Killing Innovation in HealthCare – the Way Innovation isn’t Killed in the Military

Fellow Angry Bear Save the Rustbelt has a nice post on making the transition to a single payer system in healthcare. One objection that always comes up from the right comes in comments courtesy of reader Sebastian Holsclaw:

“…a plan where no one is allowed to buy better care than the national health plan and is suggesting a fiat cut in drug prices. That is absolutely going to stifle medical advancement.”

I was wondering about this point. I hear it a lot. But most of the folks on the right who make this point will point with pride at the American military-industrial complex (to use Ike’s term). They will note that American military equipment is often the best there is (Fellow Angry Bear ILSM has been writing posts about whether they are as good or inexpensive as they should be and I’ll leave that question to him).

Anyway… why is it that a monopsony buyer of military equipment, a buyer that puts its suppliers on a cost-plus arrangement most of the time, hasn’t managed to kill off innovation in military equipment but a monopsony buyer of health care would strangle all medical advance forever more?