Thursday, July 30, 2009

Becker on Healthcare

US survival rates from major diseases are much higher than in other countries and detection is better. The value of this is equal to full percentage points of GDP (he estimates 4%, using back of the envelope numbers, but the exact number isn't important, it's the order of magnitude).

This also neglects the notion that having a non-socialized health system means that drugs get developed. If we socialize, it's gonna be a LOT worse for everyone because we will have created a monopsony that disincentivizes medical R+D. The improvement of the US in prostate survival from 7% worse to 20% better (for a swing of 27%) would be even more if the US didn't export its medical technology. In a sense, Europe and Japan "free-ride" on our medical system, and thus this 27% is an underestimate.

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