Are We Fighting Health Care Costs or Health Care Spending?

Liberal blogger Matt Yglesias over at Slate recently made a great point about the difference between health care costs and spending. It is one that I hope local pols on Beacon Hill will keep in mind as they consider payment reform legislation that will regulate by price controls.

The health care system in the United States has a lot of problems, but I think people are sometimes too pessimistic about it. This happens largely through slippage between the phrases “health care spending” and “health care costs.” Everyone knows, for example, that economy-wide spending on tablet computers has surged over the past three years. But nobody says “tablet costs are skyrocketing.” What happened is that iPads came on the market, followed by a bunch of lame competitors nobody liked, followed by the Kindle Fire which is cheap enough to open up a whole new market segment.

By the same token, it always bears noticing that the health care that’s so expensive in 2011 is qualitatively different from the cheaper health care of 1961. [The] chart, delivered to us by Austin Frakt, illustrating steady progress in fighting cardiovascular disease illustrates the point.

That’s not to let the health care status quo off the hook for its myriad flaws, but simply a reminder that “health care” is not a static target.

Find me on Twitter: @josharchambault