The Relationship Between Healthcare Costs and Good Health

What is the relationship between healthcare costs and good health? They are not only closely related, they correlate perfectly. Data was broken down into 10 classifications and was evaluated over the past 11 years (1999 – 2009 – there was not much data on the subject earlier than 1999). This data was obtained from multiple sites including the Bureau of Economic Analysis, the Bureau of Labor Statistics, the Census Bureau, and the Organization for Economic Cooperation and Development . A linear error model was created to evaluate the data to see the impact of moving millions of uninsured persons into government run healthcare (this is an attempt to model the potential outcome of the recently passed ObamaCare legislation). To understand how to create and evaluate a linear error model please refer to my blogs: Creating an Election Model Part I, Part II, and Part III on Oct 4, 5, and 6 2010. Below is the data used in the linear error model:


Year Priv Total Gov Total No Ins Costs GDP Exp Per Capita Doctors Per Capita Nurses Per Capita Life Expectancy Obesity Health Ins Rate
2009 194,545 93,167 50,674 16.2 7,700 2.40 9.7 78 28 13375
2008 200,992 87,411 46,340 16.0 7,538 2.40 9.5 78 27.5 12680
2007 201,991 83,031 45,657 15.7 7,285 2.40 9.5 77.9 26.6 12106
2006 201,690 80,270 46,995 15.5 6,931 2.40 9.6 77.7 26.2 11480
2005 201,167 80,213 44,815 15.4 6,563 2.40 9.9 77.4 25.3 10880
2004 200,924 79,486 43,498 15.4 6,196 2.40 9.8 77.4 24.3 9950
2003 199,871 76,755 43,404 15.3 5,852 2.40 9.7 77.1 23.5 9068
2002 200,891 73,624 42,019 14.8 5,453 2.40 9.3 76.9 23.8 8003
2001 201,695 71,295 39,760 14.1 5,052 2.40 9.0 76.9 22.9 7061
2000 202,794 69,037 38,426 13.4 4,703 2.30 8.7 76.8 21.8 6438
1999 200,721 67,683 38,767 13.2 4,500 2.30 8.7 76.7 21 6000

Where Priv Total equals the number of Americans who own private healthcare insurance plans (in thousands of people); Gov Total equals the number of Americans who own government healthcare insurance plans (in thousands of people); No Ins equals the number of Americans who do not have any healthcare insurance (in thousands of people); Costs GDP equals the overall costs of running the healthcare industry as a percentage of the United States Gross Domestic Product (GDP); Exp Per Capita equals the annual expenditures for Americans on healthcare (in dollars); Doctors Per Capita equals the number of doctors per 1000 people; Nurses per Capita equals the number of nurses per 1000 people; Life Expectancy is average age of the American life span; Obesity is the percent of Americans who have a body mass index greater than 30; and Health Ins Rate is the average annual expense American families spends on health insurance premiums.

In Part II of this post we will begin to run various linear regression analyses on the above model to see the potential trends of implementing the ObamaCare legislation.

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