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Home Publications Blogs Beat the Press U.S. Health Care Costs: Billions, Trillions, Who Can be Bothered?

U.S. Health Care Costs: Billions, Trillions, Who Can be Bothered?

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Sunday, 28 July 2013 20:03

The NYT caught this one itself, but it still is worth noting. An article discussing hospitals' efforts to promote themselves included a quote from Dr. Eric Topol, chief academic officer at Scripps Health in California:

“We’re pushing $3 trillion in health expenditures, and one-third of that is waste.”

The piece originally said $3 billion in health expenditures. Of course mistakes happen, but you have to wonder if the NYT's editors would have missed the error if the original sentence told readers that:

"We’re pushing $3 billion in health expenditures [0.0188 percent of GDP], and one-third of that is waste.”

It seems unlikely that one would have found its way into print. Just as the $3 billion or $ 3 trillion number, without any context, are not meaningful to the vast majority of NYT readers, they also are not very meaningful to the NYT's editors either.

Thanks to Francois Furstenberg for calling this one to my attention.

Comments (5)Add Comment
The Irony of Market Failure
written by Last Mover, July 29, 2013 5:19

Hospitals advertising to promote their own waste? Here's a comment from the article that says it all:

...I am a family doctor associated with a now-shuttered small community hospital, much to the detriment of the town. Hospital marketing exists to attract well-insured, otherwise healthy patients to money-making specialty services like orthopedics. Those twinkly-eyed guys in the snowy white coats draped across billboards want to do procedures on non-smoking weekend warriors with Personal Choice.
Over $3000 wasted per person. NYT might have mentioned that too.
written by Rachel, July 29, 2013 11:01

Eric Topol MD observes that we spend nearly 3 trillion on health care, almost a fifth of GDP, and suggests that a third of that, a fifteenth of the GDP, or a trillion dollars, is wasted.

But suppose we make a more conservative hypothesis.
Thanks to Dr. Topol's frankness, we are allowed to offer, as a conservative estimate, that only 4% of the GDP goes to medical waste. That's still about 600 billion dollars. And perhaps another 2% of the GDP is wasted on our inefficient financial system. A little more on our inefficient legal system. Do the math, and it still runs to something over $3000 wasted per person.

That's over $12,000 for a family of four. That's a burden on our cities and states. It's a burden on factories and farms and services. And people wonder about middle class stagnation.
...
written by Kat, July 29, 2013 12:17
Lastmover,
That comment really does sum it up. Thanks for highlighting it.
The other day my husband and I were driving through our downtown. I mentioned that the downtown has had a rather large influx of new housing and there are more people to be found milling around on the weekend. On the other hand, there seem to be less workers than in years past. We drove by a building where my husband used to work. The company vacated the building (which had been its headquarters) some time after being bought out by private equity and seeing a large reduction in its workforce. I wondered who was there now. The answer: it now consisted of offices for employees of one of the major hospital systems.
Compute it another way and it comes up the same.
written by FoonTheElder, July 29, 2013 1:42
Compare us to every other developed country. We spend about $3200 more per person per year on health care. Multiply that by 312m people and you're at about $1 trillion in excess costs annually.

What do we get for our extra trillion. Extreme rationing because 25% of our people are either uninsured or underinsured and 30-40,000 die each year from lack of health care.

If the British health care system spent as much as we do, they could afford to take the patients to the doctors in a chauffered Rolls Royce. We just waste a trillion to keep the big corporate welfare health care gougers flush with cash.
http://www.fedponamengineers.com/blogs/post/1981
written by http://www.fedponamengineers.com/blogs/post/1981, August 05, 2013 11:53

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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