How Government Regulations Make U.S. Health Care More Expensive

The release of Michael Moore's movie "Sicko" which criticizes the U.S. health care system have made the issue of the U.S. health care system a hot topic.

One factor overlooked by both Moore and some of his critics are how the U.S. system is much less free market than it appears and that regulations are an important factor in making the system so expensive. The Economics Focus of the latest The Economist points to a study that argues that regulations cause an additional $169 billion in annual net costs.

And that is the net cost figure. The gross cost is a full $339 billion. The study assumes that somehow $170 billion in benefits is created by these regulations. But many of these supposed benefits, even if for the sake of the argument assumed to be real, will still add to the costs of the system.