An argument advanced in favor of single payer health care is the alleged ability of a single payer to contain costs from increasing. This is known as cost containment. Austrian economic theory explains why price controls fail to contain costs, and an Austrian analysis of price controls is presented in this review. The history of thoracentesis since the 1980s is provided as an empiric example of Austrian analysis. This history illustrates how a price control to limit the Medicare reimbursement for outpatient thoracentesis to under $100 has led to the contemporary situation of thoracentesis performed in hospital at costs exceeding $50,000.
