There is confusion among many who believe that more government involvement in healthcare will lower costs. Even when they purport to believe in a free-market economy, they claim that somehow healthcare is “different”.
It is different than… computers, automobiles, televisions, and so many other consumer goods that have dramatically dropped in price and improved in quality over the past several years. But why is that?
Simple – government involvement and interference in the market. As government involvement has grown, costs have risen.
Here’s a simple, obvious example. Prescription drugs, which are highly regulated, compared to over-the-counter drugs where a much freer market with much less government involvement exists.
The average cost to get a prescription drug approved by the FDA: $403 million (in 2002). The average length of time for drug approval: 8.5 years. Not exactly an enticing business arena for most entrepreneurs.