nos-trum. pronunciation: \nos'-trum\. noun. Etymology: Latin, neuter of noster our, ours.
1. a medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness.
2. a usually questionable remedy or scheme.
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Monday, August 9, 2010

Health Care Costs And The Psychology Of Numbers

Billions, trillions.  Big numbers, but are they so big that we can't really grasp what they mean?

A lot of the debate and discussion on the effectiveness of the health care reform law has centered around what it does to the rising cost of healthcare.  I've written a number of times that the new law does nothing to reign in cost.  According to some analysts it actually increases the cost above what would have happend had we not passed the law.

What was originally billed as costing less than one trillion dollars, and reducing the deficit by over $100 billion over the next ten years, is now discredited.  As analysts dug into the fuzzy math,  estimates have risen to $2.4 trillion.

Psychologists say our eyes glaze over about big numbers.  At some magnitude any increase further isn't perceived as more.  When I was in Army airborne training as a parachutist, we were told that psychologists have measured a person's ability to assess height in terms of fear.  They found that anything above ~30 feet had the same psychological impact on us.  Jumping out into the open air from higher points added nothing to the fear.

That's why they built their training towers as they did.  This is where you jump from a platform attached to a cable that slants toward the ground.  The jumper is attached to the cable by parachute risers.  Once the short fall is arrested by the risers, the jumper then slides down the cable and strikes the ground in a simulation of how one would land under a parachute.

The towers are a little over 30 feet tall.  Just as the pyschologists suggested, this allows the parachutist to deal with the fear of heights, indistinguishably from jumping out at 5,000 feet.

So, back to health care costs.  What do millions of dollars, hundreds of billions of dollars, and trillions of dollars, mean?

Here's one way to think about terms of time.  We know that 60 seconds make a minute, 60 minutes make an hour, 24 hours make a day, etc.

One million seconds is about 12 days.

One trillion seconds is about 31,000 years.

Mind-boggling...and why we should be concerned about costs.

Doc D

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