Why is health care growing more expensive?

Our friend Josh Hendrickson rightfully crititized Robert Reich (former Labor Secretary under Clinton, among whose sins are overseeing the start of the Family and Medical Leave Act). What Reich proposed is making health care more affordable by preventing its advancement, which I'm sure appeals to many Americans who'd like nothing better than aspirin being our most advanced pill.

I had my own thoughts that were mainly about insurance being why health care costs are going up:

Completely agreed on #2. What does Reich want, a return to the Dark Ages? Yeah, I suppose leeches are a pretty inexpensive treatment.

I believe I commented before that most people don't consider widespread health insurance as a factor in rising health care costs. Americans with policies figure that they might as well take advantage of them, so they consume more health care services than if they paid out of pocket. In the end, insurance companies must raise premiums in a vicious cycle: with each increase, Americans figure they'd better use their policies to the limit to get every dollar's worth.

Medicare and Medicaid are especially bad. Since they allow people to receive something at others' expense, there is no reason for the recipients to hold back at all. Reich misses the simiple solution that will save Medicare, Medicaid and Social Security too: have people pay in what they get out. (I personally would abolish the programs.) The only way to guarantee that is individual accounting. So if to date you've paid $11,539.82 in the Medicare portion of your FICA taxes, then once the government pays out $11,539.82 for you, then you're on your own. It sounds cold, but anything less is taking from others whom government coerces into the pyramid scheme.

There's no way around the reality of the market. Health care is no more a "right" than gasoline, so no rational person should be surprised that the price rises with demand — particularly when it's often consumed at a fixed price.

From a business perspective, #1 is illogical, if not BS. First, "reduce the huge administrative costs of health care" pretends that health care companies don't want to reduce operational costs. Why should they NOT want to? A more efficient insurer or hospital will charge less and thereby get more customers. The actual hindrance comes from government regulations, not private sector competition.

"which include soaring advertising and marketing expenses designed to identify and sign up young and healthy people and avoid older and sicker people" Is Reich really saying it's bad that insurers avoid the most costly customers and target the most profitable ones? Which will a logical person choose: $2 to market to a young, healthy customer that will yield a $15 profit, or $1 to market to an old, sickly customer that will yield just $5? Insurers are not charities, nor are hospitals and other health care providers. Treating them as such is THE reason we're in such a mess.

On a final note, it's true that there are many Americans who pay for health insurance that they don't need in the end, but that's why it's called insurance, and it's their choice. Except in Massachusetts.