Surprise: Managed Competition Doesn’t Control Costs

At least Ezra Klein is surprised. And he surmises both conservative and liberal believers in health insurance exchanges will be baffled as well by a Kaiser graphic which shows that neither the Federal Employee Health Benefit Program nor the California public employees system (CalPERS) controls costs any better than other employers have.

But yours truly is not surprised. Nor will be loyal readers who have followed our thinking on this issue through the years.

Comments (5)

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  1. Joe S. says:

    I’m not surprised. But then I’m a loyal reader.

  2. Larry C. says:

    I agree with Joe. I’m not surprised either.

  3. Brian W. says:

    The theory of “managed competition” seems so foreign to what we know about other markets, I can’t understand why we keep hoping it will work in health care.

    Forgive my lack of an economics degree, but I can’t envision any scenario where “managed competition” would control costs across any industry. Is there some report I don’t know about that says the cost of flat-screen TVs have come down because of “managed competition” in the electronics industry? Perhaps I just didn’t realize that most American homes have microwave ovens because of “managed competition” in the home appliance industry over the last 40 years. Do I thank “managed competition” for the two new Wal-Mart stores, a new Home Depot and a Lowe’s being built in my town? I don’t get it.

  4. Ken says:

    Thank God for the NCPA? A lot of the other “conservative” think tanks are actually promoting managed competition and health insurance exchanges and other idiotic ideas.

  5. Neil H. says:

    I agree with Ken.