Sarah Kliff, the best writer on American health care policy, has started a new series on health care unit prices on Vox this week. To no one’s surprise, she has concluded to date that the cause of soaring American health care costs is our unit prices, not overuse of the system by consumers, and that neither political party has much of a plan to deal with them.
Given their ideological perspectives, how should the two parties address costs?
The Democrats view the health care market as being inherently flawed, and believe that more government intervention is necessary. That can be accomplished through the direct regulation of prices and by the creation of a consumer cartel with overwhelming market power (i.e., a single-payer system). Single-payer would only reduce prices, however, if the government is willing to stick it to an enormously wide range of health care providers, not just the drug and insurance industries. Thus far, there is no evidence of that; I’ve never heard Bernie Sanders complain about grossly overpaid doctors and nurses, because to do so would be politically unpopular.
Republicans purportedly believe the solutions to the problem lie in the proper use of market forces. If that is truly your position, you should be breaking up producer cartels, limiting the value of patents, encouraging more providers to enter the system (largely through increased immigration), and doing everything possible to make pricing transparent. None of this figures in any of the GOP plans to date. The GOP actually believes the problem is overuse arising from third-party payments, in spite of all of the evidence to the contrary, and its only “solution” to high prices is to suppress legitimate demands for service, which is no solution at all.