≡ Menu

Cut those costs!

If the government paid for everybody’s health care, some argue that we’d save money by cutting out administrative costs. The logic is that we’ll save on all those bureaucratic duplications caused by multiple insurance providers. The empirical evidence is that in countries where government pays for health care, they spend less for health care than we do in America.

But as Arnold Kling points out, they spend less not because they’re more efficient but because they provide fewer services. Charlie Quidnunc makes an even deeper point in the comments on this earlier post:

If profits and administrative costs are so terrible, why stop at
eliminating them in the health industry? Why not get rid of those pesky
elements in other industries? How about creating a single provider
Information Technology industry? Think about how much better computers
would be without all that complex and expensive competition between
companies. Or single provider Automobile industry. Or single provider
food companies. Why not have the government decide what a wholesome and
nutritious meal should look like and eliminate all that expensive
experimentation in fancy restaurants?

Here is additional wisdom on the issue from Tyler (HT: Whatever).


Next post:

Previous post: