This isn't simply an "open market" issue.
Sure, there's more to it than just market dynamics, but isn't it pretty insane to just ignore them? How can we even begin to seriously analyze health care inflation without looking at that side of things?
As long as there is a law (which I support) that everyone in this country is treated regardless of cost, you can't apply open market parameters to it.
You can thank that God of the Free Market, Ronald Reagan, for that.
"EMTALA".
I thank Reagan for very little actually, least of all nonsense like EMTALA. That said, the free-rider effect supposedly brought on by EMTALA (and the like) has been proven, repeatedly, to have a minimal effect on the health care prices. The numbers don't add up and it simply doesn't account for the spiraling prices in health care.
The distorted market incentives, however do. When you take away a consumer's incentive to seek lower prices, especially for a service most of us need, especially when, in most cases, a third party is footing the bill - that can't not produce inflation. Ignoring this is utterly foolish.
We can address this by recognizing that we are over-insured, and remove the policies that have promoted the practice. We all need to be paying for our own health care as much as we can possible manage, and minimize the reliance on insurance schemes (whether they're private or publicly financed). Not only does this make more sense for individual consumers (most of us will pay much more in premiums than we receive in services) but it restores a strong incentive for the health care industry to provide us efficient services and low prices.