(Bloomberg View) — While I was away last week, Vermont decided to scuttle its single-payer health-care plans. I predicted as much six months ago, 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.
"But Megan!" I hear you cry. "Single-payer systems are cheaper, not more expensive! Look at Europe!"
Alas, however, as I wrote at the time, 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."
Now, I know what you are preparing to say: I am allowing my ideological priors to blind me to the plain evidence in front of my nose. So let me explain. I concede that single-payer systems may well allow you to control the rate of health-care cost growth, thanks to government price controls on supplies and services, along with rationing or denial of expensive treatments. What it doesn't allow you to do is easily cut the rate of health-care spending. None of the single-payer systems that are frequently held up as models for the U.S. have ever managed sustained cuts in health-care spending. All they've done is prevent it from growing so fast.
The problem, as I wrote previously, is that America doesn't have a health-care cost-growth problem; we had a health-care cost-growth problem. Right now, our health-care cost growth is right in the middle of the OECD pack:
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.
