Tuesday, June 23, 2009

Will having the government run health care really reduce its cost?

What does history say about the effect on cost of government control and influence over the medical system up to now?

A look at the data is instructive. The effect of tax exemption and the enactment of Medicare and Medicaid on rising medical costs from 1946 to now is clear. According to my estimates, the two together accounted for nearly 60 percent of the total increase in cost. Tax exemption alone accounted for one-third of the increase in cost; Medicare and Medicaid, one-quarter ... [Milton Friedman]
Read the whole thing.