Simple Economics Can Help Cut Health-Care Costs
Increasing the supply of labor is a good place to start.
They’re both missing the point.
Photographer: Win McNamee/Getty Images North America
Of the $4.5 trillion the US spends on health care every year, the largest proportion — almost a third — goes to hospitals. The cost of hospital services has consistently outpaced the overall inflation rate for at least two decades. If Vice President Kamala Harris and former President Donald Trump really want to reduce health-care costs — as they both say — addressing this trend should be a priority.
Hospitals are heavily regulated, labyrinthine institutions that straddle the public and private sectors. In many cases, their pricing is subject to forces beyond their control. But absent (another) major reform to the US health-insurance system, more straightforward changes can still help rein in spending.