Richard Fernandez discusses Another Point of View that takes into account the thinking of Robert Fogel, Nobel Prize winning economist.
Fogel argues that because most Americans have satisfactorily met their food, shelter and clothing needs, people are willing to spend a greater fraction of each extra dollar on health care, simply because it matters more to them then say, extra comestibles, which they have enough of. To some extent the American propensity to spend more on health care resembles the demand for a luxury good [2], “a good for which demand increases more than proportionally as income rises”.
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An aging but still functional society, in Fogel's apparent view, would naturally demand more health care than skateboards, but for so long as they can sustainably pay for it through a well functioning market, there is no need to suppress demand. On contrary, health care will be one of the fundamental demand drivers of technology for biotechnology and other new industries way into the 21st century. In the long struggle between man versus death, humanity, having basically beaten starvation and cold, would naturally turn its efforts to fighting old age and disease.
Consequently, there is no need to suppress the demand for healthcare. Expenditures on healthcare are driven by demand, which is spurred by income and by advances in biotechnology that make health interventions increasingly effective. Just as electricity and manufacturing were the industries that stimulated the growth of the rest of the economy at the beginning of the 20th century, healthcare is the growth industry of the 21st century. It is a leading sector, which means that expenditures on healthcare will pull forward a wide array of other industries including manufacturing, education, financial services, communications, and construction.