Arnold Kling links Ben Bernanke saying:
From the economist's perspective, the question of whether we are spending too much on health care cannot ultimately be answered by looking at total expenditures relative to GDP or the federal budget. Rather, the question, whatever we spend, is whether we are getting our money's worth. In general, good information and appropriate incentives are necessary to allocate resources efficiently.
Most economists conclude that we are not. But here's a thought experiment. Say someone offered you a health insurance policy which will give you the net present value of money saved on life extending procedures, if you agreed in turn to forego expensive end-of-life care, and to forfeit your right to any procedure that health care eonomists estimated was not cost-effective in terms of life years saved. How many of you would take it? Not many, I'd wager. Which argues that the current allocation of health care resources is, in some sense, efficient, in the sense that we prefer it to the alternative.
What we'd really like, of course, is to prevent everyone else from taking advantage of "useless" end of life care and procedures. In a democracy, however, each everyone is also a we.
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