No one knows how much the people of the United States should spend on health care. When medical innovation improves treatments that relieve suffering and prolong life, people naturally spend more on health care. People also spend more on health care as they become wealthier. When American household incomes rise, people spend more on health care along with everything else. When government promises to provide free health care, people want more of it.
Strong evidence shows that private health care systems in which people spend their own money on the health care they want, using the financing arrangements that make sense for them, provide better care at lower cost. When people buy their own medical care they reward providers for rapid diagnosis, effective treatment, and convenient care at the lowest possible cost. Individual control of health spending directs money to medical care suppliers who do the best job of meeting those goals. Innovations that improve patient care or lower patient costs are rapidly adopted, often changing the very structure of health care delivery.