Here is the truth about health care.

Comparisons between the US and other developed countries show that Americans don't actually utilize "more medical care" or have more doctors per capita than other developed countries. And although there are certain conditions that we excel in healing (such as specific cancers), our overall health remains pretty bad, we die a bit early, but it is unclear how much of this is us just eating too much and not exercising enough.

We do tend to have easier access to medical imaging devices and we use far more on-patent drugs than other countries, but those are not the major items in the cost differential between the US and other countries. The very small profits of health insurers are not the reason either. Nor is the malpractice issue. Nor is the fact that our hospitals have many more people working in them besides the doctors and nurses than other countries (janitors? security?) These are all pie slices, but small ones.

The main reason US health care is so expensive is that we pay our doctors and nurses more than other countries.

Every country with socialized medicine "sticks it to the doctors". Medicaid does this already in the US. A doctor told me once that a Medicaid patient is "like working for free". Medicare pays better, but still is pretty cheap. Private patients, even when covered by insurance, is much more expensive. Except when you are in an HMO, like Kaiser Permanente, where doctors are salaried.

In Europe and Japan, the concept is called "negotiation" where a physician union "negotiates" with the government. Of course when you negotiate with the legitimate wielder of force, you generally lose. Sometimes they win a bit, like the French physicians who went on strike in 2002. Or the physicians in Luxembourg who just went on strike. The Lux dox union suggested perhaps instead of cutting their pay they could send home "non-critical surgery patients home to recover and using hospital beds for patients who need them most."

In a free market, supply and demand determine price. There is a lot of money flowing from governments into health care in the US, ironically much of it for seniors who may not be poor at all through Medicare. This drives up demand.

The tax distortion of exempting employer-paid health insurance from taxation drives people to cover more of their medicine with insurance, insulating them from the prices of the free market, again driving up demand.

Some argue that our doctor supply is artificially limited. The fact that we make immigrating doctors redo their residency even if they are of world-renowned quality is pathetic. We may also over-train our doctors, perhaps we train them more than either they need to be trained or more than they can actually remember. Sometimes you need a housepainter and some times you need Rembrandt. We may have too many Rembrandts, but our state licensing and certification boards set the bar, not patients.

I think we need some level of government-funded health care for the poor. In a perfect world, it would look like an HMO like Kaiser to keep costs low. It won't do anything for anybody. Whether it should be run by the government, or merely paid for by the government, is a larger question.

For the non-poor, we should consider removing the crazy things like the health insurance tax distortion. Medicare should go away, you are either poor or you are not, regardless of age. And there are a lot of state mandates on individual health insurance policies that are not needed (and actually avoided by large companies by Federal law).

The problem is that it is always easier to give someone something new than take away something from someone, even if taking it away will improve the economy. Loss is feared greater than gains. This is a behavioral economic problem that also reveals itself in public choice. Just because the government could behave more rationally than the market doesn't mean it will. Or even usually will. This is the danger of asking government to do something that seems rational.