Link:
http://american.com/archive/2009/september/forecasting-the-cost-of-u-s-healthcare5 measures are highlighted in the article.
The article claims that because income elasticity is high, one need not worry about rising health care costs. Something that a lot of prominent economic historians claim.
On the other hand, it is important that this money is used wisely. Sick patients who want a miracle will pay nearly any price for treatment. If the doctor offers a fancy, high-tech treatment at twice the cost of an equally effective basic treatment, the patient may decide to go for the high-tech apparatus. The thinking is, it’s my life and I want the best technology available. However, if this high-cost high-tech equipment was not made available as a choice–again, assuming it was not better than the basic treatment–I would guess that the patient would be perfectly happy with the effective basic treatment. More a case of supplier-induced demand.
