Because health care costs have been increasing faster than other costs for a long time. Everyone knows that. But why is that happening? Not so clear. This excellent article (via Marginal Revolution) says that health care is not subject to the same pressures as industries where costs have come down. Off-shore manufacturing is one such pressure. For example, a cell phone used in California can easily be made in China. In contrast, the health care a person in California is likely to want (e.g., X-rays, check-ups) must be supplied locally.
Let me suggest other reasons:
1. A large fraction of medical school professors are co-opted by industry. They get lots of money from health care companies. The companies have no interest in cutting costs. They fund research by medical school professors for exactly one reason: to sell more product.
2. The average medical school professor has little idea how to do research. Recently I mentioned a study in which they threw away half of their data. An article about the Potti scandal revealed that Potti’s main co-author, Dr. Nevins, essentially confessed he didn’t understand the research in the papers he had co-authored with Potti. As far as I can tell, medical school professors usually know so little statistics they cannot analyze the data from the studies they do. If you don’t understand how to do research, innovation will be difficult.
But I think the bigger and less obvious reasons are these:
3. The health-care supply chain is long. Some medical school professors can innovate — Peter Provonost, for example. But they face a special problem: the enormous health-care supply chain. It includes doctors, nurses, hospital workers, drug company employees, health insurance employees, medical equipment manufacturers, alternative medicine practitioners, psychotherapists, X-ray techs, health food store employees, and on and on. No other industry is like this. No one in the supply chain can innovate, yet all of them can block innovation. Everyone in the health-care supply chain must be paid. They care enormously about being paid. They hate to take a pay cut. Any innovation — unless it increases the cost of health care — threatens their paycheck. So there is a huge bias in favor of change that increases cost and a huge bias against change that decreases costs.
4. Let them get sick. If a man is not afraid, you cannot sell him protection. This is why protection rackets have two parts: (a) threat followed by (b) offer of (expensive) protection. Modern health care workers understand a similar truth: If a person is not sick, you cannot sell him (expensive) health care. Modern health care workers do not actively make people sick, they let a dysfunctional research system do that. (E.g., cluelessness about how to stimulate the immune system.) Then they pounce — and the money starts to flow. Once the money starts flowing, political power builds up. In a sane world, schools of public health, which care about prevention, would receive vastly more money than medical schools, which ignore prevention. In fact, the opposite is true.
This is why personal science will be so important: It is a way around our massively-dysfunctional health-care system — dysfunctional, that is, for everyone outside it.