Arnold is worried about economists who would “[t]ry to deal with health care costs by setting health care provider compensation policy in Washington.”  I’m not quite sure what Arnold has in mind here.  But when the typical person makes this complaint,  he’s conflating two different things:

1. Price controls: The government imposing a legal maximum price X for service Y.

2. Budgeting: The government refusing to pay more than X for service Y.

I’m against price controls.  But I’m all in favor of budgeting.  In fact, I want X to be as low as possible, because when X=0 for all Y, socialized medicine disappears by default.