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This chart in the expense share of a typical income illustrates a number of issues well, but healthcare stands out like crazy: https://mobile.twitter.com/_cingr

This chart in the expense share of a typical income illustrates a number of issues well, but healthcare stands out like crazy: https://mobile.twitter.com/_cingraham/status/1231950129843671042 https://mobile.twitter.com/_cingraham/status/123195012984367... College, transportation and housing are all pretty high overall, but the healthcare share is just stunning. If we were looking at dramatically better outcomes or services, fine. Unfortunately, doctors get to see patients for less and less time, billing is going up and you don’t really see anything in return. Most other developed nations put a stop to this a long time ago…

neuroma 5y ago
I presume you are in the USA. I watch and marvel at how the USA has such expensive health care and yet apparently has poorer outcomes than other G10 nations, in aggregate. The NHS in my home country is undergoing privatisation of the more lucrative or self-contained components. But it seems important for other countries to watch and learn from this example because free market economics are so often heralded as a solution to inefficiency, cartels, and high prices. Why healthcare is not as amenable to the benefits of capitalism is no doubt complex, but if I may speculate, I'd suggest that choice is not really a good thing in healthcare. All we want is good care, and we want it quickly and conveniently. Choice is only needed if we are getting poor care. Furthermore, the infrastructure (buildings, equipment, supply chains, specialists) are sufficiently costly that often the market cannot entertain multiple variations. In other words, we can't always have many equally equipped hospitals competing to do the same things.
- syshum 5y ago
  >>yet apparently has poorer outcomes than other G10 nations I assume you have data for this? Something more than the flawed infant mortality rate that is often cited but is a very poor judge of a health system in reality? Something like 5 year cancer survival rates. Time a person waits on Specialist Wait List, the time it takes a person to get a replacement Hip, MIR, or Heart Stent. All of which I believe the US is very high or at the top of those statistics
  - Jotra7 5y ago
    If you can afford it.
  - shkkmo 5y ago
    The US does really well at high end care. It does less well in terms of overall agregate health outcomes. As I recall last time I saw a really good analysis if this posted to HN, You have to take into account a few other risk factors (obesity etc) in addition (to how infant mortality it reported) to get the US health outcomes inline with other developed nation. Even then, the US ends up paying way more to achieve that level of care per capita. Edit: Took me a bit but I tracked down the article that my recollections are based on: https://news.ycombinator.com/item?id=21737795 https://news.ycombinator.com/item?id=21737795
    - syshum 5y ago
      >>You have to take into account a few other risk factors (obesity etc) i I disagree, we have a free society, and one of my concerns about a government run health care system is that it would allow encroachments upon that freedom. I do not need or want a parent via the government. I neither need nor want the government passing laws to control what food I eat, how much food I eat, or what health choices I make The questions comes down at that point to if you desire a collectivist authoritarian government, one that "the greater good" (which is subjectively defined) always over rules the individuals rights, or do you want individualism and individual rights to reign supreme over the collective I support individualism
      - shkkmo 5y ago
        You entirely misunderstood what I was saying. Take a moment be read stuff carefully before you start arguing.
      - CRConrad 5y ago
        Oh Jesus fuck, what is it about (some) Americans that makes them so aggressively unable to see beyond their own blinkered horizons? Is it something in the water? Approximately none of your screed had anything whatsofuckingever to do with reality.
pmiller2 5y ago
The problem is not that the share of things like college, housing, and healthcare is high. It's that they have risen much faster than inflation and much faster than median income over the past 40 years. Notice the white space in the chart below "median male income" in 1985 is all gone by the time you get to the right hand side of the chart.
gruez 5y ago
tracing back to the source of the chart... >Cass calls this calculation the Cost-of-Thriving Index. It measures the median male annual salary against four major household expenditures: > • Housing, defined as the annual rent for a three-bedroom house in the 40th percentile of the local housing market. > • Health care, defined as the annual premium on a typical family health insurance policy. > • Transportation, defined as the average cost of owning and operating a car driven 15,000 miles per year. > • Education, defined as the average cost of tuition, fees, and room and board at a four-year public college. Why is education being overweight by a factor of several times? The other items are the annual cost of expenses that you incur annually. But education is only incurred 4 years out of the 80 years you're alive. Giving them the same weight as the other items is ridiculously misleading.
- secabeen 5y ago
  > > • Education, defined as the average cost of tuition, fees, and room and board at a four-year public college. > What is education being overweight by a factor of several times? The other items are the annual cost of expenses that you incur every year. But education is only incurred 4 years out of the 80 years you're alive. Giving them the same weight as the other items is ridiculously misleading. That is strange. Education is also an oddly priced expenditure because the nameplate tuition is not the price paid by most students. It would be a lot better to use the the net price, which is much lower, but is harder to collect.
- woofie11 5y ago
  Development and economic growth. In the Roman Empire, people lived 30 years and died. Most were illiterate. As a society develops, and has more excess resources, allocating more and more of those resources on keeping people alive, healthy, and educated seems reasonable. What's missing from the charts is quality. We spend a lot on healthcare, but we also now have multi-million-dollar MRIs machines and similar magic.
  - speeder 5y ago
    What you said is WILDLY wrong. People in Roman empire lived until 90 just like us. For example Seneca de Elder was 92 when he died. The reason why "life expectance" was 30 years was because child deaths, since that number is just an average. If you have 2 people living in a country, one is 100, and the other is 0, and the child dies, life expectancy is 50.
syshum 5y ago
>>Most other developed nations put a stop to this a long time ago… hmm I wonder if there might be a connection there... as other nation implement price controls a larger part of the R&D and the costs associated with that are born by the US Further Medicare / medicaid price controls to keep the cost of the entitlement program from going bankrupt has transferred the cost to patients not on those programs Third leg of this stool is standard of care, American patients have a high exception for standard of care then in "most other developed" nations where waiting months for a specialist is accepted as normal, or having ward style hospital rooms is normal as well. Where the US we expect must faster treatment times, and semiprivate rooms normally with no more than 2 people to a room, though 4 to a room has become more popular in some regions. This increases costs
- maxerickson 5y ago
  Lots of people get pretty mediocre care in the US, our high spending isn't delivering for everybody. Hospitals complain that Medicare and Medicaid underpay, but it's a modest amount, not something that explains the very high costs for other patients: https://www.aha.org/fact-sheets/2020-01-07-fact-sheet-underpayment-medicare-and-medicaid https://www.aha.org/fact-sheets/2020-01-07-fact-sheet-underp...
  - syshum 5y ago
    I would not call 15% underpayment by 60% customers to be " a modest amount" if a company routinely had to settled 60% of its account payable with a 15% shave those companies would go out of business very quickly Also in the Hospital context there are other factors that drive up the costs. Keep in mind that about 70-80% of all US Hospitals are non-profit
- modo_mario 5y ago
  > "most other developed" nations where waiting months for a specialist is accepted as normal Which are these developed nations? Because to give my annecdotal perspective it isn't the case in Belgium or others that i know of (With minor exceptions like recently where orthodontists couldn't handle anyone but the most urgent due to covid measures and now have a backlog of patients.) >and semiprivate rooms normally with no more than 2 people to a room, though 4 to a room has become more popular in some regions. Every bedroom in every hospital i've been to has been double or single though i have no experience on that front in surrounding countries. Most are double with the single ones being for special cases or people willing to dish out or with great insurance.
wodenokoto 5y ago
I think healthcare is 3 fold: 1. Is that it is just out of control in the US, but there are also some valid reasons, like, 2. Aging population. As people get older, they need more medical care, so an aging population will have higher average healthcare spend than a young population. 3. Advances in healthcare tech. We can treat more things, so there are more things to receive healthcare services for. And we can also treat things for longer, at great expense. Something along the line of: 10 years ago you could live with disease A for 10 years at a cost X. Now you can live for 20 years at cost X^2.
- sologoub 5y ago
  The thing is that these don’t hold up well when compared to other peer nations, especially with the top EU healthcare - per capita spend is double in the US and outcomes are not better (actually worse than some). The more likely issue are lack of competition and high cost of entry (regulatory and educational). Regulatory you can’t really loosen, as that’s a direct protection for patients. Educational costs for doctors we can absolutely fix. The lack of competition probably cannot be fixed with the normal “market” approaches because you are not dealing with a rational consumer behavior - when people are sick they are anything but rational. This is where something like a public option health care plan could come in with a strong negotiating position. Unfortunately, there is a good chance politics would prevent that from negotiating as well…
- CRConrad 5y ago
  Nope; only your first point is valid. Both of the other fail at the example of, well, pretty much every other developed nation.
fouric 5y ago
Slate Star Codex has an article that examines this effect in more detail (although the author doesn't make any conclusions as to the cause): https://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/ https://slatestarcodex.com/2017/02/09/considerations-on-cost...

neuroma 5y ago

I presume you are in the USA. I watch and marvel at how the USA has such expensive health care and yet apparently has poorer outcomes than other G10 nations, in aggregate. The NHS in my home country is undergoing privatisation of the more lucrative or self-contained components. But it seems important for other countries to watch and learn from this example because free market economics are so often heralded as a solution to inefficiency, cartels, and high prices. Why healthcare is not as amenable to the benefits of capitalism is no doubt complex, but if I may speculate, I'd suggest that choice is not really a good thing in healthcare. All we want is good care, and we want it quickly and conveniently. Choice is only needed if we are getting poor care. Furthermore, the infrastructure (buildings, equipment, supply chains, specialists) are sufficiently costly that often the market cannot entertain multiple variations. In other words, we can't always have many equally equipped hospitals competing to do the same things.

syshum 5y ago
>>yet apparently has poorer outcomes than other G10 nations I assume you have data for this? Something more than the flawed infant mortality rate that is often cited but is a very poor judge of a health system in reality? Something like 5 year cancer survival rates. Time a person waits on Specialist Wait List, the time it takes a person to get a replacement Hip, MIR, or Heart Stent. All of which I believe the US is very high or at the top of those statistics
- Jotra7 5y ago
  If you can afford it.
- shkkmo 5y ago
  The US does really well at high end care. It does less well in terms of overall agregate health outcomes. As I recall last time I saw a really good analysis if this posted to HN, You have to take into account a few other risk factors (obesity etc) in addition (to how infant mortality it reported) to get the US health outcomes inline with other developed nation. Even then, the US ends up paying way more to achieve that level of care per capita. Edit: Took me a bit but I tracked down the article that my recollections are based on: https://news.ycombinator.com/item?id=21737795 https://news.ycombinator.com/item?id=21737795
  - syshum 5y ago
    >>You have to take into account a few other risk factors (obesity etc) i I disagree, we have a free society, and one of my concerns about a government run health care system is that it would allow encroachments upon that freedom. I do not need or want a parent via the government. I neither need nor want the government passing laws to control what food I eat, how much food I eat, or what health choices I make The questions comes down at that point to if you desire a collectivist authoritarian government, one that "the greater good" (which is subjectively defined) always over rules the individuals rights, or do you want individualism and individual rights to reign supreme over the collective I support individualism
    - shkkmo 5y ago
      You entirely misunderstood what I was saying. Take a moment be read stuff carefully before you start arguing.
    - CRConrad 5y ago
      Oh Jesus fuck, what is it about (some) Americans that makes them so aggressively unable to see beyond their own blinkered horizons? Is it something in the water? Approximately none of your screed had anything whatsofuckingever to do with reality.

pmiller2 5y ago

The problem is not that the share of things like college, housing, and healthcare is high. It's that they have risen much faster than inflation and much faster than median income over the past 40 years. Notice the white space in the chart below "median male income" in 1985 is all gone by the time you get to the right hand side of the chart.

gruez 5y ago

tracing back to the source of the chart... >Cass calls this calculation the Cost-of-Thriving Index. It measures the median male annual salary against four major household expenditures: > • Housing, defined as the annual rent for a three-bedroom house in the 40th percentile of the local housing market. > • Health care, defined as the annual premium on a typical family health insurance policy. > • Transportation, defined as the average cost of owning and operating a car driven 15,000 miles per year. > • Education, defined as the average cost of tuition, fees, and room and board at a four-year public college. Why is education being overweight by a factor of several times? The other items are the annual cost of expenses that you incur annually. But education is only incurred 4 years out of the 80 years you're alive. Giving them the same weight as the other items is ridiculously misleading.

secabeen 5y ago
> > • Education, defined as the average cost of tuition, fees, and room and board at a four-year public college. > What is education being overweight by a factor of several times? The other items are the annual cost of expenses that you incur every year. But education is only incurred 4 years out of the 80 years you're alive. Giving them the same weight as the other items is ridiculously misleading. That is strange. Education is also an oddly priced expenditure because the nameplate tuition is not the price paid by most students. It would be a lot better to use the the net price, which is much lower, but is harder to collect.
woofie11 5y ago
Development and economic growth. In the Roman Empire, people lived 30 years and died. Most were illiterate. As a society develops, and has more excess resources, allocating more and more of those resources on keeping people alive, healthy, and educated seems reasonable. What's missing from the charts is quality. We spend a lot on healthcare, but we also now have multi-million-dollar MRIs machines and similar magic.
- speeder 5y ago
  What you said is WILDLY wrong. People in Roman empire lived until 90 just like us. For example Seneca de Elder was 92 when he died. The reason why "life expectance" was 30 years was because child deaths, since that number is just an average. If you have 2 people living in a country, one is 100, and the other is 0, and the child dies, life expectancy is 50.

syshum 5y ago

>>Most other developed nations put a stop to this a long time ago… hmm I wonder if there might be a connection there... as other nation implement price controls a larger part of the R&D and the costs associated with that are born by the US Further Medicare / medicaid price controls to keep the cost of the entitlement program from going bankrupt has transferred the cost to patients not on those programs Third leg of this stool is standard of care, American patients have a high exception for standard of care then in "most other developed" nations where waiting months for a specialist is accepted as normal, or having ward style hospital rooms is normal as well. Where the US we expect must faster treatment times, and semiprivate rooms normally with no more than 2 people to a room, though 4 to a room has become more popular in some regions. This increases costs

maxerickson 5y ago
Lots of people get pretty mediocre care in the US, our high spending isn't delivering for everybody. Hospitals complain that Medicare and Medicaid underpay, but it's a modest amount, not something that explains the very high costs for other patients: https://www.aha.org/fact-sheets/2020-01-07-fact-sheet-underpayment-medicare-and-medicaid https://www.aha.org/fact-sheets/2020-01-07-fact-sheet-underp...
- syshum 5y ago
  I would not call 15% underpayment by 60% customers to be " a modest amount" if a company routinely had to settled 60% of its account payable with a 15% shave those companies would go out of business very quickly Also in the Hospital context there are other factors that drive up the costs. Keep in mind that about 70-80% of all US Hospitals are non-profit
modo_mario 5y ago
> "most other developed" nations where waiting months for a specialist is accepted as normal Which are these developed nations? Because to give my annecdotal perspective it isn't the case in Belgium or others that i know of (With minor exceptions like recently where orthodontists couldn't handle anyone but the most urgent due to covid measures and now have a backlog of patients.) >and semiprivate rooms normally with no more than 2 people to a room, though 4 to a room has become more popular in some regions. Every bedroom in every hospital i've been to has been double or single though i have no experience on that front in surrounding countries. Most are double with the single ones being for special cases or people willing to dish out or with great insurance.

wodenokoto 5y ago

I think healthcare is 3 fold: 1. Is that it is just out of control in the US, but there are also some valid reasons, like, 2. Aging population. As people get older, they need more medical care, so an aging population will have higher average healthcare spend than a young population. 3. Advances in healthcare tech. We can treat more things, so there are more things to receive healthcare services for. And we can also treat things for longer, at great expense. Something along the line of: 10 years ago you could live with disease A for 10 years at a cost X. Now you can live for 20 years at cost X^2.

sologoub 5y ago
The thing is that these don’t hold up well when compared to other peer nations, especially with the top EU healthcare - per capita spend is double in the US and outcomes are not better (actually worse than some). The more likely issue are lack of competition and high cost of entry (regulatory and educational). Regulatory you can’t really loosen, as that’s a direct protection for patients. Educational costs for doctors we can absolutely fix. The lack of competition probably cannot be fixed with the normal “market” approaches because you are not dealing with a rational consumer behavior - when people are sick they are anything but rational. This is where something like a public option health care plan could come in with a strong negotiating position. Unfortunately, there is a good chance politics would prevent that from negotiating as well…
CRConrad 5y ago
Nope; only your first point is valid. Both of the other fail at the example of, well, pretty much every other developed nation.

fouric 5y ago

Slate Star Codex has an article that examines this effect in more detail (although the author doesn't make any conclusions as to the cause): https://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/ https://slatestarcodex.com/2017/02/09/considerations-on-cost...