January 12, 2010

THE THIRD WAY IS THE ONLY WAY OUT:

The High Cost of No Price: A simple chart will help you understand why healthcare spending has gone out of control ( Veronique de Rugy, January 12, 2010, The American)

Economists have shown that if a good’s price is zero or decreasing, then the demand for this good will likely increase. In 2008, consumers were only directly responsible for 11.9 percent of total national healthcare expenditures, down from 43 percent in 1965, according to new data from the U.S. Department of Health and Human Services. This means that someone other than consumers pays roughly 88 percent of all healthcare costs, giving consumers little incentive to mind costs and much incentive to over-consume.


If we care about costs--which there is no evidence of--the only way to get them under some control is to make people take cash out of their own pockets to pay for their health care, which means HSAs.

Posted by Orrin Judd at January 12, 2010 6:35 AM
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