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Questions about health care spending

ASK THIS | July 07, 2004

Reporters should be digging deeper into some scary trends in health care financing, writes economist and blogger Brad DeLong. Fourth of a series (see previous).

By Brad DeLong


Q. What has the "managed care" revolution really been like for those on the receiving end? Is it rationing-by-hassle? Rationing-by-paperwork? Or is it minor annoyances coupled with getting more medical care for the buck by lowering the quality of doctors' and nurses' lives?


Q. How many people in America today are not receiving appropriate care because they are too poor to buy insurance?


Q. How many people in America today are able to buy insurance, but would rather spend money on other things and gamble that they will stay healthy or that somehow the taxpayer or the church will pick up the tab if they get sick?


Q. Why are inventions in medicine so expensive? What are some examples of some part of medical care that has become much, much cheaper over the past two generations?


Q. Drugs. How do we get pharmaceuticals cheaply while (a) still channeling enough R&D money into drug research and (b) making sure that R&D money goes primarily into life-saving and only secondarily into vanity drugs?


Twenty-five years ago we spent 9 percent of our gross domestic product on health care. Fifteen years ago we spent 12 percent of GDP on health care. Today we spend 15 percent of GDP on health care. In 2025 we are likely to spend 20 percent of our GDP on health care. We believe that sick people – even if they are poor – should not be allowed to die if we can heal them, and should not be left lame if we can fix them. We also believe that you ought to be able to spend as much as you want on your own health care. These two principles were in conflict when we spent 9 percent of GDP on health care. They are in sharper conflict today when we spend 15 percent of GDP on health care. They will be in much, much sharper conflict in 2025.


We, as a nation, need to be thinking about these questions. But in order for that to happen, we need journalists to be thinking about them – and reporting tentative and partial answers – first.

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