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Opinion: The role of prices in healthcare spending

The New York Times, September 19, 2011
The term "healthcare" evokes different images in people's minds. To patients who find a miraculous cure, healthcare may be almost sacred. For physicians, nurses and other healthcare professionals it is a compassionate human activity. To hard-nosed economists, healthcare represents just another exchange of favors embedded in a wider market economy that consists of exchanging favors. Some members of society surrender real resources ? their time, amplified by their skill or the healthcare products they produce ? to the process of patient care, which is meant to improve the patients' quality of life. In return, society issues these providers of real healthcare resources generalized claims (money) on all the things included in gross domestic product. Thus, the healthcare sector of any country always has the dual goals of enhancing the quality of life of patients as well as enhancing the quality of life of the providers of healthcare, and, charity care aside, patients are at once objects of compassion and biological structures yielding cash.

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