The Derb on inflationary medical costs...

At NRO:

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The other day I had the opportunity to ask an actual economist this question [why a technologically driven medical industry’s prices increase while similar industries’ prices decline] — a Nobel-Prize-winning economist, in fact. He gave me a brisk economist’s answer: “Because someone else is paying for it.” Well, … but for most Americans, this is true.

What’s to be done? All the proposals coming out of the presidential candidates’ campaigns amount to making the “someone else pays” principle more universal, which doesn’t seem to me a very promising approach. I mean, it might get me off the hook by turning everyone else into a “someone else”; but when choosing among political options, we should be mindful of what is good for the nation at large, not merely what is good for ourselves.

Is there a way out? Possibly. A friend tells me: “About a year ago my wife had an endoscopy done while we were in China on business. The cost was 150 yuan, less than twenty dollars. Recently in Arizona she had the same procedure. This time the bill came to $3,776.12. The only difference being in China they let her take the picture home with her.”

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Seems to me there is a terrific arbitrage opportunity here for Chinese doctors, dentists, and hospitals. According to The Economist, they are hungry for patients anyway. The China trip wouldn’t be appropriate for all medical situations, of course. If you fall off a ladder and break your leg, hobbling to the airport for a China flight isn’t really your preferred option. It does seem surprising, though, that the Third World isn’t getting more of our medical business. I’m betting this will change.