#77 Planet Money: Health Care Goes to the Economist

The cost of health care is rising faster than our economy is growing — it's an economic train wreck waiting to happen. The debate over fixing that situation rests on a couple of key questions, namely how do we get coverage for everyone and how do we control costs.

That second question turns out to be much harder to answer. For all the talk about healing, a hospital is also a business. Cutting costs at a hospital falls to a hospital administrator like Daniel Kearns. He worked at a string of hospitals in the Southwest. Kearns says the hardest part of his job was dealing with doctors, like the one who wanted baseball season tickets for his family and the one who wanted a helicopter for transportation.

Those may sound wacky, but Harvard health economist Tom McGuire, says neither patients, doctors nor hospitals have real incentives to trim expenses because they're all spending someone else's money.