I recently had a freak accident while cutting some timber on a saw table. A sliver of the off-cut wood fell under the blade guard and was flung into my forearm like an arrow.

I had a deep puncture wound which necessitated a quick visit to the emergency room. The wound was no big deal but I noticed a portion of my arm and hand had lost some sensation. Unfortunately the splinter had cut a nerve which I was informed needed rejoining in a routine outpatient surgery procedure.

A month later all's done although full sensation has not yet returned to my hand, something I'm told can take months.

But the bills are rolling in and I am stunned that with a few charges still to go, the total has passed 55,000 dollars and is still rising. Insurance took care of most of it so that's not the issue. But I am left with a disturbing question. How can it have cost so much? 55 thousand dollars?

This is more money than most U.S. citizens earn in a year. How can repairing one small accident cost such an obscene amount?

The answer is medical insurance. The problem is it's not really insurance at all but a type of subsidy which has distorted medical pricing to outrageous levels for the services received.

Consider the stock market. We see it is reaching for ever higher levels despite a mediocre economic recovery and depressed consumer demand. This is because it is fueled with cheap government money and not market forces. Easy, almost free credit is driving the stocks up. When that stops the market will instantly crash and everyone knows it.

Medical insurance has precisely the same effect. By subsidizing every medical visit or need, it fuels an ever rising spiral of charges to extract more from the system. This is shown by two facts.

● Doctors and hospitals routinely exaggerate work done to maximize their return from insurance. They know insurance only pays a percentage of charges so they inflate them. Because insurance picks up most of the tab, the patient doesn't care what's on the bill. They would care very much if they paid them directly.

● If medical insurance functioned like regular insurance or completely disappeared, medical fees would drop like a stone. A doctor's fee would be very quickly commensurate with work or service done or people would seek services elsewhere. That is how a normal marketplace functions but medical insurance keeps fees high regardless of market forces.

We are about to begin the worst thought out subsidy/insurance law in U.S. history, ObamaCare, which is already showing signs of collapse. What the effect of cheap U.S. government money flooding onto an already distorted market will be can only be imagined.

What will definitely not happen is a price reduction for medical services. I predict the distortion can only get worse even though at 55,000 dollars per wound, it's already cheaper for me to stay home and not risk working at all.