Uh-Oh: Slowdown in Health-Care Costs Might Be Temporary

by Greg Pollowitz

Ignore the Hype: Health Care’s ‘Cost Disease’ Hasn’t Been Cured.

. . .Not every prominent economist subscribes to Baumol’s theory of cost disease. Tyler Cowen, editor of Marginal Revolution, has long argued that organizations and regulation are as much to blame as the product itself.

“My view was [and] is that cost disease is not intrinsic in a particular sector,” Cowen tells California Healthline.

But Cowen acknowledges that a slowdown, “almost by definition …is temporary.” (Although temporary “may be good enough,” he adds.)

Meanwhile, we shouldn’t rush to declare that the cost curve has been cured, Kaiser Family Foundation President and CEO Drew Altman wrote last week.

“The more the nation believes the health cost problem is solved,” Altman warned, “the less likely we are to keep the pressure on to try new, more innovative, and perhaps more painful cost control strategies.”