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Privatization, of course, is based on yet another myth: that government-run programs must be inefficient, and privatization accordingly must be better. In fact, as we noted in chapter 6, the transaction costs of Social Security and Medicare are much, much lower than those of private-sector firms providing comparable services. This should not come as a surprise. The objective of the private sector is to make profits—for private companies, transactions costs are a good thing; the difference between what they take in and what they pay out is what they want to maximize.31

Well, this was predictable. House Republicans last week acceded to an extension of the Export-Import Bank for at least the next nine months. The Export-Import Bank is far from the worst example of government-business cronyism. I just completed a history of American political corruption and actually had to leave Ex-Im on the cutting room floor. Its cronies are pikers compared with the corporate moguls that take advantage of tax preferences like the G.E. and Apple loopholes. They also cannot hold a candle to the American Medical Association, which is basically free to write the reimbursement rates for Medicare Part B. And nothing compares to Fannie Mae and Freddie Mac from 1991-2008. The two mortgage giants kept the entire D.C. political class bent over a barrel for almost 20 years as its top executives reaped enormous bonuses while putting the broader economy at risk.

People employ what economists call “rational ignorance.” That is, we all spend our time learning about things we can actually do something about, not political issues that we can’t really affect. That’s why most of us can’t name our representative in Congress. And why most of us have no clue about how much of the federal budget goes to Medicare, foreign aid, or any other program. As an Alabama businessman told a Washington Post pollster, “Politics doesn’t interest me. I don’t follow it. … Always had to make a living.” Ellen Goodman, a sensitive, good-government liberal columnist, complained about a friend who had spent months researching new cars, and of her own efforts study the sugar, fiber, fat, and price of various cereals. “Would my car-buying friend use the hours he spent comparing fuel-injection systems to compare national health plans?” Goodman asked. “Maybe not. Will the moments I spend studying cereals be devoted to studying the greenhouse effect on grain? Maybe not.” Certainly not —and why should they? Goodman and her friend will get the cars and the cereal they want, but what good would it do to study national health plans? After a great deal of research on medicine, economics, and bureaucracy, her friend may decide which health-care plan he prefers. He then turns to studying the presidential candidates, only to discover that they offer only vague indications of which health-care plan they would implement. But after diligent investigation, our well-informed voter chooses a candidate. Unfortunately, the voter doesn’t like that candidate’s stand on anything else — the package-deal problem — but he decides to vote on the issue of health care. He has a one-in-a-hundred-million chance of influencing the outcome of the presidential election, after which, if his candidate is successful, he faces a Congress with different ideas, and in any case, it turns out the candidate was dissembling in the first place. Instinctively realizing all this, most voters don’t spend much time studying public policy. Give that same man three health insurance plans that he can choose from, though, and chances are that he will spend time studying them. Finally, as noted above, the candidates are likely to be kidding themselves or the voters anyway. One could argue that in most of the presidential elections since 1968, the American people have tried to vote for smaller government, but in that time the federal budget has risen from $178 billion to $4 trillion. George Bush made one promise that every voter noticed in the 1988 campaign: “Read my lips, no new taxes.” Then he raised them. If we are the government, why do we get so many policies we don’t want?

People employ what economists call “rational ignorance.” That is, we all spend our time learning about things we can actually do something about, not political issues that we can’t really affect. That’s why most of us can’t name our representative in Congress. And why most of us have no clue about how much of the federal budget goes to Medicare, foreign aid, or any other program. As an Alabama businessman told a Washington Post pollster, “Politics doesn’t interest me. I don’t follow it. … Always had to make a living.” Ellen Goodman, a sensitive, good-government liberal columnist, complained about a friend who had spent months researching new cars, and of her own efforts study the sugar, fiber, fat, and price of various cereals. “Would my car-buying friend use the hours he spent comparing fuel-injection systems to compare national health plans?” Goodman asked. “Maybe not. Will the moments I spend studying cereals be devoted to studying the greenhouse effect on grain? Maybe not.” Certainly not —and why should they? Goodman and her friend will get the cars and the cereal they want, but what good would it do to study national health plans? After a great deal of research on medicine, economics, and bureaucracy, her friend may decide which health-care plan he prefers. He then turns to studying the presidential candidates, only to discover that they offer only vague indications of which health-care plan they would implement. But after diligent investigation, our well-informed voter chooses a candidate. Unfortunately, the voter doesn’t like that candidate’s stand on anything else — the package-deal problem — but he decides to vote on the issue of health care. He has a one-in-a-hundred-million chance of influencing the outcome of the presidential election, after which, if his candidate is successful, he faces a Congress with different ideas, and in any case, it turns out the candidate was dissembling in the first place. Instinctively realizing all this, most voters don’t spend much time studying public policy. Give that same man three health insurance plans that he can choose from, though, and chances are that he will spend time studying them. Finally, as noted above, the candidates are likely to be kidding themselves or the voters anyway. One could argue that in most of the presidential elections since 1968, the American people have tried to vote for smaller government, but in that time the federal budget has risen from $178 billion to $4 trillion.

Phlebotomy. Even the word sounds archaic—and that’s nothing compared to the slow, expensive, and inefficient reality of drawing blood and having it tested. As a college sophomore, Elizabeth Holmes envisioned a way to reinvent old-fashioned phlebotomy and, in the process, usher in an era of comprehensive superfast diagnosis and preventive medicine. That was a decade ago. Holmes, now 30, dropped out of Stanford and founded a company called Theranos with her tuition money. Last fall it finally introduced its radical blood-testing service in a Walgreens pharmacy near the company headquarters in Palo Alto, California. (The plan is to roll out testing centers nationwide.) Instead of vials of blood—one for every test needed—Theranos requires only a pinprick and a drop of blood. With that they can perform hundreds of tests, from standard cholesterol checks to sophisticated genetic analyses. The results are faster, more accurate, and far cheaper than conventional methods. The implications are mind-blowing. With inexpensive and easy access to the information running through their veins, people will have an unprecedented window on their own health. And a new generation of diagnostic tests could allow them to head off serious afflictions from cancer to diabetes to heart disease. None of this would work if Theranos hadn’t figured out how to make testing transparent and inexpensive. The company plans to charge less than 50 percent of the standard Medicare and Medicaid reimbursement rates. And unlike the rest of the testing industry, Theranos lists its prices on its website: blood typing, $2.05; cholesterol, $2.99; iron, $4.45. If all tests in the US were performed at those kinds of prices, the company says, it could save Medicare $98 billion and Medicaid $104 billion over the next decade.

These and other measures, however, seemed relatively inconsequential in 1965 compared to a Big Four that passed by the end of the session: federal aid to elementary and secondary education, Medicare and Medicaid, immigration reform, and a civil rights act to guaranteee voting rights.

For interested consumers, there are many health pricing tools. For starters, I recommend The Wall Street Journal’s “Medicare Unmasked” tools,2 although they may be behind a paywall. The Health Care Cost Institute3 is a health-insurer funded effort to compare the cost of various procedures around the country.4 ProPublica, a non-profit news site, is one of several consumer sites that has used the CMS databases to build tools that are not exactly beloved by health care providers, including Dollars for Docs5 and Surgeon Scorecard.6

Beyond these supports, which are comparable to the subsidies provided to Original Medicare users, Medicare began several years ago to pay bonuses to MA plans with high-quality ratings of 4 or 5 stars. These ratings will be explained in a bit. The takeaway here is that MA plans with high ratings are receiving several billion dollars each year in additional payments from Washington.

there have been 48,465 deaths among Medicare/Medicaid beneficiaries within fourteen days of a first or second dose of a COVID-19 vaccine.72,73 There are about 59.4 million Americans covered by Medicare, representing only 18.1 percent of the population, so these staggering numbers are roughly comparable to Steve Kirsch’s population-wide estimate of 150,000.