ABSTRACT
One of the Administration's arguments against a tax-financed single-payer scheme is that it implies an amount of redistribution that is not politically feasible. This is one reason the Clinton Administration proposed financing universal coverage through employer-based premium payments. Ironically, the proposal nonetheless creates substantial redistribution because of the subsidies. Most popular debate about who pays for health care assumes that the checkwriter bears the cost. The implied assumption is that if health care costs were lower, the car's cost would be lower. In fact, the most likely outcome of lower health care costs is that the price of the car would not change much, but cash wages of auto workers would be higher. The Prospective Payment Assessment Commission has estimated how much of the Medicare program's hospital spending increase can be attributed to specific new technologies. Virtually all of the increase in hospital spending is seen in cost per admission or cost per patient day.
