We Should Be Asking the Right Question About Single-Payer Health Care

Tyler Cowen has a question:

In the United States, Medicare starts at age 65. So to the extent health care improves health outcomes, we should see a noticeable uptick in results as people reach 65, at least relative to the trajectory of aging they otherwise would experience. Of course many other national health care systems treat 64 and 65-year olds as the same, so we can compare the American case to those alternatives. That would give us a better sense of the relative performance of single-payer coverage, no?

Most people in the US have health coverage, so turning 65 and qualifying for Medicare doesn’t really change anything for them. Among those who don’t have coverage, I think there have been a few studies making use of the discontinuity at age 65, but I don’t remember what they concluded. I wouldn’t expect anything very dramatic, though. After a lifetime of poor health coverage, suddenly getting good health care at age 65 is unlikely to have any kind of immediate impact.

But that doesn’t interest me too much. Mainly, I’m posting about this because I think it asks the wrong question. Unfortunately, it’s a very, very common question.

For the most part, there’s no special reason to think single-payer health care produces substantially different outcomes from the US system. Most people in the US get good health care, and most people in France get good health care. We’re better at some things, they’re better at other things. Beyond that, “overall health outcomes” is such a fuzzy concept that it’s all but impossible to measure, and mortality rates are hopeless as a metric. There are just too many variables aside from health care that contribute to it. Life expectancy owes more to poverty rates, public health measures, and cultural norms (around eating habits, cigarette smoking, etc.) than it does to acute health care.

The right question to be asking is: What kind of system is most efficient? The advantages of single-payer are that (a) it leads to lower costs, (b) it’s far more convenient, and (c) it covers everyone. The advantages of the US system are—something. I’m not sure what, to be honest. I suppose some people would argue that the higher prices we pay effectively fund most of the world’s advances in health care, while everyone else is free riding on our backs. There’s probably a kernel of truth to that, but I’ve never seen any persuasive evidence that it’s much more than that.

In any case, the question to ponder is how France (and every other advanced economy) can provide high-quality health care that covers 100 percent of their residents for about a third less than we pay to cover 90 percent of ours. Isn’t market-based health care supposed to lead to lower prices, not higher?

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