Food, housing transportation, apparel--all are paid fee-for-service, and all have a lower rate of inflation than health care does.

Yes, the providers of these services would like to sell us more units of service. But we have good reason to resist--we don't want to waste our money on services we don't need. What is unique about health care is not fee-for-service, but third-party payment. Only in health care is someone else picking up the tab for our spending.

If we applied the same third-party payment technique to any other segment of the economy, we would get the exact same inflationary spiral we see in health care. I buy donuts from time to time. If those donuts were free at the point of purchase, I would buy (and eat) a whole lot more than I do today. The stereotype of cops eating donuts came about because donut shops gave them away to the cops for free.

When I was working as a state-level lobbyist for the Blue Cross Blue Shield Association, I would attend meetings of the National Association of Insurance Commissioners (NAIC), the National Governors Association (NGA), the National Conference of State Legislators (NCSL), and a bunch of other organizations. These groups typically held their meetings in the ritziest hotel in Kansas City, New Orleans, San Diego, Boston, or some other place that was easy to get to.

Not once did I ever inquire what the room would cost. Why should I? Blue Cross was paying for it. The cost made no difference to me whatsoever. Some years later, when I went into business for myself and tried to attend the same meetings at my own expense, I became very interested in the cost of the rooms. Most of the time, I would stay at a cheap motel on the edge of town and drive to the meetings.

Ah, but health care is different, you might say. Yes it is. It is different because of third-party payment and for no other reason.