A foolish system and your money …

It's ironic, no doubt, that the big Allina nurses strike — round two of which opened last week — is chiefly about health care costs.

And it's instructive that the fiercest dispute concerns the health care system's wish to shift nurses to health insurance plans that require more out-of-pocket payment from patients — higher deductibles and copays — while generally lowering insurance premiums.

Nothing, it seems, makes vivid the high cost of certain things like asking people to pay with their own money each time they use those things. And not just in health care.

Higher education stirs similar frustrations these days. Nearly all Americans agree that higher ed, like health care, is profoundly valuable. And, more than ever, they also agree that both of these priceless possessions cost way too much.

We'd like to pay less for many commodities. But politicians seldom vow to tame the runaway cost of cars or cabbages or cargo shorts. We seem to detect something particularly unhealthy, even a little dumb, about our health care and higher-ed marketplaces. It's worth asking what they may have in common.

In health care, the sickening price increases of many brand-name prescription drug products are again raising temperatures. Minnesota's U.S. Sen. Amy Klobuchar has lately led a political chorus (which includes Hillary Clinton) in denouncing the soaring price of the EpiPen, a device that delivers a lifesaving antidote to victims of allergic shock. But the critics make it clear that they consider U.S. pharmaceutical prices to be painfully swollen across the board and in need of a public policy antidote.

Such complaints aren't new. But outrage over prescription drug prices had quieted a bit in the early 2000s, after enactment of Medicare's "Part D" extended prescription drug insurance for America's senior citizens. Before that, seniors often paid for drugs with their own money. One hasn't heard so many claims since about elderly subsisting on dog food in order to afford their medicines.

In higher education, meanwhile, it is spiraling tuition and mounting college debt for students and families that have pols of many stripes (again including Clinton) studying various ambitious plans to make the costs of a degree more bearable.

Here again, the sore spot is the fact that, of late, more of the overall cost is being borne directly by the actual buyers of the service. As any public college administrator would be eager to explain, student tuition has climbed as collective taxpayer funding for public universities has weakened over the past few decades.

But is it possible that all this displeasure among people spending their own money for health care and college is the solution, not the problem — or at least a step toward a solution?

Free markets allocate resources efficiently and help produce prosperity when they accurately weigh the value and cost of goods and services and inform sensible decisions. Often they do this the old-fashioned way, by requiring those who choose to enjoy the benefits of each good or service to also bear its full cost.

We are all pretty careful with our own money. We shop around for the best price; we buy only what seems worth what we have to pay — and only so much of it as we value more than other things we could buy instead.

Market failures come in various forms. Sometimes, they lead to society "buying" too little of certain things (like unpolluted air or water). But in other cases, when Peter gets to choose to enjoy a widget that will be paid for by Paul (or, worse, by countless anonymous Pauls who pay taxes or insurance premiums), Peter is rather likely to choose the very best, and plenty of it, and not to worry unduly about what he's being charged. And in that situation, total costs will rise, even if they remain hidden within tax bills and insurance premiums, lower wages and slower growth.

This kind of disconnect is rampant in health care and higher ed. In both systems, what people "buy" is often dictated by government insurance mandates and myriad other regulations, or by employers who have made a four-year college degree a threshold requirement for an astonishing array of jobs.

Meanwhile, in both systems, it's almost impossible to find out what anything really costs. Tuition, drug prices and prices for medical procedures vary wildly, depending on discounts and subsidies funded by dozens of revenue streams from state and federal governments and private sources — and depending on legal decrees and closed-door negotiations.

Patients and students commonly pay — out-of-pocket, that is — only fractions of even the discounted, subsidized prices.

But day by day they directly pay more and more, as public budgets remain pinched and ever more employers push the same kinds of changes Allina is seeking.

In short, Nurse "Peter" would be spending more of his own money.

Students and parents spending more of their own money as they ponder college choices likewise face new incentives to ponder carefully. And as patients and pupils shop more shrewdly, providers of health care and higher ed may gain new incentives to control costs and compete openly on price and value.

Even the politicians' agitation — as always, a side effect of their constituents' agitation — could prove a good thing in these matters. Maybe.

There is a danger that pols will respond to higher education's bloated cost only by pouring more subsidies into the system, numbing students' pain for a time, but only further inflating a bubble that must ultimately burst. And there is a danger that they will respond to painful prices for prescription drugs and other health care — especially where provided by for-profit firms — with what amount to price controls, little heeding the risk of discouraging innovation.

And yet, what's missing in these two arenas is precisely a mechanism for deciding when enough is enough. The discomfort of parting with one's own money is the best mechanism for that purpose ever discovered. We should let it do its work.