Comment by formerly_proven

While I agree that you shouldn't, and that the end goal (privatized health care) is at the same time more costly and less efficient, that doesn't mean people can't or don't.

The Baumol effect you link to only shows that wage demands from health care workers go up in proportion to the wages of other workers. This means (roughly speaking), that reducing the health care budget will reduce the effectiveness of your health care system, because you're able to afford fewer people (I think this is the point you're making, please correct me if I'm wrong).

But that's entirely the point of starving the beast! By cutting funding to some federal department, that department becomes less effective, which makes people think that the government is incapable of running said department, and makes them open to the idea of privatizing the department. Et voila, you've opened up a whole new market that can be exploited for profits! The holy grail is opening up a market with inelastic demand such as health care, where people, no matter what you charge, will be forced to buy your product. This program has been incredibly successful in the US, which can be seen by comparing their health care system to that of other wealthy nations.

You can reduce the spend per person by replacing more qualified workers with less qualified (cheaper) workers, and adding friction to the process of obtaining healthcare.

Increasing prior authorizations, increasing paperwork complexity, increasing hold times on the phone, obfuscation for who is responsible for what, constantly changing coverage so people have to change providers, and otherwise discourage them from seeking care.