Chartist surrealism appears in online medical journals too! LeBron links to the following amazing chart of "excess health care spending growth". The article in the New England Journal of Medicine defines "excess" growth as the difference between the growth of health care spending and the growth of potential GDP (no word if this is "real" potential or "nominal" potential GDP).
Just to summarize, they are taking a totally unobservable and made up variable and using it to define another unobservable and totally made up concept, that of "excess" health care spending.
Shouldn't excess spending be defined as wasteful spending, like unnecessary tests or surgeries or inefficient record keeping?
Doesn't health care have to be paid for out of actual GDP? Can you tell your doctor, look, the output gap is 13%, so I am only paying 87% of this bill.
How can anyone define the correct path of health care spending? Must it be a constant portion of GDP? Why? Why couldn't preventative care and lifestyle adjustment make health care shrink as a proportion of GDP? Or conversely, why couldn't some amazing but expensive breakthrough cause optimal health care spending to soar as a percentage of GDP?