# News How much can society afford to pay?

1. Mar 29, 2010

### edpell

How much can society afford to pay to extend the life of one person by 1 year? By 10 years? By 70 years? Is there any limit? Please keep in mind the GDP is about 14 trillion dollars per year. Can I safely say we have an upper bound of 14 trillion dollars per year on all three numbers?

2. Mar 29, 2010

### Staff: Mentor

The problem with this question is that the cost cannot be applied uniformely, so answers won't mean much. Some people will spend millions of dollars over their lifetimes for care they never use, while others will spend thousands of dollars and get millions of dollars worth of care.

Last edited: Mar 30, 2010
3. Mar 29, 2010

### edpell

I guess the first question is is the demand for medical care currently less then the available supply of medical care? If so, I guess the second question would be is it sustainable? If so, then we are fine all is well.

If demand is above current supply we can ask what would the cost per year be for medical care at the level where everybody gets everything. At that cost level we could ask is that level of spending sustainable? If so, then we are fine all is well. If the answer is no, then the question is what do we do?

4. Mar 29, 2010

### calculusrocks

I think we are making it up as we go along.

5. Mar 30, 2010

### edpell

That sure seems like what is happening "making it up as we go along"

To design an electrical circuit with a few dozen transistors we use computer simulation. To design an economy with 300 million people we wing it. Strange way to run a world.

6. Mar 30, 2010

### calculusrocks

I see it as more like dominoes. There are just too many people looking at the (R) and the (D) to actually analyze the problems we are having today. Politicians make political calculations to get re-elected. They've realized that all they have to do is to target groups of people, and give them bacon. What other line of reason can be used to justify the nonsense that we can spend our way out of the recession?

And the people, many of the people have decided they'd rather have bacon than freedom because freedom simply isn't a concept they relate to anymore. There are also a lot of single-issue voters that simply don't see the economic chaos that is being created in Washington. I can't believe I'm saying this, because I think that people should vote for whoever we want, but we need term limits. The framers never intended for career politicians. The framers intended political office to be a civic duty.

7. Mar 30, 2010

### Staff: Mentor

You've argued in favor of socialism/communism in another thread and seems you are here as well. That's the sort of system where the government designs the economy. Turns out, it doesn't work very well, as it ignores and/or attempts to counteract freewill. In general, you're better off giving people the freedom to choose how much they are willing to pay for what services.

I wouldn't exactly call this "making it up as we go along", though: I'd simply call it allowing the economy to follow the laws of nature.

8. Mar 30, 2010

### edpell

To understand what the laws of nature give us in complex systems we often use computer simulation (i.e. galaxy formation, standard model lattice gauge calculations, blackhole mergers, etc.). I particularly found the MIT Sloan School of Management computer simulation of the world economy presented in their book "The Limits to Growth" informative. Studying a complex system to better understand the behavior of a complex system is neither communist, nor capitalist, nor any ideology except maybe scientific.

9. Mar 30, 2010

### mheslep

Friedman's pencil story is illustrative

10. Mar 30, 2010

### Staff: Mentor

Trick is, these simulations are not worth much more then the weather forecasts. And from what I know they are used when analysing economical situation to predict - for example - next year's inflation and GDP. But they fail, as they can't take into acount things like creative bookkeeping or Lehman Brothers failure, followed by panic. This is just outside of the model.

11. Mar 30, 2010

### edpell

I agree that computer simulations are often wrong (just as theories built by theorists are often wrong). But we are not going to stop theorists from theorizing nor model builders from making computer models. The hope is that in the long run both learn and finally get it right. And even in the short run that both are learning even from their mistakes.

How complex a system can be modeled and to what level of accuracy are interesting questions that I am not an expert on but I am sure their are folks that work on these questions.

You did not mention global climate simulations ;)

Simulations are always approximations but sometimes they are good enough approximations to be useful. In the semiconductor industry the implanting of impurities by low energy accelerators is simulated (i.e. the distribution of the implants as a function of x, y, z and are accurate enough to be useful).

There are limits to simulation but I think we are still learning where those limits are.

12. Mar 30, 2010

### Jack21222

Are we talking about a maximum? An average?

The system doesn't consist of one person. It consists of 300,000,000, not all of whom will need the same level of care to have their life extended by one year. In most cases, that number will be close to zero. Lets simplify the system to 100 people. If 99 people can have their life extended by 1 year for free, and the other person needs 1,000 dollars, how would you define the cost to society?

When you pick your "one person" in your example, do you pick the 1,000 dollar person, and ask if that society can afford to spend 1,000 dollars to keep a person alive for one more year? Or, do you take an average of the whole system, and ask if society can afford to spend 10 dollars to extend a person's life for a year?

In your calculation, are you counting only what "society" contributes, or are you also counting what the individual contributes?

13. Mar 30, 2010

### edpell

The question I have in mind is IF then total demand for medical care is greater than the amount society can supply what do we do? So I guess the first question is does demand exceed possible supply? And the second question is what do we do?

This is not a black and white question with a black and white answer. For example some people feel that funding art is important, some people want space exploration, some people want LHC, some people want fancy food and drink, etc.... the list is long.

The issue is the baby boom demographic bubble is hitting old age. The age where the majority of medical cost take place. If meeting each and every medical care desired backrupts the society that would be an issue. The first question is is it an issue? The second question is if it is an issue where do we draw the line?

14. Mar 30, 2010

### calculusrocks

There is unlimited demand, unlimited! As soon as universal health care is implemented (theoretically speaking), then there isn't any reason for me not to go to the doctor as soon as I stub my toe. How are we going to meet that demand? Although I'm going to be chastised for even uttering it, it's going to lead to some form of rationing. It always has. Nobody wants to answer your OP because this is the painful logical consequence of universal health care.

It's a very thought provoking question.

15. Mar 30, 2010

### calculusrocks

fitting

16. Mar 30, 2010

### Jack21222

How about the time and hassle it takes to go to the doctor, with the knowledge that there's not a damn thing they can do for your slightly hurty toe? Surely that's a reason to not go to the doctor. Try using a real example.

17. Mar 30, 2010

### Staff: Mentor

Elderly, bored people, who go to see the doc every week just to kill time. They don't pay for visits, so that's what they do. This is not a made up example, this is a (tiny) part of the problem with medical care in Poland at the moment.

18. Mar 30, 2010

### calculusrocks

Now you're entering time as a commodity. Free health care isn't free because it takes time out of your day. That's true. However some people have an abundance of time, and will do exactly that. You'd see that as a waste, but he'd see it as a reasonable proposition to kill a day.

19. Mar 30, 2010

### edpell

Real example 70 year old window is lonely stubs her toe and goes to the doctors because she want human contact and they are so nice at the doctors office.

I know a person who works at a hospital and people even before any of whatever just happened come to the emergency room:

to get warm in the winter
for social contact
for food
for a place to sleep
for attention
to get cool in the summer

Now it will not be just the poor who have nothing to lose by incurring hospital fees but all of us who can enjoy the benefits of unlimited medical care.

20. Mar 30, 2010

### edpell

Hey I am getting old I want a full course of age countering hormone treatments available to me. It will only cost about $4000 per year and if I live to be as old as my grandma I will be alive for another 50 years so$200,000 I do not want rationing.

There you have been chastised :)