Following the recommendations of David Leonhardt and Arnold Kling, I read Shannon Brownlee's book "Overtreated" over the holidays. It was a fascinating read about (1) how there is a large amount of unnecessary health care and spending on it in the USA and (2) how this unnecessary care actually does more harm than good. I learned a lot reading this book, but probably the most fascinating thing I found is how much of medicine is an art and not a science. Many doctors simply fail to keep up with the literature in their field and even when they do, the literature is often inconclusive or not scientifically robust. Next time a doctor recommends an invasive procedure for me I will be sure to quiz him/her on the literature.
The broader point of "Overtreated"should not be too surprising, though, given that 86 cents of every dollar expended on health care comes from a third party--there is very little incentive to be conscious of costs by both consumer and providers when someone else is footing the bill. Michael Cannon and Michael Tanner also make the case in their book "Healthy Competition" that since Medicare accounts for 1/2 of the all health care expenditures and influences choices made by private insurers, there are going to be distortions in the health care industry.