I am sure you have made this argument before, but a nice and simple point that can help non-economists understand the misleading nature of such “studies” is to point out that the law of diminishing returns is sufficient to guarantee such results. Of course the bang for the buck falls as we spend more or try to do more to live forever.

Suppose we found an island nation that has never been exposed to the outside world. Suppose all we did was sell them Bactrum. Bactrum is an old anti-biotic that sells even in the U.S. for about $2 a bottle today. It is a wide spectrum antibiotic that solves lots of health care issues very cheaply.

That island nation would have the highest value from their health care system in the world by far. They would spend almost nothing on an anti-biotic that addresses a wide range of diseases. But they would still have unset broken bones, die of heart attacks, etc., etc., etc.

In short, they would be healthier at the margin at very low cost but they would not be “healthy” overall by any stretch of the imagination. To be “healthy,” they’ll have to spend more money. The richer they are the truer it is they will be able to afford lower bang-for-the-buck treatments that nevertheless move them a little closer to immortality.

How did they arrive at these conclusions? What can we do to be able to refute this? I trust we can refute this data.

Thanks for the heads up.

Thanks for the kudos. I’m afraid you are in the minority, however. Health policy is the most humorless field there is. It’s so bad that we have started posting “Satire Alerts” so that people who are jocularly challenged will know not to take the printed word seriously.

On coverage, insurers can, and do, limit what they will pay. But I am proposing that GM could go a step further and ration access to MRI scans, etc., just like Canada does. You would have to have legal agreements to get around possible tort law complications, but with the UAW negotiating for the employees, I would think these agreements would hold up in court.

We are trying to encourage them to build an IT infrastructure to go along with their 20,000 new community clinics and hundreds of new hospitals budgeted last week, and integrate the levels of care. There is also strong growth in use of savings accounts and what they call “bancassurance,” but probably it will be mostly a large government risk pool paying clinics and doctors on salary. Even the insurers say they can hardly handle a billion new customers, and wraparound products will be required for both individuals and employers similar to HK.

Unlike most other countries, the Chinese want to learn from Americans and Europeans and want to avoid the mistakes we all made. It won’t be easy, but they have the advantage of starting from scratch.