March 5, 2012

Cost of healthcare--or the world before the safety net

I am struck by the conservatives who seem to long for the world before the social safety net.  Several people I know just routinely talk about the fact that we used to "take care of" people at the community and church level.  But all of that misses two key points.  One, that the reason for Social Security and then Medicaid and Medicare was that churches and communities weren't able to help everyone.  Two, they are remembering a time when healthcare costs were much, much, much lower.

Here are some numbers, though as I start this process, I realize how hard it is to find good numbers and consistent numbers.  Bear with me.

Prior to 1920, medical technology wasn't much, so there wasn't that much doctors could do that was that expensive.
 In fact, the chief cost associated with illness was not the cost of medical care, but rather the fact that sick people couldn't work and didn't get paid. A 1919 State of Illinois study reported that lost wages due to sickness were four times larger than the medical expenditures associated with treating the illness
In 1929, one study has the average family paying medical expenses of $108 per year.  One estimate I saw had the average income around $1,400 per year, so medical expenses were less than 10% of income.  This was without insurance, mind you, as most didn't purchase insurance, and a small percentage of this was hospital stays.  So this is paying for the cost of healthcare, not healthcare insurance.  Hospital care starts to get more expensive as we move through the century.  Almost nothing in 1900, by 1965 a day in the hospital cost $128 but was up to $1,289 in 2002.

That alone demonstrates one huge leap in healthcare costs.  I will keep working on this, but I think comparing a world before 1930 with today is comparing apples with computers.  I read the other day that Rick Santorum had incurred some $100,000 out of pocket expenses taking care of his disabled daughter.  Those are costs that the uninsured simply can't do.

Imagine taking away that safety net all together, and then imagine the elderly without prescription coverage, assisted living, or access to expensive treatments.  Imagine the poor disabled and their costs.  We are not taking care of them now, but imagine that with a gutted Medicaid?

Anyway.  This is an early take.  I welcome your thoughts.


leighton said...

While I would be very interested in tracking how much steeper the exponential curve of healthcare costs is than the curve of income, I can't help but think that using facts to try to persuade people who demonize facts is not an undertaking with a high likelihood of success. Still, gathering solid evidence that they are either lying liars who lie, or have themselves bought into the lies of lying liars, is a useful thing to do. Vin Scully once remarked that people use statistics like a drunk uses a lamppost: more for support than illumination. It seems that mainstream conservatives have now expanded that approach to more general historical and economic arguments.

Streak said...

I see that point, Leighton. But I still believe there are low-information voters who are open to facts. They just don't know them. That certainly doesn't apply to all, but some.

steves said...

I think this is a good approach. I doubt many people have ever had to pay for their health care and don't really look at the bill. I am in my 40's and remember going to the doctor and paying the bill right away. You then submitted the bill to BC/BS and got reimbursed. I doubt with the cost today that many people have that kind of cash on hand and could do that. My parents still have a copy of the bill from when I was delivered. I believe it was around a few hundred dollars, and included 4 days of inpatient care.

I think that as people's insurance gets crappier and covers less, they may be open to some kind of public option.