BrianGarst.com

Ezra Klein thinks the health care debate is uninformed.  Not to worry, the savvy commentator offers the antitidote: an explanation for why health care costs are high in the U.S.  He has a miraculously simple explanation.  Health care costs are high in America – I hope you’re paying attention – because the per unit costs are higher than other countries!

There is a simple explanation for why American health care costs so much more than health care in any other country: because we pay so much more for each unit of care.

Don’t you feel so much more informed?

He goes on to attribute the difference to our lack of price controls.  Quelle surprise!

It’s a neat trick he pulls off in trying to assume price controls as the default model. Price controls are a policy choice – a restriction of freedom – that must be justified on grounds beyond just an assumption of existence (they have price controls and we don’t, thus our prices are higher!). Of course, I don’t buy that any justification exists for such an unconstitutional policy, but its advocates owe those without principled objections an affirmative case that weighs the advantages and disadvantages. For instance, other countries that use price controls have an advantage that we would not if we attempted to do the same: the existence of a U.S. market that subsidizes their policies. Canada can dictate drug prices because drug makers can recoup that money by raising prices in the lucrative U.S. market. Take that away and health care across the world suffers a tremendous blow.

Other American industries without controls  see price reductions over time. An astute observer would ask why that is, rather than simply pointing out the obvious fact that price controls reduce prices. Of course, the answer wouldn’t suit big government pushers like Klein, who also makes no mention whatsoever of costs that are not strictly financial (prices and costs are not synonymous).  He looks at none of the other costs (insufficient capacity, reduced innovation, rationing and intolerable wait times) placed on systems by price controls. These are costs that Americans are simply not likely to accept.

If Klein were serious about having an informed debate, he would ask about all the government distortions placed on health care that prevent normal market forces from working to hold down prices.