There is no Healthcare “Market”

Obama says that thepublic sector needs to get into the healthcare biz to create competition. That makes for a  curious inversion. Ordinarily it is the private sector which is supposed to have competition…so what gives? The truth is that the problem with Healthcare isn’t too much private sector, it’s too little market. In fact there is essentially no market in Healthcare. Who goes to their doctor and asks “How much for a physical?” Who price shops medicine? Pretty much nobody. The thing is that the public sector can’t “create” competition, it can only command and control. When it gets into the healthcare game, it will push out the private sector, because that is quite simply in its economic self interest. But it doesn’t need to. What needs to happen is for the price system to actually be put into practice in healthcare. Because without prices, there is no market. That is what is wrong with the whole system. It isn’t the market-it’s the absence of one.

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6 Comments

Filed under Economics, Freedom, Healthcare

6 responses to “There is no Healthcare “Market”

  1. Andrew, I remember (just vaguely) before the widespread availability of health insurance…at least I hear my parents (in their 70’s now) talk about it.

    There was competition in health care. People had to pull the money out of their pocket on the spot. In many ways, health insurance has driven the costs through the roof for those without it. Add to that the insertion of Medicare, and Medicaid since those days. Add to that the litigious society we live in. Add to that the demand for new technology and research (and I’m certainly not unhappy about the amazing discoveries and new treatments just in my adult lifetime). Add to that the societal attitude that says, “I must live forever…and not feel bad one day of forever.” Add to that, etc. And you’ve got a recipe for medical disaster…

    But I do see some competition in the medical field that I had not before…mostly in elective stuff, but there is some.

    I have not carried health insurance for the last 19 years. In that time, I have sent three boys off on their own (still have one 13-year-old at home), had one child, and paid cash for all the medical care.

    I figured it up one day and it seems like I figured I had saved about $120,000 in insurance premiums, deductibles, co-payments, etc. And the heck of it all is that if you DO NOT have health insurance the Doctor always cuts you a deal. Example: My youngest son needed some tests done by a Urologist a few years ago. I asked how much the tests would be. $1200. I said, “I don’t have health insurance.” Response, “Oh, well could you stand $550?”

    It’s a big issue, and a conundrum for us all as fellow citizens for sure.

    But I’ll agree with you. Put competition back in the medical field. Don’t allow the gubmit to set concrete prices on what they will, or won’t pay for Medicare, or Medicaid patient services. And for God’s sake, get rid of the stupid Prescription Drug benefit!

    I can dream, can’t I?

  2. timetochooseagain

    Yes indeed. There was a very good article in American Thinker about this recently. Just think, if we had a health insurance system in auto”care” how much a simple repair job would cost versus the normal rate when the price system actually works!

    http://www.americanthinker.com/2009/06/health_care_is_not_that_compli.html

  3. Sundjata

    I’m not exactly sure why, but I conservatives continue to assume that the market is society’s savior. What proof of this do we have?

    [REPLY:What more proof is required than the immense advancements it has brought us so far?]

    Is it not the market that, if followed logically, results in monopolies–that is, it self-destructs? Is it not the market that created the stock-market issues we have today?

    [REPLY:I’m not sure why you think that monopolies are a “self destruction” of the market, however you are wrong on this point anyway. Monopolies are not the “logical” consequence of markets. In fact, government institutes monopolies all the time. But the government’s role is to set the ground rules such that competition can occur, which would include disallowing anti-competitive business practices. One can debate what constitutes such practices, but one I would include is getting the government to eliminate your competition because it is to “big”. BTW, do you also dislike labor unions, which are merely labor monopolies?]

    I think we should (or should have) allowed the markets to do their thing when AIS, the auto makers, and the housing and investment markets were failing. I don’t recall hearing anyone suggesting that their failure was simply the natural ebb and flow of the far more efficient “market.”

    [REPLY: We absolutely should have let them fail. The reasons they each got insolvent had to do with many particular factors. The “ebb and flow” of markets does not cause failures, failures are an inevitable result of people screwing up. Which happens, the world ain’t perfect. But the point is that if the normal course had been followed, the collapse of these business would have opened a niche into which healthier business would have come.]

    On a more direct note, we should not speak of the government as if it is some monster in the hills that persecutes people. If this were a democracy, we would be the government, but since this is a republic, our government is nothing more than those who we have elected to represent our interests. The reification of the government only confuses issues. Moreover, there is no reason to assume that a government-run organization would be any less efficient or beneficial than a privately-run organization. After all, the goal of any private company is to earn profit. History has shown that the pursuit of profit is always at odds with the greater good of a people.

    [REPLY:This is extremely naive. Why do you assume that the intentions of government officials are fundamentally good? “History” would tend to say otherwise. “No reason to assume” Have you ever even been to the DMV? Have you ever had any experience with bureaucracy at all? Probably not, me thinks. “History has shown that the pursuit of profit is always at odds with the greater good of a people.” This is totally baseless. Communist crap. Let’s get something straight, the pursuit of ones own self interest is directed by the market to serve the greater good. The “Invisible Hand” prevails. Don’t waste my time with your nonsense further]

  4. You’ve got the patience of a saint, Andrew.

  5. timetochooseagain

    :blush: I doubt that…