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I was amused to see the news that Vermont has decided to abandon their attempt to be the first US state with a truly single payer health care system. Amused because there are people like myself (and thoroughly libertarian economists like Mike Munger) who do think that a single payer system would be better than the current mess that is the US health care system. This isnt because we know all that much (or at least in my case it isnt) about the details of health care systems, its because we know something about economics and incentives.

Heres the news out of Vermont over that single payer system:

Believe it or not, there really are liberals disappointed that ObamaCare does not involve more taxation and central planning of medicine. So be grateful for the state laboratories of federalism and in particular Vermont, where the purest progressive progressive version of ObamaCare has imploded.

Last week, in a reversal that deserves more attention, Democratic Governor Peter Shumlin announced that Vermont would no longer create Americas first statewide single-payer health system. Vermont was seeking a waiver from the Affordable Care Act to abolish whats left of the nominally private insurance market by 2017, but Mr. Shumlins budget gremlins concluded the plan was too expensive and would damage the state economy.

Too expensive there should be taken to mean everyone had conniption fits when they saw what theyd have to ask the voters for in increased taxation. But heres the bit that has me wondering whether theyre mad up there or merely Progressives:

There are only 14 hospitals, and providers are already divided into nonoverlapping service areas meant to reduce competition.

Theres confirmation of this is this report from the Robert Johnston Foundation:

Vermont is divided into non-overlapping service areas, which reduces competition among hospitals, mental health agencies, and other health care organizations.

What? No wonder health care is expensive there (second most expensive in the country I believe). Therere arguments in favour of state provision of health care, of state financing of it (that single payer, as opposed to single provider) just as there are advantages to having markets and competition in both. The net balance can be argued over: but its insane to go to all the expense and cost of ensuring that youve still got multiple private sector providers and then insist that they dont compete with each other. Thats to entirely throw away all and any of the advantages of having private sector involvement at all.

See more here:
Are They Actually Mad In Vermont Or Just Progressives?