Why though? Food has become cheaper despite agricultural yields advancing tremendously since the Green Revolution. IT has become significantly cheaper despite performance improving enormously. Where any product is essentially an information product it nearly always reduces in price to the extent where it becomes a commodity.
Because with consumer products, the scale of production allows for economies, we're a long way from having an MRI on every desktop.. this is specialist kit, and it's not replacing anything, it's an entirely new advance so is always going to bump up spending.
You mention that the pharma companies have healthcare by the short and curlies, and this is precisely why. There is no competition. The healthcare organisations don't care because customers have no choice, they simply have to pay. So costs inevitbaly rise. You're seeing changes on the production side of things because emerging economies are knocking off patented products so rapidly. As mentioned above, the IP is becoming commoditized.
so pharma isn't making a killing in the US where patients can walk into their doctors and choose which brand? I couldn't believe the first time I watched US tv and saw the ad breaks filled with pharma commercials. The reason that big pharma has the world by the short and curlies is that this part of the healthcare 'chain' is the bit that is almost exclusively private. They're the ones investing the R+D cash and so they get to dictate the price to the end user (us). This is a window as to what would happen in a fully free market healthcare system - it's competitive alright, survival of the fittest will rule : the wealthy will thrive and the weak and poor will die (sadly, in this case quite literally).
Imagine how much cheaper healthcare could be if governments could fund the level of R&D spending thrown about by big pharma, the return would be there in cheaper med costs (there's clearly a margin as GSK and the like are still in rude health) the pain would be felt in the 10 year pipeline time, but it would seriously be worth it.
We have NICE telling us what treatments should or should not be used at the moment. Is that any better? It's not the customer that is in control of their own healthcare, it's the government or quangos that control the NHS. That simply can't be right. I mentioned earlier about innovation and the lack of diversity in a workforce strangling this because it encourages groupthink. It's just the same in a monopoly situation, and this is the reason they're so bad. It doesn't matter if its a public monopoly (as in the case of the NHS or our schools) or a private one.
There needs to be some
objective body because the money has to be spent effectively, which requires some very hard, dispassionate decisions to be made, NICE is no worse than any other solution on the table, and it's better than most.
The customer still has choice, if they have cash, but the service available to those without the funds to have that choice has to be as robust as possible and as such has to be immune to the vagaries and capricious nature of market forces.