22nd November 2012
Six years ago, we wrote about Andy Kessler’s fascinating book, The End of Medicine, which got me to totally rethink how nearly every society approaches healthcare today. Even though the book is years old, I recommend it frequently. The key issue is that we still tend to treat healthcare as something driven by two key industries: pharmaceuticals and insurance. However, the book is based around the idea that, in pretty much every other industry, technology tends to (1) get better and (2) get cheaper. But that doesn’t happen much with healthcare — and that’s because it’s all about insurance and drugs. That means it’s really about treating the symptoms, rather than actually trying to prevent problems.
Drugs are incredibly expensive. The reason drugs are incredibly expensive is that government regulations make sure the it costs big bucks and takes a long time before a drug can be sold lawfully. So thank the government.
The reason insurance pays a major role in health care is because during WWII, when there were wage controls imposed by the government, companies had to bid for workers based on fringe benefits — a major one of which was employer-paid medical insurance. This was compounded by the fact that health insurance is a business expense for a business, and hence deductible on its taxes, but not for an individual. So thank the government.
And of course the government is wringing its hands and pissing and moaning that the incredible cost of health care (which it caused) means that we need government-provided health care. So thank the government.
Or maybe not….