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BNN Bloomberg: America Can?t Shake the Cost Disease
19 July 2019
But looking at the details of health-care pricing casts doubt on this explanation. For example, economists Zack Cooper, Stuart Craig, Martin Gaynor and John Van Reenen have uncovered a number of odd anomalies in the way health care is priced in the U.S. They find that a MRI on a leg can vary by a factor of 2.5 or more between hospitals in the same city. Prices for these services can even vary a lot within a single hospital. Meanwhile, they find that at hospitals with little local competition, prices are substantially higher. These facts are hard to explain with either Baumol cost disease or income effects.