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But even the grift comes with high salaries. The pills don’t dispense themselves (yet!).
Government salaries can be high, too. That doesn't mean they're good for the overall economy.
What matters is what else could be done with those resources. The medical system is highly subsidized and distorted, so it's very unlikely for it to be economically efficient.
We all need healthcare. I agree that its current form is corrupted by enrollment caps imposed by medical schools and the disparity in pay between CEOs and healthcare providers. However, I believe that healthcare is a benefit in maintaining people’s health when an ailment does occur. Additionally, the general idea of having a place to go if something goes wrong is crucial.
The point is more subtle than that. Given all the mal-aligned incentives, a hospital may be the best use for the space but this system that is leading to so much demand for medical services is making us poorer.
It's not about whether health care is a good or not. The idea of economic growth is supposed to represent greater prosperity, not just expending more resources for the same or worse outcomes.
So it’s the current system that inhibits growth not the act of keeping humans alive is what I am gathering.
You got me curious about the empirical evidence on this and the first paper I found supports my priors that hospitals don't really keep people alive on net.
I use variation in access to hospitals caused by nearly 1,300 hospital entries and exits to show that hospital entries cause sharp increases and exits cause sharp decreases in the quantity of inpatient care and emergency department visits with no short-term effect on the mortality rate.
This is a top journal in this field of economics. I haven't scrutinized the paper but it would be shocking if the authors weren't put through the ringer for coming to this conclusion. They would definitely have had to do many robustness checks on their methodology.
Well if you are getting admitted to a hospital that alone increases your probability of dying I would assume so I’m not surprised it’s net negative.
But many more old people go to hospitals than younger folks who make up the majority of labor participation. The paper would have to make that distinction.
They don't find net negative. They find no significant impact and this is monitoring the local mortality statistics after a hospital either opens or closes in the area, so it should have no impact on how many people need to be admitted to a hospital, unless you think hospitals create their own demand somehow.
If anything, entry and exit of hospitals would be in response to local need, which would lead to an overly positive estimated impact due to selection bias.
My guess is that the lack of an observed effect comes down to four things:
- People usually get better on their own but attribute getting better to the treatment they receive (post hoc ergo proctor hoc)
- Hospitals are a source of two leading causes of death (doctor and pharmacist error)
- Hospitals provide diagnostics and symptom management more than remedies
- The most valuable hospitals have already been built and the returns to additional ones are very small.
All of that's fine but beside the point. It's a lot of activity going towards ends that are more like symptom management (if not an outright grift).
That it's good for the construction sector is akin to a broken window being good for the local glazier.