In recent years I have repeatedly demonstrated that the cost of labor is the main driving force behind rising health care costs in the U.S. ( for example, here). The US health care workforce has grown far faster than the population, even adjusting for aging. Meanwhile cost control efforts have focused on areas like pharmaceuticals and the number of hospital beds, so that the number of hospital beds per person have been steadily declining even as the population has aged.
These two divergent trends define the nature of our current situation. Take a look at the two charts below.
When it comes to nurses per 1000 population, the U.S. compared well with most of its OECD peers. The healthcare system is doing okay in terms of human capacity–that’s what we have been spending money on. Other OECD figures show the same trends.
But when it comes to hospital beds, we are at the low end, having been squeezing out beds as a cost savings move.
These charts also explain why Italy is being hit so hard, and why Germany is relatively unworried. Italy is weak on both nurses and beds compared to its European neighbors. Meanwhile, Germany is strong on both nurses and beds.
More to come.