Future Monopoly

In an article in post on Newsweek, Robert J. Samuelson writes about the future monopoly that may be effecting all of our lives in the near future. The article titled "Public Plan Mirage" gives a brief outline of why a public plan for health care will not work. He compares this new option to the current Medicare monopoly the exist today. He is able to point out several fundamental difference between the status that Medicare currently enjoys and what a public health plan for those under 65 would face.


1 comment:

Dr. Tufte said...

Devin: I'd really like to see a little more thought show through in your post.

I'll add that a big chunk of the cost savings that Obamacare is supposed to generate come from two things. First, is market power, and second is reduced efficiency.

The government intends to use monopsony power to reduce prices. Fair enough - this is theoretically possible, and it's arguable that Medicare is already doing this. However, inefficiency is usually a product of insufficient competition, so the introduction of more monopsony power is likely to actually increase inefficiency rather than decrease it.