Why the U.S. Spends So Much More Than Other Nations on Health Care
&quot;The US spends more on healthcare because the prices are higher!&quot;<p>Um, okay. Duh. A better question to ask would be: Why are prices not falling? In the &quot;normal&quot; economy, people can&#x27;t offer any arbitrarily high price they want: They have to compete with others to offer their good or service at a low price. The more you raise your price, the more you invite competition and give them room to run a profitable business.<p>Anyone who has gone to a doctors office or hospital lately knows why there is so much overspending in health care: The health care system is the most fucked up, overcomplicated, ridiculous system you could possibly imagine. You start out by filling out a big paper form with all your info on it... They use that to bill your insurance, which then says okay, we&#x27;re going to pay you half of what you asked for. What ridiculously perverse incentives. Now the provider will naturally ask for twice as much, knowing they won&#x27;t get everything they bill for.<p>Health Care will be fixed not by laws or insurance companies, but by technical innovation and good old fashioned economics. You know, those old ideas Adam Smith had. If there was serious technical and economic &#x2F; business model innovation in the industry (an Apple of health care) prices would go down,  outcomes would improve, etc.