TITLE:
Why Is Medical Care Expensive in the US?
AUTHORS:
Kaz Miyagiwa, Paul Rubin
KEYWORDS:
Medical Care Expenditures; US Health Care Reform
JOURNAL NAME:
Theoretical Economics Letters,
Vol.4 No.1,
February
12,
2014
ABSTRACT:
America spends more
on medical care than any other nation, with no noticeable difference in
results. It is commonly thought that this is a result of a defect in the
organization of medicine in the US, which can be repaired by “reform.” However,
medicine is a labor-intensive good and labor is more expensive in the US. We
show that these conditions will invariably lead to a higher price and a higher
percentage of GDP spent on medicine. Thus, while reforms may improve the
functioning of the health care sector, they are unlikely to have a major effect
on spending levels.