Saturday, October 2, 2010


Anyone interested in the politically-biased interpretation of numbers should take a few minutes (but not longer) to read a recent post on the otherwise-reputable Health Affairs blog. The post is by Thomas Miller and a young colleague at the conservative American Enterprise Institute, titled “Out-of-Pocket Theory for Health Spending Cutbacks is Clueless.”

Starting with a snide comment about a New York Times article that quotes a study by the prestigious National Bureau of Economic Research on the effects of the recession on medical care usage in different countries, the post goes on to attack the study itself. Miller’s complaint is “the NBER study assumed facts that were not in evidence—that Americans face significantly higher OOP costs for health care than people in other comparable nations. It confused absolute dollar totals (in a larger health economy) with the more decisive “share” of health spending that is paid OOP.” Miller criticizes the NBER study for using OECD nations’ OOP percentages of GDP without adjusting for the much higher share of GDP for health spending in the US, and accuses the NBER authors of “detaching the numerator from the relevant denominator, to make the former look larger compared to another less-related one.”

Who’s clueless here? It seems as if it’s the Health Affairs blog post’s authors who are having the most denominator trouble.

If it’s their intent to show that OOP reductions in the US have less impact on consumers than in nations with “socialized” medicine, perhaps they should have surveyed US users of medical care. If so, they would have discovered that few, if any, Americans evaluate their OOP costs in terms of national spending on health care, any more than they consider the cost of a new automobile in terms of national costs of vehicle production.

And if the Health Affairs blog authors were trying to show that OOP reductions in the US are small in overall terms compared with those in other OECD countries, they have succeeded only in showing that almost any expenditure is small compared with the United States’ bloated health care costs. Using the post authors’ rationale—and their denominator—it seems there’s nothing like out-of-control total spending to make our OOP cutbacks look good (at least, in percentage terms).

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