THE COMMODIFICATION OF MEDICINE:

Reinventing Medicare (ROBERT SAMUELSON, 9/13/06, The Washington Post)

Some economists believe that we've gotten our money's worth from higher health spending. Since 1960, life expectancy at birth has risen from about 70 to more than 77. Harvard health economist, David Cutler, attributes about half the increase to medical advances — new drugs, surgeries and therapies. (Candidates for the other half: less smoking, less-punishing jobs, fewer accidents.) Academic studies suggest that people value an extra year of life at about $100,000, says Cutler. That's how much they'd pay — in theory — to live a year longer. Since 1960, the average extra health spending at all ages needed to increase life expectancy one year has been less than $100,000 per person. Therefore, we've gotten value for money.

By this logic, higher health spending is non-threatening. In a recent paper, economists Robert Hall of Stanford and Charles Jones of the University of California, Berkeley, suggest that health spending may reach 30% of national income by 2050, up from 16% today and 5% in 1950. But they are unperturbed, because as Americans get richer, they prefer more health spending — longer and better lives — to a "third car (or) yet another television."

A decent liberal must certainly rebel against the notion, but health care is just another consumer good at this point and not properly considered one of the necessities (since de facto universal). The best option for getting a handle on prices is to accelerate the commodification process via HSA's, which make individuals into shoppers again.

Posted by Orrin Judd at September 13, 2006 9:48 AM