THE MOST USEFUL CHART FOR THE UPCOMING YEAR. Professor Mankiw has been posting a number of instructive charts. This one, illustrating the declining proportion of spending on medical services paid for directly by consumers, illustrates one reason for rising expenditures on health care.

I refuse to use the expression "rising health care costs" because many services that were previously not available at any price are now available at some price. But when those services qualify for coverage by insurance, including coverage at the national government's monopsony Medicare rates, the incentives for consumers to shop around and the providers to find improvements are attenuated.

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