This week’s episode on Crash Course Economics deals with the United States Healthcare System. The episode didn’t really have much economics in it; it was more a series of fun facts about health care numbers.
It’s a shame because the US Healthcare System is a perfect subject to talk about how public policy and economics have responded to one another in the past 60 years or so. What an opportunity here for Crash Course! Unfortunately, Crash Course did not take advantage of these great examples, but we will here on Crash Course Criticism. Let’s do it:
United States Healthcare Assumptions
When talking about the US Healthcare System, Crash Course assumed a lot of things about the US system simply exist and have always existed, offering no explanation for how these phenomena came about or how economics could explain them. Let’s look at them now.
People Use Healthcare Insurance, and it’s Usually Paid by Your Employer
Insurance in general has been around for thousands of years, but it’s only recently that health insurance has been common. The first modern health insurance plan in the United States emerged in the 1930’s, but few used it. Until the 1940’s, people would pay doctor and hospital expenses out of pocket, and patients wouldn’t go bankrupt because of it.
During World War II, the government restricted employers from increasing the pay of their employees. As a natural economic reaction to get around these rules, employers instead would offer employees more benefits, including health insurance. This soon became the standard, and today many employers pay for their employees’ health insurance.
Healthcare Costs are Expensive
This was not always the case. Take a look at this graph:
As any media pundit will tell you, health care costs in the United States have exploded in recent decades, but the initial rise started in late 1960’s. What would make healthcare providers charge more for their services?
Medicare and Medicaid were both introduced in the mid-60’s, and Crash Course may have alluded to how this increases health care costs: