For those who have just entered the Health Care debate a few stylized facts:

• Most developed nations have lower health care costs than the US.
• These developed nations all have universal or near universal coverage. Every citizen is entitled to health care.
• The share of costs paid by patients in all of these nations is low or non-existent.
• Health insurance is provided by the government or by a tightly regulated health insurance industry.

So the Brookings Institution has just published a grand report on ways that the US can deal with its own out of control medical costs short of establishing universal tax supported medical coverage.

Which solution would involve lots of new IT spending, new comparative effectiveness research, broadening the scope of practice for less trained medical workers so that they can take the place of doctors and so on.

And of course they would also like to see the elimination of tax deductions for high cost plans.

In addition we need to:

Establish tiered copays consistent with the principles of value-based insurance design, to align Medicare cost-sharing with the value and overall cost of services (including pre-deductible coverage of high-value services and higher co-pays for low-value care, consistent with the payment reforms described in Section II).

In other words the implementation of a complex system of cost sharing designed to discourage the use of low value treatments. Reimbursements for physicians should be determined by quality and complex measures of outcomes etc.

Medicare cost shares and deductibles should be reformed and no one should be able to purchase supplemental insurance that pays medical expenses from the first dollar.

In other words we need to developed a grand, finely tuned and "scientifically administered" price system in order to optimize medical care and we need to be sure that everyone has some skin in the game and is making out of pocket payments.

At the same time some light regulation of insurers is needed:

Focus insurer competition on cost and quality through requirements for guaranteed issue without — or with very limited — preexisting condition exclusions; limited health rating, such as those related to age and behaviors only; and full risk-adjustment of premiums across insurers based on enrollees’ risk. For market stability, these reforms must be undertaken in the context of an enforced mandate that individuals maintain continuous, creditable basic coverage.

It is a wonder to Wonks Anonymous how the Europeans and the Japanese have been unable to see the truth of these ideas and blindly forge ahead with their simplistic universal coverage schemes. They have only to look to the United States to see how well value based insurance design has already worked to control costs.

Why should we follow them when theory tells us that they should not have low costs?