When it comes to healthcare, widely cited as 1/6 of our economy, extraordinary inflationary pressures have become both a public and political crisis. As Milton Friedman correctly noted, the root cause of the exploding costs of healthcare can be traced back to a single fatal error: the introduction of third-party payment (typically, coverage through employers.) Friedman writes:
Third-party payment has required the bureaucratization of medical care. … A medical transaction is not simply between a caregiver and a patient; it has to be approved as ‘covered’ by a bureaucrat. … The patient has little … incentive to be concerned about the cost since it’s somebody else’s money. The caregiver has become, in effect, an employee of the insurance company or, in the case of Medicare and Medicaid, of the government. … An inescapable result is that the interest of the patient is often in direct conflict with the interest of the caregiver’s ultimate employer.
It is also true that, when it comes to the healthcare market, we do not have a free market. We have an uber-bureaucratized market, and a very inefficient one at that.
What are the odds, one might ask, of us ever getting to real free market dynamics here?
A few months ago, Charles Krauthammer predicted the U.S. would go to single-payer in a few years time:
Krauthammer said ObamaCare “failed at every level,” but it did change Americans’ expectations regarding health care.
“I would predict that in less than seven years, we’ll be in a single-payer system,” Krauthammer said, pointing out that Republicans aren’t even arguing for a free market system anymore.
“They have sort of accepted the fact that the electorate sees health care as not just any commodity, like purchasing a steak or a car,” Krauthammer explained. “It’s something now people have a sense the government ought to guarantee.”
He explained that there are only two options for the future of health care in the U.S. – a radically, individualist system where the market rules or single-payer – and the country is not going to ever go back to the former.
“The terms of debate are entirely on the grounds of the liberal argument that everybody ought to have it,” Krauthammer said. “Once that happens, you’re going to end up with a single-payer system.”
Today, Chase Madar argues “The Conservative Case for Universal Healthcare”:
Don’t tell anyone, but American conservatives will soon be embracing single-payer healthcare, or some other form of socialized healthcare.
Yes, that’s a bold claim given that a GOP-controlled Congress and President are poised to un-socialize a great deal of healthcare, and may even pull it off. But within five years, plenty of Republicans will be loudly supporting or quietly assenting to universal Medicare.
And that’s a good thing, because socializing healthcare is the only demonstrably effective way to control costs and cover everyone. It results in a healthier country and it saves a ton of money.
That may seem offensively counterintuitive. It’s generally assumed that universal healthcare will by definition cost more.
In fact, in every first-world nation that has socialized medicine–whether it be a heavily regulated multi-insurer system like Germany, single-payer like Canada, or a purely socialized system like the United Kingdom–-it costs less. A lot, lot less, in fact: While healthcare eats up nearly 18 percent of U.S. GDP, for other nations, from Australia and Canada to Germany and Japan, the figure hovers around 11 percent. (It’s no wonder that smarter capitalists like Charlie Munger of Berkshire Hathaway are bemoaning the drag on U.S. firm competitiveness from high healthcare costs.)…
I don’t want to oversell the friction-free smoothness of the GOP’s conversion to socialized healthcare. Our funny country will always have a cohort of InfoWars ooga-boogas, embittered anesthesiologists and Hayekian fundies for whom universal healthcare is a totalitarian jackboot. (But, and not to be a jerk, it’s worth remembering that Hayek himself supported the socialized healthcare of Western Europe in one of his most reasonable passages from the Road to Serfdom.)
From a recent Tucker Carlson show, here is NR’s Reihan Salam arguing for a single-payer heath care system that offers levels of choices: