Economists Say Third-Party Payment Key to Increases in Medical Cost | MediBlog

Forum for Healthcare Freedom

Notice the two graphs that I included below:

The first shows the gradual decline of patient-dollars (out-of-pocket expenses) as a percentage of total healthcare expenditures from 1960 – 2006. The second graph shows aggregate healthcare spending as a % of GDP starting to more rapidly increase from about 1968 (6%) to the absurdly high levels it is now (17%). 

My interpretation of these inverse related graphs is that as patient-consumers lose their ability to influence prices with their own dollars (falling % of out-of-pockets) it leads to an inflationary spiral of the kind we have witnessed over the past 40+ years.

Show me an area in healthcare where people spend their own money to purchase care (or most of it) and I’ll show you a market where prices are stable or falling and care is affordable.


“Government payers have an even worse cost-containment record than privately provided medical care.” Since…

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