CBO to Obama: Your budget deficit numbers are off by 1.2 trillion

[muon2]

If you look at the countries that have been able to keep healthcare costs under control, they've done it only through strict fee schedules, where the government decides and enforces a set cost for every single procedure and service. In Japan, for example, where the government has been most stringent in doing this, healthcare costs as a percentage of GDP have actually fallen in some recent years, staying more or less constant long-term. A similar system has been enacted in Maryland, and costs there have also stayed relatively stable in the past few decades.

Maryland and Japan essentially treat hospitals and other health care providers like utilities. The key to regulating private utilities is a well understood model for local costs. That's why utilities like electricity have broadly regulated continental markets, then specific regulatory and cost oversight at the state and sometimes even local level.

At this point I don't see Washington willing to set up that sort of structure. If they were serious about a Maryland-style cost containment plan, then there would need to be serious discussions about crafting a cost-control role for the states. The current bill is organized in a way that seems too centralized to move in that direction.

[muon2]

Muon2, why do you consider the feds (as opposed to the states) micro managing costs (aka in my view in large part cannibalizing medical infrastructure assets unless a system is put in place to make consumers more cost conscious, but that is another matter), as violating some law of well, to pick an analogy at random, say physics? 

I'm saying that a utility is best regulated at the most local level that can be sustained. I think that is likely to make it most responsive to local cost variations and the consumers in the local area. For federal law that typically means involving the states, who would then determine what, if any, local involvement would take place.

My post was intended to put more thought into the what-if suggested by Lief's post. In that case, I believe that if health care is to be looked at as a utility as it seems Maryland does, and if a utility can be better regulated at a level lower than a national one as I have suggested, then a federal health care bill needs to go in a very different direction than what is currently discussed.