs are out of this world
rasz_pl 10y ago
Wait, there was real Health Care before World War II???
paviva 10y ago
Rising health care costs are a classic example of the tragedy of the commons[1]. In general, human needs are boundless, and as long as the people who make decisions about healthcare use do not bear the associated costs, health care costs will keep increasing. The costs are two-fold : the financial cost of the medication, the doctor’s visits or the procedure and the moral or existential cost to the person who receives the care. I argue that even in a fully subsidized, “free” healthcare system costs would not rise as fast as they are now in the USA (and elsewhere in the developed world) as long as healthcare use was only decided by the patient, who is the only one to suffer during futile procedures. It is not surprising that care is most expensive in the ICU and the long-term facilities for the demented or otherwise disabled — in those setting the patients themselves do not decide, and their families bear nor the actual costs nor the sufferings incurred. Anecdotally, those family members who care the least in everyday life, who never come to see the patient, are those who push the most for expensive, pointless care, who demand that “everything be done”. Every day, demented patients are shipped, alone and frightened, to emergency rooms, where they are put into restraints and treated for their tenth episode of aspiration pneumonia while their next of kin stay home watching TV and never bother to come. [1] https://en.wikipedia.org/wiki/Tragedy_of_the_commons https://en.wikipedia.org/wiki/Tragedy_of_the_commons
saturdaysaint 10y ago
I'm surprised that the libertarian Misces Institute doesn't mention the mainstream theory that fringe benefits like health care were due to high taxes - %93 was the top rate. So employers were incentivized to attract employees using benefits.
- maxerickson 10y ago
  What percentage of the workforce was paid that rate? I imagine it was small enough (and they were wealthy enough) that it was not a big driver. The article does mention an incentive to provide benefits over wages though: More importantly, insurance programs benefited greatly from the federal Stabilization Act of 1942 which allowed companies facing scarce labor (during a time of price and wage control) to compete for this labor by offering health insurance benefits and by making those benefits exempt from payroll taxes.
  - sn9 10y ago
    It was mostly jacked that high so that American businessman wouldn't profit too much from WWII.

50 points by clarkmoody 10y ago

The money quote: What were the real reasons for the return of medical price inflation? A: Undoubtedly, moral hazard.... There are two aspects to moral hazard that are at play in health care. [...] The [second, more important] aspect of moral hazard stems from the fact that every single medical encounter or medical act can be said to be ordered toward the preservation of life or toward the well-being of the person.This by itself presents a strong incentive to use medical services, and the behavior should not have the same negative connotation as in the first aspect of moral hazard. In fact, economist John Nyman has argued that the behavior by which insured people would use more health care is a social good. The bottom line is that one does not need to be sick to utilize medical services and that all that is needed is a plausible argument that if a medical action is taken, life may be prolonged or enhanced. Such plausible arguments are not hard to come by, especially in a health care system where doctors and hospitals are largely paid on a fee-for-service basis. There is no objective limit on what can be considered “desirable care,” and if cost is not a consideration, more medical actions will be taken.

ap3 10y ago
When we had a $10 copay for in network visits we took the kids in every time they were a little sick. With 3 kids thst could mean 3 visits in one week. My copays are now $35, it adds up - if was paying full price I can see how I would first call the nurse hotline or go to the pharmacy to describe the symptoms and get OTC medication
- dionidium 10y ago
  we took the kids in every time they were a little sick Why? There's really not a lot a doctor is going to do for your kid's sniffles. Just wait it out. Even if it were free, I wouldn't take a kid in for a minor illness. Hell, even if you paid me a nominal amount, I wouldn't waste the time. This is an education problem. It sounds like you're taking your kids to the doctor too often, regardless of cost.
- mikestew 10y ago
  I never understood this amongst my cow-orkers when I worked at Microsoft ("co-pay? What co-pay?"). I don't care if a doctor visit is free, I'm not so starved for entertainment or human contact that I'm going to drag kids to a doctor because they have the sniffles.
  - benjohnson 10y ago
    A lot of insurance companies also have a heath-line where you can call a Nurse and give they symptoms - they either tell you wait it out or go to the doctor. Saved us a bunch of time and money - and saved my life: I have a respiratory infection that I refused to see the doctor about. My wife eventually called the nurse, gave the symptoms and duration. Turns out, I was really close to dying.
  - wutbrodo 10y ago
    That's a pretty uncharitable way to look at it. I don't have kids but it's a lot easier to imagine that they're thinking something more like "I'd rather not take chances with my kids' health". It may not be particularly rational when you consider the time cost, but it's a hell of a lot more understandable than insultingly assuming they're "starved for entertainment or human contact". In general, plausible explanations that don't require being a dick tend to be better.
    - mikestew 10y ago
      In general, plausible explanations that don't require being a dick tend to be better. Oops, guess we both failed. I wasn't "explaining" anything, as I clearly stated that I didn't understand it. One will assume what they assume when there is a lack of information, whether you find it insulting or not.

lumberjack 10y ago

Where is the source to support that claim of moral hazard? The US has much less doctor consultations per person per year than other OECD countries which is an indication of the contrary: Page 101: http://www.oecd-ilibrary.org/docserver/download/8115071e.pdf http://www.oecd-ilibrary.org/docserver/download/8115071e.pdf

alpsgolden 10y ago
I'm fairly skeptical of claims of moral hazard on the part of the patient. Even if healthcare is free in monetary terms, it still has a big cost in time and annoyance. Going to the doctor is annoying. Seeing a specialist is annoying. Getting surgery is the worst thing ever. Where moral hazard likely plays a bigger role is on the part of the doctor. It is always better to prescribe another test or a pill, or some precautionary treatment. It both makes you money and covers your ass from lawsuits, and you don't feel guilty about making your patient pay for it because insurance will cover it. This is a pretty good case study of how the process can get very dysfunctional: http://www.newyorker.com/magazine/2009/06/01/the-cost-conundrum http://www.newyorker.com/magazine/2009/06/01/the-cost-conund...
- maxerickson 10y ago
  If the patient had to pay the full cost of the tests, they might take a bigger interest in how necessary they are and whether the prices make sense. So they are participating in whatever moral hazard is there.
  - zepto 10y ago
    The patients qualified to do that are called doctors.
    - maxerickson 10y ago
      Unqualified patients can ask their doctor to explain what the test is for. Like, what risks does it rule out, is there much danger in waiting a week instead, etc. There's a whole line of questions that absolutely don't require an MD. Just asking a few questions is already a big difference from doing whatever the doctor says.

anonymousDan 10y ago

If moral hazard really is the problem (which I doubt), then surely the simplest way to guard against it is to introduce an "excess" charge that must be paid for each consultation?

georgeecollins 10y ago
Isn't that what a co-pay is for?

xyzzy4 10y ago

The main issue is that they artificially limit the number of doctors.

Loughla 10y ago
Explain yourself, I don't understand how they're artificially limited.
- xyzzy4 10y ago
  "Medical-school applicants basically need to have near-perfect GPA's and very high MCAT scores to get accepted to an accredited U.S. institution. Even among that much better qualified pool of applicants, only about 50 percent get accepted." http://www.cnbc.com/2015/04/30/doctor-shortages-heres-the-real-culprit-commentary.html http://www.cnbc.com/2015/04/30/doctor-shortages-heres-the-re...
  - maxerickson 10y ago
    There's medical school graduates that can't get into residency programs. The bottleneck in the US right now is residency slots.
    - refurb 10y ago
      And the reason for that is that Medicare (CMS really) pays for all the residency slots. There is pressure to keep the Medicare budget from growing too fast which translates to slow/no growth in residency openings.
      - maxerickson 10y ago
        That's an explanation, not a reason. Providers with billions of revenue could easily afford to fund slots. They'd probably even benefit financially from it.
        10y ago

jchrisa 10y ago

No mention of the switch to sedentary lifestyles and processed food, which also happened at the same time.

gaius 10y ago
Mass automobile ownership off of manufacturing capacity built for WW2...
- sn9 10y ago
  And the not unrelated explosion of the interstate highway system, the rise of the suburbs and the corresponding decline of the walkability of many population centers. Declining rates of physical activity, a rise in cheap subsidized processed food, and a TV in every home . . . .

daxorid 10y ago

What's always missing from these discussions is culture. Nobody wants to point out that a century ago, the zeitgeist regarded death as a natural thing, and took only nominally prudent steps to avoid it. Now, we will expend enormous efforts, all available options, just to trivially extend the life of anyone and everyone with health problems.

hippich 10y ago
While your argument makes sense from practical short-term standpoint, I think it also should be viewed more long-term. Each effort to extend life / save from immediate death brings experience, technology advancement. And what today might be just a short extension of life, in few years might bring several years of quality life, and in 100 years - even more.
- hx87 10y ago
  Most of these short-term life extending efforts basically amounts to putting people on chemical and mechanical life support, which isn't going to be a source of significant improvements in life quality.
- coredog64 10y ago
  That's patently false. If you've got a drooling Alzheimer patient that has given up on their will to live, it's pointless to leave them hooked up to machines, prolonging their last painful days. There's no frontier advancement happening, just rent extraction.
hammock 10y ago
But which is the chicken and which is the egg?
dionidium 10y ago
Did health care change because our attitudes about death changed or did our attitudes change as health care improved? You seem to think it's the former, but I am almost certain it's the latter.

roymurdock 10y ago

Their explanation of moral hazard [1] is incorrect. A moral hazard occurs when someone who is insured subsequently pays less attention to preventing the deterioration/damage of the ensured object, in this case one's own body, than would otherwise be the case if they did not have insurance. People do not pay less attention to their health because they know they are insured. Nobody wants to be sick or obese, and it is an absurd, academic, and out-of-touch to argument. It makes sense to apply the moral hazard concept to something like a car (driving recklessly if insured) but not something so integral as personal health. Health care costs exploded because people (myself included) are weak-willed and uneducated, and will satiate their cravings for sweet/salty/mind-altering without a strong government to provide adequate health education, curb the bombardment of junk food/tobacco/alcohol/drug advertising, subsidize healthy lunches in school, and keep pharma regulatory capture in check. Does anyone think: "I'll eat McDonalds twice a week, smoke a pack a day, and drink all I want because I'm insured." Come on... [1] "the tendency for insured persons to utilize medical services more than they would if they did not have insurance"

savanaly 10y ago
How is their explanation incorrect? Your explanation is simply a rewording of theirs. Of course, apart from that you are disagreeing that it exists at all for health insurance. But the fact that consumers have "skin in the game" as it were in addition to the insurance doesn't mean there's no potential for moral hazard. No doubt, if there were no personal wellbeing implications of treating yourself unhealthily, moral hazard would be even more severe, but it still exists in some non-zero quantity as long as you have insurance. Does it explain all the effects that the article claims it explains? Not necessarily.
- dionidium 10y ago
  Grandparent is making a distinction between, "I'll engage in less healthy behavior because I'm insured" vs. "I will use more health care because I am insured." The latter doesn't imply the former.
geodel 10y ago
> Does anyone think: "I'll eat McDonalds twice a week, smoke a pack a day, and drink all I want because I'm insured." Come on... No, they will think like well I have earned through hard work to enjoy simple pleasures of life. Expectation is government or someone should take care of them with that bazillion dollar healthcare budgets.

HarryHirsch 10y ago

The alternative theory is that modern medicine was born around the time of World War II. That was the time when the pharmaceutical industry really took off and, for the first time in human history, permitted physicians to treat disease. Before that, with the notable exception of surgery, they could only give a prognosis and hope for the best. Now they can prescribe pills that do work. There was a reason that Hitler promoted homoeopathy and all sorts of natural healing stuff - he could claim his Germanic naturopaths did not perform worse than the (traditionally Jewish) medical faculties of the time. [1] [1] Before anyone throws about accusations of antisemitism - this is the thesis that Viktor Klemperer makes in this "Lingua Tertii Imperii". It's recommended reading about the insanity of Nazi Germany.

rskar 10y ago
Interestingly, Viktor (Victor?) had doctors in his family, such as Georg Klemperer (see https://translate.google.com/translate?hl=en&sl=de&u=https://de.wikipedia.org/wiki/Georg_Klemperer&prev=search https://translate.google.com/translate?hl=en&sl=de&u=https:/...): [He] was a German internist. ... [He was] a son of the Reform rabbi Wilhelm Klemperer and had seven siblings, four sisters and three brothers. His brothers were the writer and literary scholar Victor Klemperer , the physician Felix Klemperer and the lawyer Berthold Klemperer (1871-1931). The conductor Otto Klemperer (1885-1973) was his cousin. As to Viktor or Victor, this makes me think its the same person: https://translate.googleusercontent.com/translate_c?depth=1&hl=en&prev=search&rurl=translate.google.com&sl=de&u=https://de.wikipedia.org/wiki/Victor_Klemperer&usg=ALkJrhiShmqv93XzDsblN4XoVbTa_MGTRA https://translate.googleusercontent.com/translate_c?depth=1&... . The article there mentions his treatise LTI - notebook of a philologist (LINGUA Tertii Imperii: Language of the Third Reich).

wellbehaved 10y ago

Barking up the wrong tree. Costs are driven down mainly by innovations at the production side not due to consumer behavior. The cost problem is almost entirely due to myth, paranoia, and authority worship, which means innovation that would drive down costs comes very slowly and painfully. These are the wages of refusing to question dogma.

partiallypro 10y ago
No on denies that innovations drive down costs, this is from a libertarian blog...which basically worships market innovations and their effect on driving down costs. But, if you ignore bad incentives and human behaviors in terms of driving up costs, you're gonna have a bad time.
- wellbehaved 10y ago
  You missed my point, which was that factors that influence productivity are more fundamental than those that influence consumption. Nobody (sane) enjoys going the doctor.
  - topspin 10y ago
    No one missed your point. Your point is obvious and terrible. You want the demand side of the equation ignored. Your world view requires that demands for health care be unrestrained and unquestioned and you perform whatever mental contortions you must to allow that view to remain plausible inside your head. You're mentality is common and identified in the story here: "many academics and health care leaders found the idea of health insurance so appealing as to have a bias blinding them to the negative impact of moral hazard" Your point has not been missed. It's just wrong. But don't worry; you have lots of company and you won't be left wanting for support from lots of other wrong people.
    - wellbehaved 10y ago
      Yes, you missed my point, because no, I don't want the demand side of the equation ignored.

AzzieElbab 10y ago

Moral hazard is universal, while US health care costs are out of this world

rasz_pl 10y ago

Wait, there was real Health Care before World War II???

paviva 10y ago

Rising health care costs are a classic example of the tragedy of the commons[1]. In general, human needs are boundless, and as long as the people who make decisions about healthcare use do not bear the associated costs, health care costs will keep increasing. The costs are two-fold : the financial cost of the medication, the doctor’s visits or the procedure and the moral or existential cost to the person who receives the care. I argue that even in a fully subsidized, “free” healthcare system costs would not rise as fast as they are now in the USA (and elsewhere in the developed world) as long as healthcare use was only decided by the patient, who is the only one to suffer during futile procedures. It is not surprising that care is most expensive in the ICU and the long-term facilities for the demented or otherwise disabled — in those setting the patients themselves do not decide, and their families bear nor the actual costs nor the sufferings incurred. Anecdotally, those family members who care the least in everyday life, who never come to see the patient, are those who push the most for expensive, pointless care, who demand that “everything be done”. Every day, demented patients are shipped, alone and frightened, to emergency rooms, where they are put into restraints and treated for their tenth episode of aspiration pneumonia while their next of kin stay home watching TV and never bother to come. [1] https://en.wikipedia.org/wiki/Tragedy_of_the_commons https://en.wikipedia.org/wiki/Tragedy_of_the_commons

saturdaysaint 10y ago

I'm surprised that the libertarian Misces Institute doesn't mention the mainstream theory that fringe benefits like health care were due to high taxes - %93 was the top rate. So employers were incentivized to attract employees using benefits.

maxerickson 10y ago
What percentage of the workforce was paid that rate? I imagine it was small enough (and they were wealthy enough) that it was not a big driver. The article does mention an incentive to provide benefits over wages though: More importantly, insurance programs benefited greatly from the federal Stabilization Act of 1942 which allowed companies facing scarce labor (during a time of price and wage control) to compete for this labor by offering health insurance benefits and by making those benefits exempt from payroll taxes.
- sn9 10y ago
  It was mostly jacked that high so that American businessman wouldn't profit too much from WWII.