Is healthcare spending doomed to increase forever?

Does healthcare spending suffer from an inevitable escalation in costs? Can it ever be reduced?

Matt Yglesias has a good post up over at Slate, detailing the problem that all wealthy countries have when it comes to healthcare expenditure: Demand for health is, quite literally, insatiable.

Yglesias writes:

It turns out that electronic medical records may not reduce health care spending (see Lohr & Kliff) for the very sensible reason that when you make it cheaper and easier to order and analyze tests, medical professionals grow more inclined to order tests. It's kind of a health care version of the energy efficiency rebound effect, when you make it cheaper to keep your home comfortably warm in the winter people grow more inclined to crank up the heat rather than wear a thick sweater inside. The difference is that once you reach a certain level of affluence your house is warm enough and you find yourself sated. The crux of the matter with healthcare is that we're never really sated. Once you're talking about a middle class family in a developed country—a family that's not worried about starving to death or freezing on the streets or being unable to afford shoes—you're talking about a family that's going to plow what resources it has into attempting to address the potentially limitless health care needs of its members.

It is a real concern for anyone trying to improve the efficiency of health services; and yet, at the back of my mind, I couldn't get this out of my head:

Healthcare: Chart One

It clearly is possible for the US to reduce spending on health - possibly even halve it. So what's missing from Yglesias' analysis? It may be as simple as saying 'no'.

For all the hysteria over the accusation that Obamacare would lead to a network of "death panels", the problem with the claim is more style over substance. Health systems necessarily involve an element of rationing (we do not live in a post-scarcity society quite yet); but whereas NICE attempts to do that in a way that guarantees the most efficient use of resources for the nation as a whole, the US system follows the path which ensures that those who can afford to spend ever-increasing amounts of money, to secure ever-decreasing returns, do so.

In the long term, we may hope for a change in attitude to that demonstrated in Ken Murray's wonderful piece from January, but for now, it seems that the best response to the infinite demand for health may be gentle pressure in the opposite direction.

A patient is monitored by a nurse while walking on crutches. Credit: Getty

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Election results in Wales: Labour on course to remain the largest party

Despite a shock victory for Plaid Cymru leader Leanne Wood, Welsh Labour will be able to govern without a coalition.

Labour have posted good results in Wales, where the party remains on course to be the controlling force in the Welsh Assembly.

At the time of writing, Carwyn Jones’ party has 24 of the 40 constituency seats, with Plaid Cymru a distant second on 6 and the Conservatives on 5. Among Labour’s notable holds was Gower, which the party lost narrowly at a Westminster level in the 2015 general election by just 27 votes.

There was a surprise victory for Plaid Cymru leader Leanne Wood in Rhondda, where she defeated Labour cabinet member Leighton Andrews with a swing of 24 per cent. Speaking about the result, a spokesperson for Welsh Labour said:

“The Rhondda result is a really tough for us – we’ve lost a great Minister and one of the most respected politicians in Wales. Clearly the huge national profile afforded to Leanne Wood has had an impact, and Plaid seem to have won this seat at the cost of making progress anywhere else in Wales.

“The other results so far have been good. In particular where we are fighting the Tories it shows the local campaigns have been successful.”

Welsh Liberal Democrat leader Kirsty Williams held on to her seat in Brecon and Radnorshire, while Ukip have yet to win any seats (although they are likely to get a few on the regional list).