The strongest argument against universal and single-payer healthcare, IMO, is the argument that they inevitably lead to price controls. And as any student of economics knows, price controls are detrimental to many things we like about healthcare. Things like technological innovation, pharmaceutical innovation, and quick access are all harmed when price controls are implemented.
Advocates of ObamaCare have assured us that nothing in his bill calls for, nor will lead to price controls. They promise that the United States is different and will not need price controls.
Lucky for us, we have a natural experiment: the Massachusetts healthcare reforms are the foundation to a lot of ObamaCare. And they prove exactly what the critics of ObamaCare have been saying:
Last month, Democratic Governor Deval Patrick landed a neutron bomb, proposing hard price controls across almost all Massachusetts health care. State regulators already have the power to cap insurance premiums, which Mr. Patrick is activating. He also filed a bill that would give state regulators the power to review the rates of hospitals, physician groups and some specialty providers. Those that are deemed too high “shall be presumptively disapproved.”
Mr. Patrick ad-libbed that he had “a whole bunch of pals here who are in the health-care field, and I saw the color drain out of their faces.” Little wonder. The administered prices of Medicare and Medicaid already shift costs to private patients while below-cost reimbursement creates balance-sheet havoc among providers. Now the governor wants to import these distortions to save the state’s heavily subsidized insurance program as costs explode.
Remember, per capita Massachusetts is one of the richest states in the country. If they are already looking to price controls, with only 4 years after reform, how do you think ObamaCare bodes for the country?
The WSJ has more. Arnold Kling has more.
Nobody’s talking about single payer. That was out the window as soon as Obama took office and could then ignore the people that went door to door to get him elected.
Medicare has been around a long time with no price controls.
Medicare only affects a portion of the United States (and, btw, Medicare is also headed in the same direction, it is projected to bankrupt the USA in another 20 years). ObamaCare would encompass almost everybody. Its a complete reordering of the healthcare system. Similar to what the Massachusetts healthcare plan does to Massachusetts citizens. Also, ObamaCare is modeled around the Massachusetts healthcare plan.
So what happens in Massachusetts is a big indicator of what will happen at the national level, only worse (Massachusetts, per capita, is far richer).