The US healthcare system is one of the top five economies in the world. Yes, that is true!! It’s time to step back and ask: How did we get here?
The ongoing debate about how people should be insured and how healthcare should be provided is the result of historic trends that are intersecting at this moment in time. It wasn’t too long ago that treatment options were very limited for just about any ailment and life expectancy was less than sixty years old. Governments had no involvement in provision of healthcare to their populations and the concept of insurance as a way to pay for healthcare was unheard of. What happened? Well, many things.
First, industrial revolution resulted in great wealth creation and ability to invest in research and development in many areas, including Medicine. At the turn of the twentieth century, the top causes of mortality were almost all infectious diseases. Cardiovascular disease was not in the top 10 causes of mortality worldwide. Why? People have to live long enough to develop cardiovascular disease and many people died with infectious disease or in wars. With the discovery of penicillin and the subsequent creation of the pharmaceutical industry, improvements in sanitation, and anesthesia and surgery, suddenly many of the universally fatal illnesses became treatable. People were now living longer and developing new illnesses, which meant opportunities for new research to discover new drugs to combat these illnesses. Heard of statins? How about ace inhibitors? These two classes of drugs are responsible for improving survival rates of two of the deadliest chronic diseases.
So, now people are living longer and new, exotic treatments are coming out everyday to take care of their arthritis, alzheimer’s, and bad knees. What are the consequences? well, people living longer means that they can work for a longer time and be more productive. More economic output produces more wealth and prosperity and hence a faster economic growth rate, exactly what we have seen in the last 100 years! It means that provision of healthcare gradually became an industry in and of itself. Not just any industry, over time it grew to be the large sector of the US and global economy. This means more employment and prosperity! All good things. It is also employment in a sector that directly impacts people’s lives and those employed in healthcare feel good about themselves and the work they do. Keeping the rest of the people healthy does not only mean that those people and their families will be happier, but their increased economic output creates a stronger tax base, which means the government has more money to invest in the long-term growth of the country.
This all sounds pretty good. So, why do we keep hearing about how the high spending on healthcare is a problem and healthcare’s high share of our GDP is not necessarily a positive thing for our economy as a whole?