Kevin Drum on Medicare for all

This is Joseph

This as a remarkable development:

The libertarians at the Mercatus Center did a cost breakdown of Bernie Sanders’ Medicare for All plan and concluded that it would save $2 trillion during its first ten years

(via Kevin Drum)

There is some nuance here:

 There is the rub. The federal government is going to spend a lot more money on health care, but the country is going to spend about the same.

“Lower spending is driven by lower provider payment rates, drug savings, and administrative cost savings,” Yevgeniy Feyman at the right-leaning Manhattan Institute told me. “It’s not clear to what extent those savings are politically feasible, and socially beneficial.”

(One concern is whether cuts to prescription drug spending would discourage medical innovation. It’s simply hard to know — Mercatus projects a $61 billion drop in drug spending in one year, but there would still be hundreds of billions of dollars spent annually on medications.)

But, that said, it is a remarkable inflection point.   Sure, making health care less profitable would slow the pace of innovation but there are already some issues with how the market focuses innovation.  There is a lot of social good in new generations of antibiotics, but these tend to be underdeveloped in a system that rewards chronic disease medication discovery.

At a certain point you need to wonder just how large would be disincentive effects be (it is a big world), could we change drug patent rules to mitigate the impact, and could we invest in drug research directly, say via the national Institutes of Health.  Because half of that 2 trillion dollars in savings might well fund the best research environment imaginable . . .

The biggest problem is structural -- how do you redirect private health care spending into taxes?

One thought that I increasing wonder about is whether this should be a state level program.  Canada requires all provinces to have a Medicare program, but allows significant differences between provinces.  I am not convinced a single federal program will drive innovation as quickly as 50 separate states all trying to puzzle out the best way to make it work.