Will public health help cure the cost disease?
On VA benefits, "efficient" massage appointments, and the inevitable growth of health-care costs
In his book “The Cost Disease”, economist William Baumol delivered one of the most important insights for anyone involved with public budgets. It distills to this: Technological progress will tend to make many goods better and cheaper because their production can be automated and standardized at scale. But lots of “high-touch” services will always be demanded, and there’s only so much that can be done to make them more efficient. Improvements can be made to the quality of a haircut, an annual physical exam, or a tutoring session, but they can hardly be made more efficient: A 45-minute massage is not more “efficient” than a 60-minute massage, it’s just shorter.
■ This matters to public budgets because governments pay for health care in all kinds of ways (Medicare, Medicaid, VA benefits, and health insurance benefits for public-sector workers, to name some of the big ones), and because health care is extremely high-touch (literally and figuratively), many of those health-care costs are bound to grow both in absolute terms and as a share of budgets, irreversibly and indefinitely.
■ The resulting message isn’t very satisfying: “Health care will get better and more expensive as far into the future as you can imagine, taking up more and more of everyone’s budget with no end in sight, but you’ll be OK with it because lots of other things will get better and cheaper, leaving room for you to still feel much richer.” This doesn’t mean efficiency improvements don’t matter in health care -- just that they’re inherently difficult to find.
■ With National Public Health Week drawing to a close, it’s timely to observe that if Baumol was right, then the public health professions are almost certain to grow in importance and consequence -- basically in perpetuity. In statistical terms, our three biggest health victories in the last two centuries have been antibiotics, vaccinations, and safe drinking water, and the latter two are squarely in the public-health domain.
■ Prevention usually costs less than cure, and if we can discover more high-impact tools of prevention, those might be our only ways to put brakes on the growth in health-care spending. The question is: Will the public health professions have the resources, imagination, and credibility necessary to carry that burden?