While it is true that we spend more than other countries in an accounting sense, we actually use fewer real resources: fewer doctors, fewer nurses, fewer hospital beds, shorter lengths of stay, etc. That means that from an economist’s point of view, we aren’t necessarily spending more than other countries.
I get the sense that left-wing health economists can get an op-ed in a major newspaper pretty much any time they want. Goodman’s point of view is less widely circulated.
I know your point was regarding newspapers and who’s Op-Ed’s they publish, but this particular post from Goodman makes a pretty stupid argument, even if his final conclusion is sensible
There are a lot of moving parts in the comparison of approaches he is describing. We may consume more doctors, nurses and beds, but less of a whole lot of other stuff- particularly high cost capital intensive items. Those actually take up resources to deploy too. So how do we weigh all this out and come up with a conclusion? We do a comparison in the “accounting sense”.
So good to know money is not a ‘real’ resource. Another reason not to worry about costs or deficits.
The previous paragraph contains important context:
“And he adds: the number of beds per capita would actually increase as would the number of physicians ― which is a hint that there might be something seriously wrong with the whole argument.”
Not the exact point, but we nearly double the GDP per capita of Germany. And Germany is full of Germans. Ya’think some things might be a little more expensive here?
It might be a good idea to take a close look at demand perversions or supply bottlenecks that might be increasing prices. I’ll expect that…not in a million years. Why would they when they could use the crisis for what they want?
Btw…”bridges”? Come on. In the business, we call that the dangle.
“nearly double the GDP per capita of Germany” I exaggerate, but it’s close enough for government work, and in thinking about it I think I can illustrate Goodman’s point perfectly.
Bump our healthcare costs to 20% of GDP, just to be generous. Lop that off the top of our GDP per capita. It’s now like we are making 80% of our GDP. It’s still higher than Germany who still has to pay for their “cheap” healthcare.
To some degree, it seems like there is something weird going on here. I have heard concerns raised about a shortage of primary care doctors in the coming years, and the standard explanation is that its because too many med school grads become specialists because there’s more money to be made there. And yet, anytime I’ve wanted to go see a specialist (even a dermatologist), the wait times for an appointment seem to be absurd. Two to three months, sometimes. And that’s if the doctor is accepting new patients at all.
Seems to me that if the market is undersupplying primary care doctors and oversupplying specialists, which I think is the view that Goodman is criticizing, then the opposite should be true: it should be easy to get an appointment to see a specialist in the near future, and very difficult to find a primary care doctor who’s accepting new patients. But that’s not my experience at all.
Isn’t that sort of a Marxist way of thinking? The services of a $400 a visit American doctor aren’t really more costly than a $200 a visit German doctor because they both do the same amount of labor?
In the real world cost isn’t measured in rescources consumed, it’s measured in opportunities forgone. We may still be at the production possibility frontier, but it is a ppf where we are building more consumer goods for doctors than the alternative. Over time, that means lower growth and, probably, less utility (in a benthamite sense).
You are right, Arnold. But thanks for helping me get the word out.
It might be useful for commenters to read the entire post first. Regarding the comment that “It might be a good idea to take a close look at demand perversions or supply bottlenecks that might be increasing prices. I’ll expect that…not in a million years.” – try reading Goodman’s book “Priceless” for more information. In a country that relies on markets for most goods and services, it is astonishing the degree to which the market has been disabled in healthcare.
That’s what my comment said, btw…just for the record.
As in, it is similar to what I said 5 years ago about entering a depression with a likely jobless recovery – we should look at the artificial fixed costs added to labor.
Or what Russ Roberts has said about finance: If the problem was deregulation, put those regulations back.
People are pointing this kind of thing out here and there, but the establishment will never do them…was my point. Why would they? A problem is an opportunity to do a bunch of semi-unrelated stuff.