Now, it’s not true that the U.S.'s efforts to control health prices have zero impact. It's just that these efforts are akin to squeezing certain areas of a balloon while it’s being pumped with air: The volume still grows but the shape is distorted. So, limit reimbursement for Medicaid primary care, and hospitals “prove” that the warehouselike treatment in their emergency rooms is somehow a higher-cost alternative. Have Medicare pay lower-than-market prices, and oversee an empire of unnecessary care and fraud. Penalize rehospitalization, and multiply the number of patients admitted only for “observation.”
Or, as Rosenthal reported, limit reimbursement for surgeons performing spinal operations, and unleash a proliferation of “assistant surgeons” requiring payment. It’s endless. Our health-care balloon-squeezers have the power to drive down some prices, but the effect is merely to push up some price bubble elsewhere.
Limiting prices without simultaneously limiting demand is like capping the salaries of “overpaid” shortstops and then being surprised when all the good ones turn into high-priced second basemen.
Look at the National Football League and the National Basketball Association -- the two major U.S. sports leagues that managed to cap players’ salaries. Did this cause ticket prices or pay-TV prices to decline? Of course not. How about those big-time “nonprofit” college sports programs that pay their players absolutely nothing? The artificial wage control merely inflates the salaries paid to coaches, the arms race in training facilities and the size of university athletic department staffs.
Keep these examples in mind the next time you read about increasing pay for hospital administrators. The squeeze on reimbursement rates paid to private doctors has motivated them to sell out to hospitals, pushing up the demand -- and pay -- for hospital administrators.
Since Medicare’s inception, government and health insurers have tried to control health-care prices; 50 years later, it’s time to admit failure. If America’s health-care politics are unique in refusing to accept limits on demand, then we need a solution tailored to our reality. Let’s reduce the role of the big intermediaries who have allowed our system to become so expensive and opaque and increase that of the one force that can drive good behavior: the consumer.
After all, America's fully employed army of health-care cost experts knows a lot about an extraordinary range of small things -- the prices of literally millions of individual medical goods and services in every nook and cranny of the industry. But they don’t know baseball.
(David Goldhill, the president and chief executive officer of the cable TV network GSN, is the author of “Catastrophic Care: How American Health Care Killed My Father -- and How We Can Fix It.”)