IBD on Health Care Costs

This article from Investors Business Daily absolutely nails the problem with our current health care system and with the system President Obama is so desperately pushing on the American people.

From the article:

The cost of American medical care is so high that it's thought by some to be a tragedy. About one-sixth of the economy is made up of health care expenditures. On average, each American runs up $7,290 a year in medical bills. Bringing down the costs — without sacrificing quality of care — is a reasonable objective.

But supporters of the health care legislation recently passed in Congress have lost sight of the spending problem — if they ever had any clear concept at all.

There are two reasons why per-person health care spending in the U.S. is far higher than even Switzerland at $4,417 a year, or Luxembourg at $4,162, which rank second and third in the world.

One, America has the best health care on the planet. The smartest doctors, the finest in diagnostic equipment, top-flight treatment and advanced drugs don't come cheap.

Two, our system encourages overuse. And, as any ninth-grade economics student will confirm, an increase in demand forces prices higher.

......Americans would be more judicious in seeking health care — they would self-ration — if the right incentives were in place. An effective way to cut overuse and bring down costs would be to encourage through public policy the use of health savings accounts. If consumers used HSAs to pay the full amount for medical care at the point of service rather than letting employer-funded insurance or a government program pay the bills, the demand would fall.

The Democrats' health care legislation, however, puts more distance between Americans and the payment process and promotes dependence on government. That will only drive down consumers' out-of-pocket expenses even further and force overall health care spending upward. Under such a regime, the system will be worse off than it is now.