Jon Walker: "It’s a Ripoff!" Or "Why America Spends So Much on Health Care"

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It’s a Ripoff! -or- Why America Spends So Much on Health Care

By: Jon Walker Thursday April 28, 2011 4:16 pm

As you can see in this helpful chart from the Kaiser Family Foundation, America pays much more for health care than any other first-world country.



There are a lot of false ideas or very minor explanations that are overstated to try to justify why we pay so much.

• Other countries are just evil nations that allow thousands to die in the street for lack of care. False
  
• Our costs are hidden by things like the tax exemptions so we need more consumer-driven smart shopping like an excise tax to eliminate low-deductible insurance and insurance exchanges. False–basically every cheaper country has lower co-pays, deductibles, out of pocket costs and are, in general, less consumer driven.

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What is the solution every other country has hit upon to lower their costs? Central price regulation.

Most of medicine doesn’t really work like a free market because it is either more like a monopoly or hostage situation–you can’t put a price on your urgent need to be saved from death. Even when it could work like a market, the huge imbalance of knowledge makes smart consumerism basically impossible. So, all sensible countries do the same thing when dealing essential and unavoidable monopolies, they regulate prices, as we do with utilities. In single-payer countries, this is obviously done as an inherent part of having only the one government insurer. In other countries like Japan, Germany, or Switzerland, they use all-payer. This is where the federal or local government works with the providers and insurers to establish a fair, uniform pricing system.

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