Pundits are debating the merits of single-payer health care again, thanks to Bernie Sanders’s new proposal. Under a single-payer system such as Medicare, all medical providers bill the same purchaser — namely, the government, which sets rules about what it will pay for. The putative benefit of this arrangement, as Ezra Klein explains over at Vox, is that the government can use its monopoly on demand to pay medical providers below-market rates:
The real way single-payer systems save money isn’t through cutting administrative costs. It’s through cutting reimbursements to doctors, hospitals, drug companies, and device companies. And Sanders gestures towards this truth in his plan, saying that “the government will finally have the ability to stand up to drug companies and negotiate fair prices for the American people collectively.” But to get those savings, the government needs to be willing to say no when doctors, hospitals, drug companies, and device companies refuse to meet their prices.
Clearly, the savings described here will not be a free lunch, since lower payments mean lower-quality care or the withholding of certain treatments altogether. But Sanders and other single-payer boosters are reluctant to acknowledge the high cost of low prices — just so long as they are talking about health care. As I once noted in a piece for Forbes, the same people who use the cost-control argument in favor of single-payer healthcare would be horrified to see it applied to other types of government monopolies.
Take public education. There is essentially a “single payer” for education within school districts. The teachers, principals, custodians, textbooks, and school buildings are all paid for by the government. Yet Bernie Sanders would never argue that the government should use its near-monopoly to push teacher salaries below market levels. In fact, raising teacher pay to be on par with the salaries of other college graduates is a perennial goal of progressives. Americans “must do everything we can to support our educators,” Sanders says on his website. “Something is very wrong when, last year, the top 25 hedge fund managers earned more than the combined income of 425,000 public school teachers.” But by Sanders’ own cost-cutting standard for single-payer systems, the supposedly low pay of teachers should be celebrated as a major success of public education!
To see the inconsistency another way, imagine Republicans trying to portray a cut in education spending as merely “savings” generated by “limiting reimbursements to education providers.” Sanders would have an arm-waving fit, warning that education quality would suffer. Somehow he has no similar concern when doctors are the ones being squeezed. So here is a question for a reporter to ask: “Senator Sanders, given the benefits of single-payer systems you’ve described, shouldn’t you want to underpay not only doctors, but teachers as well?”