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National Recreation Crisis!

While health care costs are undeniably rising fast, this is not necessarily a sign of something wrong with the system. It could simply be a reflection of the legitimate preferences of an increasingly wealthy nation. After all, once basic necessities are met, it is reasonable to assume that an increasing share of each extra dollar earned will go to things that improve quality of life, like health care, beauty aids, or recreation.

In fact, that is what has been happening. Over the past 20 years, spending on recreation, health clubs, even lawyers, has climbed at about the same rate as health care. (See Table 1.) Yet nobody talks about a national health club crisis, or the need to reform the nation’s recreation industry.


At 2:46 PM, Blogger oded said...

What exactly are you suggesting? that the increased amount of spending on recreational goods and services is supposed to be of comfort to people who cant afford healthcare?

At 4:37 PM, Blogger Ivan said...

No, that increases in spending as a percentage of GDP don't necessarily imply things are more difficult to afford -- rather than they are being consumed in greater abundance, which is a good thing.

You know I have big problems with the current health care system, but the point of this post is to show the conventional wisdom of just tracking spending as a percentage of GDP is flawed.

Even the rate of uninsurance is flawed because health care availability is what is important -- not converage by a 3rd party payment system.

By the way, look for Bush to suggest a tax credit for health care spending in the SOTU tonight. I would immediately switch to private catestrophic care and pay everything out of pocket if that were the case. I probably lost a few thousand dollars on my company's providing health insurance this year...

At 5:18 PM, Blogger Miguel said...

Your company allowed you access to a pool, but made you take a more risk-averse approach than you'd like. The benefits of the pool are huge, though; your rate will stink when you go in as an individual...

How's the availability of private catastrophic insurance in MA? I live in a liberal cosmopolitan area myself and the options aren't too hot (I do probably pay less than your company does, though).

PS the problem of the uninsured is different than you frame it: they accrue higher bills than necessary because they avoid early or preventive treatment. The tax credit system will, btw, incentivise everyone to act that way - most of all people living paycheck to paycheck.

At 6:14 PM, Blogger Ivan said...

The problem is that I'm pooled with people who are far older than me, with back problems, heart issues, and kids. How does pooling help when I am certain I use less than the average?

I haven't really explored catestrophic insurance much. I'm not sure why you call it "private" ... do you mean "individual" ?

I'll look into it.

At 6:24 PM, Blogger Miguel said...

Pooling lowers transaction costs for the provider (lame but true).


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