Ways to Control Health Care Spending: Matthew Yglesias Criticizes David Wessel
There is a lot to be learned about controlling health care spending from the experiences of other countries, says Matt:
Yglesias » Only One Of The Major Approaches To Controlling Health Care Costs Is Unproven: David Wessel’s overview of the six think tank plans for long-term debt reduction offered yesterday is generally fairminded, but I think there’s a mistake in his description of the ideological divide on health care:
There are two fundamentally different approaches. One relies on market forces, making beneficiaries pick up more of the tab and relying on them to be discerning shoppers and on competition among providers and insurers to control costs. The other relies more on government muscle, enforcing aggregate caps on spending and shifting Medicare from fee-for-service to give providers incentives to care for the whole patient, not to sell individual services. In short, the debate isn’t only about how much savings to squeeze from Medicare, but also about which unproven avenue to restraining health costs is best....
[T]he world has a lot of examples of health care systems that are more statist than Americans.... [T]he statist approach does in fact succeed in pushing costs down lower than what we experience in the United States.... [N]on-statist approaches like the one they use in Switzerland lead to higher than normal costs for Europe.... [T]he super-statist approach of the United Kingdom leads to extremely low costs.... [W]e conveniently have a single-payer health insurance system for senior citizens, and a more market-oriented one for non-seniors.... Medicare is cheaper. The administrative overhead is lower, and the unit cost of services rendered is also lower.
The argument against a statist approach... is the idea that statist approaches make health spending too low.... A cheaper system would presumably end up with less equipment, or less R&D or less of something. But if the goal is to spend less money, there’s tons of evidence on the side of big government.
