Healthcare Prediction

In theory, the government could establish a single payer system and use it to mitigate the adverse selection problem in healthcare, preventing overutilization. It could also use its newfound monopsony power to reduce healthcare prices, leading to lower pay for doctors and healthcare bureaucrats. There are people who believe that this would happen were any of the Democrat single payer plans adopted. I wonder what they are smoking. Saying something is possible with single payer doesn’t mean it’s gonna happen, you need to look at who will actually be designing and running the system. And if you look at the Democratic candidates, all of them want more healthcare. One of their most common talking points is how people can’t get it due to “underinsurance,” i.e. people actually having an incentive not to use it. Yes, I’m sure there would be some committee to study overutilization(In the ACA there was the Independent Payment Advisory Board, since repealed with bipartisan support), but the overwhelming motivation of the bill will be to make sure no one ever has an incentive to second-guess healthcare. Might the Democrats try to favor pay providers less even as they demand more healthcare consumption? For all their egalitarian rhetoric, doctors are high-status experts and Democrats want to be seen as respecting high-status experts. See what happened with Washington:

“The whole debate was about the rate mechanism,” said Mr. Frockt, the state senator. “With the original bill, with Medicare rates [for the state’s public option], there was strong opposition from all quarters. The insurers, the hospitals, the doctors, everybody.”

Mr. Frockt and his colleagues ultimately raised the fees for the public option up to 160 percent of Medicare rates.

“I don’t think the bill would have passed at Medicare rates,” Mr. Frockt said. “I think having the Medicare-plus rates was crucial to getting the final few votes.”

Thus, my prediction, which does not depend on any particular policy being enacted:

The National Health Expenditure Accounts estimate of National Health Expenditures as a Percent of gross domestic product in 2027 will be greater than its estimate of 2017. Estimates for both years will be taken by the first year they both become publicly available: 90%

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