I got to this from reading Brad DeLong's blog and chasing links down. There's a wide ranging conversation, but the bit about health care inflation is interesting.
"If I compare healthcare costs today versus in the year 1800, well, I could go out and buy a bunch of leeches today for almost nothing. And I could have the healthcare I had in 1800. If you had a certain condition and you had $10,000 to get treated at today’s health prices, or $10,000 to get treated at 1960s prices with 1960s technology, I don’t think it’s so obvious that people would want to go back in time to get their important health conditions dealt with. In that sense, you say, I don’t know if there’s inflation. It’s pretty hard to say that there’s been a lot of inflation over the long haul in healthcare."
I'm always a little suspicious of "hedonics" (also discussed in this interview), in particular its highly selective application, and I feel a little suspicious of this as well. If we were comparing public health measures (water safety, say) between 1800 vs 1960 vs today, I'd be all for this analogy. There are certainly aspects to our health care system that are _way_ better today, but there's also a lot of aspects to our health care system that we didn't have in 1800 or 1960 and that we would be better off without now.