Why Your Expensive Health Insurance is Worth Every Penny
As I write this post, an article about health insurance is the most popular story on the New York Times' Web site, edging out a story about Borat, the controversial fictional Kazakh.
The story's headline, "The Choice: A Longer Life or More Stuff," is indeed very catchy.
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A recent study released by the Kaiser Family Foundation prompted Leonhardt's article. The foundation's widely circulated findings say that in seven years the cost of employer-sponsored health care "has doubled, while incomes and company revenue, which pay for health insurance, haven't risen nearly as much."
It has become conventional wisdom that the way out the health care crisis is to cut costs. "Yet it's wrong," says Leonhardt. "Living in a society that spends a lot of money on medical care creates real problems, but it also has something in common with getting old. It's better than the alternative."
Leonhardt says health care costs continue to rise not because we have broken system, but because the quality and scope of medical science and technology continue to improve. "The best way to reduce health care spending is to reduce health care itself," he says.
Back in the 1950s, people paid their health insurance with ease. Before you grieve for those bygone days, consider this: they didn't expect much in return and died a lot sooner than the average person today--often from diseases that are now easily treated.
Because of advances in medical science and technology, the average life span of a baby born today is a decade longer than the average baby born in 1950. A decade longer.
"We think of health care as if it were gasoline," says Leonhardt.
"If you think about this as the return on the investments in medicine, the payoff has been fabulous: Would you prefer spending an extra $5,500 on health care every year -- or losing 10 years off your lifespan?"
So, yes, health care costs are doubling and wages are still lagging far behind. But is that necessarily evidence of a broken system? Or is it simply evidence that the quality of care has doubled? Leonhardt suggests it's the latter.
Advances in medical procedures and drug remedies have grown exponentially in the past half century. We quickly absorb new technologies, forgetting that expensive and effective things like chemotherapy and defibrillators and cholesterol drugs weren't always around.
"We think of health care as if it were gasoline," says Leonhardt, "a product whose price and quality have nothing to do with each other."
In other words, we might change the way we think about health care.
"Somehow, going to the mall to buy clothes has come to be seen as a vaguely patriotic way to keep the economy humming, and taking out a risky mortgage is considered to be an investment in one's future. But medical care? That's just a cost."
Of your other big purchases—car, house, boat, house boat—how many add years to your life?
