Who to Blame for Health Costs: The Poisoned Chalice of “Moral Hazard”

There is no question that healthcare in the US today is very expensive. But health costs have been dead flat as a percentage of US GDP for the past thirteen years. The explosive growth in health costs is over. Increasingly, attention is turning to the real culprit–socially determined causes of illness, and the inadequacy of our policies toward nutrition, shelter, mental health, gun violence and investment in public health. It’s time for the economists to eat some humble pie, and acknowledge that medicine will probably never fit in their cartoon universe of “Pareto optimality in perfect markets”.