ADRIAN, Mich. -- In recent months my wife has been treated for a foot problem by some excellent doctors and therapists at the Slocum Center in Eugene, Ore. Walking up to the third floor one notices the large number of steps between each floor. The floors must be 15 or 20 feet apart. The building is elegant, with high ceilings, wide halls and expensive furnishings. But Slocum is not unusually extravagant when compared with other recently constructed medical facilities we have seen.
These buildings, of course, are financed with fees largely paid by insurance companies or Medicare. The enactment of Medicare may account for no small part of the huge increase (way beyond inflation) in the cost of medical treatment during the last 40 years.
When our daughter was born in 1969 our hospital bill in Adrian (for six days due to some complications) was $471.22. We paid $47.50 and insurance paid the rest. The daily room rate back then was $33.64, which would be $202.42 in 2011 dollars. The daily rate at the Corvallis, Ore., hospital, in 2009, was $1,357, about seven times as much.
Elegant facilities probably do little to improve the efficiency with which medical services are provided. Facilities in former strip malls vacated by stores which cannot compete with Amazon.com could probably work equally well at much lower cost. But we cannot blame medical administrators for opting for nicer, more expensive facilities when they know they can pay for it by raising their charges.
A similar situation can be found in universities. When I was an undergraduate at Willamette (Ore.,) University in the late 1950s, annual tuition was about $600. This would be $4,529 in 2011 dollars, but today's tuition at Willamette is $38,800. This is 8 1/2 times as much as I paid 50 years ago.
When I was at Willamette the facilities were adequate, but spartan. There was no student union, though there was a small, dark and shabby coffee shop in the basement of Waller Hall. Facilities were even less extravagant when I joined the faculty at Adrian College in 1964.
Today the new buildings at Willamette are spectacular and the newest buildings at Adrian are also much nicer than in 1964. Students can get an excellent education at both of these colleges, but I am not sure they are learning more than we were 50 years ago. Certainly they are not learning 8.5 times as much!
As in the case of medicine, there is a lot more money available now for higher education than there was 50 years ago, and a good part of this may be due to the availability of Pell grants and loans for college students. Borrowing for college was unheard of 50 years ago and was just beginning to be discussed while I was in graduate school. (One of my undergraduate students at Johns Hopkins University feared in a paper that such loans would undermine the "martial attractiveness" of young women seeking husbands. I think he meant "marital" but reassured him that indebtedness would be no obstacle to women seeking to join the Army.)
Experience in medicine and education suggests that throwing more money into worthy purposes may not always be a good idea. I have no idea how to deal with the problems this extra money has created, but we may be about to find out whether reducing the flow of such money, while painful, could have unexpected benefits.