Here’s a pretty inspiring interview with inventor Dean Kamen, who says the focus on long term costs of the health care system (and fears of rationing) is all wrong, and that we should put more money into innovations that more than payoff later.
I’m sure in 1920 if you asked actuaries to say what percentage of our GDP are we going to spend taking care of people with polio, they’d say: “They get polio, it goes to their lungs, they sit in iron lung machines, they could live a whole lifetime with three people watching over them. We can’t support them all.”
But what did it cost to deal with everybody with polio? Oh, $2 apiece.
Simple cures for diseases like diabetes (high cost in aggregate) and Alzheimer’s might be just down the road and would radically change the cost of care. So how do we pump up innovation? In this Ezra Klein article, MIT economist Amy Finkelstein says, “If you cover people with insurance it increases their demand for health care and that will create a larger market for innovations. That’s certainly what I found happened with Medicare.” (No evidence provided but she does have a lot of publications on Medicare and insurance markets.)
So even if costs rise (and long-term costs appear scary today), the increased coverage that some kind of HC reform (private or public) would provide is likely to raise demand and spur more innovation, not less, increasing our chances of finding treatments that will lower costs in the long run? It’s an interesting hypothesis anyway.