Thursday, November 5, 2009

Thomas Sowell on heathcare costs in RealClearPolitics this morning:

Although it is cheaper to buy a pint of milk than to buy a quart of milk, nobody considers that to be lowering the price of milk. Although it is cheaper to buy a lower quality of all sorts of goods than to buy a higher quality, nobody thinks of that as lowering the price of either lower or higher quality goods.

Yet, when it comes to medical care, there seems to be remarkably little attention paid to questions of both quantity and quality, in the rush to "bring down the cost of medical care."

In other words, reductions in healthcare costs are just that, reductions, if the only goal is to spend less, without regard to quality.

My friend Andrew Langer, of Institute For Liberty, put it well awhile back: There are three kinds of "costs" in healthcare. There's the healthcare costs that you pay, out of pocket, there's the cost someone else--e.g. an insurance company, or the government--pays, and then, out there somewhere, is the "actual cost." That actual cost is hard to figure of course, since the whole healthcare economy is a big welter of cross-subsidies, but the truth is out there, somewhere. It's just that nobody is very interested in figuring out what it is.

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