Here’s a good summary of the major pathologies in our healthcare system. The author thinks:
The projection that health care spending will reach nearly 20 percent of gross domestic product (GDP) within the next ten years confirms what every leading health care economist is saying: health care spending is out of control, and the time for action is now. But these are not signs that the health care market has failed.
Nope. Again, the problem is government. Three major issues this author cites are:
a) One key problem lies in the federal tax code – specifically, the federal tax exclusion for employer-provided coverage. It is this policy that causes most Americans to rely on their employers for health coverage. But small businesses frequently cannot afford group insurance for their employees, and large companies have tended to restrict the choices of employee coverage on the false premise that such restrictions would restrain cost growth.
b) Another major distortion in the market is the huge amount of spending the government pumps into Medicare and Medicaid. As the projections show, about half of the $2.4 trillion we spend on all health care nationally comes from taxpayer dollars. And when government pours that much money into any sector, prices go up. The cost of private insurance is also affected, since these programs create benchmarks for private plans.
c) And… One of the big problems in health care is that prices are opaque. In the Milwaukee area you can pay $100,000 for a bypass operation at one hospital, and just $48,000 for the same procedure at another hospital. But most patients – and sometimes even the doctors – don’t know this.
Now, progressives say they are only concerned about resolving problems that will mean 100% coverage for all Americans. They don’t care how they get there. But short of sticking the government jackboot into people’s necks, there is a way you can asymptotically approach universal coverage: refundable tax credits. Carrots are better than sticks. (We can already see the unraveling of the Massachusett’s plan, which has most of the elements of Hilarycare 2.0.)