What should we do about health care?
Health Care is often described as one eighth of the economy. But without an effective health care system, all workers become unproductive sooner than they need to. And without an efficient system, we devote more resources to keeping workers healthy than we need to. So getting health care right is important.
It’s well known that health spending as a percent of the economy is much higher in the US than elsewhere. Much of this difference is due to the higher wagest that American doctors and nurses earn. We could reduce our health expenditures by slashing their salaries, but that just might affect the quality and availability of our care.
Lost in this discussion are our “exports” of health care. Around 70,000 foreigners per year seek medical treatments in the US. Most them come here because they want better care than they can get at home. This shows that the quality of our care continues to attract discriminating buyers.
These dollars, while small, help our system’s solvency. Any restructuring needs to take this into account.
Douglas R. Tengdin, CFA
Chief Investment Officer
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