Thus I untie your Gordian Knot!

I don't really understand the health care market. I don't know why we have a "fee for service" model instead of a "payment for results" model. I don't know what is really driving skyrocketing costs. I don't know the particulars of which Americans consume which kind of health care, or the cost-effectiveness of various treatments, or the ways in which existing government regulation affects the shape of the market. An on top of this, there are a million health-related issues and questions that I don't even know exist. This is why I normally avoid talking about health care.

But I do know that there are two basic issues in American health policy: rising costs, and incomplete coverage. And I do know that although these two problems are in some ways linked - uninsured people tend to use emergency rooms, for example - it seems fairly clear to me that there is a trade-off here. Making health care universal will increase the total amount this nation spends on health care.

If I were enacting a solution without knowing the particulars, therefore, it might look something like this: have the government give some sort of limited baseline health coverage to all Americans. Have the government health provider implement a payment-for-results plan for all services that it pays for. Have the government health provider use its negotiation leverage to hold down the cost of everything it pays for. And then have purely private markets for every kind of health care that is not covered by the government agency; use antitrust enforcement to make sure that these private markets are as competitive as possible.

In other words, satisfy people's demand for equality by providing baseline coverage, and satisfy people's desire for quality with private markets on top of that. The beauty of this system is that it doesn't set in stone exactly which things are covered by the government and which things are covered by private markets; this can be adjusted according to the will of the people, and changed from decade to decade. The important part will be that a universal government health care provider exists, and that private markets also exist.

In fact, this kind of system has already been suggested. It's called Universal Medicare, and it would be really simple to implement, since Medicare already exists and all we'd have to do is extend the existing system to everyone in the U.S. (eliminating Medicaid in the process). Medicare already works just like the system I describe above, and the bureaucracy that administrates it is already in place (saving us the need to create a new arm of government). And what's more, this solution is politically feasible, since Republicans have been championing Medicare recently - all Democrats have to do is to say "OK, well, how about Medicare for young people too?"

If you have a very complicated problem, the first thing to do is to set up a framework for finding solutions. For health care, the solution "framework" is a two-tiered system, with government providing universal baseline coverage and markets providing everything else. Then all the complicated parts become mere details.