Capping the Price of Health Care Is a Mistake

AdvertisementSKIP ADVERTISEMENTYou have a preview view of this article while we are checking your access. When we have confirmed access, the full article content will load.With health insurance premiums surging again, a growing chorus of economists and policymakers has settled on a cure for American health care: Cap what hospitals, drug makers and insurers can charge. The idea shows up in many forms, including Medicare drug price negotiation, proposals to limit private hospital prices to multiples of Medicare rates, and calls for public plans that pay providers at government-set rates.Their diagnosis is half right. Prices are high, opaque and frequently baffling, and they often do not reflect superior quality or convenience.But it does not follow that the government can fix the problem by