I wrote the blog post. Some of these broader patterns do relate to Baumol's cost disease, i.e., health and other service typically do not see productivity incr

I wrote the blog post. Some of these broader patterns do relate to Baumol's cost disease, i.e., health and other service typically do not see productivity increases at the same rate as manufactured products, agricultural produce, and wages in these services will tend to reflect increasing wages in other parts of the economy (especially skilled ones), but mostly this is about increasing volume, i.e., quantitive and qualitative increase in health goods and services. This empirical regularity can be explained by the fact that as countries get rich they attach increasing value to human life _and_ they experience diminishing marginal utility with most other consumption expenditures (an extra year of life, even discounted, can be worth a lot more than buying yet another bauble, a few more sqft in housing, etc) "Profits" as such are unlikely to explain more than a tiny fraction of this as (1) for-profit sector isn't that large in the health care space (2) their cost profile is generally very similar to government and non-profit alternatives (3) the patterns generally have relatively little to do with true price increases/inflation. Further, even removing profit per se from the equation does not mean that problems of this sort necessarily disappear. Principal-agent problems abound, even a physician on state payroll doesn't necessarily have their incentives well aligned with the interests of their patients.