Health Care Costs; why the high prices?

George Will has an interesting article today:

Americans Will Regret Health Care 'Fix'

[...] Most Americans do want different health care: They want 2009 medicine at 1960 prices. Americans spent much less on health care in 1960 (5 percent of GDP as opposed to 18 percent now). They also spent much less -- nothing, in fact -- on computers, cell phones and cable and satellite television.

[...]

The Hudson Institute's Betsy McCaughey, writing in The American Spectator, says that in 1960 the average American household spent 53 percent of its disposable income on food, housing, energy and health care. Today the portion of income consumed by those four has barely changed -- 55 percent. But the health care component has increased while the other three combined have decreased. This is partly because as societies become richer, they spend more on health care -- and symphonies, universities, museums, etc.

It is also because health care is increasingly competent. When the first baby boomers, whose aging is driving health care spending, were born in 1946, many American hospitals' principal expense was clean linen. This was long before MRIs, CAT scans and the rest of the diagnostic and therapeutic arsenal that modern medicine deploys.

In a survey released in April by NPR, the Kaiser Family Foundation and Harvard, only 6 percent of Americans said they were willing to spend more than $200 a month on health care, and the price must fall to $100 a month before a majority are willing to pay it. But according to Grace-Marie Turner of the Galen Institute, Americans already are paying an average of $400 a month.

Most Americans do not know this because the cost of their care is hidden. Only 9 percent buy health coverage individually, and $84 of every $100 spent on health care is spent by someone (an employer, insurance company or government) other than recipients of the care. Those who get insurance as untaxed compensation from employers have no occasion to compute or confront the size of that benefit. But it is part of the price their employers pay for their work.

The president says the health care market "has not worked perfectly." Indeed. Only God, supposedly, and Wrigley Field, actually, are perfect. Anyway, given the heavy presence of government dollars (46 percent of health care dollars) and regulations, the market, such as it is, is hardly free to work. [...]

Government is a big part of the problem. MORE government is not going to make the situation better. Read the whole thing.