A unique historical review that traces health spending from ancient times to the present and forecasts 21st century trends.
There are many histories of medicine, yet none that assess the dynamics of expenditures over decades and centuries. Economists have not yet addressed the magnitude of the transformation that occurred during the twentieth century as payments shifted from solo physician practices to health systems, nor the legacy effects of social practices accumulated over millennia that will shape health spending in the twenty-first.
In Money and Medicine, Thomas E. Getzen provides a unified narrative of medical spending from ancient Egypt and Babylonia to the present day. Drawing on a wealth of historical reports, data, and documents, Getzen concentrates on a single ratio-the share of income devoted to medical care-to frame the evolutionary path of medicine, revealing an S-shaped growth curve that rose rapidly after 1900 as science made therapies more effective and more expensive, inflected as national health systems coalesced and rates of expansion peaked in the 1960s, then decelerated after 1975. International trends in forty-three countries are graphically illustrated with analysis supporting a parsimonious financial model. Significant lags are seen between medical innovation or macroeconomic shocks and the corresponding changes in national health expenditures. Getzen explains inertial responses to the 2008 financial crisis and Covid-19 recession, provides a method for projecting trends over the next fifty
years, and suggests why spending is so much higher in the United States than other countries.
As rising costs and unequal distribution of medical care have created a sense of crisis in many countries, Money and Medicine shows that we must look beyond the last few years to craft sensible solutions.
Author(s): Thomas E. Getzen
Publisher: Oxford University Press
Year: 2022
Language: English
Pages: 359
City: New York
Cover
Money and Medicine
Copyright
Dedication
Contents
List of Tables and Figures
Preface
Acknowledgments
1. Introduction: The Transformation of Medicine
2. Hammurabi to Middlemarch, 1750 bce to 1850 ce
Historical Review
State Medicine, Hospitals, and Public Health
Medical Effectiveness and Expenditures from 1800 bce to the 19th Century ce
Early Medicine: 3,000-Year Generalizations
3. The Rise of Modern Medicine, 1880–1975
Preconditions
Medical Expenditure Trends and Levels
Advances in Medical Science
Institutional Changes Driven by Technology
Financing and Health Insurance
Coalescence of National Health Systems and “Postmodern” Medicine After 1975
4. Global and National Market Trends, 1950–2019
Growth Trends for 21 OECD Countries
Trends in Emerging Markets and LDCs
Convergence?
5. Scaling Up
Medical Science Scales Up
Organizational Scale: From Doctors to Hospitals to Networks
Financial Scale: From Patient Fees and Charity to Social Insurance
From Commodity to Human Right: Ethical and Moral Scales
Political Scales: From Neighborhood to Nation
Interacting Scales and the Coalescence of National Health Systems
Path Dependence and Timing
6. Contracts: Buying and Selling Medical Care
What Is a Price?
Network Financing and Social Contracts
What Makes Medical Transactions Different?
“Uncertainty and the Welfare Economics of Medical Care” by K. J. Arrow
Evolutionary Perspectives: The Adjustment of Medical Institutions
Third-Party Payment and the Changing Nature of Medical Transactions
7. United States: A Case Study of Leadership and Excess
US Data and Literature Review
Historical Trends over the Last 200+ Years
Trend Shifts and Regime Changes
The Breakdown of Voluntary Financing
When and Why Did US National Health Expenditures Become an Outlier?
Static Versus Dynamic Efficiency, Global Versus Local Effects
8. Aging Populations
Expenditures and Population Aging Across Countries
Spending on the Elderly Is a Result of Policy, Not Biology
Time-to-Death and the Marginal Value of Medical Care
9. Temporary Fluctuations, Trend Shifts, Lags, and Inertia
Decomposing Growth: Population, Inflation, Real GDP per Capita, Plus “Excess”
Lags
Smoothing: Short- or Long-Run? How Many Years?
Employment
Unemployment, Longevity, and Mortality Rates
A Tale of Two Necessities
Expectations
Specifying Turning Points and Growth Paths
10. Measuring NHE: Accounting, Boundaries, and Budgets
Accounting Frameworks for National Health Expenditures
Boundaries: Categorical, Temporal, Spatial
Scale and Units of Observation
Budgets: How Much and Compared to What?
What Is “Technological Growth”?
Limits to Measurement and Econometric Testing
11. Forecasting National Health Expenditures: 2030 to 2130
NHE Projections for 2025 to the 2030s
Short-Term Nearcasts Are Different from Long-Run Forecasts
Types of Forecast Modeling
Accuracy
NHE Forecasting for the Very Long Run: 2050 to 2130
Forecasting in the Time of COVID
12. Conclusion: Seeing the Growth Curve Bend
Micro to Macro: Seeing the Leaves, the Trees, the Forest, and the Ecosystem
Seeing the Curve
A Budgetary Perspective
National Health Systems
Evolution
The Nature of Medical Transactions
Appendices
Appendix A: Data Sources, Documentation, and Extrapolations: International, 1850–2019
Appendix B: Data Sources, Documentation, and Extrapolations: United States, 1770–2020
Appendix C: An Economic Exegesis of the Hippocratic Oath
Appendix D: Is Sir William Petty’s 1672 Treatise on Taxes the First Health Economics Paper?
References
Index
