Single payer makes health care simple, advocates tell us. How cute and charming. And nonsensical–to try to operate without prices.
When I read that under a proposal that draws at least some interest from Minnesota’s Rep. Keith Ellison, “Physicians and other health care staff are reimbursed within 30 days of service ….” my first thought was “And what price do they get reimbursed at?”
Before I clicked through to the original article, I thought “Perhaps it’s some made up price.”
And so I continued reading “ … and that reimbursement would be mandated to be at current pay grade.”
Pay grade? Perhaps Mr. Segal, legislative aide to Rep. John Conyers (D-Mich.) is referring to the Diagnostic Rate Groups (DRGs) used by Medicare. Great. If there’s any government program that is more convoluted and complicated than the internal revenue code, it’s Medicare and its DRGs. Yeah, right. More price-setting by government.
What we have in single-payer systems … or at least any single-payer system that incorporates enough of the population to have market power … is an attempt to allocate resources without prices. When you don’t use prices, you end up—when government is the purchaser—using politics. And with that comes rationing, political favoritism, misplaced priorities (bridges to nowhere), and a host of other ills.
This isn’t to say that that American health care policy is great. It isn’t. Government has too much power. So do corporate HR departments, and “non-profit” hospitals that operate in a quasi-monopolistic environment.
Can the status quo endure for long? I don’t think so. We’re going to complete the government takeover of health care, in which case politics will decide who gets treated, how diseases are treated, and so forth. Or we’re going to make a greater use of prices, in which people actually ask for the price of a treatment, medical providers actually have real prices, and trusted third parties help people decide among options.
For further reading on the topic, I’d recommend three resources. One is The Cure: How Capitalism Can Save American Health Care and Who Killed Health Care? are two great books. Who Killed Health Care? sketches out how the medical industry will have to adapt to greater use of market forces to fulfill its potential. Another resource is the web site State House Call, which focuses on state-level efforts to bring either greater political control or greater freedom to health care.
(first published at True North on 9/26/2007)