Whether private or public, third-party payment for health care is a huge problem.

Evoking a collective scream of despair from socialists and anti-corporate types, police in Pennsylvania arrested Luigi Mangione, a suspect in the murder of UnitedHealthcare CEO Brian Thompson. Thompson, they insist, stood in the way of the sort of health care they think they deserve and shooting him down on the street was some sort of bloody-minded strike for justice.

The assassin’s fans—and the legal system has yet to convict anybody for the crime—are moral degenerates. But they’re also dreaming, if they think insurance executives like Thompson are all that stands between them and their visions of a single-payer medical system that satisfies every desire. While there is a lot wrong with the main way health care is paid for and delivered in the U.S., what the haters want is probably not achievable, and the means many of them prefer would make things worse.

“Unlimited Care…Free of Charge”

“It is an old joke among health policy wonks that what the American people really want from health care reform is unlimited care, from the doctor of their choice, with no wait, free of charge,” Michael Tanner, then of the Cato Institute, quipped in 2017.

The problem, no matter how health care is delivered, is that it requires labor, time, and resources that are available in finite supply. Somebody must decide how to allocate medications, treatments, physicians, and hospital beds, and how to pay for it all. A common assumption in some circles is that Americans ration medicine by price, handing an advantage to the wealthy and sticking it to the poor.

“Today, as everyone knows, health care in the US can be prohibitively expensive even for people who have insurance,” Dylan Scott sniffed this week at Vox.

The alternative, supposedly, is one where health care is “universal,” with bills paid by government so everybody has access to care. Except, most Americans rely on somebody else to pay the bulk of their medical bills just like Canadians, Germans, and Britons. And while there are huge differences among the systems presented as alternatives to the one in the U.S., third-party payers—whether governments or insurance companies—do enormous damage to the provision of health care.

Third-Party Payers, Both Public and Private, Raise Costs

“Contrary to ‘conventional wisdom,’ health insurance—private or otherwise—does not make health care more affordable,” Jeffrey Singer, a surgeon and senior fellow with the Cato Institute, wrote in 2013. “The third party payment system is the principal force behind health care price inflation.”

In the U.S., the dominance of third-party payment, whether Thompson’s UnitedHealthcare, one of its competitors, Medicare, Medicaid, or something else, makes it difficult to know the price for procedures, medicines, and treatments—because there really isn’t one price when third-party payers are involved.

Several years ago, the first Trump administration required hospitals to publish prices for services. My local hospital offers an Excel spreadsheet with wildly varying prices for procedures and services, from different categories of self-pay, Medicare, Medicaid, and negotiated rates for competing insurance plans.

“A colonoscopy might cost you or your insurer a few hundred dollars—or several thousand, depending on which hospital or insurer you use,” NPR’s Julie Appleby pointed out in 2021.

That said, savvy patients paying their own bills can usually get a lower price than that paid by insurance.

“When government, lawyers, or third party insurance is responsible for paying the bills, consumers have no incentive to control costs,” Arthur Laffer, Donna Arduin, and Wayne Winegarden wrote in the 2009 paper, The Prognosis for National Health Insurance. After all, the premium or tax is already paid, right?

Other Countries Struggle With Similar Issues

Concerns about rising costs, demand, and finite resources apply just as much when the payer is the government.

“State health insurance patients are struggling to see their doctors towards the end of every quarter, while privately insured patients get easy access,” Germany’s Deutsche Welle reported in 2018. “The researchers traced the phenomenon to Germany’s ‘budget’ system, which means that state health insurance companies only reimburse the full cost of certain treatments up to a particular number of patients or a particular monetary value.” Budgeting is quarterly, and once it’s exhausted, that’s it.

Last year in the U.K., a Healthwatch report complained: “We’re seeing a two-tier system emerge, where healthcare is accessible only to those who can afford it, with one in seven people who responded to our poll advised to seek private care by NHS [National Health Service] staff.” Britain’s NHS remains popular, but it has long struggled with the demand and expense for cancer care and other expensive treatments.

And Canada’s single-payer system famously relies heavily on long wait times to ration care. “In 2023, physicians report a median wait time of 27.7 weeks between a referral from a general practitioner and receipt of treatment,” the Fraser Institute found last year. “This represents the longest delay in the survey’s history and is 198% longer than the 9.3 weeks Canadian patients could expect to wait in 1993.”

You have to wonder what those so furious at Brian Thompson that they would applaud his murder would say about the officials managing systems elsewhere. None of them deliver “unlimited care, from the doctor of their choice, with no wait, free of charge.” Some lack the minimal discipline imposed by what competition exists among insurers in the U.S.

We Need Less Government Involvement in Medicine

“Policymakers need to understand that the key to ‘affordable health care’ is not to increase the role of health insurance in peoples’ lives, but to diminish it,” Cato’s Singer concluded.

My family found that true when we contracted with a primary care practice that refuses insurance. We pay fixed annual fees, which includes exams, laboratory services, and some procedures. My doctor caught my atrial fibrillation when he walked me across his clinic hall on a hunch to run an EKG.

The Surgery Center of Oklahoma famously follows a similar model for much more than primary care. It publishes its prices, which don’t include the overhead and uncertainty of dealing with third-party payers.

Those examples point to a better health care system than what exists in the United States—or in most other countries, for that matter. They’re probably not the whole answer, because it’s unlikely that one approach will suit millions of people with different medical concerns, incomes, and preferences. But making people more, rather than less, responsible for their own health care, and getting government and other third-parties as far out of the matter as possible, is far better than cheering the murder of people who supposedly stand between us and an imaginary medical utopia.