The Failure of the Market IV: Price

Abstract

America in the 1950s and 1960s spent a higher percentage of its gross national product on medical care than did Britain. This fact does not, however, demonstrate that the quality of service in America was better, or that the quantity supplied was greater. It might simply reflect rising cost to the consumer: ‘Since 1958 it has risen much more than in Britain … By far the steepest rise has been registered by the price of hospital rooms and group hospital insurance premiums. These are now rising at the rate of over 7 per cent per year, or twice as fast as the national income.’¹