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.

Photo: Getty Images/Richard Stonehouse
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Here's how Jeremy Corbyn can win back the Midlands

The Midlands is where elections are decided - and where Jeremy Corbyn can win. 

The Midlands: this “formless” place is where much of Labour’s fate lies. The party witnessed some of its most disappointing 2015 results here. In those early, depressing hours of 8 May, Nuneaton was the result that rang the death knell of Labour’s election chances. Burton, Cannock Chase, Halesowen & Rowley Regis, Redditch and Telford weren’t far behind. To win here Labour need to build a grassroots movement that engages swing voters.

Luckily, this is also a place with which Labour’s new leader has a natural affinity. The bellwether seat of Nuneaton is where Jeremy Corbyn chose to hold his last regional rally of the leadership contest; just a couple of counties over you’ll find the home Corbyn moved to in Shropshire when he was seven. He cut his political teeth round the corner in marginal constituency The Wrekin; it was in this key seat he did his first stint of campaigning. Flanked by a deputy leader, Tom Watson, who represents Labour stronghold West Bromwich East, Corbyn has his eye on the Midlands.

As MP for Islington North since 1983, Labour’s leader has earned London-centric credentials that have long since overshadowed his upbringing. But Corbynism isn’t a phenomenon confined to the capital. The enthusiasm that spilled out of Corbyn’s summer leadership rallies across the country has continued into the autumn months; Labour’s membership is now over 370,000. It’s fast catching up with 1997 figures, which are the highest in the party’s recent history.

London is the biggest beneficiary of this new movement - with 20 per cent of Labour’s members and 19 per cent of new members who signed up the week before conference coming from the capital. But Corbynism is flourishing elsewhere. 11 per cent of all Labour party members now reside in the southeast. In that same pre-conference week 14 per cent of new members came from this mostly Tory blue area of the country. And since last year, membership in the southwest increased by 124 per cent. Not all, but a good deal of this, is down to Corbyn’s brand of anti-austerity politics.

A dramatic rise in membership, with a decent regional spread, is nothing to be sneered at; people are what you need to create an election-winning grassroots movement. But, as May proved, having more members than your opposition doesn’t guarantee victory. Corbyn has spoken to many who’d lost faith in the political system but more people need to be won over to his cause.  

This is clear in the Midlands, where the party’s challenges are big. Labour’s membership is swelling here too, but to a lesser degree than elsewhere. 32 per cent of party members now and 13 per cent of those who joined up in seven days preceding conference hail from this part of the country.

But not all potential Labour voters will become card-carrying members. Corbyn needs to speak to swing voters. These people have no party colours and over the summer they had mixed views on Corbynism. In Nuneaton, Newsnight found a former Labour turned Ukip voter who thought Corbyn would take Labour “backwards” and put the economy at risk. But a fellow Ukip voter said he saw Corbyn as “fresh blood”.

These are enduring splits countrywide. Voters in key London marginal Croydon Central gave a mixed verdict on Corbyn’s conference speech. They thought he was genuine but were worried about his economic credibility. While they have significant doubts, swing voters are still figuring out who Labour’s new leader is.

This is where the grassroots movement comes into play. Part of the challenge is to get out there and explain to these people exactly who the party is, what it’s going to offer them and how it’s going to empower them to make change. 

Labour have nascent plans to make this reality in the Midlands. Tom Watson advocated bringing back to life this former industrial heartland by making it a base for manufacturing once again – hopefully based on modern skills and technologies.  He’s also said the leadership team will make regular regional visits to key seats. Watson’s words chime with plans floated by shadow minister Jon Trickett: to engage people with citizens’ assemblies where they have a say over Labour politics.

But meetings alone don’t make grassroots movements. Alongside the economy, regional identity is a decisive issue in this – and other – area(s) of the country. With the influx in money brought in by new members, Labour should harness peoples’ desire for belonging, get into communities and fill the gaps the Government are leaving empty. While they’re doing this, they could spread the word of a proper plan for devolution, harking back to the days of municipal socialism, so people know they’ll have power over their own communities under Labour.

This has to start now, and there’s no reason why the Midlands can’t act as a model. Labour can engage with swing voters by getting down to a community level and start showing – and not just saying –  how the party can make a difference. 

Maya Goodfellow is a freelance journalist.