Category Archives: Government

Health Cost

A Human uses 20% of its personal energy to maintain its total body health; America’s 330 million humans will soon use 20% of their national body’s economic energy to maintain its total body health. Does this make sense?

Yes, because “Health cost has a mind of its own.”

I found this quote I had written in a deep-dive analysis on national health care issues and costs I had prepared for clients decades ago.  I had arrived at this conclusion when I was working on national healthcare issues that are very much the same the issues in the news today. Nothing has fundamentally changed.  Why?

The problem then, as now, is that health care is still generally seen from a “thing” perspective, a dying  paradigm that sees everything as an object outside of ourselves on a shelf that we can buy or sell like any other product in a free market.

“Health” is a living complex “thing” that is in constant dynamic interaction with other living systems and non-living objects of nature.

It was not until 1984 when the new science of complexity paradigm emerged at the Santa Fe Institute as a serious field of study that allowed a  new and better understanding our complex living world.  I visited SFI where I learned many new things that would shape my life,  including an old piece of knowledge that had been first discovered in 1844 by a mathematician, Dr.  Pierre François Verhulst, in his population studies.

This new/old knowledge was the logistic equation,  popularly known as the s-shaped curve like the one shown in the graph above from one  of my research reports in the 1990s.

This equation has been rediscovered, repurposed, and studied to death since it was first discovered, including being currently used to mimic neural net processes of the brain and deep-learning artificial intelligence computing.

The essence of the logistic equation to me in its simplest and purest form is that it represents the dynamics of learning; real-time learning at all levels from: a child learning its vocabulary, to: a nation learning to produce and consume its energy, to; humans and society learning to develop existing worldviews, or paradigms, as well as how to shift to new paradigms as needed, like today, in the FrictionLessSociety.

In all of these cases, the s-curve shape represents the dynamic give and take between “what is” and “what can be,” given local boundary constraints of available resources that fuel the give and take.  (A thorough development of this idea will be posted on my “paradigm research” blog tab above in the near future).

The main characteristics of the logistic equation as a learning curve within a local bounded environment are:

  1.  Exponential growth in learning during the first half.
  2. Inflection point at 50% growth, switching to decline in learning efficiency.
  3. Exponential decline during the second half reaching the limit within that local boundary.

It is important to emphasize that use of the logistic equation as a learning curve requires a well-defined boundary of its local setting with definite “knowledge” in all its forms available to be learned there, and with large numbers of data elements to be processed.

Long learning cycles can be seen as a sequence of interlocking s-curves of short duration tracing out the much longer s-shaped learning curve as each interim plateau of the short learning complete their cycle before a new short learning curve begins. In Zen this is called mastery.

Energy S-Curve

Modern humans took hundreds of thousands of years  to learn how to fully develop their modern bodies.  The brain that runs the body requires 20% of the body’s total energy needed to manage all of the physical, mental and emotional tasks in order to maintain the body in a healthy state of being.

Is the “American body,” fundamentally, any different?

As the world’s freest democracy, America has taken only 240 years for its society of humans to collectively learn to become the most powerful and innovative body polity on earth.  The living brain of America is the distributed physical, mental, and emotional knowledge, will and energy of its 330 million citizens as represented by their collective economic energy as measured by Gross National Product.

Is it surprising that a free democratic country would gradually learn to allocate the same fraction of national resources to maintain national health as each human allocates to their individual biological health? Both are dynamic living bodies, individuals making a collective whole.

For nations, this allocation is best measured by the fraction of it’s economic energy, or GNP (GNP differs from GDP slightly because income citizens earn outside America is included in GNP).  The fraction of GNP for national  health cost in America was plotted from 1933 up to 1992 in the chart above, and then projected to level off at around 21% around 2027 based on a curve fit of existing data to the logistic equation.

The latest CMS  official projections in 2015 put health expenditures at 17.8% of GDP in 2015 for America (in line with my above projections of 18% made in 1992).  CMS projections start to level off at 20% of GDP in 2024, also in line with my projections of 19% in 2024 that were made in 1992.

The usual practice of using cost per capita, ironically, may not be the best nation-to-nation comparison as a measure of individual health relative to individual health cost. The fact that health cost per capita of America is higher than other western nations who have “better health” can be explained by our unique culture.

American culture from its beginning has arguably been more aggressively competitive and innovative than other western democracies, which arguably, leads to poorer overall average health both individually and as a nation, as well as increased average cost due to the additional physical, mental and emotional effort American’s put into life.  Americans tend to work harder for success and pay for it with poorer and more expensive health care.

Dominance has its costs and rewards, as does conflict. America was founded on the basis of perpetual conflict between the give-and-take conflicting principles of freedom and collective control.  The logistic equation makes us look at the dynamic balance between such carrots and sticks in a new, and more realistic, way.