Health Care Reform Means Cutting Costs

At Reason Peter Suderman has unearthed a video clip from 30 years ago of the younger Bernie Sanders telling what is the simple truth: Medicaid for all would bankrupt the United States. Go on over there for the clip.

Note that real per capita health care spending is significantly higher today than it was 30 years ago. Mr. Suderman observes:

Medicaid, notably, is far less generous than Medicare, the health program for seniors that Sanders wants to expand.

Medicaid’s provider networks are narrower, and its benefits are generally more limited. It pays doctors quite a bit less than Medicare, on average, and it costs substantially less per capita. Relative to Medicare, it’s the bargain option.

This is a short clip, and the full version may reveal additional relevant context. But what Sanders is describing in the segment above is the comparatively high cost of health care services in the United States relative to countries like Canada. As the clip ends, Dr. Milton Terris begins to discuss the ways in which other countries limit extra charges and use the power of government monopoly to force down prices.

Forcing health care spending down to the levels seen in other countries would radically upset the system, pushing doctors out of business and likely leaving many hospitals with little choice but to close down or eliminate services. It would, at minimum, be incredibly difficult politically, since it would require decreasing funding to hospitals and other large medical facilities, which would in turn require eliminating jobs or drastically reducing compensation. At the end of every health care spending cut is an individual with a job and a paycheck.

That’s the conclusion I came to as well. How should health care be reformed? Start making the hard choices now rather than handwaving them away, assuming they’ll be made later, or will be unnecessary. Adopt the mindset of using “the power of government monopoly to force down prices”. Government already pays for more than half of all health care. It has influence which it does not presently choose to use.

Stop subsidizing the wealthy and the well-to-do. Help the genuinely needy. Those are the reforms we need.