The Medical Care Market 1 comment


As Kevin Drum notes the US medical care market is not a free one:

The United States really doesn’t have a free market in healthcare at all; in fact, it’s just a bizarre melange of jury rigged policies that seem to provide the worst of all worlds. We don’t get the universal coverage and bargaining power of a single-payer system, but we also don’t have the competitiveness and price pressure of a true free market system.

Kevin then goes on to ask:

So what, then, is the big problem with simply trying to rationalize the system?

By which he means implement a federal single payer system or more specifically universal health care. And he then argues:

In fact, if the system were well designed � never a betting proposition, I admit � overall costs might even be a little less.

Well, he is right if congress is going to design it you don’t want to bet on it being rational or anywhere close to efficient.
I had actually thought for an irrational moment that when he suggested “simply trying to rationalize the system” that he might have really meant what he was saying and been about to suggest beginning to move down the long road to a free market for medical care. Oh well.


One thought on “The Medical Care Market

  • zombyboy

    Even if congress designs what most of us consider to be a rational system, unless it includes heavy rationing, the costs will rise. When people have “free” access to something, the demand for it rises.
    To some people, that’s acceptable. To me, it just seems to be a gateway to higher taxes and, arguably, worse overall health care for the majority of people.
    The thing is, the truly wealthy will still be able to afford the best care under a universal plan, so their coverage won’t likely change. The truly indigent will be able to have better health care, although the overall effect will be mitigated by those things that make their need for care so important (poor diet and higher rates of both alcoholism and tobacco use, for instance). The vast majority of people in the middle, though, will likely receive worse care, but at an apparently cheaper cost (after whatever tax is paid to implement the system, it’s unlikely to be an cheaper on an overall scale).
    So, the people at the top will end up paying more for the care that they already get. The majority of people will pay more or the same for worse care (most likely there will be rationing and less access to doctors for all but the most important procedures). And then there will be a class of people that benefit from much better care than they would otherwise have received.
    While that last bit appeals to my conscience, it’s hard for me to understand advocating the majority of people sacrificing their good care.
    Government programs invariably cost more than the government estimates when they convince us to accept them. I’d also be hard-pressed to find more than a handful of government programs that improve on a private organization’s ability to provide service more efficiently and at a lower cost.
    Asking the government to design a good universal health care system that will be inexpensive (or even reasonably expensive), provide good quality care, and be efficient is like asking a professional politician to ignore the special interests that pump millions into the campaign kitty. It sounds nice on the surface, but in the real world, it just doesn’t work that way.
    Yeah, it would be nice to see more people advocating moving away from the regulation that made such a mess of things and toward a free market solution.

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