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May 20, 2009

The value of health care spending

Much of the discussion of health care focuses on how much we spend, both individually and collectively. A goal of many of the proposals for changing our health care system is to reduce these costs. But isn't there a flip side to this debate that looks at what we get for our health care spending? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Indeed, there is, and when we look at that flip side, we see a lot of good things that we've gotten from our health care spending. If you look at the U.S., we've made a lot of progress in health care: increased longevity, improvements against disease and injuries, lower incidence of infant deaths. You can also look at the fact that as our society increases income, and living standards rise, people want to become more healthy. And we're willing to spend more money on health care. And there has been an effort by economists to put a dollar value on the benefits of our health care spending. Now these, of course, are controversial, but I think they do give us some perspective. One study, for example, estimated that these benefits are enormous, averaging over $3 trillion each year between 1970 and 2000, equal to half the annual gross domestic product, or total output of our economy over that period. So keep this in mind; certainly we want our health care system to be as efficient as possible. We want to spend as little as possible and get the same outcome, but don't forget to look at those outcomes. And when we do, we see a lot of good things."

Posted by Dave at May 20, 2009 08:00 AM