There’s a lot wrong with pricing of healthcare versus its costs, but that spending on it increases faster than inflation isn’t abnormal.

If you ask people what’s most important for them, health ranks very high, often is #1. So, once you’re rich enough to pay for food, clothing, and living, almost all extra money should go to health, rather than, say, dining at three star restaurants, wearing tailor-made clothing, or four day working weeks.

Also, automation makes things that can be automated cheaper, and, hence, things that can’t (or aren’t yet) relatively more expensive. Education, day care centers and healthcare fall in the latter category.

>"There’s a lot wrong with pricing of healthcare versus its costs, but that spending on it increases faster than inflation isn’t abnormal."

Well yes an increase in consumer prices for health care results in an increase in health care spending as a percentage of GDP. But that's not what I referring to. I was referring to the fact that the price for basic services and components far outstrip the rate of inflation inflation. Here's one example - generic drugs. A generic drug, barring a supply chain disruption should at most keep with pace with inflation. Using an ancient antibiotic such as doxycycline:

"The price that hospitals and pharmacies pay for a bottle of 500 tablets of doxycycline, a decades-old antibiotic, rose to $1,849 in April, from $20 in October 2013"[1].

There are many other such example regarding run of the mill generic drugs.

Here's another example - a visit to see a primary care physician for either a either a yearly checkup or for because one has caught the flu. During an office visit a patience sees a doctor for maybe 5 to 10 minutes and nurse practitioner for maybe another 10 minutes. Maybe the doctor writes a prescription, updates the patients charts or might additionally refer them to a specialist. None of these activities involves cutting edge technology and the routines of such visits haven't fundamentally changed in years. Yet the price of these office visits has risen 14% in recent year.[2]

Lastly the premiums for the same basic health plane HMO, PPO etc have also continued far outstripped despite the fact that copays and deductibles - the out of pocket portion for consumers have risen not decreased. So it's not even though Americans are paying more for increased coverage or paying more for increased quality they are paying more for less.

[1] https://www.nytimes.com/2014/10/08/business/officials-questi...

[2] http://www.healthcostinstitute.org/report/2016-health-care-c...

> If you ask people what’s most important for them, health ranks very high, often is #1.

So is food, water and plumbing, but those costs decreased.

The parallels in both cases are that service providers have no incentive to hold costs down, because the costs are not directly borne by the consumer or are delayed.

Providers charge whatever they want, because they know you really don't have a choice and that insurance is picking up the bill, and if insurance won't pay you can go after the patient. Patients don't have any way to price shop (it's usually impossible to know the cost of a procedure or service before you get it, nor what will really be covered by insurance) and are insulated from most of the costs by their insurance.

In education, a huge chunk of the tab is covered by loans, which makes students price-insensitive, and the institution has no real incentive to hold costs down, in fact they actually use the fancy rec center and stadium to attract students. They can also run up the gen-ed courseload to artificially increase the amount of time it takes to graduate. Students have no real flexibility here either, because it's not like you can take a class at another university because it's too much, or choose to pass on a gen-ed.

The sad truth about healthcare is there's just too many middlemen all taking their cut and it all adds up. Hospitals, drug companies, insurance companies, doctors all need to make their cut, and by the time the service is delivered it's extremely expensive. Most other countries impose a lot more price controls, reduce the number of middlemen, and provide doctors with free education to increase the supply and remove the need to repay their own steep student loans (iirc you are looking at about $400k these days). Fixing the problem involves taking on a number of very powerful lobbying groups at the same time and is going to piss off a lot of people whose gravy-train would come to an end.

In schools, the problem largely comes down to reducing the amount of administrators and reducing the spend on non-essential facilities (rec center, stadium, etc). The actual teachers themselves are usually overworked and underpaid, the money is disappearing at an institution/administration level.

Example that comes to mind: my alma mater tore down a building that contained english/math classrooms and lecture halls, and replaced it the year I graduated. The basic requirements of an english/math classroom or a large lecture hall have not fundamentally changed in the last 100 years, they may have added projector screens but it's still fundamentally a room that people sit in and receive instruction, and there was no real need to replace it besides "we could".

The university did put forward that it would save them $300k per year in energy costs, which means that at the cost of $69 million it'll only take them 210 years to make their money back.

https://www.mlive.com/news/kalamazoo/index.ssf/2010/05/weste...

They are currently planning to tear down 12 student dorms and rebuild them at a cost of $55-75k per bed.

https://www.mlive.com/news/kalamazoo/index.ssf/2017/09/weste...

That's the kind of thing that drives up costs.

Hm...housing, healthcare, college, pharma are all heavily regulated and are subsidized by the government in one way or another. All are outpacing inflation by a very significant margin, for dubious gains in utility.

Anyone else seeing a trend here?

I'm not understanding your comment. This is the exact same point I was making.

He blames the government for increasing cost.