Your post brings up the interesting question of whether there is a “healthcare bubble” in the U.S., and if so, when it’ll pop.
Psycritic stepped into it with his question, because I was actively musing about whether there was a medical/pharmacological bubble when Senator Grassley began his investigation in 2008-2009. But when I started looking, I got pulled into the vortex of the corruption in the academic-pharmaceutical alliance in my specialty of psychiatry and never got out. But the term, Irrational Exuberance, sure fit when it came to the antidepressants and atypical antipsychotics – the blockbuster era in psychopharmacology.
So here’s the question back on the table. I have no doubt that Healthcare in the US is a falsely inflated market, no doubt at all. I would be surprised if anyone doubts that. But it doesn’t look like a bubble graph. It’s a long slow climb – a relentless progression …
… rather than the steep rise like we expect in a financial bubble – a boom. And it has been going on for a very long time. In fact, it has been going on about as long as there has been a Healthcare Industry. I’m not even sure I can define what I mean by the Healthcare Industry or know enough to say when it even started, but I have the feeling everyone knows what I’m talking about. It came in pieces. Health Insurance after World War II. FDA regulations and drug approval in the 1960s. Then hospital corporations, and managed care, and pharmaceutical giants, and Medicare, and Medicaid, and … It just happened along with the corporatization of everything else until it became the Healthcare Industry and that’s how we talked about it. And along with that, there were the Healthcare Market[s].
This falsely inflated market doesn’t have the steep lead-in of a financial bubble, and that graph up there just keeps on rising and taking a bigger and bigger piece of the pie. And back to Psycritic’s question, it doesn’t burst or pop like financial bubbles. It seems to grow unaffected by those usual market forces economists so love to talk about. What do you call a market like that – a falsely inflated market that is unopposed by any apparent forces to hold it in bounds? I personally think it’s called a Monopoly, and I don’t think we’ll be able to do anything about it until we come to grips with what that means. I wish it were a financial bubble, but it’s not. The medical analogy for an economic Monopoly is cancer – something that grows without restraint until it destroys its host. That’s a real possibility with the Healthcare Industry.