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.