False Alarm About Distribution of Health Care Costs

Mother Jones published a piece about the unequal distribution of health care costs in the US.  The purpose of the piece was to present the numbers. It did not claim to analyze them and acknowledged that the current popular political response was inadequate.

My comment is a supplement to the piece. I point out why this kind of unequal distribution is normal and should be treated as such in the public policy debate about health care. Here it is:

There’s nothing abnormal here. The frequency of this type of pattern is why we have an insurance industry and why the other Western democracies have universal health insurance. There are a lot of  small probability, high cost events in life. Most states make every car owner buy auto insurance even though only a small number of them will cause car crashes.

What percentage of the US population suffers financial losses as a result of a house fire each year? I guarantee it’s a small number. But because the expense of losing your house to fire is so high, a huge number of people buy fire insurance. The same is true of everything else we insure.

There may be a few people in the 1% of the population that generates 20% of health care expenses who could have prevented their need for that care. But most of them just got unlucky (or old). It’s extremely expensive to be a quadriplegic. Does that mean it’s preventable? I wish. You or I or anyone we know could become a quadriplegic tomorrow. All it takes is a moment of bad luck. The same is true of traumatic brain injuries. A very expensive catastrophic injury that any person could suffer on any given day. Nancy Hall mentioned a few of the host of chronic or long-term illness that are not related to lifestyle. People with those had no way to prevent themselves from being in the 1%. We don’t either. Not being in the 1% today doesn’t mean we won’t be in it sometime in the future.

That chart isn’t bad news. It’s good news. The vast majority of people in the US are healthy. It would be wonderful if no one had any serious health problems but that won’t happen anytime soon. In the meantime a small % of the population will have a serious illness or injury that requires significant on-going medical care.

The incidence of a few chronic illnesses can be dramatically reduced by lifestyle. But our politicians talk about health care as if all chronic illnesses are preventable.  Our public policy debate about health care is taking place in a fantastyland where the ill and disabled are to blame for their medical problems. In addition to being extremely cruel, that leads to unrealistic and foolish suggestions for public policies. The more we buy into that myth, the worse America’s public policy on health care will be.
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