Misconceptions That Mar Medical Care
Posted 11/06/2009 06:19 PM ET
This is the last installment in a nine-part series excerpting the chapter on medical care from the latest version of economist Thomas Sowell‘s “Applied Economics.” The entire series can be read at IBDeditorials.com.
IBD Exclusive Series:
Thomas Sowell on The Economics of Medical Care
A number of confusions plague discussions of the economics of medical care.
A confusion between prices and costs has allowed politicians in various countries to be able to claim to be able to bring down the cost of health care, when in fact they only bring down the individual patient’s out-of-pocket costs paid to doctors, hospitals, and pharmacies.
The costs themselves are not reduced in the slightest when additional money to pay for these costs is collected in taxes or insurance premiums and routed through either government or private bureaucracies. Since these bureaucracies and the people who work in them are not free, they add to the cost of providing medical treatment.
Most proposals to bring down the cost of medical care pay little or no attention to the actual cost of creating pharmaceutical drugs, training medical students, or building and equipping hospitals.
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