People talking about how Europe is not paying its "fair share" of drug development costs have the problem wrong. Drug companies charge what the market will bear. Drugs wouldn't be any cheaper here if Europe dropped its price controls. What we would have is more drugs. But this is a hidden cost. And governments almost always prefer hidden costs to explicit ones. It's just electoral logic.
I understand that progressives object to price rationing because it implies that people who don't have the money aren't worth saving. But the number of people who actually don't get treatment they would benefit from because of their insurance status is small, and there are more direct ways to deal with this problem. You don't gut rehab an entire industry because 2% of the population can't afford its products. You figure out a way to help them buy the products.
Let me close with two thoughts.
John Holbo challenged me in a former post to say what I would think about the various proposals, or a putative single payer system, if it worked just the way progressives think it will. I thought I had, but I'll do it again. The answer is that I would be against it because I don't believe in taking money from the rich to subsidize the middle class--I don't think that people whose basic needs are taken care of have any distributional claim on people with more money, even though it is perfectly fair to ask the wealthy to pay more for goods that are broadly publicly enjoyed.
If it were up to me, I'd combine a broad income subsidy like the EITC with some sort of reinsurance pool for high-risk patients, then I'd probably force everyone to buy some sort of catastrophic medical coverage on the grounds that otherwise, people with adequate income but few assets will be too tempted to freeload off the generosity of the public. But anything that involved price controls I would shoot down faster than a duck at an NRA convention.
That said, if we end up with some sort of single payer system, and I turn out to be totally wrong and there's no issue with innovation and quality stays high, I will be happy. I will still object, in principle, to middle class subsidies. But as an issue for me, it will recede to somewhere between public highways, and the words "under God" in the pledge of allegiance.
Now, having embraced Holbo's thought experiment, and hopefully illuminating the principles by which I am evaluating future health care plans, I'd hope he'd return the favor. I've asked once before, but Holbo has so far ignored the question in favor of long disquisitions on what he thinks rationing is. So here goes again:
I've answered your thought experiment, saying what I would do if everything went just as you think and hope it will. Now please turn the question around and try the same thought experiment. What if everything goes the way I think it will? What if converting the United States to a single payer system causes the pace of medical innovation to slow to a crawl? People who have diseases for which there are not now good therapies lose all hope, because there is virtually no pharma or medtech industry which might invent something to save their life. Lifespans stop lengthening. Pharma and medtech turn into fat, soft, government suppliers, using the regulatory power of the healthcare agencies to keep out incumbents. There are periodic shortages of various treatments because the government has a budget problem, or has gotten the prices wrong--and knowing us, the whole system comes with a "buy American" mandate.