Back in the day (early 2008), you made another post on a McArdle article. I commented on that (as: ‘shayne’) at the time, and referenced some elements of your book.

And my comment then is still relevant now. The U.S. health care system is to an even greater extent being financed to grow (build-out mode) rather than to just maintain.

Again, back in the day, the metaphor that was being applied was the “pig through a python” – with the aging ‘baby-boomer’ generation being the “pig”, and the U.S. health care system being the “python”. It seems there is no end to how large the “python” is going to get, to the point the “pig” is nothing more than an appetizer. And the python is still going to be hungry.

y impression from the bills (always a indicator fraught with danger due to absurd medical accounting) is that a simple doctor’s visit or procedure such as, say, an appendectomy, is a few times more expensive than it was a generation or two ago, even adjusting for inflation.

One could make the claim that there should also be a ‘hedonic’ adjustment for quality, but the fact that these procedures in the US also cost a multiple of what they cost in other countries with similar standards of care and quality leads me to think that’s not what’s driving the above-inflation rise in costs.

An analogy could be made to the other ‘commanding height’ of education, which has also seen tuition soar far above the rate of inflation for an extended time. Does it really cost ten times more to provide, say, an ordinary liberal arts education or a major in the humanities than it did two generations ago? Again, one can make some appeals to Baumol cost disease, but that doesn’t seem to cut it. One can also say that one should make hedonic adjustments for all those fancy facility and new buildings and IT infrastructure, but I think the cost residual is still larger than the portion explained by such factors.