Health Policy

Health Policy

Choice, Equality and Cost

David Reisman

This lucid and comprehensive book explores the ways in which the State, the market and the citizen can collaborate to satisfy people’s health care needs. It argues that health care is not a commodity like any other. It asks if its unique properties mean that there is a role for social regulation and political management. Apples and oranges can be left to the buyers and the sellers. Health care may require an input from the consensus, the experts, the insurers, the politicians and the bureaucrats as well. David Reisman makes a fresh contribution to the debate. He argues that the three policy issues that are of primary importance are choice, equality and cost.

Chapter 15: The cost of care

David Reisman

Subjects: politics and public policy, public administration and management, social policy and sociology, health policy and economics

Extract

The share of health care is rising. It is rising as a share of the domestic product, a share of total public spending and a share of the household budget. The phenomenon is across the board. It is happening in all countries, developed and developing alike. Both the price tags and the units supplied have been going up. Prices have been the principal cause: ‘Between 2000 and 2011, increase in price (particularly of drugs, medical devices, and hospital care), not intensity of service or demographic change, produced most of the increase in health’s share of GDP [gross domestic product]’ (Moses et al., 2013: 1949). The medical care consumer price index has ‘outpaced general price inflation, in some cases substantially’ (McGuire et al., 2012: 134). The unit price times the quantity supplied has had a tendency to escalate. Mainly because of the nominal variable but also because of the real magnitude, the health care sector, absolutely and relatively, is costing us more. In America in 1950 total spending on health care was only 4.6 per cent of the gross domestic product. It is 18 per cent today. Health care in 1950 accounted for 3 per cent of the combined budget of the federal, state and local governments. Today, second only to defence, it has grown to 29 per cent. It is political economy as well as economics. A great deal of health-related spending is a charge on the State. Deficits have problems of their own. In 1950 the typical American spent $500 on health care. Now it is $5615.

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