In the discussion on Dr. Keith Smith’s defense of his right to earn a fair wage, everyone has a theory about why healthcare is so expensive. It’s undoubtedly a combination of profit motive and obesity, among other bad lifestyle choices.

RKannan76 suggests in the comments that we consider Milton Friedman’s analysis of whose money we are spending on whom to identify the real source of healthcare costs. The commenter and the economist are both thinking of the government as the spender, but it could just as easily be doctors spending insurance money on a patient.

“Most of the uninformed and hostile responses to Dr. Smith can be summed up Milton Friedman’s principles.

“The people who derive their benefit when the cost is born by someone else they feel entitled and spend/utilize more leading to the spiraling costs.

“There are four ways in which you can spend money.

You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money.

Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.

Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!

Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government.”

“The entitlement mindset reflects the mismatch between who (service/behavior) is costing and who the (service/behavior) is benefiting. If benefits and costs are not both shared to some degree, we will have potentially troublesome motives and outcomes.

“If it is my resource (time, effort, money, property), I am more likely to protect it. If it is someone else’s resource, I am less likely to protect (value) it.

“If doctors want to become millionaires, no one will enter the field anymore and will find ways to get out of the field. The compassion and satisfaction is what motivates.

“Hourly wages of many physicians are less than plumbers & over priced IT workers.”

[Image from flicker user Donkey Hotey]

— Comments have been edited for clarity and length.