How Republicans misunderstand health care costs

Congratulations! The cost of your health insurance is increasing.

What? You don't think that's a reason for celebration? Good, you're avoiding a mistake that's far too common among economic analysts, especially Republicans.

Academic studies and news media regularly report that in recent decades the middle class has been stagnating economically. Conservative and libertarian analysts often downplay these stories by saying that while wages for people in the middle of the economic spectrum may look flat, their total compensation has been rising steadily.

So, for example, Michael D. Tanner of the Cato Institute, trying to present a more optimistic economic picture, recently observed that "incomes among lower- and middle-income workers have been shifting from cash wages to non-cash benefits such as health insurance and pensions." Count those benefits, he added, and "inequality may not be growing at all."

A recent study reported that median household income had risen only 22 percent from 1979 to 2007. An article in National Review, the conservative magazine where I work, responded by noting that using a broader measure of income raised that number to 46 percent. That broader measure counted health benefits.

Excluding such benefits when measuring inequality, writes Ron Haskins, a conservative scholar of social policy, "is roughly equivalent to estimating the size of a city by counting the names in the phone book, but ignoring all names that begin with 'R,' 'S,' and 'T.'"

A Problem

Conservatives are right that trends in total compensation look better than trends in wages. But that's not a reason for complacency. It's a problem. What the numbers mean is that increases in health-care costs have depressed wage growth, and sometimes kept wages from rising at all.
If there's a consensus among health economists about anything, it's that employer-provided health benefits come out of wages. If health insurance were cheaper, or the marketplace were structured so that most people bought health coverage for themselves rather than getting it with their jobs, people would be paid more and raises would be higher.

If people consciously decided to spend most or all of their pay increases on health care, that would be one thing. They don't. Current policies elaborately disguise how much health coverage costs people.

Because the federal government taxes wages but not health benefits, employers provide more of the latter and less of the former than they otherwise would. Most people have no idea how much money they have forgone in wages because of those benefits. They never see the money.

Health benefits are, of course, valuable to people, and the increase in their cost over the last generation -- which those statistics on rising compensation show -- partly reflects that medicine can do more than in the past. It also reveals a lot of waste and inefficiency, however, rather than increased well- being.

The less people's wages rise, the less they feel they're getting ahead, regardless of what's happening to their health premiums. During the middle of the last decade, conservatives talked about "the Bush boom" and wondered why it wasn't more widely appreciated.

One reason: Wages were flat even as compensation rose. Because conservatives didn't see the importance of cash wages, they misunderstood the politics of the economy. Flat or slowly rising wages have probably also reduced public support for useful reforms such as freeing trade and cutting corporate-tax rates.

Health Inflation

The research that conservatives cite, in other words, doesn't show that wage stagnation is nothing to worry about. It helps explain a troublesome trend. If you ignore the role of health costs in suppressing wage growth, you might be tempted to rely too much on other explanations, such as a technology slowdown or the decline of unions. The data also make clear that reducing health inflation would go a long way toward boosting wages.

President Barack Obama's health-care law is supposed to bring costs down, although there is reason for skepticism. Conservatives have their own ideas, but Republican politicians haven't done much to advance them, partly because they haven't paid much attention to the link between health costs and wages. (In fairness, Democrats sometimes get this link wrong, too.)

Conservatives shouldn't say that the wage-stagnation problem is an illusion because health benefits have been rising. They should say, instead, that the problem is real and that surging health costs are a major cause.

The American dream isn't to pay ever-higher health premiums.


http://www.newsday.com/opinion/oped/...osts-1.4447270

I posted this on another thread

Health expenditures in the United States neared $2.6 trillion in 2010, over ten times the $256 billion spent in 1980. [1] The rate of growth in recent years has slowed relative to the late 1990s and early 2000s, but is still expected to grow faster than national income over the foreseeable future.[2] Addressing this growing burden continues to be a major policy priority. Furthermore, the United States has been in a recession for much of the past decade, resulting in higher unemployment and lower incomes for many Americans. These conditions have put even more attention on health spending and affordability. [1]

Since 2002, employer-sponsored health coverage for family premiums have increased by 97%, placing increasing cost burdens on employers and workers. [3] In the public sector, Medicare covers the elderly and people with disabilities, and Medicaid provides coverage to low-income families. Enrollment has grown in Medicare with the aging of the baby boomers and in Medicaid due to the recession.[1], [4] This means that total government spending has increased considerably, straining federal and state budgets. In total, health spending accounted for 17.9% of the nation’s Gross Domestic Product (GDP) in 2010. [5]


huh? up 97% since 2002?

fucking Obamacare !!

No one is saying healthcare costs have not been increasing........

Why did Obama promise to lower costs ?

So why did Obama promise to lower costs ? Originally Posted by Whirlaway

why lower costs ?

seriously?

Yeah; why.

We know he didn't; most knew he wouldn't. Your own posts imply it is impossible to lower costs....

So why did Obama make the phony promise ?

Yeah; why.

We know he didn't; most knew he wouldn't. Your own posts imply it is impossible to lower costs....

So why did Obama make the phony promise ? Originally Posted by Whirlaway

AHC hasnt gone into full effect


The Henry Ford Health System in Detroit has documented savings of $10 million per year from its efforts to improve patient safety. The "Nuka" system of team-based primary care in Anchorage has reduced hospital days more than 50 percent. Denver Health, using modern, "lean production" approaches to decreasing waste in health-care processes, has reduced costs by more than $150 million and achieved the lowest mortality rates among 115 comparable academic medical centers. The Affordable Care Act will help make these successful examples the norm.

HAHAHAHAHAHAH !

Spoken like a true kool aid swallower; slup, slup !

Obama promised healthcare costs would be coming down by the end of his first term; now you are telling me that was a lie ?

“We won’t do all this twenty years from now, or ten years from now,” Obama said. “We’ll do it by the end of my first term as President of the United States.”

AHC hasnt gone into full effect Originally Posted by CJ7

HAHAHAHAHAHAH !

Spoken like a true kool aid swallower; slup, slup !

Obama promised healthcare costs would be coming down by the end of his first term; now you are telling me that was a lie ?

“We won’t do all this twenty years from now, or ten years from now,” Obama said. “We’ll do it by the end of my first term as President of the United States.” Originally Posted by Whirlaway

they did, and are .. see the addition to my above post

then go have a nice glass of republican talking point piss

Healthcare costs have NOT declined.........the OP and your own follow up post says so...........you say one thing in one post and then the completely opposite in a follow up post......

you are a loon CJ.

Since 2002, employer-sponsored health coverage for family premiums have increased by 97%, placing increasing cost burdens on employers and workers. [3] In the public sector, Medicare covers the elderly and people with disabilities, and Medicaid provides coverage to low-income families. Enrollment has grown in Medicare with the aging of the baby boomers and in Medicaid due to the recession.[1], [4] This means that total government spending has increased considerably, straining federal and state budgets. In total, health spending accounted for 17.9% of the nation’s Gross Domestic Product (GDP) in 2010. [5]

So which is it CJ; during Obama's 1st term have healthcare costs gone up or down ?

they did, and are .. see the addition to my above post

then go have a nice glass of republican talking point piss Originally Posted by CJ7

Healthcare costs have NOT declined.........the OP and your own follow up post says so...........you say one thing in one post and then the completely opposite in a follow up post......

you are a loon CJ.

Since 2002, employer-sponsored health coverage for family premiums have increased by 97%, placing increasing cost burdens on employers and workers. [3] In the public sector, Medicare covers the elderly and people with disabilities, and Medicaid provides coverage to low-income families. Enrollment has grown in Medicare with the aging of the baby boomers and in Medicaid due to the recession.[1], [4] This means that total government spending has increased considerably, straining federal and state budgets. In total, health spending accounted for 17.9% of the nation’s Gross Domestic Product (GDP) in 2010. [5]

So which is it CJ; during Obama's 1st term have healthcare costs gone up or down ? Originally Posted by Whirlaway

prove this isnt true ...

The Henry Ford Health System in Detroit has documented savings of $10 million per year from its efforts to improve patient safety. The "Nuka" system of team-based primary care in Anchorage has reduced hospital days more than 50 percent. Denver Health, using modern, "lean production" approaches to decreasing waste in health-care processes, has reduced costs by more than $150 million and achieved the lowest mortality rates among 115 comparable academic medical centers

I don't need to prove it; I accept it as fact.

But these are minor savings. You are the one who said that Obama lowered healthcare costs in his first term; but also posted that healthcare costs are baked in to our demographics and therefore increases are inevitable.

So which is it CJ ?

Is your point so lame as to be that ObamaCare lowered the operating costs in a couple of hospitals, so therefore ObamaCare lowered healthcare costs for everyone ?

HAHAHAH,...I BET IT IS.....YOU ARE A BUFFOON......HAHAHAH!!!!!!!

those few hospitals are a reflection on hospitals everywhere, youre just too stupid to understand complex reasoning

$10 -$150 million dollar savings is what you call minor ?

a wise mane once said

"youre just too stupid to understand complex reasoning"

Healthcare expenditures in 2012 were about $2.8 trillion, so your $10 to $150 million in savings is paltry - less than 0.0001% of total expenditures.

The facts are the facts; Obama promised to bend the cost of healthcare downward by the end of his first term. He didn't !

FACT JACK !

But you want us to believe otherwise. You are dumber than dumb !

Healthcare costs are going up, not down. Obama didn't and won't bend the curve downward !

no, its a fact the cost of healthcare is getting lower as we speak .. Ive proven just that, and you even agreed

simply put, you dont want Obamacare to bend the cost downward

You are such a dipshit DIPSHIT OF THE YEAR!

By making the system more efficient, eliminating duplicity and promoting health rather than critical care, the overall expenditure in health care will cost less. Numerous studies indicate that. Studies by employers, insurers and medical organizations. These aren't opinions, DIPSHIT OF THE YEAR. These are MATHEMATICAL FACTS.

Of course you wouldn't understand that because it requires several lobes of the brain.

And you're so obsessed with our President that you can't see straight. (After reading your reviews, I can tell you're really jealous)