And many single payer systems around the world only appear to work as well as they do because the US effectively subsidizes medical costs through its own out of control prices.
If we could get healthcare to that level, it would be great.
For a less extreme example: Wal-Mart and Amazon have made plenty of people very rich, and they charge customers for their goods; but their entrance into the markets have arguable brought down prices.
> It should be a regulated utility like electricity or railroads, we should have a public alternative like the post office is to UPS, or it should be nationalized.
I agree that electricity and railroads should be regulated like Google Search.
It's really weird that snail mail in the US is a government monopoly. When even social democratic Germany managed to privatise them.
> The situation gets more dire when you consider their browser monopoly.
Don't a lot of people in the US use iPhones? They don't ship with Chrome as the default browser, do they?
(And yes, Safari is built on top of the same open source engine as Chrome. But you can hardly call using the same open source project a 'monopoly'. Literally anyone can fork it.)
There's also plenty of other browsers available.
A public mail service is required by our constitution. It's cheaper than the private options and often the only option for many rural areas. It's not a monopoly.
Where does it say so in your constitution? All I can find is the postal clause which Wikipedia summarises as follows, but whose full text isn't much longer:
> Article I, Section 8, Clause 7, of the United States Constitution, the Postal Clause, authorizes the establishment of "post offices and post roads"[1] by the country's legislature, the Congress.
https://en.wikipedia.org/wiki/Postal_Clause
The Postal Clause certainly allows the government to run a public postal service, but I don't see how the constitution _requires_ it. It doesn't even require the federal government to regulate postal services, it merely allows it.
Perhaps I missed something?
> It's cheaper than the private options and often the only option for many rural areas.
If you want to subsidise rural areas, I would suggest to do so openly, transparently and from general taxation. At least general taxation is progressive etc. Instead of just making urban folks pay more for their mail, whether they be rich or poor.
I would also suggest only subsidising poor rural areas. Rich rural areas don't need our help.
> It's not a monopoly.
Compare and contrast what USPS has to say https://about.usps.com/universal-postal-service/universal-se...
And why do customers come back to shop there?
Customers continue shopping there because human beings are typically incapable of accepting a short-term loss (higher price) for a long-term gain (product lasts more than three uses).
That's a weird metric. If tomorrow Wal-Mart laid off all employees and replaced them with robots, they would surely be worse off, but by your metric Wal-Mart would look less evil?
> Customers continue shopping there because human beings are typically incapable of accepting a short-term loss (higher price) for a long-term gain (product lasts more than three uses).
Groceries typically only last one use.
Likewise, I would not use my flippant 3 times metric regarding durability to cover the quality of produce.
You have to look at the counterfactual of what these people would do, if Wal-Mart weren't around. You seem to implicitly assume that they'd be getting higher paying jobs somewhere else (so they wouldn't have to rely on welfare)? If so, what's stopping those people from switching to these better jobs right now, even while Wal-Mart is still around?
And sure, let's disregard how many times you can eat your groceries. That was a cheap shot. However I think quality vs price trade-off is something customers have to make for themselves anyway. Who am I to judge their choices?
Google searches cost many billions of dollars: your confusion is because the customer isn’t the person searching but the advertisers paying to influence them. Healthcare can’t work like that not just because the real costs are both much higher and resistant to economies of scale but, critically, there aren’t people with deep pockets lining up to pay for you to be healthy. That’s why every other developed country sees better results for less money: keeping people healthy is a social good, and political forces work for that better than raw economic incentives.
Yeah, because we saw what a great job the tech bros did making government more efficient.
Profit isn't even a big part of the overall revenue.
> Mandate at least decent minimal coverage standards
I assume you want higher coverage standards than what currently exists? Independently of whether that would be the morally right thing to do (or not), it would definitely increase prices.
> and large insurance pools that must span age groups and risk groups.
Why does your insurance need a pool? An actuary can tell you the risk, and you can price according to that. No need for any pooling. Pooling is just something you do, when you don't have good models (or when regulations forces you).
Wuh? The more diverse the pool, the lower the risk. Your way of thinking will very quickly lead to "LiveCheap: the health insurance for fit, healthy under 30s only" for dollars a month, and "SucksToBeYou: the health insurance for the geriatric and chronically disabled" for the low low cost of "everything you have to give".
There's insurance which allows you to convert an uncertain danger into a known payment. And then there's welfare and redistribution.
By all means, please run some means testing and give the poor and sick or disabled extra money. Or even just outright pay their insurance premiums.
But please finance that from general taxation, which is already progressive. Instead of effectively slapping an arbitrary tax on healthy people, whether they be rich or poor. And please don't give rich people extra stealth welfare, just because they are in less than ideal health, either.
Just charge people insurance premiums in line with their expected health outcomes, and help poor people with the premiums using funds from general taxation. (Where poor here means: take their income and make an adjustment for disability etc.)
We _want_ the guy who loses 5kg and gives up smoking to get lower insurance premiums. That's how you set incentives right.
> The more diverse the pool, the lower the risk.
No. The diversification comes from the insurance company running lots of uncorrelated contracts at the same time and having a big balance sheets. For that, it doesn't matter whether it's a pool of similar insurance contracts, or whether they have bets on your insurance contract, and on the price of rice in China, and playing the bookie on some sports outcomes etc. In fact, the more diversified they are, the better (in principle).
But that diversification is completely independent of the pricing of your individual insurance contract.
Have a look at Warren Buffett's 'March Madness' challenge, where he famously challenges people to predict all 67 outcomes of some basketball games to win a billion dollar. Warren Buffet ain't no fool: he doesn't need a pool, he can price the risk of someone winning this one off challenge.
More generally, have a look at Prize indemnity insurance https://en.wikipedia.org/wiki/Prize_indemnity_insurance which helps insure many one-off events.
In any case, what you are saying is only true, if you buy your health insurance second to second on the spot market.
Insurance companies are more than happy to enter long running contracts, where you both agree today on (the algorithm for) the premiums for the next twenty years or even until the rest of your life. That's pretty common with life insurance and disability insurance already.
The above already exists, but if you allow some speculation: you could even envision people buying insurance for their kids before conceiving them. That way you don't have to worry about pre-existing conditions.
(Well, if the parents already have heritable conditions that would make the kids more likely to have expensive medical problems, those would push up their premiums. But then: perhaps these people should think twice about burdening a potential kid with these issues.
Compare how in Cyprus where sickle cell anemia is prevalent, even the Catholic church demand you get screened, before they'll marry you.)
If you really want specialised in-kind welfare, you can get people a voucher for the catastrophic version of 'unconceived baby insurance'.
Basically, you can buy insurance against insurance premiums being expensive.
Well, there I entirely agree with you - health insurance as it exists in the US now is "insurance in name only".
> large insurance pools that must span age groups and risk groups.
What you describe (community rating) has been tried and it works. But it requires that a lot of young, healthy people enroll, and seniors receive most of the care. In an inverted demographic pyramid like most Western economies have, this is a ticking time bomb, so costs will continue to rise.
> Mandate at least decent minimal coverage standards
I think a better solution is to allow the government to threaten in negotiating prices with companies as Canada does; it greatly reduces rent-seeking behavior by pharmaceutical companies while allowing them to continue earning profits and innovating. (I understand a lot of the complaints against big pharma but they are actually one of the few sectors of the economy that doesn't park their wealth and actually uses it for substantive R&D, despite what the media will tell you, and countless lives have been saved because of pharma company profits)
Essentially the gist of what I'm saying, as someone who has been involved with and studied this industry for the better part of five years, is that it's much more complex than what meets the eye.
Even SpaceX's vaunted "disruption" is just clever resource allocation; despite their iterative approach to building rockets being truly novel they're not market disruptors in the same way SV usually talks about them. And their approach has some very obvious flaws relative to more traditional companies like BO, which as of now has a lower failure-to-success ratio.
I don't think you'll find many providers clamoring for an AI-assisted app that hallucinates nonexistent diseases, there are plenty of those already out there that draw the ire of many physicians. Where the industry needs to innovate is in the insurance space, which is responsible for the majority of costs, and the captive market and cartel behavior thereof means that this is a policy and government issue, not something that can be solved with rote Silicon Valley style startup-initiated disruption; that I would predict would quickly turn into dysfunction and eventual failure.
Enshittification has done a lot of damage to the concept of "disrupting" markets. It's DOA in risk-averse fields.
Her bill before "insurance negotiated prices" was $59,000. Effectively $1,000/hr, 24/7.
Eg your argument would predict that healthcare price inflation is not as bad in areas with less insurance coverage. Eg for dental work (which is less often covered as far as I can tell), for (vanity) plastic surgery, or we can even check healthcare price inflation for vet care for pets.
Pets typically don't have medical insurance, and any insurance that does exist there has a radically different regulatory regime than for humans.
Since 1980 for the US:
CPI has gone up by 3.16% on average per year (x4.17 in total). Human healthcare costs by 4.9% per year (x8.96 in total). And pet healthcare costs by 6.49% (or x17.87 in total).
It's similar to how AI data center buildout race is raising the prices for consumer electronics in 2026 and beyond. The suppliers have no incentive to sell lower cost products to tiny niche
But dental and vanity cosmetic surgery have gone up by that metric. Dental is less covered by insurance for most people. Vanity cosmetic insurance is covered for almost no one.
Vet care for pets has gone up a lot more than healthcare for humans.
The real source of high medical costs is the entity that sets the hospital bill in the first place.
The explanation is much simpler than people want to admit, but emotionally uncomfortable: doctors and hospitals are paid more than the free market would otherwise justify. We hesitate to say this because they save lives, and we instinctively conflate moral worth with economic compensation. But markets don’t work that way.
Economics does not reward people based on what they “deserve.” It rewards scarcity. And physician labor is artificially scarce.
The supply of doctors is deliberately constrained. We are not operating in a free market here. Entry into the profession is made far more restrictive than is strictly necessary, not purely for safety, but to protect incumbents. This is classic supply-side restriction behavior, bordering on cartel dynamics.
See, for example: https://petrieflom.law.harvard.edu/2022/03/15/ama-scope-of-p...
We see similar behavior in law, but medicine is more insidious. Because medical practice genuinely requires guardrails to prevent harm and quackery, credentialing is non-negotiable. That necessity makes it uniquely easy to smuggle in protectionism under the banner of “safety.”
The result is predictable: restricted supply, elevated wages, and persistently high medical costs. The problem isn’t mysterious, and it isn’t insurance companies. It’s a supply bottleneck created and defended by the profession itself.
Insurance companies aren't innocent angels in this whole scenario either. When the hospital bill fucks them over they don't even blink twice when they turn around and fuck over the patient to bail themselves out. But make no mistake, insurance is the side effect, the profession itself is the core problem.
They absolutely do not.
They have their profit levels capped at 15% by law and regulation. That means if the insurer wants more absolute dollars of profit, prices must go up.
It also means that if they push prices down they necessarily have less funding to administer those plans, even if the needs are the same (same number of belly buttons, same patient demographics and state of health).
As you note there's also other variables, but this claim: "Insurance companies are structurally incentivized to minimize payouts across the board" is absolutely and categorically not so.
I tell you this with certainty as a 3rd year medical student: If physician wages go down and tuition stays as is, no one will do this. Intrinsic motivation to help people evaporates as soon as you see how enshittified healthcare in the US has become.
I do agree that medical school is far too restrictive to get into (For MD schools at least). However, if you want to make medical school easier to get into: Where will all those students rotate at for their clinical years? There aren't enough spots in hospitals to jam students in.
Stop taking aim at the people that sacrifice so much to help you. Take aim at the real drivers of healthcare expenditures: administrative bloat.
This is a policy fiction. Residency slots are capped by federal law, not by hospital capacity. The Balanced Budget Act of 1997 froze Medicare-funded residency positions, and despite modest expansions decades later, the cap remains largely intact. Teaching hospitals routinely report excess clinical volume relative to trainee supply. The bottleneck is artificial and regulatory, not logistical.
>Stop taking aim at people who sacrifice so much to help you. The real cost driver is administrative bloat.
This framing collapses under scrutiny. Administrative bloat is real and well-documented, but pretending physician incentives are irrelevant requires willful blindness. Numerous studies show that U.S. physicians earn multiples of their OECD peers while delivering no commensurate advantage in outcomes. Many doctors are motivated by altruism, but many are also motivated by status, income, and professional gatekeeping—normal human incentives in a high-prestige, high-pay profession.
Further, high patient throughput is not an accident. Fee-for-service reimbursement structurally rewards volume over care quality. Seeing 20–30 patients a day is not a moral failure of individual doctors, but it does predictably lead to burnout, emotional detachment, and assembly-line medicine. Incentives shape behavior. Ignoring that is not compassion, it’s denial.
>Physician reimbursement is only ~9% of national healthcare spending.
That statistic is repeatedly used as a rhetorical shield, and it shouldn’t be. Cost systems do not fail because of a single oversized line item; they fail because multiple protected constituencies simultaneously extract rents while deflecting blame. Administrative overhead, defensive medicine, pharmaceutical pricing, hospital consolidation, reimbursement incentives, and physician compensation are jointly optimized for revenue, not outcomes.
Nine percent of a multi-trillion-dollar system is not trivial. More importantly, physician compensation is not isolated—it drives downstream costs through referral patterns, test ordering, procedure rates, and resistance to scope-of-practice reform. Treating physicians as a sacred class exempt from economic critique is precisely how you end up with a system that is unaffordable, unaccountable, and structurally resistant to reform.
If the argument is “9% is too small to question,” then by that logic no component is ever large enough to examine in isolation, which is how dysfunctional systems persist indefinitely. Real reform requires abandoning moralized narratives and admitting the obvious: healthcare costs are the product of aligned incentives across many actors, and physicians are not magically outside that system simply because the story is uncomfortable.
We are yet to see major, nationwide physician strikes. If that is what it will take for society to realize the value provided, so be it. Without physicians, there is very little healing going on. You can't say the same for so many other roles.
Lack of providers isn’t what’s driving up costs.
9% might also seem pretty big to me if it's out of all spending and doesn't include other provider compensation? What if overall healthcare costs went down, but physician compensation stayed the same? Would that then be a problem because it was an increased proportion of the total costs — fat left to be trimmed, so to speak?
There are many problems that don't have anything to do with providers per se, but I also don't think you can glean much by extrapolating to more of the same, especially compensation per se.
We don’t have to extrapolate from physician compensation though. We know that providers per capita have increased, but costs have continued to skyrocket. Therefore a lack of providers is not the immediate cause of the increase.
In addition to increasing the number of providers, the scope of practice for non-physician providers has almost universally increased.
All of this doesn’t prove that increasing the number of physicians wouldn’t lower costs some amount, but it does show that the increases over the last 20-30 years requires some other explanation.
It's the self-driving cars debate all over again.
Before medical school, I was not so sure of the quality of your average doc. Now having spent a year in clinical practice across various settings, I am extremely reassured. I can say with certainty that a US trained doctor is miles ahead of AI right now. The system sucks really bad though and forces physicians to churn patients, giving the impression that physicians don't pay attention/don't care/etc.
Not sure if this is a typo (of wringing) or a pun, but it's apt either way.
If you don't have a medical issue and an AI system tells you this then you save yourself a trip to a specialist and the associated diagnostic tests. Again, this saves a bit of money but is nowhere near the bulk of medical expenses. And it has to be able to do this without any diagnostic testing, just based off of your reported symptoms.
Even if AI diagnosis works flawlessly we save a bit of money but absolutely do not revolutionize the cost of the industry.
It'll be great at first while in development. But when profits need to be generated, seeing a specialist will get harder. There will be less wiggle room. I predict we will see more GP utilization.