Brilliant New Solution To Health Care Costs: Government Price Controls


Pricing is paramount in a free market. Price signals are what regulates the market. They’re set by supply and demand, and in turn control supply and demand. When supplies are short, and demand is high, prices go up to protect supply and discourage demand. Price also encourages expansion of supply to meet demand by being set at levels which produce profit, and thus capital for investment in future supply.

Prices, in other words, are of the utmost importance in a free market. But now a study suggests that the government ought to remove pricing from the free market and instead institute price controls set not by supply and demand but by government bureaucrats.

WASHINGTON, Jan 10 (Reuters) – The United States could save $2 trillion in healthcare spending over the next decade, if the U.S. government used its influence in the public and private sectors to nudge soaring costs into line with economic growth, a study released on Thursday said.

Compiled by the nonpartisan Commonwealth Fund, the study recommends holding the $2.8 trillion U.S. healthcare system to an annual spending target by having Medicare, Medicaid, other government programs and private insurers encourage providers to accelerate adoption of more cost-effective care.

Such a plan would require new legislation from a bitterly divided U.S. Congress, where Republicans would likely oppose new government controls, despite claims by the study’s authors that families, employers and government budgets would receive long-sought relief from their growing financial healthcare burdens if the changes were enacted.

Of all the things that have come in up America’s slow march toward government-controlled health care, this ought to scare Americans the most. This is the thin, leading edge of rationing. This is the beginning of the “death panels” Palin worried about. If the government is controlling price, they control everything.

If the government decides a certain procedure, or a certain medicine, is too expensive it simply won’t be available any more. Medical research will be seriously hampered without an influx of capital from accurate market pricing. Our health care system will be poorer for being price-controlled.

But it might be cheaper, I guess. Small consolation.

Truth be told, the run-away costs in health care should be solved by removing government distortions from the health care markets. Rather than the government imposing arbitrary price controls set by markets, why not deregulate the insurance and care markets and let individual Americans find the best ways to save costs? End the promotion of third-party, government or employer-based insurance and make insurance and health care a supplier-to-consumer transaction again. And then end restrictions such as the prohibition on selling insurance across state lines, etc.

We could have cheaper health care and health insurance without the government. Unfortunately, that would mean politicians giving up power, and they won’t do that.

Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

Related posts

  • flamemeister

    Considering the history of the effects of price-controls, anyone who suggests this approach is pig-ignorant or certifiable.

  • igx

    it should be rationed by price starting at micro level as much as possible. Fat deductibles. See The Purple Plan.

  • SigFan

    As always the government solution to government caused problems is … more government. Let’s do the time warp again …

  • kevindf

    Why doesn’t Obama just repeal the law of supply and demand?

  • Onslaught1066
  • banjo kid

    Returning the hospitals to a non-profit status would do wonders about lower prices . Ever since they was put on the stock market the prices for hospital care has more than tripled . Ask your Physician next time who makes the money they will tell you the hospitals do while they get pay cut after pay cut . They have price controls it is called medicare and unfortunately the doctors get the lower wages while the hospitals keep making money off of the stock market for their investors. I think some doctors are going on the stock market if nothing else to pay off their loans . I sure is nice to see 8 dollars for an aspirin on the itemized bill, while you were captive to it while in there. good advise is to not ask for any thing unless it is very much needed and have your family bring the aspirins. The government needs to stay out of the free market but hospitals should be a community effort with no return, not free but supported by each community .

  • WOOF

    Insurance companies, medicare, and medicaid set prices now. Medical R&D and medical education are subsidized . Consumers of medical services do not have the knowledge to make good medical decisions.
    ” banjo kid
    Returning the hospitals to a non-profit status would do wonders about lower
    prices . Ever since they was put on the stock market the prices for
    hospital care has more than tripled .”

  • Yogibare

    Are we to believe that our system is a competitive system driven by free enterprise?
    Try this: Ask for a bid on a simple procedure that is very much routine; like a colonoscopy. The health care system does thousands of these each day; our local hospitals each possibly do a dozen every day; so what does one cost?
    Bet you will never find out before you have one done. Make them a cash offer and see what they say? Go down the street and make the other hospital an offer and see what they say.

    The point is: this is not a competitive system. This is a tightly controlled and regulated system from the entry to a medical school, the licensing, the siting of a facility, the taxing, the payments for service, drugs and devices, etc. There is nothing that approaches free enterprise in the U.S. health care system.
    For Profit or Not-for-profit has little to do with the cost of health care.

    • fredlave

      Bidding on medical services does not exist because a provider cannot charge a person less than he/she/it charges Medicare for the same service. The best a person can do is try to negotiate a lower price AFTER the service is performed by claiming hardship, or just don’t pay the bill.

  • mickey_moussaoui

    All government employee salaries should be price controlled at a level never to exceed the national average of the private sector

  • fredlave

    Hardly anyone has heard of the “Graduate Medical Education National Advisory Committee Report” of 1980. It was an attempt to predict physician manpower needs in the future and it failed miserably and is (partly) responsible for physician shortages today and the downsizing or closing of many residency training programs in the 80s and 90s. The lead time to produce a physician is about 10 years (college + medical school + residency) and to produce a surgical specialist is closer to 15 years. That is why you see so many “midlevel” providers being hires by hospital systems. The real docs just aren’t available.