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I was surprised to learn that, in the US, health care is part of GDP. How messed up is that? Health care costs are not a productive output of an economy and t

I was surprised to learn that, in the US, health care is part of GDP. How messed up is that? Health care costs are not a productive output of an economy and to include them in GDP is ludicrous.

Retric 4y ago
By that token why not exclude entertainment spending as useless. In reality people devote surplus to things they want rather than pure needs.
- Nullabillity 4y ago
  Entertainment is positive value ("I want to watch/play/whatever this because I enjoy it"), healthcare is compensation for negative value ("I got injured and want to feel a little less shit"). Nobody goes to the doctor just because they felt like doing it that day. Counting the positive contribution of healthcare without counting the negative contributions of the injuries that lead people to seek healthcare is going to lead to a metric that looks better the more injuries there are!
  - Retric 4y ago
    First do you really think people will get more injured to game GDP? Anyway the metric is capacity to fulfill peoples wants. If the population has injuries then it will be less productive and therefore have a lower GDP. See the broken window fallacy.
    - Nullabillity 4y ago
      > First do you really think people will get more injured to game GDP? Death squads going out and punching people to get them into hospitals? Probably not. Lowering safety/emissions/etc standards in ways that both lead to increased immediate profit and (hopefully unintentionally) causes an increase in injuries over time? Absolutely.
      - Retric 4y ago
        There is a balance between worker safety and productivity. Even the CCP who cares about human rights about as much as a shark is still trying to reduce pollution to some degree because the current level is a net negative on GDP. As such even your example is really about productivity not simply using healthcare to boost GDP.
    - lmm 4y ago
      > First do you really think people will get more injured to game GDP? I think politicians will be incentivized to adopt systems that underfund preventative care in favour of more expensive emergency care, and this has already happened. > Anyway the metric is capacity to fulfill peoples wants. If the population has injuries then it will be less productive and therefore have a lower GDP. Only to the extent that those injuries affect economic productivity. Someone at the bottom will "earn" more in one medical bankruptcy than in an entire lifetime of minimum-wage work.
      - deleted 4y ago
        [deleted]
  - osterwood 4y ago
    Exactly. Putting health care in GDP also puts a positive light on rising health care costs -- and in the US there is nominally zero consumer power against rising health care costs. Most of the time it's impossible to know how much something will cost prior to the appointment, procedure, etc -- so people cannot "vote with their wallet" like they can with other spending.
    - Retric 4y ago
      It doesn’t put healthcare costs in a positive light, it puts the economic surplus to support healthcare spending in a positive light. There’s a subtle but critical difference between them. Namely you can simply increase healthcare spending by 100x in the US without dramatic improvements in other parts of the economy.
      - osterwood 4y ago
        This would be true if health care costs were discretionary, but they are not. Your bank account going to zero due to breaking a leg, or medication needs, or X is not a sign of a a healthy economy. If that health care demand hadn't occurred, you could have spent your "economic surplus" in a way of your choosing -- perhaps frivolously or perhaps on something that provides longer term financial upside to you, your family, your community, whatever. The problem with counting health care costs as part of GDP in the US is that it is a cost which is not distributed in any rational way -- local markets have vastly different service costs, employers have vastly different bargaining power with insurance companies, and individuals have vastly different health care needs with vastly different costs associated. If health care were normalized and distributed across a population (instead of cost burden ultimately falling to individuals) then I can see the reason to count it as part of GDP. Then it's somewhat analogous to physical infrastructure -- a healthy economy can support spending money on infrastructure. But, no one goes bankrupt because the town voted to increase taxes slightly to pay for a new road or renovating the local library. Health care cost is the number one cause of bankruptcy in the US -- health care cost increasing does not necessarily mean there is "economic surplus" to support it, instead more people could be driven to bankruptcy.
em500 4y ago
Would it surprise you then to learn that in every country in the world where medical personel get paid in currency, health care is part of GDP?
refurb 4y ago
I hope it is or that would mean our doctors and nurses aren’t paid! GDP is literally just goods and services provided. So any compensated activity or good is included, so things like doctor's salaries, teachers, social workers are all included. It's hilarious how people have such an aversion to GDP when it literally represents stuff they want.

I was surprised to learn that, in the US, health care is part of GDP. How messed up is that? Health care costs are not a productive output of an economy and to include them in GDP is ludicrous.

Retric 4y ago

By that token why not exclude entertainment spending as useless. In reality people devote surplus to things they want rather than pure needs.

Nullabillity 4y ago
Entertainment is positive value ("I want to watch/play/whatever this because I enjoy it"), healthcare is compensation for negative value ("I got injured and want to feel a little less shit"). Nobody goes to the doctor just because they felt like doing it that day. Counting the positive contribution of healthcare without counting the negative contributions of the injuries that lead people to seek healthcare is going to lead to a metric that looks better the more injuries there are!
- Retric 4y ago
  First do you really think people will get more injured to game GDP? Anyway the metric is capacity to fulfill peoples wants. If the population has injuries then it will be less productive and therefore have a lower GDP. See the broken window fallacy.
  - Nullabillity 4y ago
    > First do you really think people will get more injured to game GDP? Death squads going out and punching people to get them into hospitals? Probably not. Lowering safety/emissions/etc standards in ways that both lead to increased immediate profit and (hopefully unintentionally) causes an increase in injuries over time? Absolutely.
    - Retric 4y ago
      There is a balance between worker safety and productivity. Even the CCP who cares about human rights about as much as a shark is still trying to reduce pollution to some degree because the current level is a net negative on GDP. As such even your example is really about productivity not simply using healthcare to boost GDP.
  - lmm 4y ago
    > First do you really think people will get more injured to game GDP? I think politicians will be incentivized to adopt systems that underfund preventative care in favour of more expensive emergency care, and this has already happened. > Anyway the metric is capacity to fulfill peoples wants. If the population has injuries then it will be less productive and therefore have a lower GDP. Only to the extent that those injuries affect economic productivity. Someone at the bottom will "earn" more in one medical bankruptcy than in an entire lifetime of minimum-wage work.
    - deleted 4y ago
      [deleted]
- osterwood 4y ago
  Exactly. Putting health care in GDP also puts a positive light on rising health care costs -- and in the US there is nominally zero consumer power against rising health care costs. Most of the time it's impossible to know how much something will cost prior to the appointment, procedure, etc -- so people cannot "vote with their wallet" like they can with other spending.
  - Retric 4y ago
    It doesn’t put healthcare costs in a positive light, it puts the economic surplus to support healthcare spending in a positive light. There’s a subtle but critical difference between them. Namely you can simply increase healthcare spending by 100x in the US without dramatic improvements in other parts of the economy.
    - osterwood 4y ago
      This would be true if health care costs were discretionary, but they are not. Your bank account going to zero due to breaking a leg, or medication needs, or X is not a sign of a a healthy economy. If that health care demand hadn't occurred, you could have spent your "economic surplus" in a way of your choosing -- perhaps frivolously or perhaps on something that provides longer term financial upside to you, your family, your community, whatever. The problem with counting health care costs as part of GDP in the US is that it is a cost which is not distributed in any rational way -- local markets have vastly different service costs, employers have vastly different bargaining power with insurance companies, and individuals have vastly different health care needs with vastly different costs associated. If health care were normalized and distributed across a population (instead of cost burden ultimately falling to individuals) then I can see the reason to count it as part of GDP. Then it's somewhat analogous to physical infrastructure -- a healthy economy can support spending money on infrastructure. But, no one goes bankrupt because the town voted to increase taxes slightly to pay for a new road or renovating the local library. Health care cost is the number one cause of bankruptcy in the US -- health care cost increasing does not necessarily mean there is "economic surplus" to support it, instead more people could be driven to bankruptcy.

em500 4y ago

Would it surprise you then to learn that in every country in the world where medical personel get paid in currency, health care is part of GDP?

refurb 4y ago

I hope it is or that would mean our doctors and nurses aren’t paid! GDP is literally just goods and services provided. So any compensated activity or good is included, so things like doctor's salaries, teachers, social workers are all included. It's hilarious how people have such an aversion to GDP when it literally represents stuff they want.