Friday, August 18, 2006

The Free Market And Healthcare

This never fails to fire up the commentators at Daily Kos: Scathing Indictment of U.S. Healthcare. As always we get my favorite sorts of comments:

And we need progressive Democrats who will go to bat for ordinary Americans against the huge, profit-greedy insurance industry.

Ever notice how the only "profit-greedy" industries are the ones where the most people tend to be the most unhappy about the prices. Why does no one ever complain about the greedy bastards in the diamond industry? Or the leather industry? Or the DVD industry? (I mean c'mon! The first five seasons of the Sopranos costs $283.68 on

It's silly really, but that doesn't change the fact that health care costs are a big issue for a great deal of people- including myself.

But as always the real issue is no- as those on the left seem to suggest- whether healthcare is a right that everyone should have access too. The real question is what is the most efficient way to supply healthcare to the greatest number of people?

Take food for instance, because everyone needs to eat even more than they need modern healthcare. We have a free market for food distribution because that is the most efficient way of meeting supply and demand. Sure, everyone should have enough to eat, but that fact alone doesn't mean we turn food distribution over to the government. If you're going to make the argument that the government should control the healthcare business, you need to make some sort of argument about why that would be efficient. (We know it would be fair, but why would it work better than a real free market system?)

Obviously, people tend to complain about the markets where they are unhappy with prices. And sometimes, as in healthcare, these complaints can be justified. Healthcare is an utter mess because we don't have a real free market of healthcare. Insurance disconnects individuals from even the most routine of costs, and government mandates stifles the insurance market itself. What we have now is basically much more similar to government run health care than to a free market system, because in both cases we are disconnected from costs and traditional supply and demand does not function. But just because this is a bad system does not mean we want to further isolate individuals from the costs of healthcare by implementing a government run plan.

The real problem when it comes to healthcare is ensuring all Americans have access. But unlike food, which we mentioned above, healthcare is not seen as the same sort of necessity. For many people healthcare is seen as a choice. This is why young people routinely decline health insurance as they are just starting out- it may not be a matter of not being able to afford it. It's more a matter of rather having money to spend somewhere else. There are sometimes stories on the news of families that seem somewhat well-off who "can't afford" health insurance. But when you live in a 300,000 dollar house and own several nice cars, is it really that you can't afford health insurance, or is it that you'd just rather spend your money on other things?

For those who want to ensure the poor receive healthcare, why not make healthcare into another poverty based program? (Well, we actually do have Medicare and Medicaid already, but maybe those sorts of programs need to be extended ...?) The problem is, of course, where to draw the line. At what point should the government not have to subsidize your lifestyle in order to pay for your healthcare?

Of course, now I'm delving off into a conversation that isn't really going on, at least not amongst policy makers. Which is just a shame.


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