The Capital Spectator has an excellent post on rising healthcare costs. Here is a sample:
Surprise, surprise. The world's major economies are spending record amounts of their gross domestic products on health care. In 2001, an average of 8.4% of GDP was consumed with health expenditures, up from 7.3% in 1990, according to a new survey from the Organization for Economic Co-operation. That translates into a growth rate for medical spending of 3.4%, or about two-thirds higher than overall GDP growth over that span. The report is the latest warning sign that as medical technology progresses, it threatens to impose an ever-larger financial burden on governments, a burden that at some point, unless checked, threatens to consume public spending.
Demand for cutting-edge medicine is, of course, unlimited, and largely price insensitive. If consumers approached auto purchases with the same mindset applied to health care, everyone would demand a Rolls Royce, and the price was no object. That's always been true of course. The difference is that radical advances in the past have been relatively inexpensive.
There are two competing forces at work here. On the one hand, the healthcare industry hasn't applied breakthroughs in Information Technology as fast as other industries, so they haven't seen the costs savings and productivity increases that await. On the other hand, innovation in the industry leads to longer life and more healthcare costs. New procedures and devices are often very expensive at first, and everyone thinks they deserve them. We have come to feel that we have a "right" to healthcare. We feel that our individual lives are so important that any cost is justified to save us. But the truth is that as a society, the individual life of someone we don't know isn't worth that much. I don't think the answer is to turn it over to the government. That's like saying we should practice communism because we feel that everyone has the "right" to a job. I think the answer is to change the way we think about healthcare, which unfortunately, may mean we need to change the way we think about life and death. I still believe someone will come along with a good private sector idea sooner or later that will help fix this problem. Maybe I'll put my businesspundit brain to work on it. Or maybe I'll go to bed instead. Yawn.