Here is an excellent NYT column on health care, by Alex Berenson. The bottom line is this: U.S. medical care costs are so high for (at least) two key reasons: a) personnel costs are much higher than in Europe, and b) U.S. doctors usually are paid fee for service, rather than fixed salaries. That leads to much more spending, for obvious reasons.
Keep this in mind next time someone tells you that America can cover everyone through a single payer system at lower expense. Berenson continues:
Medicare, especially, does not like to second-guess doctors’
clinical decisions, said Dr. Stephen Zuckerman, a health economist at
the Urban Institute. “There’s not a lot of utilization review or prior
authorization in Medicare,” he said. “If you’re doing the work, you can
expect to get paid.”
As a result, doctors have steadily increased
the number of procedures they perform on Medicare beneficiaries – and
thus have increased their income from Medicare, Dr. Zuckerman said. But
the extra procedures have not helped patients’ health much, he said. “I
don’t think there’s any real strong evidence of improvements in health
This same incentive is weaker when doctors are paid fixed salaries. One key question for single payer advocates is the following:
Through what mechanism will you replace doctors’ fee for service with fixed salaries?
In closing, let me quote the always-worth-reading Matt Yglesias:
…when it comes to defending the interests of powerful, entrenched local groups, Democrats are usually about as bad as Republicans.