One of the pretexts that single-payer advocates use to justify their push for government-run health care is cost. This is presumably why they have been so quiet about recent reports showing that health care inflation is slowing. As the Health Affairs Blog puts it:
National health care spending grew at its lowest rate in nearly a decade in 2007.
And what put the most downward pressure on overall spending? Per the WSJ Health Blog:
The main reason for the overall slowdown was the 4.9% growth in prescription drug spending, the lowest rate in decades.
Both blogs are at great pains to attribute this slowdown to the sluggish economy and the advent of new generics, but neither mentions a much larger factor—-competition among the providers of Medicare prescription drug plans.
This competition, as this CMS fact sheet explains, has been driving drug prices down for years. Obviously, Medicare beneficiaries drive a huge proportion of drug purchases, and the natural operation of the market is driving down the prices.
So, here’s what we’re looking at: the continuation of what is now a years-long downward trend in health care inflation, largely driven by a flattening trend in the cost of prescription pharmaceuticals. And this flattening of drug prices is largely due to competition.
The market works, folks.
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