|341, the 18 to 64 category had dipped
to 561 -- and the over 65 group had increased to 98.
Age Marches On
By the year 2000, this little town will really
feel the population pinch. Only 166 residents will be 18 or younger, 613
will be in the middle range, but 122 will now be in the group that is 64
Meanwhile, the average age in this village is
slowly inching up from 30.2 years in 1950, to an expected 35.5 by the year
The only age group showing consistent and steady
gains in numbers is the one composed of older citizens.
It isn't difficult to see how this has affected
everybody's taxes. We have Medicaid and Medicare, we're facing a growing
population of older citizens and a shrinking population of young people.
So, as the population of little towns like this
one grows older, the part of our federal budget set aside to help seniors
grows larger, from $40 billion in 1969, to a projected $153 billion next
The problem here is our population shift --a
lower birthrate and an expanding older population with longer life expectancy.
The elderly are not the problem. It's only that so many of us are moving
into that category, while at the same time the birthrate is dropping.
The very special and real needs of the elderly
American concerns each of us, for if there is one certainty in life, it
is that each of us will eventually be older.
But the shift in our population is only part of
the cause for the increase in health care costs.
Let's take a look at some other causes, and how
our health care system arrived at the point where it is today.
For starters, the health care industry may be
one of the few businesses -- if not the only one -- where the buyer really
doesn't make the decision to buy.
Decisions to buy are made by the seller
-- the type of treatment, whether or not you need X-rays, what type of
surgery, what type of medicine, and so on.
In theory, the patient does control these decisions,
but the very human tendency, probably a correct one, is not to question
our treatment. That means we seldom question the cost of it, either. We
Americans have a tradition of equating quality with high cost, and if our
health is on the line, we want the very best.
Out of Sight, Out of Mind
But most of the time, most of our medical bills
are not paid by us at all, but by "third parties" -- insurance companies,
group plans, employers, the government.
That means a big part of the bill is not only
"out of sight" but "out of mind," too. What we don't pay, we don't worry
How many times have we heard a friend say, "Hey,
remember when my son was in the hospital? It only cost us $150 and the
bill was $1,150." There is good reason for his jubilation -- and bad.
True, the man only paid $150 out of his pocket,
but the other $1,000 came from somebody else's pocket. As someone
once said, "There ain't no such thing as a free
Let's suppose the entire cost of the man's insurance
is borne by his employer, who happens to manufacture, for example, refrigerators.
If the cost of hospitalization of that man's son
is higher than it was a year ago, the insurance company that takes care
of that group plan is likely to raise the cost of premiums.
Now, the refrigerator manufacturer is faced with
higher insurance costs. What can he do? The easiest solution is to raise
the price of refrigerators.
And if the hospitalization and premiums go up
again, the price of refrigerators will rise again.
And if the patient happens to be on Medicare,
you might even get hit a second way, with higher taxes.
An Apple a Day?
If an apple a day won't keep the doctor away,
chances are that more than one visit won't do it, either.
The truth is, our health care system just doesn't
reward the doctor who gets the job done with one visit or one treatment
or one trip to a laboratory.
The more tests that are run, the more times the
patient is seen, the longer he or she is hospitalized, the more profitable
-- and costly -- it becomes.
Well, the biggest insurance companies, who long
ago set the standards in their business, decided they would pay "all reasonable
costs" that result from seeing a doctor, or from hospitalization, or whatever.
It can turn into a cruel cycle. Insurance companies
can always pay because they can always raise premiums, and because they
can always raise premiums, our health care system can always charge more
Faced with this kind of picture, it's little wonder
then that charges keep escalating. What's the incentive to hold costs down?
There is almost none.
That, clearly, is a big part of the problem.
A Drug By Any Other Name
Likewise, there is no incentive to prescribe,
or even produce, medicine at the lowest possible cost. Our system rewards
brand-name drugs, the most expensive kind.
On a small scale, you've seen this at work in
your local supermarket: a brand-name bottle of aspirin sits on a shelf
next to the "house brand" aspirin. Chances are, both bottles of aspirin
came from the same factory. Regulations govern its manufacture, and you
know there is virtually no difference between the two.
But the brand-name aspirin will cost a lot more.
We might even go a step further and find some
slight differences between a brand name and a Brand X drug, but even if
there were differences, even if the quality of one were higher than the
other, you probably aren't paying for that.
What you're usually paying for is advertising.
The "difference," then, is more likely to be in
selling the heavily-advertised "Udall's Wonder Elixir" at $5 a bottle,
and selling the same thing as just "Wonder Elixir" with the same ingredients
for only $2 a bottle.