One of my mentors, Richard Zeckhauser, says that one of the most powerful tools in policy analysis is long division. Let's see if he's right.
1. Approximate cost of the health insurance plans now under consideration in Congress:
$1 trillion over 10 years
2. Average annual cost of (1)
$100 billion
3. U.S. GDP in 2008 (U.S. Bureau of Economic Analysis)
$14.441 trillion
4. Average annual cost of plans as a percentage of U.S. GDP in 2008
0.7%
5. Total U.S. expenditures on health care in 2008 (projection, U.S. Center for Medicare and Medicaid Services)
$2.4 trillion
6. Average annual cost of plans as a percentage of 2008 U.S. expenditures on health care
4.1%
7. Expenditures by pharmaceutical companies on drug promotion, 2004 (PLoS Medicine 5(1) (2008), Gagnon, M.A. et al.)
$57.5 billion
8. Average annual cost of plans as a multiple of 2004 drug promotion spending by drug companies
1.74 times
Yes, that's right. The staggering bill for Congressional proposals on health care is 4% of what we're spending now on health care, or less than twice what the pharmaceutical industry spends on drug promotion. If we had more current figures for the denominators, the percentages would be even smaller.
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