The problem is that the growth rate in health care spending exceeds the growth in GDP. As Karl Denninger correctly reminds us, such growth rates are exponential functions. When two exponential functions diverge, they do so rapidly. The result will be a crash. Perhaps the solution would be to have an individual cap on Medicare expenditures and let the patient decide how they want to spend the available money. When it is gone, they’re done. Just like every other expenditure. It would force patients to make cost-benefit decisions.
No, the better way to save on increased medical costs would be to make the patient pay for all costs until they exceed a certain percentage of their income in a given year at which time a catastrophic policy would take over for the rest of that year. Then all patients would shop for all their care just like we shop for electronics, clothing, etc. If i needed an MRI i would go online and shop. Some facility with an underused MRI dept would underbid others and I would buy it there.