A Single-Payer System is Not Health Care’s Panacea

Ezra Klein clarifies who are the “bogeymen” of the American health care system, cautioning liberals not to make the mistake of assuming a single-payer system is our panacea.

“The dirty truth about American health care is that it costs more not because insurers are so powerful, but because they’re so weak.”

“There are few truly single-payer systems in the developed world … Why? Because in every case the government sets prices for health-care services and products.”

But in the US, “insurers negotiate with hospitals and drug companies on their own — and they pay more as a result. In fact, because of their weak negotiating position they frequently use whatever price Medicare is paying as a baseline and then, because they lack the power to strike a similar deal, add a percentage on top.”

“That leaves the U.S. with the worst of both approaches: Prices aren’t set by the market, but they also aren’t set by the government.”

The bottom line: “It’s health-care providers — not insurers — who have too much power in the U.S. system.”

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  • zappa24

    What Klein is describing is a problem of market power. Usually, the way to deal with one actor in a market that has too much power is to have the government step in to even the odds. If you think about Klein’s argument, it actually is a better argument for single-payer than it is against.

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