The United States does spend considerably more than any other country on healthcare. Observers on both the political left and right commonly recite this point as prima facie evidence that American healthcare is in crisis. They generally assume that salvation lies in some bundle of reforms to the healthcare system—particularly price controls or restructured health insurance—though they differ ferociously on which reforms.

But an alternative view—convincing, I believe—is that America’s heavy healthcare spending does not by itself constitute a crisis and is driven mostly by factors outside of healthcare. An earlier Bastiat’s Window piece, “From Strings to Sutures,” discussed how healthcare prices are influenced by prices in other sectors. This piece discusses how healthcare spending depends on facotrs outside of healthcare itself.

In particular, a 2017 article by software engineer and entrepreneur Peter Laakmann (“The Price is Right”) argues that Americans spend more on healthcare because, in effect, we’re wealthy spendthrifts (on everything)—not because of factors intrinsic to American healthcare.

[It’s not just that either, although I think Bob’s onto a key point here. We also make it more costly through deliberate opacity on price signals by reinforcing the power and reach of third-party payers in the system. My podcast this week addresses that very point with Dr. Richard Kube. — Ed]