Understanding the Cause of Health Care Inflation

"This is one of those cases in which the imagination is baffled by the facts." - Adam SmithHealth care inflation is a topic that lends itself to considerable demagoguery and "straw men arguments" from the left, where it is often attributed to capitalism and the free market. Their solution: more regulation and the creation of a massive new government entitlement program to provide every American with "comprehensive" health insurance. Unfortunately, this solution will only exacerbate health care inflation as it completely ignores the major causes of the problem -- rising government health care expenditures and increased regulation. In a new policy review prepared for the Commonwealth Foundation Laffer, Arduin, and Winegarden describe how the government's involvement in the health care system has resulted in: "[A] large and growing health care wedge - an economic separation of effort from reward, of consumers (patients) from producers (health...(Read Full Article)

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