Yes, that the patient doesn’t pay (much) to providers and the entity they do pay, the insurers, are not providing the service imposes a lot of distortion.

On the relationship between cost and receipt of care or the effects thereof on the un- and under-insured: try Google Scholar. There are loads of studies.

It seems to me that higher education and health care are suffering from the same problem. With such few people paying the full tuition because of financial aid, set your tuition rates at astronomical levels. However, many more people are being truly hurt by high retail pricing in health care than in higher education. Why are there no studies on how un- and under insured being hurt by this if this is the population we are most concerned about?

Having barely thought through the mechanics of this, let’s turn to politics. Ain’t gonna happen. Providers won’t go for it. And they’re politically powerful, in case you haven’t noticed (which I’m sure you have).

So, again, while there are many ingenious ideas out there, only a small number are politically viable. I could point out that many other countries have perfectly reasonable approaches to health care yet we’re not doing any of those either. I’m interested in the best politically possible ideas. I’m afraid this isn’t one of them.

@Aurthur_500 – I don’t think a public option has to kill the insurance industry. If it is available only to a small subset of the population it could actually help the industry by sucking up some bad risks. The insurance industry is powerful. I think they’ll find a way to survive. To politicians, their money is as good as anyone else’s. Don’t count them out.

Force healthcare providers to have a single price. E.g. if you accept $60 for an office visit, that is your price for *everyone* no matter whether they are insured or not.

Why?
a) Suddenly, not being insured is not nearly as expensive.
b) The poor can suddenly afford 3-4x more healthcare than they can today
c) Healthcare providers need to be more selective about their insurance carriers- if an insurer wants to pay $50 for a visit, the doctor will be forced to lower his price to $50 for everyone (or not accept that insurance). This creates compeition between insurers to have the best payment plans.
d) This creates competition between doctors to have better prices to match the most competitive insurers.

To make this work, we’d also want to allow intrastate insurance providers, and repeal state & local insurance regulations.

There is no reason to have a public plan, and the public plan has the risk of creating a new Social Security. That is a risk we cannot afford.