Health Care

Why Are Health Costs Rising? - Devon M. Herrick, Ph.D.

Prices for medical services have been rising faster than prices of other goods and services for as long as anyone can remember. But the Subcommittee should consider that not all health care prices are rising. Although health care inflation is robust for those services paid by third-party insurance, prices are rising only moderately for services patients buy directly. For example, the real (inflation-adjusted) price of cosmetic surgery fell over the past decade - despite a huge increase in demand and considerable innovation.