What is health care worth?

Although as a matter of self-protection I’ve been following the latest developments in health care policy, I have no interest in how the matter is ultimately resolved because I think the wrong questions are being asked. And wrong questions inevitably lead to wrong answers.

Charles Hughes Smith is asking the right question, which I will rephrase as: what is health care worth? He starts with a simple demonstration that we have completely lost sight of the true value of health care, by looking at the cost of having a baby in 1952 at the Santa Monica hospital. Here are the inflation-adjusted prices.

  • Private deluxe room: $183 (per day or per stay, I can’t tell)
  • Baby care: $48.50 per day
  • Obstetrical service: $244
  • Cesarian section: $244 additional, plus anesthetic charge
  • Circumcision: $40.50.

Modern day prices are all over the map, but our last hospital birth (Elizabeth, in 2002, normal delivery, less than 24 hour stay) set us back $13,000 on paper. Even our last home birth cost us around $3,000, although that included prenatal visits. But according to the above schedule, Santa Monica Hospital would have charged us $475.50.

Smith’s proposed solution makes for interesting reading, but it isn’t worth serious consideration—because no proposal to fix the system is worth serious consideration. As a practical matter, the problem is unsolvable by any means available to us. No one will be able to persuade us that health care is only worth one-twentieth of what it is currently costing us. However, Smith’s solution may be the one that is eventually ‘adopted’—after the current system collapses and people are reduced to suppying their health needs on an individual level, without being subsidized by their neighbors as is the case now.


4 thoughts on “What is health care worth?

  1. I think the same basic solution would “fix” many of our economic problems… housing is one notable example. Once a group of people decides to increase their purchasing power with credit, its only a matter of time before they are parted from all real assets and in bondage to debt. Once in that condition only the banks and the government have any say in any matters of importance.

    Its worth noting, I think, that the societal order God laid out in the Bible avoids these conditions by (among other things) prohibiting usury and syndicated surety, and prescribing honest money, a year of release, and a periodic jubilee. Of course, if we would just be content with what God has blessed us with, that would solve quite a few problems!

  2. While I agree with your point, you leave out one important element in your comparison: the level of medical technology available in 1952 vs today. The hospital has a lot more beepy-boopy machines than it did back then. What price would someone in 1952 be willing to pay to achieve the lower infant/mother mortality rate that we enjoy today? I would expect that this greater level of safety would account for a portion of your difference.
    However, I agree that the question “what is health care actually worth” is completely missing from the dialogue. I expect that the answer would be VERY close to the price most of us pay in health care deductables/copays, and the true value has nothing to do with what we pay in insurance premiums.

  3. The infant mortality rate has dropped from about 20 per 1000 births (2%) in 1950 to more like 6 or 7 today (less than 1%). While this is good, it must be balanced against the outrageous rise in the C-section rate, which has gone from 4.5% (of all births) when it was first measured in 1965, to a whopping 35% in 2008. The technologization of birth is a controversial subject. I could tell you some more horror stories and shocking technological developments, but I’ll save it for another time.

  4. Like with any “what is it worth?” question we have to have a free buyer and a free seller.

    In the current health care market there is no free buyer nor seller. The “most free” purchaser is the employer purchasing bulk health insurance for employees, and the larger the group the more free he is. In most cases the health care providers is a free seller, provided they don’t accept Medicare patients.

    The technology issue is important, but we ought to also note that technology, in the long run, in other industries has driven *down* costs.

    So “what is it worth?” needs to be replaced with “why is it so expensive?” and the answer, as it often is, is it’s the government’s (and by extension the voters’) fault. Government interference drives up costs in secondary and graduate education. Government regulation drives up health care costs in general. Foolish tax policy artificially increases demand by insulating the consumer (patient) from prices.

    I have been doing lecturing and interviews on this during the “reform” efforts, and I can tell you that it does matter to all of us. And in the end, should these bills pass, Christians need to be thinking in terms of a charitable gray market for health care services, for the sake of being salt and light to those around us who are in worse straits than they are now.

    Glad to dialog more later–email me if there are any follow-up questions or comments because I don’t usually read this blog (followed Chad’s link).

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