Do We Spend Too Little on Health Care?
By Arnold Kling
From an article in The New York Times.
In 1950, the country spent less than $100 a year — or $500 in today’s dollars — on the average person’s medical care, compared with almost $6,000 now, notes David M. Cutler…
Yet we often imagine that the costs and benefits are unrelated, that we can somehow have 2006 health care at 1950 (or even 1999) prices.
In Crisis of Abundance, I point out that we could easily afford the health care of 1975, which was not such bad health care. Harvard economist David Cutler thinks that the higher-cost medical care of today is worth it. I agree that some of today’s medical care is worth the cost. However, I think that our impulse to over-collectivize health care spending leads to a mis-allocation of resources.