Munger on Single-Payer

Mike Munger, Duke political scientist and sometime Libertarian Party of North Carolina gubernatorial candidate, explains his support for single-payer health insurance:

I would prefer personal responsibility, and a competitive market in health care. Modeled after the very successful, constantly cheaper, constantly better quality, service in Lasik surgery and other “elective” surgeries. If someone, anyone, would even consider going in that direction, that would be fine.

Insurance would be for major problems, big surgeries, accidents. You might have an annual deductible of $5k or more. Doctors would advertise prices (yes, PRICES) of standard surgeries.

Does any of that sound familiar? I didn’t think so. Instead, we have something really bad. Single payer would be better than what we have. Single payer is also better than ACA, by the way, which is why I am not happy about the decision yesterday.

What we have is this…

Click through for the rest. I’m not persuaded by the claim that single-payer is better than what we have now, but I think it might be better than what the PPACA sets up. The fact is that in unregulated states (no community rating or guaranteed issue, elimination riders permitted, low mandated benefits), health insurance is pretty cheap for healthy people, and states are increasingly experimenting with allowing nurse practitioners and dental hygienists to practice independently, making less than half of their respective top-level professional equivalents and presumably passing along the savings to us. The problem is that in unregulated states, unhealthy people can’t get coverage. At all. There are tools that insurance companies can use to make coverage reasonably achievable even for the unhealthy, like elimination riders, but there is strong social pressure against their use. As a result, insurance companies would rather deny coverage to a high risk than offer coverage with exclusions. It looks bad to people to do the second. It makes no sense, but it’s a good case study of how social pressure can influence markets just as much as law and policy. And yes, mandated ER care is a problem, but uncompensated ER care is something around $50 billion a year – not a huge enough number to be driving cost inflation. Finally, the employer health insurance deduction probably means that the employed are over-insured, but the fact is that people want low-deductible, expensive, gold-plated health insurance. Some of the rise in health care costs is being driven by the market. People are willing to pay high prices even for a very small marginal benefit in treatment technology. Single-payer would probably drive down costs, at the expense of a small amount of quality – but people put tremendous value on that small amount of quality, and thus the welfare losses would stand to be huge.

5 thoughts on “Munger on Single-Payer

  1. Where does one go and what does one do if one rejects the fundamental premise that individual health care is a problem demanding a public solution?

    1. Isn’t a public solution inevitable? There is going to be some public policy with respect to health care, so the question is which one is best. Or perhaps I misunderstand what you mean by the term. If you mean a government-regulatory solution, then I agree with you. But there’s still a question about what politically realistic reforms can be made if total withdrawal is infeasible.

      1. Yes, I mean a government-regulatory system. I agree that some form of public solution is inevitable – whether that be mandates to provide some sort of coverage and insurance, or to institute reforms reducing government and legal involvement in the health care scheme. I am convinced a majority of Americans favor the former, whether conservative, independent, or liberal. I favor the latter and am painfully aware of my severe minority status.

      2. You may be right… The pre-existing conditions ban plays well in polls. Of course, most voters just don’t understand insurance economics. If they understand that the unpopular mandate were an essential component of this kind of scheme, they might not be so keen.

  2. I think the real, cynical agenda of PPACA was to make the private insurance model so unpleasant that demand would rise up for single payer.

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