There have long been some very strange contradictions. The first is the notion that we need to control healthcare costs so they stop strangling the private sector and racking up massive debt in the public. The second is that the private sector is much more efficient than the public, as it fosters competition, and that any attempt to restrict treatments or make cost-benefit analyses in healthcare is a form of Nazi eugenics. Even a simple measure that would cut healthcare costs drastically – counseling Medicare patients on power-of-attorney issues if they are incapacitated – is demonized as "death panels."
The trouble with this argument is that while it is indeed doctrinally perfect, and therefore appealing to today's brain-dead GOP base, it is empirically wrong. The private healthcare sector is far more expensive than the public and enormously inefficient – especially compared with more socialized systems abroad. You can still legitimately defend the private over public model, but only if you confess that it means vastly more public spending, and an ever-growing and ever-more-expensive private system, with all its weight on profits, labor mobility and wages. If you cut off Medicare spending with a voucher, as in the Ryan plan, or raise the retirement age, you will either simply shift and increase costs to the private sector or you will simply be rationing in the most brutal way possible, by letting people die earlier than they should – in a country where poverty is growing and may be here for a long, long time.
Austin Frakt helpfully summarizes the empirical data we have:
The right argument for private options is not that they reduce health care spending. The evidence I’ve seen and the statements by the health care industry itself illustrate otherwise. The right argument is that private options offer more choice, greater flexibility, and rapid innovation. Those things are good, but they cost something. A well-functioning, competitive private market can drive that cost to a minimum, but that cost may still be above what we’d pay for a government health plan (albeit one with less or no choice and relatively slow to adjust to the changing needs and demands of Americans).
Private health plan advocates are right. Choice, innovation, and flexibility are all valuable. They’re so valuable, people may be willing to pay more for them. There’s nothing wrong with that. But paying more means, well, paying more. If you think you can get all that for less, show me the evidence. Until then, I don’t see any reason to, on faith, waive the fundamental law of economics: there’s no such thing as a free lunch.