What Can Healthcare Prices Teach About Inflationary Woes?

Source: American Institute for Economic Research
by Raymond J March

“According to data from the US Department of Labor’s Bureau of Labor Statistics, medical inflation has increased 3-4 percent every year since 2010. Even in 2020, when healthcare access was strongly curtailed because of COVID-19, medical inflation measured 4.11 percent. The same data reveals that annual medical inflation has exceeded 8.6 percent five times since 1982. This is to say nothing of US healthcare expenditures, which comprises about 20 percent of GDP, and are expected to increase about 5.5 percent per year over the next decade. Despite passing countless regulations, politicians have made little progress in bringing down healthcare costs. But their failures have been quite lucrative. Politicians and special interests benefit from US healthcare’s expensiveness while the American public foots the bill. Public choice economics reminds us that political exchanges, like those between politicians and healthcare providers, result in concentrated benefits, but dispersed costs.” (06/18/22)