As we become richer, we spend a greater share of our earnings on health care. Today, it sits at 18 percent, but could well grow to 50 percent by the end of the century. At the same time, a heart bypass is cheaper than it was 30 years ago and far more expensive now than it will be in 2050. The cost of providing a specific health care service is declining, but we are spending more and more money on new tests and procedures. Health care behaves exactly like our entertainment budget, except our employers pay a big part of the tab. To a business it is a cost, pure and simple.
When we again re-examine health care in a comprehensive way, we must face the fact that the ACA did nothing to cut health care spending. It couldn’t possibly have done so against the ever growing desire to live longer and better. That was its problem all along.
Michael J. Hicks, Ph.D., is director of the Center for Business and Economic Research and a professor of economics at Ball State University. Contact him at email@example.com.