Everyone assumes, as something entirely obvious, that health care costs have gone up much faster than the rate of general inflation since the 1950s, but I can’t seem to find any source that compares the two. Is there something online?
It’s certainly way outpaced the rate of inflation, but there are other factors to consider rather than the raw percentages. For example, I’m sure a case of cancer would cost far more now than in the 1950s more precisely because cancer is now treatable.
One of the main factors in rising healthcare costs is that healthcare is more advanced and used more often. So when you compare healthcare costs from 1950 vs today that is like comparing the cost of a 1000 sq foot home w/o any anemities in 1950 and a 3000 sq foot home with a pool, WiFi, & central heating/cooling in 2005
To clarify: I’m not asking why health care costs have risen so steeply – I plan to start a GD thread on that; but I’d like to start it with hard figures in hand.
It may help to clarify what you are asking. If you are asking if the cost of aspirin or penicillin or other drugs that were available in the past have risen at greater than the inflation rate then I expect you might get a different answer than if you were to ask if the typical treatment for lung cancer has risen at a greater rate. There are simply more treatments now for things that were untreatable in the past.
So it would probably help to define your terms a little better but I think you might be frustrated in the end because you will almost inevitably end up comparing apples to oranges. Even if you just looked at the room cost of staying overnight in a hospital you have to take into account that the overhead of those room fees may have to support different things than they did in the past such as better technology or patient to provider ratios etc…
Since people don’t typically pay for their healthcare directly it is hard to know what you are being charged. There are rules about what can be charged in certain situations so you get charged more for some things than they are worth and you get charged less for others than they are worth and the providers have to make up the cost elsewhere. So you are likely to find a lot of variability in how providers go about cobbling together a profit. The market is really distorted by regulations to such an extent that it is hard to establish what the true price for anything is anymore.
For all the figures you see in the media I’m not sure any of them are based on any standard that would make sense if given a hard enough look.
I did a poli sci paper on this (and used in econ as well :)) in the mid-90’s. Both professors ripped my rough draft(s) (:() because my numbers were too simply stated. I was comparing raw costs and adjusted for inflation. However, as others have pointed, this is not a good comparrison. A lot of treatments weren’t available in the past. Additionally, less people actually saw the doctor (adjusted for population growth). My numbers in the 90’s (which was data from 80’s) were that common medicines and procedures did out pace inflation, but not by too much. Some googling found this link for prices of aspirin in the last 4 years (0.4 inflation). However, note that governmental agencies, HMOs, insurance countries, etc. now all have a hand in the pot when it comes to determining prices (e.g. price schedules, combined treatments, additional required tests, etc.), which they didn’t have 20+ years ago.
With these other factors in place, it beomes even harder to compare prices for like goods and services. A better comparrison would be to start to look at prices post-HMO, and after the creation of Medicar/Medicaid. Other sources I was finding had inflation estimates all over the place. Time had a good, very basic article this year. The Economist is a wealth of information (but sometimes, context is not there). Pure numbers and raw data are found in journals and government price indexes, but those are completely without any explanation.
Is there no reliable way at all, then, to answer this very important question?!
There is. Try this (follow link for handy chart):
The comparison between inflation and healthcare spending probably needs to take into account the wide variation in healthcare costs. Pretty much everyone experiences the same degree of inflation, but healthcare costs depend a lot on what conditions you have and whether you have insurance (and has the percentage of uninsured people stayed constant over the years?).
Sure. Difficulties remain, but the best guess is better than nothing. Here’s a table for Australia (from the Australian Institute of Health and Welfare) As I understand it, US medical inflation has been rather higher than elsewhere.
Table 4: Annual rates of health inflation, 1993–94 to 2003–04 (per cent)
Period Health inflation General inflation(a) Excess health inflation
1993–94 to 1994–95 2.1 1.1 1.0
1994–95 to 1995–96 3.0 2.4 0.5
1995–96 to 1996–97 2.4 1.5 0.9
1996–97 to 1997–98 3.1 1.3 1.7
1997–98 to 1998–99 2.4 0.1 2.2
1998–99 to 1999–00 2.3 1.9 0.4
1999–00 to 2000–01 3.7 5.0 –1.3
2000–01 to 2001–02 3.7 2.7 1.0
2001–02 to 2002–03 4.1 3.0 1.1
2002–03 to 2003–04 3.8 2.9 0.9
Average annual rates of inflation
1993–94 to 1997–98 2.6 1.6 1.0
1997–98 to 2002–03 3.2 2.5 0.7
1993–94 to 2003–04 3.1 2.2 0.8
(a) Based on the implicit price deflator for GDP.
Note: Components may not add due to rounding.
Sources: AIHW health expenditure database and ABS 2005.
This would be a useful table too, I guess:
Table 39: International comparison of health expenditure as a proportion of GDP and per person, OECD countries, 1993 to 2003(a)
1993 1998 2003
Country Health to GDP ratio (%) Per person expenditure (A$) Health to GDP ratio (%) Per person expenditure (A$) Health to GDP ratio (%) Per person expenditure (A$)
Australia 8.3 2,082 8.7 2,733 9.7 3,931
Austria 7.8 2,236 7.6 2,558 7.5 3,108
Belgium 8.1 2,145 8.5 2,627 9.6 3,816
Canada 9.9 2,699 9.2 3,009 9.9 4,054
Czech Republic 6.7 1,018 6.6 1,187 7.5 1,752
Denmark 8.8 2,362 8.4 2,801 9.0 3,730
Finland 8.3 1,916 6.9 2,101 7.4 2,859
France 9.4 2,517 9.3 2,928 10.1 3,919
Germany 9.9 2,664 10.6 3,253 11.1 4,045
Greece 8.8 1,443 9.4 1,801 9.9 2,715
Hungary 7.7 855 7.3 1,014 8.4 1,713
Iceland 8.4 2,338 8.7 2,987 10.5 4,205
Ireland 7.0 1,392 6.2 1,941 7.4 3,309
Italy 8.0 2,049 7.7 2,363 8.4 3,048
Japan 6.5 1,829 7.2 2,283 n.a. n.a.
Korea 4.3 607 4.5 807 5.6 1,450
Luxembourg 6.2 2,534 5.8 3,010 6.9 5,002
Mexico 5.8 532 5.4 559 6.2 787
Netherlands 8.6 2,279 8.2 2,678 9.8 4,018
New Zealand 7.2 1,494 7.8 1,898 8.1 2,546
Norway 8.0 2,271 8.5 3,030 10.3 5,139
Poland 5.9 507 6.0 727 6.5 1,004
Portugal 7.3 1,181 8.4 1,699 9.6 2,426
Slovak Republic n.a. n.a. 5.7 732 5.9 1,049
Spain 7.5 1,459 7.5 1,776 7.7 2,477
Sweden 8.6 2,203 8.3 2,568 9.4 3,649
Switzerland 9.4 3,217 10.3 3,904 11.5 5,104
Turkey 3.7 268 4.8 409 7.4 693
United Kingdom 6.9 1,651 6.9 2,066 n.a. n.a.
United States 13.2 4,498 13.0 5,368 15.0 7,607
Average (unweighted) (29)(b) 7.8 1,871 7.9 2,279 8.8 3,240
Average (weighted) (29)(b)(c) 9.6 2,301 9.7 2,775 10.9 3,856
(a) See definition of ‘OECD financial year’ in Box 2.
(b) Excludes the Slovak Republic. Averages for 2003 incorporate 2002 data for Japan and the United Kingdom.
(c) Averages weighted by GDP or population.
Note: Expenditures converted to Australian dollar values using GDP purchasing power parities.
Sources: AIHW health expenditure database; OECD 2005.