Arnold Kling  

Marcus Welby Was Greedy, Too

Backwards Induction in The ... Health Care Policy...

From my letter to the editor at the Washington Post:

In 1960, 50 percent of personal health-care spending was paid for by patients out of pocket. Today, that figure is about 10 percent. We will never again see a patient-centered system as long as someone else is paying the bills.

I was responding to an op-ed by someone claiming that the reason that today's doctors are more beholden to insurance companies is because the doctors are greedier. Before they would print the letter, the Post called me and asked for sources for my figures. I had forgotten where I had seen the 50 percent figure. The more recent 10 percent figure comes from the Cato book Healthy Competition, by Michael Cannon and Michael Tanner.

Fortunately, I was able to Google my way to this book, which has it. It also points out that for the narrower category of physicians' services, out-of-pocket payments accounted for 62 percent of spending in 1960. It seems almost almost foreign to be paying that much of your own medical bills. Kind of like listening to music by playing 45's.

Anyway, I give the Post credit for fact-checking a one-paragraph letter to the editor. The New York Times doesn't even bother to fact-check its regular columnists.

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COMMENTS (3 to date)
HB writes:

I believe this information is also available on the Centers for Medicare and Medicaid Services (CMS) website. Can you not take their "out-of-pocket payments" and divide it by total National Health Expenditures?

see: National Health Expenditures by type of service and source of funds, CY 1960-2007 (ZIP, 39 KB)

gnat writes:

Do the figures reflect the intro and growth of Medicare and Medicaid, as opposed to your point that individuals were paying more out-of-pocket?

cjc writes:

Wasn't a lot of medical care in 1960 along the lines of "you got better on your own or you died"? That type of care would be relatively inexpensive and less compelling to insure against.

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