11/25/2019

Are We Really Ready for Free-Market Healthcare?

"The chart above illustrates the pronounced and widening gap between health spending as a percentage of GDP in the U.S. versus other developed economies. But there’s another trend at least equally as profound–spending is going up everywhere, more than doubling as a percentage of GDP over a 50-year period.

This stark result is likely due to a combination of the insurance model, whether government or private, and the fact we’re getting better and better at healthcare. Life expectancy increased by about 20 years during that period, something everyone can celebrate, but at what cost?

And that’s why healthcare is different. Throughout the vast majority of human history, medical technology was so rudimentary that almost nobody had to face the choice between employing significant resources to prolong their life or using them for something else.

The idea that we’ve overinvested in medical technology, that we’re in a sense too good at healthcare, may sound absurd. But consider that a large fraction of medical R&D is either directly subsidized by governments or large private foundations, or implicitly subsidized by our intellectual property protections."