The columnists at Forbes magazine seem to be the leading practitioners of this warning: Healthcare spending as a portion of the U.S. economy is inching dangerously close to 20 percent. The authors usually deliver this news with hints of fiscal doom if this trend continues unabated.
There's nothing wrong with such warnings--the U.S. healthcare system is indeed far more profligate than any other on the planet.
However, I sometimes wonder what Forbes and the other politically conservative finance pundits would do if, say, the automotive or another manufacturing sector were growing at the same clip. Would they call it a harbinger of doom?
Healthcare represents such a large portion of our economy not only because our population is aging, but because of the latent talent of the American business community to commodify absolutely everything. And while many right-of-center figures make valid points about such growth, I suspect some likely do so out of fear that our current market-based system would have to be replaced with a more fiscally rational single-payer system. And they fear that more than anything else because former President Ronald Reagan told them they should.
Despite the grotesque amounts of money spent in delivering healthcare, it does reap fiscal benefits for a lot of people.
I've met people who have gone to nursing school well north of the age of 40 in order to obtain a better-paying job (which they usually land). My daughter, who is entering high school in a couple of weeks, has said for years she wants to go to medical school and perhaps flip houses on the side. I'm not discouraging her. Not only have I never heard of an unemployed doctor, that career would probably provide enough income to fund her avocation.
Of course, if she became a hospital CEO instead, she could buy up and redevelop entire neighborhoods.
And while it's a wonderfully romantic notion to try and bring our healthcare spending down to the levels of the rest of the industrialized world, it's far more likely to bring on the doom and gloom the growth naysayers have actually been predicting were we to continue in the other direction.
In the 1990s, I covered the aerospace industry as a journalist, and the end of the Cold War had had a calamitous impact on Southern California. Companies shut down, people who had held well-paying jobs couldn't find work and large chunks of the region's middle class were shaken to the core. Healthcare is a much, much larger chunk of the economy.
So I may grit my teeth when some Medicare initiative brings down costs just a percent or two. But I am also beginning to believe we're going to have to get used to cost reductions that are microscopically incremental. To do no harm to the rest of the economy for now, we're stuck with doing just a little in transforming healthcare. - Ron (@FierceHealth)