• Publications
    • Essay
    • Case Study
    • Policy Study
    • Report
    • Testimony
    • Other
    • Newsletter
  • Blog
    • Daily Blog
    • Podcasts and Radio
    • Video
    • Infographics
    • Commentary / Op-Eds
    • Events
  • Events
  • Donate
  • About
    • Our Team
    • Show-Me Institute Board of Directors
    • Fellows and Scholars
    • Our Authors
    • Jobs
  • Contact
  • Explore Topics
    • Education
      • Accountability
      • Education Finance
      • Performance
      • School Choice
    • Health Care
      • Free-Market Reform
      • Medicaid
    • Corporate Welfare
      • Special Taxing Districts
      • Subsidies
      • Tax Credits
    • Labor
      • Government Unions
      • Public Pensions
    • State and Local Government
      • Budget and Spending
      • Courts
      • Criminal Justice
      • Municipal Policy
      • Property Rights
      • Transparency
      • Transportation
    • Economy
      • Business Climate
      • Energy
      • Minimum Wage
      • Privatization
      • Regulation
      • Taxes
      • Welfare
      • Workforce
Show Me InstituteShow Me Institute
Show Me InstituteShow Me Institute
Support the Show-Me Institute
  • Publications
    • Essay
    • Case Study
    • Policy Study
    • Report
    • Testimony
    • Other
    • Newsletter
  • Blog
    • Daily Blog
    • Podcasts and Radio
    • Video
    • Infographics
    • Commentary / Op-Eds
    • Events
  • Events
  • Donate
  • About
    • Our Team
    • Show-Me Institute Board of Directors
    • Fellows and Scholars
    • Our Authors
    • Jobs
  • Contact
  • Explore Topics
    • Education
      • Accountability
      • Education Finance
      • Performance
      • School Choice
    • Health Care
      • Free-Market Reform
      • Medicaid
    • Corporate Welfare
      • Special Taxing Districts
      • Subsidies
      • Tax Credits
    • Labor
      • Government Unions
      • Public Pensions
    • State and Local Government
      • Budget and Spending
      • Courts
      • Criminal Justice
      • Municipal Policy
      • Property Rights
      • Transparency
      • Transportation
    • Economy
      • Business Climate
      • Energy
      • Minimum Wage
      • Privatization
      • Regulation
      • Taxes
      • Welfare
      • Workforce
Health Care / Free-Market Reform

Health Care Is a Growth Industry

By Sarah Brodsky on Sep 4, 2009

Robert Fogel explains why controlling health care costs is counterproductive:

Expenditures on healthcare are driven by demand, which is spurred by income and by advances in biotechnology that make health interventions increasingly effective. […] It is a leading sector, which means that expenditures on healthcare will pull forward a wide array of other industries including manufacturing, education, financial services, communications, and construction.

The statistics on health care expenditures may seem alarming at first glance, but they aren’t so out of the ordinary when you compare health care to other sectors of the economy. The average consumer spends a lot more on personal computers than she did 40 years ago. That’s because people are wealthier, computers are more readily available, and technology has improved. The increased spending on computers has created jobs directly, as more people work to build the hardware and software components that go into computers. Computer spending has also helped the economy indirectly, because when people use computers to work more efficiently, they free up resources for new investment.

Health care is similar. As Fogel points out, people tend to purchase more health care as their incomes rise and medical technology advances. These spending increases are not a sign of rising costs, but of the changes in resource allocation that come with wealth. Controlling health costs — i.e., limiting health care expenditures — would hold back this sector of the economy and keep new jobs from materializing. No one would want to control spending on computers; health care spending should also grow unfettered.

  • Share
  • Tweet
  • Share
  • Email
  • Print
About the author

Sarah Brodsky

More about this author >
    Footer Logo
    Support the Show-Me-Institute
    Showmeinstitute.org is brought to you by Show-Me Institute and Show-Me Opportunity.
    • Publications
    • Blog
    • Events
    • Donate
    • About
    • Contact

    Reprint permission for Show-Me Institute publications and commentaries is hereby granted, provided that proper credit is given to the author. We request, but do not require, that those who reprint our material notify us of publication for our records: [email protected]

    Mission Statement
    Advancing liberty with responsibility by promoting market solutions for Missouri public policy.

    © Copyright 2023 All Rights Reserved