[Torie]

I lay most of the cost increases in our healthcare system at the feet of Medicare and Medicaid, and soon the new Presciption Drug Benefit program will just make it worse. When the recipient only sees 10% of any cost increase, additional demand and cost increases are guaranteed.

There is some truth in what you say, although it is most pronounced in the higher education industry. In medicine, PPO's and HMO's do quite a bit of price maintenance. The real problem in medicine, is that much of the new fancy stuff is very expensive. Miracle drugs cost a lot to invent, particularly since most of the drugs experimented with don't make it to the finish line. There is no free lunch.

[Kellis91789]

That's a circular argument. Drug companies pursue drugs long after they should give up because the demand is high. When people only pay 10% of what a new drug costs, people demand it hoping it will be 'the' cure for what ails them.

If they paid it all out of their own pocket, the demand for existing drugs would fall, and drug companies would be chasing fewer miracle cures.

We might end up with fewer drugs, but I doubt it. I think they'd just cut their losses quicker on the drugs that weren't going to pan out anyway.