Health care– free market or cheap, not both

Terrific post from Ezra this week.  You know, I first discovered Ezra when I got into health care wonkery.  I do love how the current health care controversy is bringing so much good stuff out of him.  Anyway, another excellent piece on the inherent contradictions in Republican health care policy desires:

Republicans in particular, but Americans in general, are confounded by an unusual dynamic in health policy: The health care systems that spend the least rely on government the most. This is difficult for Americans to grok because anti-government rhetoric takes as a given that government services cost more — we’ve all heard the stories of Pentagon procurement gone awry, or some agency somewhere spending absurd sums on pencil trays.

But in health care, the cheapest, highest-performing systems all do the same thing — they let government set prices centrally. That’s true in the UK’s absurdly inexpensive, and fully socialized, health care system; but it’s also true in the Singaporean system, which conservatives often hold up as a model.

Hell, it’s even true in the American system! Medicare and Medicaid pay much less for health services than private insurers…

The other argument you hear is that setting prices means rationing care. In the most stringent systems, like the UK’s, there are worthwhile treatments the government simply refuses to cover, and so patients have to pay for them out-of-pocket. This is an unacceptable abrogation of freedom — we don’t need government telling us what treatments we can and can’t but.

This is true, but it’s less of a difference with our system than people realize. We ration care, too — we just do so by letting individuals who can’t afford it go without it. This rationing by price is a particularly brutal form of rationing, and it’s one reason there’s such persistent political pressure to have the US government ensure access to medical care. It turns out that being free to not be able to afford lifesaving treatments is not a freedom Americans value very highly…

Republicans have failed to resolve these tensions in their own health care ideas. They say they want to build a generous health care system around private insurance — the most expensive form of insurance — but they also don’t want to spend much money on it. So far, they have tended to try to resolve that dispute by cutting back on the “generous” and “insurance” parts.

This is more or less what the American Health Care Act attempted. But as Republicans learned, Americans don’t want a health care system where 50 million people go uninsured and the remainder struggle with higher deductibles and sparer coverage.

I’ve said it before, I’ll say it again.  Free markets are great where they work.  Creating universal, affordable health care is one place they definitely do not work.

About Steve Greene
Professor of Political Science at NC State

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