I can see that neither Matthew Yglesias nor Steve Verdon is reading The Glittering Eye. If they had, they’d have read my recent post on Gammon’s Law and they’d know why neither increasing the supply of health care providers nor decreasing the demand for health care will have much effect on the rising cost of health care in the United States.
I posted a comment on your other (older) post. Exactly what does the number of hospital beds tell us about the demand side of the issue?
The key point behind both Friedman’s article and Gammon’s article is that costs in health care rose while outputs—however they were measured fell.
I can see I’m not explaining this properly. When inputs per output are rising increases in demand are not necessary to explain price increases and increases in supply won’t be sufficient to bring them down.
Note that this isn’t an argument against eliminating the involvement of government in health care. But getting government out won’t solve the problem, either. You’ve got to get the bureaucracy out and that means insurance company bureaucracies, HMO bureaucracies, and hospital chain bureaucracies.
I think the only path to doing that leads through a single-payer system. The issue is managing the transition. Sometimes you have to go up the hill to get to the valley.