The Most Important Health Care Chart

A blog about business and economics.
Feb. 12 2013 9:49 AM

The Most Important Health Care Chart Nobody Is Talking About

1360680544897

Ex-Moneyboxer Annie Lowrey has a great piece in the New York Times about the sharp slowdown in the rate of health care spending increases, the potential impact of that on long-term budget balance, and the considerable uncertainty as to whether it makes sense to project the trend into the future. There's a lot of nuance to this, but the chart I have above is a data point that I think belongs in this discussion, even though you rarely hear about it.

It's a chart of construction spending in the health care sector. And I think it's an important indicator, not because health care construction spending is such a big deal on its own, but because it's the closest thing we have to a real-time forecast of what the future is going to look like. Spending money on health care construction projects today is an investment in the idea that health care spending volumes will be higher in five and ten years. The fact that we're in an era of construction spending that's flat in nominal terms (and thus declining in inflation-adjusted per capita terms) suggests pessimism on the part of health care providers about the idea that spending volumes will explode. What's unfortunate is that the data series only goes back about ten years, so we can't put this construction bust in any kind of historical context. Absent that context, it's at least possible that health care construction has historically been a super-cyclical boom-and-bust industry, and my chart here is totally meaningless. But I think it counts as evidence of a real market anticipation that the future of health care will not involve a continual upward spiral in spending.

Advertisement

Perhaps related, we all recall when IBM built a supercomputer named Watson that could win at Jeopardy! Well, Watson is now being used by health care providers as a resource for medical advice: "Over the past two years, IBM’s researchers have shrunk Watson from the size of a master bedroom to a pizza-box-sized server that can fit in any data center. And they improved its processing speed by 240 percent."

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

History

The Self-Made Man

The story of America’s most pliable, pernicious, irrepressible myth.

The GOP Senate Candidate in Iowa Doesn’t Want Voters to Know Just How Conservative She Really Is

Does Your Child Have “Sluggish Cognitive Tempo”? Or Is That Just a Disorder Made Up to Scare You?

Naomi Klein Is Wrong

Multinational corporations are doing more than governments to halt climate change.

The Strange History of Wives Gazing at Their Husbands in Political Ads

Television

See Me

Transparent is the fall’s only great new show.

Doublex

Lena Dunham, the Book

More shtick than honesty in Not That Kind of Girl.

Rehtaeh Parsons Was the Most Famous Victim in Canada. Now, Journalists Can’t Even Say Her Name.

Parents, Get Your Teenage Daughters the IUD

The XX Factor
Sept. 30 2014 12:34 PM Parents, Get Your Teenage Daughters the IUD
Moneybox
Sept. 30 2014 12:04 PM John Hodgman on Why He Wore a Blue Dress to Impersonate Ayn Rand
  News & Politics
Politics
Sept. 30 2014 1:38 PM Mad About Modi
 Why the controversial Indian prime minister drew 19,000 cheering fans to Madison Square Garden.

  Business
Building a Better Workplace
Sept. 30 2014 1:16 PM You Deserve a Pre-cation The smartest job perk you’ve never heard of.
  Life
Education
Sept. 30 2014 1:48 PM Thrashed Florida State’s new president is underqualified and mistrusted. But here’s how he can turn it around.
  Double X
The XX Factor
Sept. 30 2014 12:34 PM Parents, Get Your Teenage Daughters the IUD
  Slate Plus
Slate Picks
Sept. 30 2014 11:42 AM Listen to Our September Music Roundup Hot tracks from a cooler month, exclusively for Slate Plus members.
  Arts
Brow Beat
Sept. 30 2014 12:42 PM How to Save Broken Mayonnaise
  Technology
Future Tense
Sept. 30 2014 11:55 AM The Justice Department Is Cracking Down on Sales of Spyware Used in Stalking
  Health & Science
Bad Astronomy
Sept. 30 2014 7:30 AM What Lurks Beneath the Methane Lakes of Titan?
  Sports
Sports Nut
Sept. 28 2014 8:30 PM NFL Players Die Young. Or Maybe They Live Long Lives. Why it’s so hard to pin down the effects of football on players’ lives.