> Charles Brown wrote:
>
>> If as word has it, health care costs are rising, then these "raises"
>> merely keep workers up with the rise in the cost of living, if that much, no
>
> Barely. There's not much evidence that health care inflation reflects
> any serious quality increases - it's mostly pure price. Maybe Jim
> Westrich could say more.
The whole medical inflation -> premium inflation -> deferred wage growth/increased cost sharing -> avoiding real cost pressure -> medical inflation is a vicious circle. There are real medical improvements obviously but nothing that has any measurable macro benefits. Macro benefits come from general economic improvement, education, and public health.
As far as separating quality from quantity and price it is difficult. I think there are several movements in hospital care and physician practice that increase quality a bit but at extremely high cost--things like disease management and electronic record keeping. Health care is odd in that you can make money by giving people who already earn a lot of money more money to do things they already should have been doing.
The key is that there is no major actor in the private health care spiral that controls overall health costs. There is no actor in the economic system that is getting workers good value for their money (health plans pass higher costs onto their customers, employers pass their costs onto workers, and workers are in a difficult individual position made worse by not being organized to be smart purchasers of health care).
Anyway to get back to Charles\'s point, wages do not keep up with Medical inflation so health consumers are always losing in real terms. The issue about the quality not changing with price level changes is a valid one but somewhat separate. Ordinary people get less and less of unwieldy and compromised health care behemoth each year and have to pay more.
A related point to emphasize here is how much of deferred wage growth is part of macro wage numbers. I don\'t work with jobs and wage/salary numbers that much but whenever I hear things like stagnant wages I immediately think that its related to benefits cost. So not only do wage increases not keep up with medical inflation, but medical inflation through premium inflation and benefits cuts lower possible wage growth.
Jim
Coming soon, a risky pill with marginal effectiveness, that treats Assal Horizontalism.