Textbooks as an Analog to Medical Care
I have written a number of times that our health care system will never work right until the person making the choices about health care is the same one bearing the costs of those choices. Today, individuals and doctors make choices but insurance and employers pay the cost. As a result, neither individuals nor doctors are very price sensitive, and have every incentive to sign up for every expensive diagnostic imaginable, particularly given whats going on in malpractice law. Insurers who pay the bills are trying to control more of the decision making, but this just pisses everyone off. Unfortunately, many want to fix this by putting both selection and payment in the governments hands - ughh. My preference is of course to find a way to let individuals continue to make choices for themselves, but bear more of the cost. MSA's are one such approach, I am sure there are others.
Marginal Revolution has an interesting post pointing out that the market for college textbooks has a similar disconnect -- professors choose the book but students pay for them, resulting in rapidly rising textbook costs.
