State-Of-The-Art Health Care For Everyone?

by William Poole
This article appeared in Forbes on July 28, 2009.

A basic fact is being ignored amid all the spilt ink in the healthcare debate: A nation cannot afford state-of-the-art health care for everyone. The current effort to expand health care insurance is designed to make the same health care available to both those with extensive insurance and to those currently uninsured. This effort ignores the fact that resources to make such care available to everyone do not exist.

For every major category of goods, higher income families spend more than lower-income families. Health care is not an exception. Consider the BLS Consumer Expenditure Survey for 2007, the latest year available; for all respondents together, the survey reports average annual income after taxes per consumer unit of $60,858 and average annual health care expenditures of $2,853.

For the highest income group tabulated, consumer units had average income after taxes of $230,849 and health care expenses of $4,836. The highest income group, therefore, had health care expenses 70% higher than for all groups. Of course, total national expenditures are much higher, with many costs borne by government, companies and private charities.

Let's assume that the highest income group can afford state-of-the-art health care, which we would like to make available to everyone. Based on these data, that would increase national health care outlays by 70%. To achieve this outcome, the nation would need many more physicians, nurses, medical technicians, hospitals, medical schools, MRI machines, drugs and so forth. It would be easier for the space program to send astronauts to Mars than to increase the scale of the medical establishment by 70%.

Providing today's state-of-the-art health care for everyone is simply impossible. Moreover, relentless and highly desirable technical improvements keep pushing the health care frontier outward. An ambitious goal, like sending astronauts to the moon, may be desirable, depending on a calculation of benefits and costs. An impossible goal, like state-of-the-art health care for everyone, is foolish. READ MORE @ CATO