Here is a graph I created at the St. Louis Fed website, showing medical inflation since 1947:

The blue line is the annual medical inflation rate. The red line is the simple excess (when positive) of that over general inflation. As you can see, medical inflation has mostly outpaced general inflation for decades (red line mostly above zero).

Why bring this up? Dan’s post on his debates with people over medical costs says, “Some have noted that insurance costs were escalating even before a Democratic Congress passed Obamacare…”

And that is true: Medical costs (a large component of medical insurance costs) have been escalating for decades, because the government has been messing with the medical system for decades – causing increases to inefficiency, cost and price. For example, Medicare was created in 1965 and took into the mid-1990s to grow into the monster entitlement that we know today; note the large (if volatile) excesses in medical inflation, in that period.

Obamacare, because it is even more of the same, cannot help matters in the long run; not even if Obamacare achieves some specific or short-term cost reductions (which is highly debatable).

Remember Einstein’s definition of insanity: doing the same thing over and over, expecting a different result. Rather than continuing to boost the level of government intervention in health care, we should be looking to reduce/reverse it.

Hat tip to Kevin Drum at Mother Jones for the idea behind the chart. (But not that his article is very good; as a committed statist, he naturally draws the wrong conclusions from the data staring at him.)