Friday, November 18, 2011

Why aren't you reading the incidental economist?

Because if you care about health care, they are one of the most informative blogs around for those of us in the medical research community.

Consider this statistic:

By 2010, more than 60% of people lived in areas where insurance premiums cost at least 20% of their income. And that’s just premiums; it doesn’t include deductibles, it doesn’t include co-pays, and it doesn’t include co-insurance.

This is likely unsustainable. The growth rate of insurance is far above that of wages, meaning that health care costs are going to consume a higher and higher percent of people’s incomes in the future. Moreover, this is a problem of the non-elderly. Because of Medicare, few elderly have premiums which consume this level of income.

This statistic very nicely frames the entire underlying issue with the explosion in medical costs. Placed in such stark terms, the question shifts from "can we reduce medical costs" to "how are we going to reduce medical costs".

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