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Health Care Costs And The Rise Of The Superkitchen

Megan McArdle has an interesting column on the paradox that our kitchens are better, fancier, and more expensive than ever even though we spend less and less time actually cooking in them (the video is also recommended).

She makes some good points, but this is also why I’m fundamentally un-threatened by the idea of health care services or pension benefits consuming a larger and larger share of national output in the future. The fact of the matter is that even though economic growth over the past thirty years has been disappointed and the middle class’ share of that economic growth has also been disappointing, the average American middle class family has an awful lot of stuff. We have a cornucopia of kitchen gadgets, automobiles, televisions, and furniture. Scarcity of material goods is not high on the list of American problems. We do have an extreme scarcity of affordable houses in urban neighborhoods with low crime and decent public schools. We spend a lot of time stuck in traffic jams. We don’t provide enough social mobility for low income children. And lots of people are in ill health. These are all serious problems and it’s very reasonable to worry that the amount of money we’re spending on treating illness is all out of proportion to the quality of health outcomes.

But that’s a cost-effectiveness problem not a gross cost problem. Shifting money out of the healthcare sector and into fancier blenders doesn’t really solve anything. Shifting money out of health care services to health-enhancing things like healthier food and going to the gym, by contrast, might help.

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