Sunday, March 26, 2006

Sex, Violence, And Healthcare

What's the biggest industry in the world?

Sex? Funny chap, sex: always tricky to get a firm grip. Some official estimates put annual turnover at $50bn, but for all the obvious reasons that's almost certainly low-ball. Let's multiply by ten: say $500bn pa- about the size of Red Hot Dutch GDP.

But no, it's not sex.

Violence then. According to GlobalSecurity, world defence spending is running at about $1,000bn pa.

Closer. But it's not violence either.

Food? No. Energy? No. Accountancy? Nope, none of the above.

No, the answer is healthcare. The global healthcare industry is worth over $3 trillion. That's an humongous $3,000,000,000,000 pa, or 7-8% of world GDP. And growing all the time.

Here in Britain we know all about that. Ever since Tony Blair announced he would increase our laggardly healthcare spending up to the European average, our taxes have been racking up to provide billions more for the NHS. He said we needed to move from under 7%, up to around 8%...but of course he forgot it's a moving target, so it's now over 9%.

And the real question is, why? Why, all around the world, are we shovelling all this extra cash into a new arms race in healthcare?

Yes sure, as we get richer we gradually satisfy those first order Maslow hierarchy needs, so we start to go after higher order stuff. But Maslow himself only put healthcare on level two- way behind all that self-actualizing opera writing.

And does spending billions more on it actually deliver? Life expectancy is the commonsense man-on-the-Clapham-omnibus measure of overall healthcare delivery. Yet when we look round the world at developed nations with comparable income levels, there's virtually no correlation between healthcare spending and life expectancy.

Take the US: they now spend an eye-watering 15% of GDP on healthcare, by far the highest in the world. Yet life expectancy at birth is only 77.2 years, the lowest among G7 nations. Contrast that with Japan, which has the lowest healthcare spending but the highest life expectancy, at 81.8 years.

The same is true of other measures, such as infant mortality, where cheap-health Japan has the best record, and expensive-health America the worst.

Ah but, you say, that's because the Japanese eat all that raw fish, whereas Americans live entirely on flame-grilled Whoppers. And maybe there's truth in that: just 3% of Japanese are obese (BMI>30- see p10 here), whereas in America it's nearly one-third.

But if the real problem is bad "lifestyle" choices, why do we need to spend all those billions on healthcare? Why not just provide cheap and cheerful stomach stapling ops- maybe conducted en masse by Nurse Quacktitioners in trailers parked outside fast food outlets, and funded from a ring-fenced fat tax? Why on earth should the rest of us have to pay zillions failing to sort out someone else's three-a-day Whopper habit?

The really scary thing about healthcare is that, even though it's already the world's largest industry, it's now growing at about twice the rate of world GDP. What that means is that in less than a century it will account for the whole shebang. Which means there will be no cash for anything else. Think about it: sex, violence, flame-grills...everything we've come to stand for will be entirely squeezed out.

I ask you: is that really what we want?

Pic: The Physician Services Company

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