Avid Editor's Insights

Another Way To Look At Healthcare Spending

Posted by ageofpericles on May 29, 2009

Crossposted from Age of Pericles

Liberals Use Improper Metrics To Color Healthcare Debate

The United States spends more per capita on health insurance than any other developed nation. Health spending is expected to rise to 20% of GDP by 2017. Medicare and Medicaid will consume 9% of the federal budget by 2035. The grim statistics march across the pages of the President’s budget, fly forth from Nancy Pelosi’s unctuous lips, and swim through the ocean of red ink that is the Obama deficit. No sane politician would extol the virtues of skyrocketing health costs, but research indicates that this cloud has a silver lining. The two largest pharmaceutical companies, Johnson & Johnson and Pfizer, have research budgets of 11% and 15% of their total revenues. Both are based in the United States. The third largest pharmaceutical company, Bayer, is based in Germany where socialized medicine reigns. It budgets only 4% of its outlays for research. This gulf is not limited to private industry; the European Union governments spent $3.7 billion on health research. The National Institute of Health’s budget is allotted at almost eight times that, and results show. The United States birthed or heavily affected the development of five of six of the most major medical advances in the last quarter century of the second millenium. Scientists working in America won more than twice as many Nobel Prizes in the field of medicine than those working elsewhere between 1996 and 2006.

Proponents of universal health care may point to the fact that life expectancy in the United States is no higher than it is in Europe or Japan; however, the benefits of medical advances are not confined to the country in which they were birthed. For instance, magnetic resonance imaging (MRI) technology now enjoys worldwide prominence though it was first developed in the USA. Furthermore, not all aspects of health relate to quality of health care. In the words of Mike Huckabee, we have a health crisis brought on by unhealthy habits. A study completed in 1993 demonstrated that factors like obesity and prevalence of smoking have a large impact on personal health spending. Were levels of tobacco use and obesity to be brought in line with those of Europe, the United States could only gain in terms of increased productivity and reduced spending. Contrary to liberal belief, there are places for improvement in the United States healthcare system that don’t require a monolithic government program, known colloquially as a deficit machine.

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