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

https://i0.wp.com/randomcriticalanalysis.com/wp-content/uplo...

> 2. Asymptotic growth towards 100% certainly sounds unsustainable.

"Sounds" isn't an argument and I'm explicitly arguing the slope is likely to flatten, eventually. The point the income elasticity of health expenditure can be (is) well north of one and we can (and do) consume more of everything else at the same time.

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

> Log-log overfitting

That isn't a thing. You can argue this specification minimizes the residuals at the high end if you want, but it's very likely to the correct modeling decision, it's bog standard in economics, and the US residual ~= 0 (certainly not notably high). It's also pretty obvious health expenditures are increasing in % terms and that failing to log-transform results in particularly poor model performance with constant slope out of sample.

https://i0.wp.com/randomcriticalanalysis.com/wp-content/uplo...

> So if you have data about healthcare prices not being out of order, that seems a lot more relevant

https://randomcriticalanalysis.com/2018/01/06/its-not-the-pr...

https://randomcriticalanalysis.com/2017/07/27/health-care-pr...

> The lower third of this country can’t afford essential care.

The lower third of the country consumes approximately the same amount of care as the rich, as in other high-income countries, and the socioeconomic gaps in other countries are likely comparable to even larger (depending on how measured).

https://randomcriticalanalysis.com/2017/04/15/some-useful-da...

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

To the extent there are real and ultimately consequential issues with affordability for some small segment of our population, these aren't likely to be explained by aggregate costs or prices so much as by narrow details that we can tweak, i.e., without requiring massive change, should the political desire exist to do so.

> seems a lot more relevant— and less cherry-picked — than the history of household spending on food consumption.

Pardon me, but I was engaging with someone that was arguing this expenditure growth implied starvation and you're making very similar (wrong) arguments. Whether you appreciate it or not, the role of general increases in productivity, the source of real income growth in the long run, and differences in the rate of productivity growth in different sectors, which we are clearly reflected in prices, is very much on point. Food production is simply a way to make this concrete for people that struggle with abstractions like price indexes and relative prices.

While driving at large is safe, there are a few high risk subsets of driving: speeding, drunk driving, and inclimate weather.

No, but yes.

>> So if you have data about healthcare prices not being out of order, that seems a lot more relevant

> https://randomcriticalanalysis.com/2018/01/06/its-not-the-pr....

> It is the consensus view amongst researchers that have published long-run analyses:

>https://www.cms.gov/research-statistics-data-and-systems/sta...

So I think it's interesting here that you make no mention of the explanation for HCE increases provided in the "consensus view" link.

>In health care research, the impact of medical technology on health care cost increases has always been a great unknown. Yet 81 percent of the leading health economists agreed with the statement, “The primary reason for the increase in the health sector’s share of GDP over the past 30 years is technological change in medicine”.1Growing attention to the role of technological change in driving growth in health spending, and to the costs and benefits associated with new medical innovation reflects an acknowledgement of the long-term dilemma posed by historically unsustainable rates of growth in medical costs, combined with an increasing consensus that technological advance is a major factor in driving this growth. The current acceleration in health spending growth - following the quiescent period accompanying the spread of managed care - brings troubling implications for the long-term viability of our current system of financing and provision of health services. Understanding the magnitude of technology’s historical contribution to growth in costs is vital to the analysis of the future path of medical spending. Of course, in most areas of the economy a rapid pace of technological advance is regarded as a good thing. That this is not the case for medical care reflects a second point of consensus. Throughout much of history, imperfections in medical care markets have failed to provide incentives for the cost-effective provision of medical services, encouraging the development and diffusion of innovations beyond the point that would prevail under competitive market conditions. Low out-of-pocket costs for medical care due to insurance coverage, combined with patients’ lack of full information on the services they consume encourage the provision of medical care to a point where the marginal benefit of treatment to the patient is small relative to its marginal cost.

You can hand-wave this as "increased consumption", if you want, but it is:

- recognized as an anomaly

- considered a point of concern

- likely to lead to cost reductions if fixed

In other words, this is precisely the sort of phenomenon you are arguing does not exist in US healthcare!

The vast majority of medical bankruptcies have nothing to do with the cost of medical care, but the disruption to career/income flow imposed by illness. This is clearly a problem in other countries as well.

https://www.nejm.org/doi/pdf/10.1056/NEJMp1716604

> The rate of growth of US spending on healthcare....far outstrips the rate of growth of money

This is true in other OECD countries too. Further, this doesn't mean what you think it does. As our productivity rises, the share spent on consumption categories with high productivity growth (increasingly low relative prices) can decline, which frees up spending to be spent on health and other areas subject to less productivity growth (the majority of the expenditure growth corresponds to rising real health consumption tho)

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

> The same medicines by the same manufacturers and often the same production lines ... often cost 10-100 times more in the US than they do in other places

One might be able to find outliers of this sort, but that clearly doesn't reflect anything close to central tendencies (mean, median, mode, etc), especially when compared (accurately) to other high-income countries. Richer countries, like the US, generally pay relatively higher prices.

The US may pay a somewhat higher premium, but there are tradeoffs here vis-a-vis incentivizing innovation in the long run. It's also not widely appreciated that the US pays markedly less for generics....