The media is abuzz with stories of outrageous markups at many hospitals. One of the most eye-popping numbers making the rounds? A supposedly "non-profit" hospital charges $1.50 per pill for a generic version of Tylenol. That's about 100 times the retail price.
Obviously, health care takes too much out of our paychecks, too much from our bank accounts, and too many of our tax dollars. Spending in this sector accounts for almost 18 percent of the economy. And the rising cost of government health programs is the biggest long-term driver of our national debt. Medicare alone cost $551 billion in 2012 and is projected to cost more than $1 trillion in a decade.
The question is what we should do about it. One approach is simply to squeeze down costs, and there are certainly savings to be reaped this way. A better approach, however, is to look at what is driving these high levels of health care spending and see if we can intervene there.