Some of Obamacare’s main defenders are starting to look in the right places for real health care reform. In a great column diagnosing what the single-payer pivot gets wrong about insurance, Ezra Klein notes that it’s not the diversity of insurers on its own that causes high costs in the United States. Most European countries with more nationalized health care systems, after all, don’t have just one payer. Rather, it’s that, relative to health care providers, insurance companies are too weak in the the U.S. system. The power of hospitals and providers allows those groups to block reforms that could help bring costs down, especially reforms to service delivery:
“Single payer isn’t a panacea,” said Uwe Reinhardt, a health economist at Princeton University. “The magic they have is setting rates. But neither Medicare nor Canada has done anything innovative on the delivery side. Taiwan is trying a little bit but not a whole lot. By and large they just pay bills.”It’s health-care providers—not insurers—who have too much power in the U.S. system. As a result, they have the most to lose if health-care prices fall. But, as is often the case, political power flows in part from popularity.
We have no ideological objection to a single payer system. In an ideal world, where every technological development capable of making care cheaper and more efficient had been realized, single payer might make a lot of sense. But we don’t live in that world.For the world we do live in, we need the kind of delivery-side innovations that, according to Reinhardt, single-payer systems have failed to create. The U.S. health care system fails on both access and cost, but trying to expand access without bringing down costs first is a self-defeating exercise.Right now we need more than ever a determined focus on cost. As Ezra reminds us, this has more to do with innovating on delivery than with consolidating our payment mechanisms.