As our days get shorter and the temperatures drop, we see the debate about the US health care system heat up. Democrats and Republicans alike argue how best to provide “affordable health care for all”. Unfortunately, both sides are arguing for different versions of what is essentially the same solution: government intervention.
Here is a thought from left field (or, since it’s free market solution, would it be right field?): let the free market solve the problem. What a novel idea!
However, before we solve the current “problem” we might want to try and understand what exactly is the root cause of this problem.
The first problem we tend to hear about is “health care in this country is too expensive.” Having a sick wife, I can attest to the fact that health care is quite expensive. However, one must (or should) ask “why is it so expensive”? Is it because the “free market” does not work (something we are often told by statists) or is it because the market is, in fact, responding to intervention in the market by government? I would suggest the problem is, in fact, multi-faceted, but the main problem is two-fold. It is caused by government inflating the dollar and then spending said dollar in the health care arena (thus you have more dollars chasing the same number of goods and an increase in price) and by the fact you have a virtual monopoly on who can and can not become a supplier of health care services.
The second part of this problem is caused by the monopoly powers of the American Medical Association (the AMA). They have act as gate-keeper if you will in the creation of medical schools. Through their powers of accreditation and certification they ensure the number of doctors in this country is kept as low as possible, the result of which means they MUST charge more money (more buyers chasing the same amount of “product” means the price of that product must be increased) and results in doctors making more money. An interesting fact is that approximately 10% of all applicants to medical school are accepted. I seriously doubt only 10% of the applicants to medical school are qualified to be doctors.
So how could we solve this problem? Easy. Free up the market and you will see an improvement not just in the quantity of health care available, but in the quality of health care which is provided. Think of high definition televisions (or cell phones for that matter). It was not long ago that HD televisions were hovering around the $10,000 price range. Today, you can get them for SIGNIFICANTLY LESS money, thanks to the innovations of the free market (or at least a market which is significantly more free than the health care market). Cell phones at one point were large and expensive. Today, they are small, affordable and of far better quality, with many cell phones containing such “space-age” features as GPS, internet, email and gizmos limited only by the imagination of would-be designers.
The second part of the problem is to end the monopoly power of the AMA. Why is it that, when someone is taken ill with a respiratory infection or common cold they have to see a Doctor to obtain medication? Why not allow people to see a “medical technician” in such cases, a person who did not attend a full fledged medical school, but perhaps has had a year or two of training to provide people with basic services in “non-emergency” situations?
Some would argue the latter solution would be unsafe. How can they assume this? If the current system is full proof then why do we have patients who sue doctors for “malpractice”? We have it because it isn’t full proof. It will never be full proof. Instead of going to a doctor who charges $300 an hour for his services (because he has a ton of med school loans to pay off) why not go to a trained technician who would charge say, $20 to look in your throat, take your temperature and prescribe some basic medication? If you don’t get better after a day or so, then go to the more advanced practitioner. This would cut down on people using their health insurance (which should truly only be used in cases of catastrophic illness such as hospitalization) to pay for the equivalent of an oil change and tire rotation on your car. Would you use insurance for that procedure? No. Of course not.
The good news is that, without government intervention, the market is stepping in to solve this problem. Walgreens is developing “retail health clinics” where you see a health care professional and can purchase medication right there in their store. Wait times will be shorter than a doctors office and prices will be low. THIS is innovation and the free market at work. This would NEVER happen if we allow the people who run Amtrack, the war on Terrorism and the Fannie Mae get their hands on health care. Remember, if there is something being done in this world, and it’s being done wrong, it’s probably being done by the US Government!
What has happened with costs in the health care market is not because it’s free, in fact it is far from “free”. It is caused by intervention by government bureaucrats who, although I’m sure they mean well with their ideas of “economic justice” and “redistribution of wealth”, by intervening in the economy simply create the very problems they are trying to solve. What is amazing to me is that, after about a century of experimentation in the market place with “progressive” ideas we still have not learned our lesson. Socialism/Marxism/cooperative economics does not work. There is a mountain of evidence to prove it does not work. And yet, here we are in 2009 being led by people who look to the writings of Karl Marx and Mao and tell us that if we just increase the amount of socialism in the health care industry all will be well.
Here are some facts to help prove my point. In 1990 the government said medicare would cost us $12 billion. They were wrong by about $95 billion. In the UK, 20% of patients with “treatable” colon cancer (treatable at the time of discovery) have to wait so long for the “free treatment” to start that their cancer has become incurable. Think about that. In Massachusetts the state implemented a universal health care system. Some refer to it as the Romney miracle (one of the things I dislike about Mitt Romney). Rather than lower costs the people of that state have seen their health care costs RISE 18%! This is what happens when government gets involved and tries to regulate the market.

If government completely takes over the health care industry, we will all be feeling like this patient!