Wanted to recommend Steven Brill’s well-reported Time cover story on the preposterous inflation of medical costs in the American system:
Steven D. and his wife Alice knew that they were only buying time. The crushing question was, How much is time really worth? As Alice, who makes about $40,000 a year running a child-care center in her home, explained, “[Steven] kept saying he wanted every last minute he could get, no matter what. But I had to be thinking about the cost and how all this debt would leave me and my daughter….”
[T]here were still hundreds of thousands of dollars in bills left unpaid as Steven approached his end in the fall of 2011. Meantime, the bills kept coming. “We started talking about the cost of the chemo,” Alice recalls. “It was a source of tension between us … Finally,” she says, “the doctor told us that the next one scheduled might prolong his life a month, but it would be really painful. So he gave up.”
But ultimately, I agree with Matt Yglesias’s conclusion:
I can see two reasonable policy conclusions to draw from this, neither of which Brill embraces. One is that Medicare should cover everyone, just as Canadian Medicare does. Taxes would be higher, but overall health care spending would be much lower since universal Medicare could push the unit cost of services way down. The other would be to adopt all-payer rate setting rules—aka price controls—keeping the insurance market largely private, but simply pushing the prices down. Most European countries aren’t single-payer, but do use price controls. Even Singapore, which is often touted by U.S. conservatives as a market-oriented forced-savings alternative to a universal health insurance system, relies heavily on price controls to keep costs down.
For reasons I do not understand after having read the conclusion twice, Brill rejects both of these ideas in favor of meaningless tinkering around the edges. He wants to alter medical malpractice law, tax hospital operating profits, and try to mandate extra price transparency. That’s all fine, but it’s odd. His article could not be more clear about this—health care prices are high in America because, by law, we typically allow them to be high. When foreigners force prices to be lower, they get lower prices. When Americans force prices to be lower (via Medicare), we get lower prices. If we want lower prices through new legislation, the way to get them is to write laws mandating that the prices be lowered.