U.S. Health Care: The Free-market Myth

By Michael Cannon. Excerpts:

"In truth, among wealthy nations, the United States may have one of the least-free health-care markets." 

"in the United States, government controls 84% of health spending. In fact, government controls a larger share of health spending in the United States than in 27 out of 38 OECD-member nations"

"Direct government price-setting, price floors, and price ceilings determine prices for more than half of U.S. health spending, including virtually all health-insurance premiums. Moreover, government pushes all medical prices and health-insurance premiums upward through tax laws and regulations mandating that people purchase excessive levels of health insurance."

"More often, however, federal and state governments push health-care prices higher than they would be in a free market. U.S. health-care prices are excessive because government controls them."

"Government-set prices control more than half of U.S. health spending. Medicare, Medicaid, and other government programs account for 48% of such spending"

" Each year, Medicare sets prices for 10,000 distinct physician services across 112 different "payment localities," whose borders federal regulators also draw."

"More than 50% of eligible Medicare enrollees, 75% of Medicaid beneficiaries, and all who enroll in Obamacare have government-subsidized "private" coverage."

"Medicare routinely sets different prices for identical items depending solely on who owns the facility."

"When a hospital gives a lung cancer patient a dose of Alimta, its fee is about $4,300 larger than a doctor with an independent practice would receive."

"When a hospital purchases a physician practice or other facility, Medicare increases the prices it pays for the same people to provide the same services to the same patients in the same location."

"As these examples suggest, Medicare routinely sets prices well above cost. The U.S. Department of Health and Human Services admitted as much in 2018. "The Medicare program," it reported, "pays nearly twice as much as it would pay for the same or similar drugs in other countries.""

"The U.S. Federal Trade Commission and the Department of Justice have complained about Medicare's "site-of-service" pricing errors for at least two decades. In 2018, Medicare's price-setting advisory panel — the Medicare Payment Advisory Commission — confessed it has a "long-standing concern" that Medicare sets prices for procedure-based specialists and radiologists too high relative to primary-care physicians."

"One 2006 study estimated that Medicaid's drug-pricing rules increased private-sector prices by 15%."

"One study in 2017 estimated that "a $1.00 increase in Medicare's [physician prices] increases corresponding private prices by $1.16.""