Societal Trends

Societal trends over two to four decades can be telling in helping one to understand significant shifts that are taking place. Since 1980 the average personal income in the United States has increased from $24,079 to $40,454, adjusted for inflation. How does that 168% increase compare to other major expenses.

Average gasoline prices have increased from $1.25 to 2.85, at 228% in real dollar terms. While the number of miles driven a year have increased by about 22%, with more efficient engines the amount spend on gasoline when inflation is taken into account has increased only 12%, from $2,015 to 2,269.

First class stamp has increased 193% from 0.15 to 0.44, This increase does not take into account inflation.

Milk has increased from $2.16 per gallon to 3.29, a 52% increase.

The cost of the average new home has risen from $76,400 to $268,800, 251% in real dollar terms. Primarily due to more expensive land, much larger and more well appointed homes, the increase is new home prices has been a greater rate than income increase. When inflation is taken into account, the increase drops below 160%.

Over the last thirty years the amount spent on health care on a per capita basis, and adjusted for inflation, has increased 202%, again at a much higher rate than income. Health care is consuming more and more a person’s budget from 1980 when it consumed about 7.5% of the average person’s income. Today health care consumes almost 14% of a person’s income…and with more than three times the rate of people who uninsured than ever before. An aging population is a factor but it and lawsuits are not as significant a factor as the citizenry believes. The major factor is a growing profit return at all levels.

Suppliers of equipment and medicine profit share on a per dollar of sale prices has increased dramatically. In 1980 most major health care insurance plans and hospitals were run by nonprofits companies who had 3.5 to 5.5% rate of return whereas today the insurance and hospital market is dominated by profit firms who have pushed the rate of return to 18 to 20%. In 1980, 95% of insurance premiums went out to providers whereas today that has dropped to 82 to 80%. This does not take into account that for profit hospitals are retaining a greater share of each payment they receive. Further it does not account for fewer benefits being provided and with co-pays that are rising three to fivefold. Matters are not expected to improve for the better as companies seek to increase the rate of return to 78%.

Healthcare is and will continue to be one of America's greatest challenges, and will become even more so over the coming years. Significant changes are not likely to happen until the system starts to crash. Hopefully it will not take the type of protests and marches that took place during the Viet Nam error or at the level we have just witnessed in Egypt.