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Medicare for All’ Debate Is An Opportunity to Address High Prices

As the idea of expanded public coverage gains traction, we should tackle dysfunctional private-sector pricing and debate actionable policy solutions.

Sen. Bernie Sanders is among those who have introduces "Medicare for All" legislation to create a government-run health insurance plan. Here Sanders is flanked by Sen. Kirsten Gillibrand, D-N.Y., left, and Sen. Jeff Merkley, D-Ore., right. (Susan Walsh/Associated Press)

Several proposals promising universal health coverage” have been introduced by lawmakers, think tanks, and presidential candidates. And while many of them are touted under the catchy Medicare for All” campaign slogan, the ideas on the table are more varied and complex.

Only a couple propose a single national, government-run health insurance program that would replace private insurance. The remaining bills offer some type of expanded public coverage in addition to existing private or public sources of coverage. 

But regardless of the policy idea, an issue that must not be overlooked in this debate is the high prices paid in the private market. In a briefing held by the Alliance for Health Policy, Mark Miller, Executive Vice President of Health Care for Arnold Ventures, stressed the importance of putting downward pressure on hospital costs and the high prices hospitals and physicians charge in the commercial sector. 

Watch a clip from the briefing here.

My hope is that regardless of the conversations of coverage, access, and design considerations, a debate that shouldn’t be lost is how to bring discipline to the commercial market where they have failed to control the prices and payments that we’re making for hospital and physician services,” Miller said.

There’s little price discipline in the private sector, particularly in markets that are increasingly dominated by a single or a few large health systems. This stifles competition and drives up prices and premiums for patients, making care unaffordable and eating away at wages. So how do you fix a broken system that’s the result of substantial provider consolidation over the past few decades?

One way to tackle this is to apply Medicare prices — or some multiple of Medicare prices — to commercial markets that lack competition. That would set restrictions on how much health care providers are paid for a specific service — something that Medicare does very well. (Rates for hospital and physician services in the private sector are often much higher than in Medicare and more than 50 percent higher than hospital costs.)

The Medicare for All” debate is far from over. As the idea of expanded public healthcare coverage continues to gain traction, there is an opportunity to tackle the dysfunctional private-sector pricing and debate actionable policy solutions.