Are Free Market Forces Good for Healthcare?

Contrary to popular belief, the problems with the American Health Care System are not the result of market forces run amok. In fact, just the opposite is true. The American health care system languishes because the forces of the free market are unable to exert their influence. Imagine, if you will, how our free market system would look if it functioned like our health care system.

Imagine that you are sitting at home, watching television, and something feels out of sync. You can’t put your finger on what it is you are feeling but it is nagging at you and keeping you out of sorts. After a few days, the problem seems to be worsening and you are really beginning to worry. Finally, you pick up the phone and place a call to your local retail professional and make an appointment.

On the appointed day you arrive at your local mall or shopping center and you describe your symptoms to your retail professional. Your retail professional listens intently, asks a few questions, and then diagnoses your problem and offers a treatment protocol to make you feel better. Your retail professional tells you that the problem is that your home entertainment system is not meeting your minimum daily requirements. As a solution, your retail professional tells you that what you need is a new home entertainment system with state-of-the-art technology.

Now, it just so happens that you retail professional has the perfect home entertainment system to sell to you and guess what? It’s covered by your retail insurance policy. In checking your benefits it turns out that you’ve already satisfied your deductible so your insurance is going to cover eighty percent of the total cost of your new system.

What your retail professional may not explain to you is that your home entertainment system exceeds the usual and customary charges for such items so the insurance is not going cover your retail professional’s full cost. She’s not worried, however, because there are a number of accessories she can sell to you that are covered and these will more than make up for the difference.

I know this sounds a little silly, but think about how our free market economy would work if the merchants with whom we do business would decide for us what we need and how much we are going to pay, and that we would be happy to accept their decisions without question because our insurance is going to pay for the merchandise, anyway. This is exactly how the healthcare system works today and we wonder why costs continue to rise at or above the rate of the Consumer Price Index.
The problem with the American health care system is not that doctors make too much money, the problem is that the incentives in healtcare reward the wrong behavior. The problem is not that health insurance companies, managed care, Medicare or Medicaid absorb huge chunks of our health care dollar, the problem is that these entities exist at all.

Think about it for a moment. If we really want to provide universal health care what value do health insurance, managed care, Medicare and Medicaid contribute? Don’t these entities exist to restrict access to care to only those who are eligible for coverage? Don’t these entities exist to limit care to only those services that are covered by our schedule of benefits and for which we have paid?

If we want to provide comprehensive health care to all Americans we have to change the way we think about our health care system. There is a solution but it resides outside the boundaries of conventional thinking.

Visit my website and check out my book, Radical Surgery: Reconstructing the American Health Care System. In fact, tell all of your friends about it.

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