[makomk]

The US government has been heavily involved in regulating medicine since 1906. The only reason why "medical costs angled steeply upward immediately after heavy regulation and government involvement in it began" is because "heavy regulation" is a weasel-word; you could pick almost any point after 1900 or so and claim that's when it started in order to justify that argument. Take a look at the list of milestones here for example: http://www.fda.gov/AboutFDA/WhatWeDo/History/Milestones/ucm1...

[WalterBright]

The two seminal events in the 1960s are the FDA 1962 "effective" mandate, with subsequent sustained price spikes is well documented in Peltzman's "Regulation of Pharmaceutical Information".

The other one is the enactment of Medicare/Medicaid in 1966/1965. From the graphs I've seen, that corresponded with the knee in the curve.