This is an excerpt from an excellently written and well reasoned column from Megan McArdle writing at Bloomberg:
Vermont decided to scuttle its single-payer health-care plans ... for one simple reason: A single-payer system would cost too much. When faced with the choice of imposing double-digit payroll taxes or dropping his cherished single-payer plan, the governor of Vermont blinked. ...
There is nothing about single payer that will magically allow us to cut costs to European levels. People who believed otherwise were substituting a crude eyeballing of international statistics to substitute for reasoned analysis, in part because it told them what they wanted to be true: that they could have the universality and progressiveness of a single-payer system without having to ask the taxpayer for a giant heap of money to provide those benefits. They were, in the words of one of my favorite public-policy professors, "getting high on their own supply."...
Our spending is indeed high compared with the rest of the world, but that's because it started high. And while restraining government spending is easy, it is a walk in the proverbial (government-funded) park compared to actually cutting spending. Cutting spending means that a number of people are going to lose income and employment. They will have trouble paying their mortgages, car loans and little Johnny's bill for travel soccer. Then they are going to get organized and march on Washington and vote against the politicians who cut their jobs. ...
Health-care jobs are steady and well-remunerated compared to whatever else those workers could be doing. And that's not just true of the much-derided "specialists" who do too many procedures and charge too much; it's true of everyone in your hospital and doctor's office, from your beloved family physician to the woman who draws your blood. All those people have spent long years working to get where they are. If you suddenly change the rules and take that all away, their rage will burn with the righteous fire of a thousand suns.
So even if we could have had a much cheaper health-care system if we moved to single payer in 1970, that doesn't mean that we can get the same happy results by doing so now. Today we'd be building a single-payer system with the price schedule of our current health-care workers. Which means it would cost an absolutely breathtaking amount of taxpayer money, as Vermont just found out. ...
The U.S. health-care system may be all kinds of screwed up. But at least at this late date, single payer is not the cure for what ails it.
