3 ms·

That's a good point. U.S. per capita healthcare spending is $11,172. If the U.S. gave everyone a $200 a year tax credit to spend on a smart health watch, we'd

by breck 6y ago

That's a good point. U.S. per capita healthcare spending is $11,172. If the U.S. gave everyone a $200 a year tax credit to spend on a smart health watch, we'd probably save $2,000 a year per capita and get a 10x ROI.

robocat 6y ago
Most healthcare costs are at the end of our life, and we all die and often spend all we have, so the costs are fairly invariant i.e. you can never “save” $2k. The ROI for better health is very odd to measure. If you use dollars (for an economy) then the best ROI is to spend nothing once someone is of no economic benefit (i.e. the vast majority of healthcare spending is on the elderly and provides no dollar benefit to society, so economically most healthcare spending should be drastically cut). You could also look at an integral of quality of life over time. However “past me” is really bad at caring about “future me”, and “current me” doesn’t care at all about optimising for “past me”. Most people seem happy to argue that the amount that society should spend on them (or their loved ones) for health services is infinite (you can’t put a price on life), and the amount they should spend on the health services for others should be zero (those scabs should have made better life choices!) Good luck trying to make sense out of spending $20 to save $2000!
- breck 6y ago
  My ROI argument is approximately that allocating $200 for health watches for everyone AND cutting $2,000 across the board everywhere else in healthcare would lead to the same health outcomes. It's a good point about how the cost of healthcare is unevenly distributed toward the end of life. I really like the newish term "Healthy Life Expectancy".
  - robocat 6y ago
    > ROI argument is approximately that allocating $200 for health watches for everyone AND cutting $2,000 across the board everywhere else in healthcare That sounds a lot like taking $2000 from an elderly cohort (where savings today would mostly come from), and spending $200 on a younger cohort (who would eventually get the $2000 health gains!). Your statement needs far more qualification on who would pay the costs, and who would get the accrued benefits. And even if you make it fair, people would still complain because I think we are mostly hopeless at understanding past costs versus future savings/benefits (both individually and as a society.)
    - samatman 6y ago
      The gist of what I got from the post you're replying to, which I agree wasn't well fleshed out, is this: If everyone gets a $200 smart watch, and 1/10th of those people avoid obesity, we can avoid $20,000 a year in diabetic care and heart surgery and hip replacement for them when they get to be 60. Completely made up numbers of course, but speaking as one smartwatch wearer, the nudges built into the system play a significant role in keeping me heading to the gym. It doesn't follow that we'd get the same effect if everyone wore one! But there's something to the case they're making.
      - robocat 6y ago
        > $200 smart watch, and 1/10th of those people avoid obesity, we can avoid $20,000 a year Oh, I completely agree that that is a realistic and worthwhile scenario. I just think that lifetime health costs in dollars do not decrease. Let’s say we get 1/10th less diabetes due to subsidised watches. The total number of people with chronic diseases remains constant because we just get a different chronic disease on average (because we all die of something!). So the $2000 saved is just spent elsewhere. Ignoring potential savings we could make by increasing the number of sudden deaths and decreasing chronic conditions. Or from another angle, at an individual level many spend all they have on their final healthcare costs so our individual spending remains the same, and at a government level total healthcare spending mostly remains constant regardless of health improvements or lack thereof (e.g. we spend close to 0% on polio these days – however healthcare costs didn’t decline and instead other health costs substituted instead). Now, quality and length of life may improve, but total spending has not changed. I suspect I lack the economic language for talking about situations where we need to optimise for cost substitutions and quality of life. I do believe that optimisation of healthcare for an economy just using dollars as inputs to the objective function would fail us miserably. I find it really hard to think about healthcare costs, because it just doesn’t work like my intuitions might expect about saving money. Edit: the original post “U.S. per capita healthcare spending is $11,172. If the U.S. gave everyone a $200 a year tax credit to spend on a smart health watch, we'd probably save $2,000 a year per capita and get a 10x ROI.”. I believe U.S. per capita p.a. healthcare spending would now be $11,372 (the extra $200 couldn’t be found in the budget, and the amount spent on diabetes did not decrease, the total budget was not decreased.) However people have a better QOL, and are living longer so they are better off, but the economy is worse off because we’ve added years of extra cost to support the longer-living elderly!

by breck 6y ago

robocat 6y ago

Most healthcare costs are at the end of our life, and we all die and often spend all we have, so the costs are fairly invariant i.e. you can never “save” $2k. The ROI for better health is very odd to measure. If you use dollars (for an economy) then the best ROI is to spend nothing once someone is of no economic benefit (i.e. the vast majority of healthcare spending is on the elderly and provides no dollar benefit to society, so economically most healthcare spending should be drastically cut). You could also look at an integral of quality of life over time. However “past me” is really bad at caring about “future me”, and “current me” doesn’t care at all about optimising for “past me”. Most people seem happy to argue that the amount that society should spend on them (or their loved ones) for health services is infinite (you can’t put a price on life), and the amount they should spend on the health services for others should be zero (those scabs should have made better life choices!) Good luck trying to make sense out of spending $20 to save $2000!

breck 6y ago
My ROI argument is approximately that allocating $200 for health watches for everyone AND cutting $2,000 across the board everywhere else in healthcare would lead to the same health outcomes. It's a good point about how the cost of healthcare is unevenly distributed toward the end of life. I really like the newish term "Healthy Life Expectancy".
- robocat 6y ago
  > ROI argument is approximately that allocating $200 for health watches for everyone AND cutting $2,000 across the board everywhere else in healthcare That sounds a lot like taking $2000 from an elderly cohort (where savings today would mostly come from), and spending $200 on a younger cohort (who would eventually get the $2000 health gains!). Your statement needs far more qualification on who would pay the costs, and who would get the accrued benefits. And even if you make it fair, people would still complain because I think we are mostly hopeless at understanding past costs versus future savings/benefits (both individually and as a society.)
  - samatman 6y ago
    The gist of what I got from the post you're replying to, which I agree wasn't well fleshed out, is this: If everyone gets a $200 smart watch, and 1/10th of those people avoid obesity, we can avoid $20,000 a year in diabetic care and heart surgery and hip replacement for them when they get to be 60. Completely made up numbers of course, but speaking as one smartwatch wearer, the nudges built into the system play a significant role in keeping me heading to the gym. It doesn't follow that we'd get the same effect if everyone wore one! But there's something to the case they're making.
    - robocat 6y ago
      > $200 smart watch, and 1/10th of those people avoid obesity, we can avoid $20,000 a year Oh, I completely agree that that is a realistic and worthwhile scenario. I just think that lifetime health costs in dollars do not decrease. Let’s say we get 1/10th less diabetes due to subsidised watches. The total number of people with chronic diseases remains constant because we just get a different chronic disease on average (because we all die of something!). So the $2000 saved is just spent elsewhere. Ignoring potential savings we could make by increasing the number of sudden deaths and decreasing chronic conditions. Or from another angle, at an individual level many spend all they have on their final healthcare costs so our individual spending remains the same, and at a government level total healthcare spending mostly remains constant regardless of health improvements or lack thereof (e.g. we spend close to 0% on polio these days – however healthcare costs didn’t decline and instead other health costs substituted instead). Now, quality and length of life may improve, but total spending has not changed. I suspect I lack the economic language for talking about situations where we need to optimise for cost substitutions and quality of life. I do believe that optimisation of healthcare for an economy just using dollars as inputs to the objective function would fail us miserably. I find it really hard to think about healthcare costs, because it just doesn’t work like my intuitions might expect about saving money. Edit: the original post “U.S. per capita healthcare spending is $11,172. If the U.S. gave everyone a $200 a year tax credit to spend on a smart health watch, we'd probably save $2,000 a year per capita and get a 10x ROI.”. I believe U.S. per capita p.a. healthcare spending would now be $11,372 (the extra $200 couldn’t be found in the budget, and the amount spent on diabetes did not decrease, the total budget was not decreased.) However people have a better QOL, and are living longer so they are better off, but the economy is worse off because we’ve added years of extra cost to support the longer-living elderly!