The Political Economics of Health Care “Reform”

Every politician who talks about health care should be read this statement, from Tyler Cowen, and obliged to respond:

Government-dominated health systems, insofar as they work well (a number of them do), succeed simply by lowering costs.  Health care has a murky relationship to human health, pharmaceuticals and broken limbs aside.  A version of the single-payer system, as might be adopted in the United States, would not lower costs.  We would be raising taxes and lowering medical innovation to give poor people a good deal more financial security and a slight bit more health; that is the relevant trade-off.

Details, please. (HT: McArdle)

Posted on Friday, January 04 2008 | Permalink

Ah, but what makes anyone think that we are not already paying the price for both healthcare provided and healthcare not provided? Cowen’s argument is an illusion, because is presumes that a “tax” used to provide for any single-payer system would necessarily be a net increase in total costs. It might well constitute a net increase in government outlays… but changing the identity of the payor does not necessarily mean that the system’s total costs increase.

There are certainly ways that total cost could increase under a single-payer system, but most of them result from actually accounting for costs that already exist but evade accounting.

Posted by C.E. Petit  on  01/04  at  10:42 PM
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