Friedman on Health Care Cure

Excellent and highly relevant article by Milton Friedman, "How to Cure Health Care." (HT: Greg Makiw).

Two simple observations are key to explaining both the high level of spending on medical care and the dissatisfaction with that spending. The first is that most payments to physicians or hospitals or other caregivers for medical care are made not by the patient but by a third party—an insurance company or employer or governmental body. The second is that nobody spends somebody else’s money as wisely or as frugally as he spends his own.