Medicine: Phase II for Health Care

It is no accident that President Nixon's Price Commission waited four weeks after the beginning of Phase II to set federal policy for medical and hospital costs. The economics of health care is exceedingly complex and in recent years has been one of the largest balloons in inflation. While the consumer price index has gone up 38% since 1960, health costs have more than doubled, and were increasing at an annual rate of 12.9% before the Phase I freeze took effect in August. Last week the Price Commission finally announced its goal: to cut that 12.9% "by at least one-half." The...

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