Friday, March 12, 2004

Structural causes of healthcare inflation

The cost of healthcare is rising much faster than general inflation. In the US a chunk of that is the collapse of managed care. There are fundamental structural causes however; aging population, new technology, etc.

Today I ran into a structural example I'd not thought of for a while. My son needed an antibiotic for a strep throat and co-occurring ear infection. Ten years ago that would have cost about $10. Instead today it's $120. A tenfold cost increase, because of antimicrobial resistance.

We expect antimicrobial resistance to worsen. Eventually many old favorites, such as augmentin, will bite the dust. Their replacements will cost even more.

Will a strep infection eventually cost $1000 to treat with antibiotics? Talk about health care inflation ...

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