You-Must-Really-Think-We're Dumb Letters: The Cost of Health Care

Some people say that numbers don't lie. Others say "There are lies, damn lies and statistics."

I say that numbers don't lie, people do. Which places me squarely in the middle of those two sayings. That's just like me.

Here's a lovely letter about health care costs from a chap at the Pacific Research Institute, as published in today's New York Times. (By the way, the PRI's website touts the organization as "promoting individual freedom and personal responsibility". Guess where they're coming from.)

A recent study that I conducted for the Pacific Research Institute contradicts the majority opinion registered in your recent poll, namely that “government could do a better job of holding down health-care costs than the private sector.” Across nearly four decades, the opposite has been true.

The institute’s study compares the cost increases of all health care nationwide apart from the two flagship government-run programs, Medicare and Medicaid, with Medicare’s cost increases. Since 1970, Medicare’s costs — even without the prescription drug benefit — have risen 34 percent more per patient.

The government has done a far worse job at holding down health care costs.

Hmm, notice anything missing there? I do. Monsieur notes that Medicare/Medicaid costs have risen at a higher rate per patient compared with what I'm assuming is a national average. (He doesn't say exactly what the comparison number is.) But it doesn't say what the actual cost is for each.

Is this important? Let's say I get my broccoli at Sam's Government Produce for $1.50. You get your broccoli at Max's Corporate Fruit and Veggie Stand for oh, $90.00. Forty years later, the price at Sam's has gone up to $10.50. Wow, a 600% increase! That's way more than the mere 50% increase at Max's, where you're now paying just $135.00 for your broccoli. So Max clearly knows how to keep his costs down, right? Right?

But wait, there's more. This "study" goes back to 1970, which means that about half of the data come from a period before managed care became the standard in the 1990s. Hardly a fair comparison. Coincidence? Uh-huh. I'd like to see the numbers from, say, 1995 on.

Sit down. We're not done here. This also doesn't take into account the quality of the care. Insurance companies hold down costs, as the first letter-writer in the NYT link notes, by denying care to existing patients and by charging giant deductibles that dissuade people from seeking treatment in the first place. Oh yeah, and by not even covering people who might actually need the coverage (i.e. sick people). So, a large and costly segment of the population is not included in the study for the writer's "good guys". Here's a surprise: sick people cost more to treat than healthy people. Who'da thunk?

This attempt at "research" is a joke. It's a level below a damn lie.