Health Care BS

What’s wrong with health care in the United States? Why has its cost increased so much faster than the CPI? By way of answering that question, Star Parker defers to the wisdom of Milton Friedman:

Friedman explained that the problem is that the person buying health care is most often not who is paying for it … Most medical services today are paid for either by insurance companies or the government. In fact, The Wall Street Journal recently reported that government now pays for 45 percent of our health-care bills.

This is indeed the problem and it suggests its own solution: remove the middle man. If consumers are required to face the actual cost of the health care they buy, they will stop over-utilizing the delivery system. The resultant decrease in demand will reduce the upward pressure on health care prices.

Unfortunately, no major policy maker in Washington has proposed a solution that would reconnect consumers to the actual cost of healthcare. And it is even worse on the state level, where various governors (both Republican and Democrat) are promoting legislation that actually makes the problem worse.