IS THERE HOPE IN THE HEALTH CARE-COST CRISIS? "... At least we have one thing on our side--Stein's law, named after the famous economist Herbert Stein: 'If something cannot go on forever, it will stop.'".

• Author: Gordon, John Steele
• Position: MEDICINE & HEALTH

PERHAPS the most astonishing thing about modem medicine is just how very modem it is. More than 90% of the medicine being practiced today did not exist in 1950. Two centuries ago, medicine still was an art, not a science at all. As recently as the 1920s, long after the birth of modem medicine, there usually was little the medical profession could do, once disease set in, other than alleviate some of the symptoms and let nature take its course. It was the patient's immune system that cured him--or that did not.

It only was around 1930 that the power of the doctor to cure and ameliorate disease began to increase substantially, and that power has continued to grow nearly exponentially ever since. This new power to extend life, interacting with the deepest instinctual impulse of all living things--to stay alive--has had consequences that our society only is beginning to comprehend and address.

Since ancient times, for example, doctors have fought death with all of the power at their disposal and for as long as life remained. Today, the power to heal has become so mighty that we increasingly have the technical means to extend indefinitely the shadow, while often not the substance, of life. When doctors should cease their efforts and allow death to have its inevitable victory is an issue that will not soon be settled, but it cannot be much longer evaded.

Then there is the question of how to pay for modem medicine, the costs of which are rising faster than any other major national expenditure. In 1930, Americans spent $2,800,000,000 on health care--$23 per person and 3.5% of the gross domestic product. In 2015, we spent about three trillion dollars--$9,536 per person and 15% of GDP. Adjusted for inflation, this means that per capita medical costs in the U.S. have risen by a factor of 30 in about 90 years.

Consider the 1980s, when medical expenses in the U.S. increased 117%. Forty-three percent of the rise was due to general inflation. Ten percent can be attributed to the American population growing both larger and older (as it still is). Twenty-three percent went to pay for technology, treatments, and pharmaceuticals that had not been available when the decade began--a measure of how fast medicine has been advancing. However, that still leaves 24% of the increase unaccounted for, and that 24% is due solely to an inflation peculiar to the U.S. medical system itself.

Whenever one segment of an economy exhibits, year after year, inflation above the genera] rate, and when there is no constraint on supply, then either a cartel is in operation or there is a lack of price transparency--or both, as is the case with U.S. medical care.

So, it is clear that there is something terribly wrong with how health care is financed in our country, and a consensus on how to fix the problem--how to provide Americans the best medicine money can buy for the least amount of money that will buy it--has proved elusive. Still, the history of U.S. medical care, considered in the light of some simple but ineluctable economic laws, can help point the way. For it turns out that the engines of medical inflation were deeply, and innocently, inserted into the health-care system just as the medical revolution began.

It was the Greeks--the inventors of the systematic use of reason that 2,000 years later gave rise to modem science--who first recognized that disease is caused by natural, not supernatural, forces. They reduced medicine to a set of principles, usually ascribed to Hippocrates but actually a collective work. In the second century, the Greek physician Galen, a follower of the Hippocratic School, wrote extensively on anatomy and medical treatment. Many of these texts survived and became almost canonical in their influence during the Middle Ages.

So, it is fair to say that, after classical times, the art of medicine largely stagnated. Except for a few drugs--such as quinine and digitalis--and an improved knowledge of gross anatomy, the physicians practicing in the U.S. at the tum of the 19th century had hardly more at their disposal than the Greeks had in ancient times.

In 1850, the U.S. had 40,755 people calling themselves physicians, more per capita than the country would have in 1970. Few of this legion had formal medical education, and many were unabashed charlatans. This is not to say that medical progress was standing still. The stethoscope was invented in 1816. The world's first dental school opened in Baltimore, Md., in 1839. The discovery of anesthesia in the 1840s was immensely important--and, although it made extended operations possible, overwhelming postoperative infections killed many patients, so most surgery remained a last-ditch effort. Another major advance was the spread of clean water supplies in urban areas, greatly reducing epidemics of waterborne diseases, such as typhoid and cholera, which had ravaged cities for centuries.

Then, finally, beginning in the 1850s and 1860s, it was discovered that many diseases were...