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The cost of medical care is a big topic in healthcare policy discussions – whether in Congress or in think tanks. Over the last few years, costs for medical care have continued to rise. Until 2021 with the out-of-control inflation, medical care prices have generally grown faster than overall consumer prices. From 2000 to 2022, the price of medical care, including services, insurance, drugs, and medical equipment, increased by 115.1 percent, whereas prices for all consumer goods and services increased by 78.2 percent.
Hospitals’ “facility fees” are of particular concern. Facility fees are generally the price for using the hospital premises – the overhead charge in addition to professional charges. Some hospitals are charging such fees for telemedicine. Additionally, one large private insurance data analysis showed that the facility fees for emergency department use from 2004 to 2021 increased four times faster (531%) than professional fees (132%) for emergency department evaluation and management services. And until 2021, with the out-of-control inflation, medical care prices have generally grown faster than overall consumer prices.
Healthcare policy isn’t just about saving money. Otherwise, we would simply ration care. Real human beings underlie the reason we provide medical care in the first place. Accordingly, we have to look at limitations on access for certain groups, the impact of cost-cutting on quality, the ethics of rationing, and many other factors affecting the individual patient.
My guest taught the economics and ethics of healthcare for 20 years, and his overriding theme throughout those years was, “Always be skeptical.” He notes that “healthcare policy debates tend to be drenched through and through with myths, opinions, and politics—all masquerading about as scientific facts.”
Suggested Reading
“6 Lessons in Healthcare Mythology” (Robert Graboyes)
Exaggerations, Half-truths, Non-Sequiturs, and Falsehoods in Policymaking
“Defying Gravity” (Robert Graboyes)
“Fortress and Frontier in American Healthcare” (Robert Graboyes)
“How Is an Emergency Room Like a Monkey Wrench?” (Robert Graboyes & David Goldhill). Conventional wisdom says that the emergency room is the most expensive place to get care. David and I argue that you can argue just as plausibly that it’s the cheapest place to get care.
“Experts with Statistics: Chimps with Machine Guns” (Robert Graboyes). Experts armed with statistics can be dangerous as hell. This article provides some examples to keep in mind. A couple of the examples ought to terrify you.
Robert Graboyes is an economist, journalist, and musician in Alexandria, Virginia. He publishes BASTIAT’S WINDOW, an online journal exploring economics, ethics, health, technology, and culture. He holds a Ph.D. in economics from Columbia University. He has been an economist at the Federal Reserve and an economics professor and healthcare scholar at the Mercatus Center. He is the author of Fortress and Frontier in American Health Care and received the Reason Foundation’s 2014 Bastiat Prize for Journalism. He is currently a FAIR in Medicine Fellow. (Foundation Against Intolerance and Racism.)
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