Sunday, February 24, 2019

This is not a solution.

There are two U.S. industries who's products have increased in cost at a rate far outpacing standard inflation: Healthcare and Higher Education.

Both of these are information based industries. The cost of reproducing and transmitting information has dropped dramatically over the last few decades. Both of these industries should be seeing dramatic efficiency improvements from the Information Age, but they have not.

At the same time, the demand for both industries has increased dramatically. The Bachelor's degree is now considered the entry point for a reasonable job. An aging population has increased the demand for healthcare, as has the technological advancements of healthcare--better detection and improved treatments means more opportunities for treatment.

The final problem is the "Third-Party Payer" issue which pervades both of these industries. Insurance is the payer for healthcare, and student loans are the payer for higher education.

The inability of people to cope with such increasing costs had led many to look at just giving up, and demanding the government pay for it. Medicare for All/Single-Payer is offered as the solution to high healthcare prices. Free college and student loan forgiveness is offered as the solution to high higher education prices.

The problem is, neither of these are solutions to the high cost of the product. If we are going to depend on government to solve the the high cost problem, we need a solution that focuses on cost.

We need to identify the source of high costs in these industries.

We need to identify where entrenched organizations are preventing competition which could lower costs.

We need to actively invest in research which holds the potential for an order of magnitude decrease in specific health care areas (i.e., AI). Disruption of the status-quo must be the goal.

We need to actively subsidize higher education inversely to the cost of the product: more grants for students taking low-cost distance learning living at home, fewer grants for students taking high-cost courses at expensive campuses. Disruption of the status-quo must be the goal.

We need a Secretary of Health and Human Services who is a tyrant to all of the embedded interests in the health care industry.

We need a Secretary of Education who is a tyrant to all do the embedded interests in the higher education industry.

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