One reason I don't think Baumol's cost disease explains skyrocketing US healthcare costs is that plastic surgery isn't behaving the same way. The avg breast augmentation in 1999 was $3.1k — $3.5-3.9k in 2009, $3.5-4k in 2018. Adjust for inflation & the price is actually droppinghttps://twitter.com/ArtirKel/status/1198664967073026049 …
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The food equivalent of healthcare would be capping the number of acres available for agriculture and the number of farmers, mandating that farmers receive years of training, and then have to farm by hand. How much would corn cost in that system?
This is all true, and I also have to point out that price elasticity of demand is a weird thing to talk about re: an industry that is somehow allowed to charge you and/or your exorbitantly paid insurance proxy whatever it wants while refusing to tell you the number before you buy
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That’s an excellent point, demand elasticity is actually pretty irrelevant in that system. Lots of people would and do decline operations that are over a certain amount if the benefit is low or risk is high. The true elasticity is probably higher than the current system implies.
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Look at what companies like MDsave accomplish purely on the basis of price transparency. Their average procedure cost looks 30-50% cheaper than the standard, which by itself makes the US comparable with Europe if that scaled (charitable “if” there, to be fair).
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