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September 14, 2007

More money doesn't make you healthier

So I want to say loudly and clearly what has yet to be said loudly and clearly enough: In the aggregate, variations in medical spending usually show no statistically significant medical effect on health. (At least they do not in studies with enough good controls.) It has long been nearly a consensus among those who have reviewed the relevant studies that differences in aggregate medical spending show little relation to differences in health, compared to other factors like exercise or diet. I not only want to make this point clearly; I want to dare other health policy experts to either publicly agree or disagree with this claim and its apparent policy implications. ... How much could we cut? For the U.S. it seems reasonable to project the 30% cut in the RAND results to a 50% cut, since the U.S. spends so much more than other nations without obvious extra health gains. I thus claim: we could cut U.S. medical spending in half without substantial net health costs. This would give us the equivalent of an 8% pay raise.

How should we cut medical spending? There are many possibilities, and I may prefer some possibilities to others. But I do not want such preferences to distract from the main point: most any way to implement such a cut would likely give big gains. The obvious first place to cut would be our government and corporate subsidies for medicine, including direct payments, tax exemptions, and regulatory requirements. Socially, we should also try to give medicine far less prestige than we now do. After these one could consider taxing medicine, limiting it by law, or nationalizing the industry and using agency budgets to limit spending.

Posted by OneEyedMan at September 14, 2007 10:27 PM

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