mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Prices Prices Prices
Health Care Takes Bigger Bite out of Americans' Shrinking Budgets

Health care took a bigger bite out of Americans’ budgets in 2013 than in 2012, even though Americans spent less overall as their incomes decreased. A new report from the Department of Labor found that, in 2013, overall U.S. consumer spending declined .7 percent, after a 3.5 percent rise in 2012. Many constituent areas saw big drops (for example: clothes, 7.6 percent and entertainment, 4.7 percent), but spending in two areas rose despite the overall decline. The WSJ:

[…] spending continued to increase for health care and housing. Housing was the only major category to increase more quickly in 2013 than in 2012.

The data paint a grim picture of the health of the American consumer, with the average “consumer unit” (which includes families, single persons living alone, or couples who share expenses) reporting less income in 2013 than 2012.  The data also add to evidence that many Americans are being squeezed by rising costs of health care and housing. […]

Incomes are stagnating for many workers as the job market operates at diminished capacity, and even if overall inflation is low, the costs of life’s necessities continue to climb.

Policy makers must make choices that will make health care cheaper, and some tools for lowering costs already exist. Clinics are cheaper places to receive care than emergency rooms and nurse practitioners provide care at a lower cost than doctors do. Laws that restrict the scope of NPs’ practice could, therefore, be relaxed. Price transparency all on its own can lower spending; state governments can be much, much more proactive in collecting and disseminating that information. Hospitals could do a better job adopting technologies that lower costs instead of technologies that increase costs.

Meanwhile, as Pascal-Emmanuel Gobry writes in the forthcoming issue of our print magazine, Americans could learn a great deal from studying successful health care systems in other countries. As the new Labor Department report illustrates, the economic security of the American middle class depends on finding ways to improve our own.

Features Icon
show comments
  • Anthony

    How does the American political system work and for what purpose? What are the major forces shaping political life and how do they operate? Who gets what, when, how and why? “The data paints a grim picture of the health of the American consumer, with the average consumer unit…reporting less income in 2013 than 2012. The data also add to evidence that many American are being squeezed by rising costs of health care and housing….”

    The aforementioned brings to mind voters (not democratic or republican but everyday citizenry that votes) and how side issues generally attract attention rather than policy implementation or outcomes that really matter in their everyday lives. “The average citizen attaches vast importance in candidates to religion, race or ethnic grouping, national origin, sex and generally conventional conformist outlook and behavior. He feels grimly punitive toward any sort of deviation from a fixed norm, a stereotype in his mind.” So, at one level outcomes described above may be traced to our own (citizen) collusion.

  • Omar

    I’m a single mom that makes about 54k per year. Before the government started “helping me” I was able to set aside between $400 and $900 every month in savings for a better house, a nicer neighborhood, a better college, my own retirement. An extremely cheap catastrophic plan was absolutely the best option for me and my child. Now, I will be forced by my own government to purchase stuff that I don’t need at a much greater price, which will – not marginally, but SEVERLY – limit my ability to save that money and move towards a better future.
    Isn’t this country supposed to be about negative rights? Doesn’t that mean I should be secure from this sort of governmental coercion, especially when it’s clearly against my interest?

  • markbuehner

    Unfortunately we havent seen any evidence that expanding insurance makes people less likely to go to the emergency room for non-emergencies. In fact the data we do have suggests the opposite.

  • RickCaird

    You mean Obama lied about saving me $2500? How could that possibly have happened.

  • bittman

    I’m recalling reading an article a year or so ago that the Census Bureau had changed the way it tracks our healthcare costs. The bottom line was that these changes would make the costs associated with Obamacare much less than had the old system discarded by the Census Bureau at an optimal time for the Obama Administration. Those Chicago politicians don’t miss a trick!

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service