THERE'S ONE THING ABOUT HEALTHCARE THAT GETS SURPRISINGLY LITTLE ATTENTION in all the debates and punditry on the subject and the characterization of its current state as a “crisis” needing government intervention: WHY is healthcare so expensive?
We are encouraged to imagine that healthcare prices constantly rise (and rise dramatically faster than the rate of inflation, as well) due to the steady increase in our technology and its ever-broader implementation (and correspondingly increased effectiveness). But in fact, this is nonsense.
Increased capability lowers costs, it doesn’t raise them. While it is true that if doctors used to know how to do five procedures costing, say, $100 each, and they now know how to do ten procedures costing $100 each, and for some reason do “all that they know” in any given situation, the “cost of care” for such a situation would go from $500 to $1000. But this is almost never the case (or never needs to be) in regard to routine medical products and services that the market has always supplied to consumers.
FIRST OF ALL, ONCE DEMAND FOR ANY PRODUCT OR SERVICE has reached a certain minimum threshold, the cost of providing it almost invariably goes down over time -- meaning that the original “five procedures” (and the additional five, for that matter) would steadily cost less to do (in constant dollars). & ...
