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Cost Shifting Is Not Cost Cutting

You’ve heard that the U.S. spends more on health care than anywhere else on the planet. If you want to see this for yourself, spend some time with this page of charts, graphs and tables compiled by the Kaiser Family Foundation. And what makes the amount we spend even more pathetic is that our overall results do not stand up to that of other nations that spend far less.

Now the Global Health Leadership Institute points out that while we spend much more on health care costs than those other countries, we spend a great deal less on other social services — “rent subsidies, employment-training programs, unemployment benefits, old-age pensions, family support and other services that can extend and improve life.”

We studied 10 years’ worth of data and found that if you counted the combined investment in health care and social services, the United States no longer spent the most money — far from it. In 2005, for example, the United States devoted only 29 percent of gross domestic product to health and social services combined, while countries like Sweden, France, the Netherlands, Belgium and Denmark dedicated 33 percent to 38 percent of their G.D.P. to the combination. We came in 10th.

What’s more, America is one of only three industrialized countries to spend the majority of its health and social services budget on health care itself. For every dollar we spend on health care, we spend an additional 90 cents on social services. In our peer countries, for every dollar spent on health care, an additional $2 is spent on social services. So not only are we spending less, we’re allocating our resources disproportionately on health care.

Our study found that countries with high health care spending relative to social spending had lower life expectancy and higher infant mortality than countries that favored social spending. While the stagnating life expectancy in the United States remains at 78 years, in many European countries it has leapt to well over 80 years, and several countries boast infant mortality rates approximately half of ours. In a national survey conducted by the Robert Wood Johnson Foundation, four out of five physicians agreed that unmet social needs led directly to worse health.

This suggests to me that one of the several factors driving up health care costs is our low rate of “safety net” support for people in need. Here’s an eye-opening statistic:

The Boston Health Care for the Homeless Program tracked the medical expenses of 119 chronically homeless people for several years. In one five-year period, the group accounted for 18,834 emergency room visits estimated to cost $12.7 million.

In other words, it would almost certainly be less expensive to the rest of us to provide the 119 with basic shelter, food and health care than to just leave them on the streets. And there’s a chance some of them could become self-sufficient with a little help.

The conservative argument is that benefit programs make people lazy and dependent. So what does being chronically sick and cut off from health care (other than emergency rooms when they’re in crisis) make them?

My suspicions are that there is some optimum amount of government social services that gives you the best overall result for the buck, and trying to get by more cheaply just shifts costs somewhere else. So the “saving” is an illusion. In fact, the “saving” may be driving costs even higher.

The other argument a conservative might make (albeit with different framing) is that if the Glorious Free Market isn’t finding a place for some people, then they are surplus population that should just die already. Because, you know, people exist to serve the needs of the Holy Free Market Economy, not the other way around.

That kind of thinking is the only way conservative ideology makes sense.

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