Tuesday, January 5, 2010

Health Spending Rises, but at a Slower Rate

New York Times article "Health Spending Rises, but at a Slower Rate" (January 4th, 2010) makes the same mistake that The Times made two months before, reviewed in this Corrections article.  Corrections avoids  repetition, but this issue bears it.  The Times contains an entire article about rising medical expenditure without ever mentioning whether or not the good being provided has decreased, increased, or stayed the same.  To wit: it could be that heath cost per unit-of-health has decreased, and elastically-demanding Americans are now consuming more, cheaper health.

Reporting on expenditures rising, falling, or staying the same without mentioning receivables gives a reader no idea about whether or not a situation is better, worse, or the same.  All nine combinations are possible.

1 comment:

  1. Excellent point. In impoverished societies almost all resources have to be diverted to meeting basic needs - food, shelter, clothing and the like. As societies grow more wealthy there is the opportunity to spend money on additional benefits. Doubtless expenditures for entertainment activities rise as one's wealth increases for example. One of the best areas for such expenditures is healthcare. In an impoverished society one might have to "make do" with a defective hip or a cleft palate or a cosmetic defect or the long term risk of disease. In a wealthier society it makes sense for individuals to take expensive drugs like Lipitor to reduce their long term risk of heart attack and perhaps stroke or to replace defective hips. Growth in healthcare expenditures like growth in entertainment expenditures is not in itself necessarily a bad but in fact might represent a perfectly rational set of choices by the population.