A tale of two covariates: Why OWID and company are wrong about US healthcare

First time I hear of RCA, I will have to read the analysis to evaluate, and it might already have been addressed, but ...

a) many (perhaps the majority, don't have time to source now) of the bankruptcies in the US are due to medical issues and spending, and at least 75% IIRC of those going bankrupt from medical spending HAD insurance. This is practically unheard of outside the US.

b) The rate of growth of US spending on healthcare, especially government spending on healthcare, far outstrips the rate of growth of money / wages / any other measure of something that can pay for it.

c) The same medicines by the same manufacturers and often the same production lines (not just equivalents or generics, which are much cheaper still!) often cost 10-100 times more in the US than they do in other places. The DaraPrim and QuestCor cases are famous for being outliers, but they are only outliers in the speed of price increase, not in the fact that prices in the US (but not outside the US) keep going up irrespective of costs.

It was not until I lived in new york that I heard gainfully employed people say things like "I have to stitch my cuts my self because I cannot afford medical care"; neither could I understand George Carlin's "dirty doctor" joke.

So perhaps the overall spending/GDP analysis is not direct proof, but the US medical and healthcare system is very, very sick. Karl Deninger at the https://market-ticker.org has been documenting these atrocities very dilligently since 2007.

1, I can fit the US on a linear trend amongst high income countries.

2, there’s no necessary reason why increasing health share with rising real income is unsustainable. We can and have increased share spent on health while increasing real expenditures across the board.

3. I touch on some reasons why this may curve up and then eventually flatten out.

4. No, not everything fits on log-log slopes and us is very close to the trend.

https://randomcriticalanalysis.com/2019/12/03/no-means-no-th...

I think you're drawing a slightly wrong conclusion. The point is not that the US system is actually nearly as good as others, the point is that other factors make it look much worse than it is (as far as the metric of life expectancy is concerned).

If those other factors were corrected, the comparison could be made fairly. Maybe it would turn out to be good enough, and maybe it would not.

> That is to say, a socialized healthcare system with the same spending is unlikely to provide any improvements in life expectancy.

Few countries actually have a wholly socialized healthcare _system._ The UK and Canada do, but it's a completely different stories in other developed countries. In France the health insurance system is mostly socialized, while delivery (doctors, pharmacies, hospitals ...) is mostly though not entirely private. In Switzerland and Germany, if I remember correctly, insurers are private but operating similarly to utilities in the US, i.e. within strict government guidelines.

One can come up with a narrative to support almost any argument. The question is, do you have data to support it, is it credible, and how much can it actually explain? The truth is richer countries tend to be significantly fatter countries and countries are getting fatter, even though these same countries also spend significantly (increasingly) more money on healthcare and a variety of other social services. These are empirically verifiable points that actually explain things and make quite a lot of sense theoretically.

The high average caloric consumption in the US is likely substantially explained by our income levels. Humans are not genetically adapted to living in an age of cheap, plentiful, readily available, and highly palatable food. Above and beyond high average income levels and particularly affordable food prices, countries also differ in a number of other dimensions. For example, it's quite clear the US escaped the malthusian trap long before most of Europe because of the ample amount of fertile land settlers had at their disposal. Americans were taller and fatter than Europeans in Europe long before the development of the welfare state. This is also verifiable. It's quite possible such differences lingering effects on dietary preferences, serving sizes, and other variables that impact food consumption.

Further, there are clearly large spatial differences in the United States and they're unlikely to be well explained by the sorts of policy you mentioned. Parts of the US settled by people that migrated from periphery of the UK (Scotland, N. Ireland, Wales, and Northern England) suffer from these issues much more than most Americans and more than can be explained by observables like income, education, and the like. This residual also seems to play out in the UK today

https://www.bmj.com/content/342/bmj.d508.full.pdf+html

I've done my own analysis and found this maps well to genetic population structure (not yet published), but whether this is genetic or some sort of subtle cultural phenomenon is a different question.

While I'm quite skeptical that existing non-medical programs of that sort have significant effects (evidence?) or even vary nearly as much as you seem to believe (US affluence has implications for purchasing power of all households, even allowing for somewhat higher inqequality, and size of welfare state often underestimated), I think you need to explain how it is that these higher income, higher spending countries with larger welfare states achieve results no better (probably somewhat worse) than much poorer countries.

https://i1.wp.com/randomcriticalanalysis.com/wp-content/uplo...

Also, you should probably also be able to explain why it is that socioeconomic gaps in life expectancy and other health outcomes are probably at least as large in Finland, Norway, and the like.

https://twitter.com/RCAFDM/status/1203715358152167424

I (RCA) have been meaning to dedicate a blog post to this topic exclusively and quantify the root causes in considerable detail.

In short, yes, I believe globalization and, specifically, multinational corporations (affiliates of foreign owned corporations) are the primary cause. However, in regression terms, this has less to do with net income flows into the US than net income flows out of several small high GDP/person countries. The US is a very large, very rich country whereas many of these countries are much smaller so it doesn't take much to have outsize affects on them. Even if 100% of this ultimately accrues to the benefit of US households, (which I don't think is quite accurate) the effect in % terms is vastly different.

Although some of this can be directly observed as primary income flows in the current year national accounts (dividends, rent, etc), some of it shows up as gross savings or disposable income in the foreign affliates, i.e., it's equivalent to retained earnings. Over the past decade or two non-financial corporate savings have increased massively and these savings are largely uncorrelated with domestic (capital) investment, i.e., it's almost entirely financial and it's largely leaving these countries in the form of net lending. These things also influence the calculation of (GDP) PPPs and cause other headaches.

Of course, there are also other reasons why GDP misleads. For example, Luxembourg has a very large non-resident workforce. Something like 50% of their workers live in neighboring countries (varies year to year), meaning ~50% of aggregate employee compensation goes home (cross border) to Germany and the like. Then there are petro-states like Norway whose income flows are inherently temporary (finite amount of natural resources to extract) and highly volatile, meaning they can't consume out of their measured GDP like most other countries. They need to practice massive consumption smoothing if they don't want their standard of living to crash in the not too distant future.

Long story short, GDP was never intended to be an indicator of material wellbeing and the household perspective (consumption, disposable income) are better measured and more reliable. One might try to throw a bunch of variables in to counteract the many issues imposed by GDP as a proxy for the household perspective, but why bother?

~ RCA (sorry for typos, grammatical errors, etc... limited time to comment and would rather focus more effort on blog)