Cheap Health Care

Econlog has an interesting discussion, but Greg Mankiw hits the nail on the head:

Technology does bring costs down. What percent of his income did your grandfather spend on computers? I bet it was zero. Technology brings down the cost and price of health care too. How many hip replacements were done in 1950? None. So the price of a hip replacement was effectively infinity. It’s much lower now.

Indeed. While there are numerous problems and inefficiencies in health care, much of what we call health care has plummeted in price just like hip replacements. We see it as being more expensive because the price of having a hip replacement is much higher than not having a hip replacement. Duh. Ditto for most every other advance in medicine.

Another commenter makes a great point:

adjusting for accidents and deliberate deaths …, the US actually has higher life expectancy than everyone else.

Indeed. Of course, life expectancy is a crude measure because it ignores quality of life issues – like hip replacements.

The sad reality is that health care reform, if not done properly, will lead to shorter life spans and a reduced quality of life for most Americans. With politicians involved, what are the odds it will be done properly?

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