Health Care's Better, Faster, and Cheaper

From The Sacramento Bee:

The price tag is in: It would cost $400 billion to remake California’s health insurance marketplace and create a publicly funded universal heath care system, according to a state financial analysis released Monday.

California would have to find an additional $200 billion per year, including in new tax revenues, to create a so-called “single-payer” system, the analysis by the Senate Appropriations Committee found. The estimate assumes the state would retain the existing $200 billion in local, state and federal funding it currently receives to offset the total $400 billion price tag.

That is JUST California. Let it sink in: $400 billion for a universal health care system, twice what they are paying for their current system. Remember, this is not just money plucked from trees. It is removed from the economy to pay for health care.

Keep in mind, removing the profit incentive also has other effects:

The problem with removing profit in the health care industry is you remove the incentive for innovation.

— Austin Petersen (@AP4Liberty) May 22, 2017

What does providing health care have to do with innovation? Everything. When government provides anything, there is the big public incentive to provide it "better, faster, and cheaper". There is an old joke in business: Everyone wants everything "better, faster and cheaper", but you have to pick two.

Unfortunately, government cannot really control the "faster" part unless they increase the supply of doctors. But making more doctors could create less quality (less "better") and increase costs to pay all those doctors (less "cheaper").

This leaves the government mostly with control over the "better" and "cheaper". Even more unfortunate, government creates "better" through drug and medical process regulations, which work in opposition to "cheaper", because "better" costs money. "Better" medicine isn't free. Also, drug and medical process regulations create testing requirements, which delays the rollout of new medicines and processes to the markets (less "faster").

Finally, we have cheaper. Government cost controls create cheaper medicine, but at the risk of scarcity. When you hear about governments negotiating drug contracts to create "cheaper", that works well with established drugs. But pharmaceutical companies have limits to how low they can go with new drugs, because they are still paying all the costs for innovating under the burdensome government regulations (the "better" requirement"). If you take away big pharma's ability to charge through the nose for new drugs, you will watch the innovation pipeline dry up. Less "better".

People love to praise the universal health care models of the world's governments, but they also fail to recognize why they work. If you look closely at them, they have sacrificed the "better" for the "faster" and "cheaper", leaving the United States to be the universal provider of "better". If the United states leaves the medical innovation industry, who will provide it next? That will be the third world countries. Enjoy your trips to Mexico for the most innovative medicine on the planet. Just don't drink the water with your pills.