Saturday, July 17, 2010

Why Rich Old Geezers Should Be Allowed to Spend as Much as They Want to Live an Extra Week, If They Want To

Under the headline, Dying is Expensive, NYT economics blogger Catherine Rampell posts:
In case there were any doubts, a new study finds that dying is very expensive.

The paper, by Samuel Marshall, Kathleen M. McGarry and Jonathan S. Skinner, looks at how much people spend on out-of-pocket health care costs in the last year of their lives. This last year of care is generally expected to be quite expensive (it is, after all, the year when people are so ill that they’re on the verge of death).

The study estimated that out-of-pocket health care spending in the last year of life amounted to $11,618 on average, with the 90th percentile equal to $29,335, the 95th percentile $49,907, and the 99th equal to $94,310.

Yes, you read that correctly: Health care spending in the last year of life by the top 1 percent of Americans is nearly twice the annual income of the typical American household.
Rampell doesn't discuss any policy conclusions because of this data, but it's obvious where the Obama Micro-Health Managers would take the data.

They would argue that it is absurd for so much to be spent on healthcare in a person's last year of life and that exploding healthcare costs will never come under control if this spending by the near dead is not stopped.

Of course, this argument is totally wrong. The rich, when it comes to medical care are guinea pigs for the rest of us, pretty much like they are in other sectors of life.

The rich paid thousand of dollars for the first cell phones, computers and flat screen televisions, when they first came to market. These electronic toys for the rich were clunkier and of much poorer quality than the products we all own today at a fraction of the price.

It takes time to develop a superior product for the masses. The rich by buying inferior products at higher prices actually test products and support research and innovation so that we can all eventually have superior products. They are catalysts, in other words, for entrepreneurship from the Schumpeterian creative destruction perspective.
Why anyone would think this doesn't occur in the medical field, I have no idea. We need the old geezers to test out and fund all new types of medical products. The Obama people who want to kill off this type of spur to innovation, really don't have a clue about economics 101.

I really don't want to hear anymore about what schools people went to, what degrees they have, what positions they have held.

Tell me if they have read Mises, Hayek, Rothbard, Hazlitt, Bastiat, Menger, Bohm-Bwarek and Kirzner. If they haven't, they shouldn't be allowed anywhere near a policy making position. And if they have, they should then be given a test and asked what economic policy decisions they would make under various economic circumstances. They should only then be hired if they answer, "laissez faire" to each and every economic situation.


  1. It's a valid viewpoint "from the orbit", but you got details wrong here.
    1. Quality. Actually it is getting worse. Here is a short article on this from the respected industry veteran:
    The quality issues can be generalized, and it will keep getting worse, because tech people are actually getting worse at this. Momentum is what keeps it rolling, for now.

    2. Medical issues in the 80's are quite different from any other age group. If rich geezers fund some half-decent fix for Alzheimer's, it won't matter for anyone else outside that age group. So any extra progress made there would benefit only the people who are already in it, and it's still an endgame. And there is only one real cure for the age diseases.
    What would be valuable is what is applicable to most or all age groups to reduce the integral expenditures on health care. Such as a mandatory physical activity for juveniles, along with a ban on marketing and sale of junk food for juveniles. That alone would boost the quality of life and life expectancy due to decreased morbidity. Health care costs for that generation would plummet.

    But... there would be a "don't you dare telling us how to live our lives, treat our children and perish from avoidable diseases" uproar, of course.

  2. To anonymous commenter above, did you even read the article that you linked to? If so can you explain to me how it is even remotely relevant to the point that Bob was making? That article was making that point that QC in software has been quite lackluster compared to improvements and QC elsewhere. Innovation keeps small and nimble companies rolling, momentum only keeps the massive corporations rolling as they have become too large and bloated and poorly run to have enough innovation to keep them competitive. This is why massive corporations enjoy fascist setups where they can use their cronies in the government to keep the nimble and innovative competition out of the market.

    To your second point..... are you serious? Do young people not suffer from heart disease? Ever? From diabetes? Ever? From cancer? Ever? Moreover do you not think that the potential for regenerative medicine in the elderly has applications for the young? I mean honestly, were you just trolling here? It doesn't seem as if you put any thought whatsoever into your post.

    To address your final point, you think that things such as "mandatory physical activity" will boost quality of life and life expectancy. Have you ever seen middle and high school children who are forced to take phys ed and don't care about it? Their half assed "going through the motions" will do virtually nothing to improve their overall health. Finally, the fear that I have, as well as many other people. Is that "mandatory physical activity" (already a bad idea in and of itself) will become "mandatory physical activity using Precor treadmills" or "mandatory physical activity using Diamondback recombinant bicycles" The cooping of unnecessary regulations is how the large, less than competitive, massive and bloated corporations have always got by, that is their "momentum" which you so affectionately referred to.

  3. For Anon #1 to make the particular comments he did with regards to juveniles illustrates not only a complete lack of understanding of human action, but an outright disrespect for humanity itself. Forced exercise, and criminality for individuals purchasing Frosted Flakes for their youthful family members? How on Earth can any human being even remotely advocate such evil?

    Also, how would a monopoly agency enforce such absurd and evil tactics, such as criminality for a purchase of Oreos for your children? Would the stores be nationalized and then mandate that only adults without kids be allowed to purchase such products? If adults who did not have kids and purchased Oreos go to jail if caught reselling the Oreos to families with children? How would the sales of Oreos be affected? Would that company shed jobs because of their illegal products?

  4. To Anon #2 and #3,

    Keep in mind that every change occurs "at the margins", meaning Anon #1 would be in the position of punishing a child for eating Frosted Flakes because that marginal bowl might push him towards unhealth, while in the meanwhile his "steady state" could be quite healthy and fit.

    Don't let that stop you from perfecting everyone's "quality of life" though, Anon #1! We must punish people for their thought-crimes, right you goon?