Hi Matthew,

Thanks for clarifying that your priority is to reduce health care costs by decreasing prices. However, I think that your plan retains many of the drawbacks of a traditional single-payer scheme, so I am surprised that as a self-described conservative you would support it. For example, paying marginal cost for drugs and procedures could put providers out of business and deprive pharmaceutical companies of ability to develop new drugs. Also, there’s not much of a role for private insurance in your scheme, because if the government is negotiating the full price with the providers, insurers can only change their bottom line by adjusting their premiums upwards (instead of negotiating with providers to get a better deal as they do now). But they would also have to compete on premiums, which would leave them trying to operate at marginal costs as well. I’m having a hard time seeing what private insurer would want to operate in this type of a market.

Also, prices aren’t the only reason that medical costs in this country are so high — overutilization is a factor as well. For example, Finkelstein et al (https://academic.oup.com/qje/article/131/4/1681/2468872/Sources-of-Geographic-Variation-in-Health-Care) find that about 50% of the (substantial) geographic variation in Medicare utilization is caused by place-specific factors as opposed to patient-specific characteristics, which could be due to doctors ordering “excessive treatments with low return.”

Can you explain what you don’t like about the ACA that makes your single-payer plan preferable?