Greg Kesich is right that health care costs are high and rising rapidly, but his Medicare for All solution would simply shift the cost, make it less visible and cause it to rise even faster (The View From Here, Nov. 18).
Costs are rising because the third-party payment system Mr. Kesich wants to expand discourages competition and removes incentives for consumers to seek value or for providers to create it. The cost of care is lower in single-payer countries only because of rigid price controls that are applied to provider services and medications. Even these constraints have been inadequate to control costs, and single-payer countries have increasingly introduced private market options.
The effects of high costs operate along a continuum. Low-income individuals, especially those with chronic health conditions, are likely to need help with insurance premiums and deductibles, but those with much higher incomes don’t need free care provided by taxpayers. The solution is means-tested help for health savings accounts – which should include incentives to make good health care choices – and for insurance for major illness. It will be impossible to control the cost of care unless consumers have an incentive to restrain demand and providers have an incentive to compete on price and quality.
“Free” health care in the form of Medicare and Medicaid will cost the federal government $1.1 trillion this year and will absorb 33 percent of revenue, which is a major reason the government has to borrow so much money for other needs. If he wants even more single-payer care, Mr. Kesich should also tell us how much it will cost, who will pay and why it will improve the quality of care. Then we can have a constructive debate about policy.
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