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We need all-payer rate setting, now.
Every other developed nation on earth has figured out health care is an inelastic good and the free market cannot accurately set prices. We aren't fixing anything else about health care in this country until we fix that.
Every other developed nation on earth has figured out health care is an inelastic good and the free market cannot accurately set prices. We aren't fixing anything else about health care in this country until we fix that.
Here's what I mean when I say that health care is an "inelastic good." If you have a medical condition that will kill you, there is no upper limit to the price you will pay for a cure. So there is no market pressure to set the price of that cure at what it is worth.
In most industries, demand is "elastic." If Company A sets the price of a good or service at more than it is worth, people will stop buying it, or take their business to Company B.
Healthcare isn't like that. It's something people die without, and only a few people can provide.
Healthcare isn't like that. It's something people die without, and only a few people can provide.
Moreover, *because* people need health care so urgently, we have laws (like EMTALA) and an ancillary industry of insurance companies, that exist to separate consumers from the price tag they're paying.
So not only do we not care about price, we don't *know* about price.
So not only do we not care about price, we don't *know* about price.
The upshot of all this is that, unlike a bookstore or an electronics store or a furniture store, a hospital or a drug company can double or triple their price and people barely respond.
THAT is why health care costs make no sense. Because the market has no incentive for them to.
THAT is why health care costs make no sense. Because the market has no incentive for them to.
Universal health care works differently in each country. Some countries have a single-provider system (Britain), a single-payer system (Canada), govt-funded nonprofits (Germany), or insurance markets (Switzerland).
The one thing they all have in common? THE GOVT SETS PRICES.
The one thing they all have in common? THE GOVT SETS PRICES.
We really shouldn't even be talking right now about whether we are going to adopt Medicare for All, Medicaid buy-in or whatever until we solve the much more fundamental issue: the government has to set what health care providers charge.
That's step one.
That's step one.
Once we do that, and once that is the way our health care market works, we can do whatever we want. We could probably enact single-payer at a third the price economists estimate right now!
Also: an all-payer rate setting bill would probably be really popular. Just saying.
Also: an all-payer rate setting bill would probably be really popular. Just saying.
