For controlling health care costs, the government does it best

America has the most expensive health care system in the world, and costs keep rising relentlessly. Government programs are being hit especially hard. Medicare now costs more than half a trillion dollars a year and could drive huge deficits in the future. And Medicaid is the biggest budget burden for many states.

The answer for some is to harness the efficiency of the private sector. The current Republican budget proposal calls for replacing Medicare's government-run model for many recipients with vouchers they can use to enroll in private plans. Several states have agreed to expand their Medicaid programs under Obamacare only if they can do so with private insurance.

What kind of efficiency can they expect? The answer is none at all. In fact these proposals will probably increase costs even faster.

An analysis of recent data by the Kaiser Family Foundation shows that between 2007 and 2014, costs per beneficiary rose twice as fast under private insurance than under Medicare – 29% versus 14%. And they rose almost five times as fast under private insurance than under Medicaid, which saw a rise of just 6%.

The trend is expected to continue at least through 2023, when the increase in private insurance costs will have reached 104%, but for both Medicare and Medicaid it will have amounted to only 63%.

So the proposals to use the private sector to cut Medicare and Medicaid costs would almost certainly have the opposite effect – they will make those programs more expensive.

A common perception is that government programs are big and bloated compared with their private sector counterparts. In fact, the opposite can sometimes be true.

Private plans may bring other benefits in terms of innovation and experimentation that the government has difficulty matching. But these benefits come with a price.

At its core, the debate over using private plans in government health care programs is about ideology, not cost control. It reflects differences in attitudes about the appropriate role of government.

That is an important debate, and, like all public policy discourse, should be based on facts. Whatever advantages might be gained from privatizing government health care programs, the facts show that cost control is not one of them.

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