What will slow the growth of private health costs?

I think the ACA has lots of provisions that could, if allowed to work, slow the growth of public health costs (Medicare and Medicaid). What about the private side? I’m not seeing a lot of help there. The best idea is the Cadillac tax and that doesn’t kick in until 2018 and won’t affect most policies for many years after.

Check out the implementation timeline from the Kaiser Family Foundation. See also Ezra Klein’s  list of cost controls (h/t Aaron Carroll). Did I miss something? Do you see anything that seriously addresses private health costs across the entire private sector? (The bundled payments idea is for Medicare, prudent purchasing applies to the exchanges. I’ve already mentioned the Cadillac tax.)

The likely course is they keep going up much faster than inflation, the economy, and incomes. That can’t continue forever, but it can for some time, especially as the government is paying subsidies. So, I expect we’ll pay more for little additional value. If we’re not happy about it, what should we do?

The right’s solution is, broadly, to keep shifting costs to individuals. That will reduce utilization. But liberals hate the idea. Among other things it doesn’t address the information asymmetry problem. Individuals can’t really assess what is high or low value health care. Knowing prices and a few quality indicators is not enough. The reason we visit doctors is because they, theoretically, have some idea of what we need.

The left’s solution is single payer. If the government is controlling the budget then costs are checked by fiat. The right hates this idea. It’s anti-market, big government rationing. It will stifle innovation. It steals our individual liberty to make our own health care choices.

Of course, what we have now is some of each. The left has it’s Medicare. The right has it’s private-sector based system for the non-elderly (and non-poor). Both are entrenched institutions supported by powerful interest groups. Yet neither represents a political equilibrium on its own.

The private-side health care cost problem has solutions, but none that seem politically viable. Each side of the debate can point to something it deems technically workable. But each side is pointing to a different thing. So this problem is far from solved.

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