Healthcare

Since well before our most recent election, momentum toward a universal healthcare system in the U.S. has been building. The new administration looks to accelerate the pace toward universal healthcare, citing growing healthcare costs and uncovered citizens. Before you make conclusions or decisions to support this path, please make sure you are aware of the actual situation.

Contents:

  1. False Claims of Government and Mass Media
  2. The U.S. Does Not Have Free Market Healthcare
  3. Universal Healthcare Does Not Work
  4. Why Free Market Healthcare Works
  5. Obama Administration Healthcare Plan

False Claims of Government and Mass Media

False Claim #1: U.S. free market healthcare is a market failure because:

  1. Costs are out of control
  2. People go uncovered and untreated

False Claim #2: A government controlled universal healthcare system would solve our healthcare problems because:

  1. It will cost less
  2. It will provide coverage and treatment for everyone who needs it

The U.S. Does Not Have Free Market Healthcare

There is a common misunderstanding that the United States’ healthcare system is a free market system, and that its lack of regulation or centralized organization is at the core of its problems. Facts will tell you just the opposite. The table below highlights several of the many significant government interventions along with their impact on healthcare costs.

Table 1: U.S. Healthcare Government Regulation

Organization/Law Action Cost Impact
American Medical Association (AMA)  (through government enforcement) Restricts physician employment/supply Ability to charge higher fees, protection of bad physicians
Purposely blocks innovation Costs don’t drop as easily as they otherwise would
Federal/State Government Regulates health insurance deductibles Administrative costs are added where not needed
Restricts insurer’s right of refusal Pooled risk increases cost for healthy and overall
Healthcare insurance mandates Reduces flexibility for insurer and insured, insurer raises costs or retreats from market
Premium deduction from pre-tax income if purchased through employer Reduces choice, and thus competition, prices rise – Also reduces initiative to shop an learn to make educated healthcare decisions
Emergency Medical Treatment and Active Labor Act (EMTALA) Requires treatment for anyone who can’t pay Costs rise because of no payment for service, others that can pay may be sacrificed or make sacrifices
U.S. Legal System Fails to decrease frivolous and fraudulent lawsuits Malpractice insurance becomes more costly
Food and Drug Administration (FDA) Slows and disrupts innovation of drugs, medical devices, treatments, etc. Less efficiency, more processes, increased costs of products and treatments
Medicare/Medicaid Encourages dependency/carelessness More claims, higher claims and higher administrative costs
Determines what procedures are appropriate and necessary Limits patient choice, poor centralized decisions of patient treatment and pricing, health problems not fixed, increases costs
3rd party payment Added administrative costs for doctors and insurers
Doctor reimbursement problems, low reimbursement Added administrative costs, patients are turned away
Monopoly on elderly insurance Lowers quality for higher cost, adds cost when elderly uses a private policy as it is required to be a supplement
Both programs are projected to be insolvent in the near future Less financial coverage translates to poorer health which increases costs; will also require higher taxes, more government spending
State Children’s Health Insurance Program (SCHIP) Insures large number of people who do not need it or already have private coverage. Causes similar problems (administration, reimbursement, solvency, etc) as its sibling program, Medicaid. Costs increase for similar reasons described for Medicaid, as well as because of the additional unneeded coverage that it provides.
Health Insurance Portability and Accountability Act (HIPAA) Excessive privacy restrictions Added bureaucracy and administrative costs
Joint Commission (JCAHO) (through government enforcement) Screens hospital quality, accreditation for Medicare and managed care reimbursement, monopoly on accreditation Inaccurate quality assessments, Raises costs for hospitals

There are many other laws and organizations similar, related, and in addition to those outlined above. Below are additional resources to elaborate on a few of the most harmful to the U.S. healthcare system.

The American Medical Association (AMA)

The AMA’s union nature along with its establishment of a state medical licensing infrastructure is historically a significant contributor to the high healthcare cost situation America is experiencing. Through AMA practices the AMA has restricted:

  1. The number and types of doctors able to practice
  2. New information technologies that would improve efficiency
  3. New types of medical service organizations

Take a closer look at how the AMA restricts healthcare supply, increases healthcare costs, and stifles innovation:

100 Years of Medical Robbery – The Mises Institute (2004)

Real Medical Freedom – The Mises Institute (2004)

June 20-26; A.M.A to Form Union – The New York Times (1999)

How Medical Boards Nationalized Health Care – The Mises Institute (2005)

Book: Profession and Monopoly: A Study of Medicine in the United States and Great Britain

Doctors Expose AMA’s Secret Pact with Federal Government – Association of American Physicians and Surgeons (2001)

Medicare & Medicaid

Medicare’s Hospital Trust Fund Will Be Insolvent By 2019, According To Trustees Report – Medical News Today (2008)

“Medicare for All” Universal Health Care Would Not Solve the Problem of Rising Health Care Costs – National Policy Analysis (2007)

The Cost of Coverage – The Wall Street Journal (2007)

Medical Fraud a Growing Problem – Washington Post (2008)

2007 Financial Report of the U.S. Government

The Anatomy of Social Security and Medicare – The Independent Review (2008)

Report says Medicaid spending “unsustainable” – Reuters (2008)

Food and Drug Administration (FDA)

Playing God At The FDA – The Mises Institute (2005)

Is the FDA a broken agency? – Associated Press (2009)

Political Lobbying Drove FDA Process – The Wall Street Journal (2009)

FDA Requirements Block Effective Treatment – The Mises Institute (2006)

The FDA Has Blood on its Hands – LewRockwell.com (2007)

The Day the FDA Took a Cancer Cure Away – LewRockwell.com (2007)

The FDA Kills – LewRockwell.com (2005)

Abolish the FDA!! – LewRockwell.com (2003)

How FDA Regulation and Injury Litigation Cripple the Medical Device Industry – CATO Institute (2001)

CATO Handbook For Congress – The Food and Drug Administration – CATO Institute (2003)

How We Are Regulating Ourselves Out of Business – The Heritage Foundation (1993)

Regulatory Relief or Power Grab: Should Congress Expand FDA’s Enforcement Authority – The Heritage Foundation (1992)

The Food And Drug Administration’s Real Problem: Drug Unavailability – The Heritage Foundation (1989)

You will notice that most healthcare regulations are geared toward providing quality healthcare to everyone with an emphasis on guaranteeing patient safety. These regulations were not brought about by a single group or government body. Lobbyists, industry associations, companies, etc pushed government to create and enforce these measures.

What are the results of U.S. health care regulations?

Surely the intent of these regulations is not malicious and there have been cases of positive results (not necessarily net positive) from their implementation. However, when regulation becomes overbearing and negatively impacts profits (i.e. for drug, hospitals, doctors, treatments, devices, technology, insurance, etc) it begins to remove the incentive for innovation, creativity, and variety which would otherwise enable costs to drop and efficacy rise. These government-created regulations often defeat their own purpose.

The graph below is a high-level summary of a more detailed analysis of the costs and benefits of health care regulations in America.  As you can see, costs dramatically outweigh the benefits of U.S. implemented health regulations.

   Health Regulations Costs Outweigh Benefits by $169 Billion (2002)

   Graph from: Health Care Regulation: A $169 Billion Hidden Tax – CATO Institute (2004)

Additional Material on the Problems of the U.S. Health Care System and Related Regulation

Moral Health Care vs “Universal Health Care” – The Objectivist Standard (2008)

Top 10 myths of American Health Care – Pacific Research Institute (2008)

Why is Medical Care so Expensive – The Mises Institute (2006)

The Other Credit Crunch – Newsweek (2008)

More Than Half of U.S. Hospitals Are Now Technically Insolvent or at Risk of Insolvency – Reuters – Alvarez and Marsal (2008)

American Health System History

Below are helpful resources to study the history of the American healthcare system:

The History of Health Care Costs and Health Insurance – Linda Gorman, Ph.d.

The Early Development of Medical Licensing Laws in the United States, 1875-1900* – The Journal of Libertarian Studies (1978)

100 Years of Medical Robbery – The Mises Institute (2004)

Real Medical Freedom – The Mises Institute (2004)

Universal Healthcare Does Not Work

Unfortunately, U.S. healthcare problems are blamed on free market failure when the healthcare system is nothing like a free market. This leads people to easily believe in the heavily-promoted alternative solution of universal healthcare.

The 3 most popular arguments supporting universal healthcare in the U.S. are:

  1. Lower life expectancy in the U.S. than other countries with socialized healthcare
  2. Higher rates of infant mortality in the U.S. than other countries with socialized healthcare
  3. Many people go without healthcare coverage and can’t afford it in the U.S.

Addressing arguments 1 & 2:

  1. There are several countries without universal healthcare that have higher life expectancy and lower infant mortality rates than the U.S. and many countries with universal healthcare. Take a look for yourself through the WHO Core Health Indicators database
  2. There are several countries with universal healthcare that have lower life expectancy and higher infant mortality rates than the U.S. and many countries with universal healthcare. Take a look for yourself through the WHO Core Health Indicators database
  3. Because of data collection methods, nature of healthcare system use, and relevance of healthcare systems, life expectancy and infant mortality are poor measures of a healthcare system.

Addressing argument 3:

  1. Reports about the numbers of uninsured Americans are usually quite misleading. According to a study headed by Johns Hopkins University, about 45 percent of those classified of uninsured are currently able to get healthcare if they wanted it, but they do not because of assumed good health, embarrassment, laziness, they don’t know it’s available, etc.
    1. Top 10 myths of American Health Care – Pacific Research Institute (2008)
    2. Get Some! How to Fix America’s Health Insurance Crisis – reason.tv
  2. The assumption that the entire population receives healthcare within a universal healthcare system is incorrect. People go untreated in universal healthcare systems.
    1. Extremely long waiting times can lead to treatment too late or no treatment if death occurs
    2. Because of selectivity of services offered, many must travel to other countries to get their needed treatments
  3. Healthcare is an economic good/service just like other products and services [LINK]. The philosophy of unleashed demand and capped supply, which embodies socialized medical systems, cannot be sustained. This concept is part of the reasoning why the perception that healthcare is an inherent human right is deeply flawed.
    1. Health Care is Not a Right – Leonard Peikoff & Lynn Zinser (1993 & 2007)
    2. Health Care is Not a Right – The Heartland Institute (2007)
    3. Health Care is Not a Human Right – British Medical Journal (1999)

The table below outlines several of the hazards of universal healthcare and why they are hazards.

Table 2: Hazards of Universal Healthcare

Hazard Result
Centralized planning/mismanagement High costs, inefficient organization, not profitable – sustained only through taxes
Poor implementation of centrally planned info systems High administrative costs, slow innovation, poor quality, less process efficiency
Long wait times Increased sickness, complications, death
Politically motivated decisions for process implementation Decisions made for wrong reasons lead to failure
The state has control over your body, your health, and whether you live or die Loss of freedom, poor decisions for your health
Service based on level of health need, not ability to pay Not knowing true level of problem leads to error, people with significant needs suffer for those with slightly more significant needs
Paying twice if choose private over social health service More cost for consumer/taxpayer
People become dependent on system Increased demand, higher costs, more sickness, pressure for more types of treatments
Emergency ambulance calls for minor ailments Higher costs and inefficiency
Health inequality gap rises over time Masses receive declining healthcare service while those  that choose to pay will receive high quality healthcare
Unequal access and disparities still exist People that need help may not get it; people that can afford help may not get it
No competition among providers and insurers Best methods do not excel, slows or halts innovation
Decides which procedures and medications would be covered Removes personal choice, Adds to likelihood of poor decisions for your health as the decisions are not based on your health
Unlimited negotiating power over pharma, medical device companies, etc Removes incentive and discourages innovation of new drugs and medical products

World Health Organization Health Care System Rankings

Many or all of the above hazards apply to all of the world’s universal healthcare systems. The World Health Organization (WHO) ranks France and Italy as having the top 2 healthcare systems in the world and the U.S. system as #37. It is important to remember that the WHO is a UN government organization, has an “ideology” consistent with the majority of its constituents, and is subject to the same inherent problems of all government organizations.

For information to help you in your evaluation of the WHO and its health care system rankings, take a look at:

  1. The problems with the ranking methodology of the WHO health care system rankings.

WHO to revise its method for ranking health systems – British Medical Journal (2002)

WHO’s Fooling Who? The World Health Organization’s Problematic Ranking of Health Care Systems – CATO Institute (2008)

How surveys twist rankings on healthcare – International Policy Network (2008)

The Misleading WHO Health Care Rankings – RangelMD (2007)

Ranking the U.S. Health Care System – The Freeman (2007)

  1. Information about the top 2 health care systems (France and Italy) in the WHO’s rankings. You will note that not only are they experiencing important health service problems inherent to universal healthcare systems, but they are experiencing the inherent budget and insolvency problems as well. You can spend a bunch of money up front to produce “good” results for a short period of time, but that money eventually runs out because there is no profit associated with it’s use.

French healthcare is ‘badly run’ – BBC News (2004)

Health care in France: Facing hard choices – Canadian Medical Association Journal (2007)

A Look at the French Health Care System – KCPW (2007)

Italy’s health budget at risk despite lower drug’s spending – report – APM Health Europe (2008)

Health Care Around the World: Italy – Healthcare Economist (2008)

  1. Endless information about the many problems of other universal health care systems ranked ahead of the U.S. in the WHO’s rankings.

Your own web searches will reveal plenty of information about international socialized healthcare systems consistent with the concepts described within Arbitrary Vote. Additionally, take a look at The Problems With Socialized Health Care website to see lists of many published articles and reports describing international universal healthcare systems, including the UK, Canada, and Cuba (health care systems trumpeted in Michael Moore’s SiCKO).

Michael Moore’s SiCKO

Michael Moore put together a movie that criticizes the U.S. healthcare system and glorifies universal healthcare systems. Take a look at the articles below to learn more about its misrepresentations of U.S. and international healthcare systems.

‘Sicko’: Heavily Doctored – MTV (2007)

J.H. Huebert: In Moore’s world, health care is politicians’ call – OC Register (2007)

Moore’s one-sided view tells some truths – USA Today (2007)

Michael Moore’s Shticko – Reason Online (2007)

Moore’s Sicko Could Put Lives at Risk – National Center for Policy Analysis (2007)

The Michael Moore Chronicles: This Might Hurt a Little – National Center for Policy Analysis

A Prescription for SiCKO – National Review Online (2007)

U.S. Universal Healthcare Experiments Have Failed

The U.S. has tried smaller-scale versions of universal healthcare; the experiments have been failures. What makes us think that we can succeed with a similar model on a large scale?

Table 3: U.S. Government Universal Healthcare Attempts

State or Plan When Results
Medicare (Federal) Current since 1965 Projected that income will exceed outlays by 2010 and fund will run out of money in 2019; patients are turned away because of doctor reimbursement problems; fraud ridden – adding $60 billion per year in costs (over 10%); current track is a $34 trillion shortfall over next 75 years
Medicaid (State & Federal) Current since 1965 Spending is deemed unsustainable at both the federal and state levels; patients are turned away because of doctor reimbursement problems
Massachusetts Current since 2006 Costs are higher; availability of doctors is low; hospital budget shortfalls; state asking for federal funding of deficit; 160,000 people uninsured
Hawaii Current since 1975 Doctor shortages; long wait times for important procedures; costs continue to rise; up to 11% of population uninsured; cut universal child health plan within 7 months since costs were too high
Tennessee (TennCare) 1990’s Doctors and insurance companies left the state; hospitals closed; costs increase; doctors stopped seeing TennCare patients; the state almost went bankrupt; the poorest people it was trying to help were most harmed
Illinois, Wisconsin, Pennsylvania, and California All abandoned the concept because they determined it was too expensive

Take a look at Moral Health Care vs “Universal Health Care” – The Objectivist Standard (2008) to view more of the results of the systems outlined above. More detail about Medicare and Medicaid is outlined toward the top of the page, and below is additional detail on the effectiveness of current live state universal healthcare programs.

  1. Massachusetts

Safety net hospitals strained by reform – The Boston Globe (2008)

Healthcare cost increases dominate Mass. budget debate – The Boston Globe (2008)

Mandatory Health Insurance: Wrong For Massachusetts, Wrong for America – The Objectivist Standard (2008)

  1. Hawaii

Hawaii Ending Universal Child Health Care After 7 Mos. – Fox News (2008)

A Critique of the Hawaii Health Care System – The Heritage Foundation (1994)

Given the evidence from the above examples of U.S. healthcare regulation, other countries’ universal healthcare programs, and U.S. smaller-scale attempts at universal healthcare, it is not hard to see that government intervention with healthcare:

  1. Breeds inefficiency
  2. Increases costs
  3. Fails to truly cover everyone
  4. Restricts quality improvements of healthcare
  5. Restricts innovation
  6. Defeats the purpose of patient safety

Because of the hazards of universal healthcare and the failures experienced in its implementation, the system obviously does not work. If you understand the principals of a free market you will understand better why universal healthcare cannot possibly be more efficient in the short or long run than the free market.

Health Care is Not a Right – Leonard Peikoff & Lynn Zinser (1993 & 2007)

Socialized Medicine in a Wealthy Country – The Mises Institute (2006)

Universal Health Care – Call it Socialized Medicine – Lawrence R. Huntoon, MD, PhD (2000)

Socialized Healthcare Is Not Cheaper Than Free Market Healthcare – LewRockwell.com (2007)

Why Free Market Healthcare Works

Healthcare is like any industry – There are scarce resources with varying value that need to be optimally allocated to create the most value.

  1. Human (e.g. doctors, medical staff, administrative staff, etc) – Requires time, knowledge, skills
  2. Non-human or material (e.g. medical equipment and devices, drugs, beds, buildings, electricity, etc) – Requires the purchase and manipulation of physical resources put together in unique material combinations to form each product

Below are a couple of example scenarios to depict the importance of economic principals in healthcare.

  1. If there was a single doctor in the U.S. and all 300 million Americans (or even a fraction of them) needed medical help, not everyone would get helped by the doctor. Doctors are humans with limited time and abilities. Their time and abilities are scarce resources and therefore have a value placed upon them. Their services are not unlimited. Therefore need alone cannot define the order in which patients are treated.
  2. If there were enough doctors to handle the 300 million patients, but only one ablation catheter, plenty of people with atrial fibrillation would go without an ablation treatment. Medical equipment is made of metals, plastics, etc and manufactured into their final form. The materials and processes to create the final product are scarce resources and services that require time and money to create. Therefore need alone cannot define the order in which patients receive the value of the medical equipment.

Healthcare is not exempt from the laws of supply and demand. Natural economic pricing based on supply and demand offers a system to define the order in which consumers receive treatment. Higher prices lead to supply increasing to meet patient demand, so it will not be long that health problem goes without accommodation. Additionally, voluntary charity to help those in need is able to play a more organized role in a free market healthcare system.

You will notice that when a given government program (regulation, health welfare, health services, etc) fails there is no backup or competing program in place to replace the failed program, and quality and service decline dramatically across the board. In a free market, competition most optimizes the replacement of failed solutions; there are constantly new ideas and solutions in place or emerging to solve the problem.

A significant reason that free markets most optimally accommodate solution failure and arising problems is the fact that accountability and incentive are at the core of its functions. The table below compares the levels of accountability and incentive associated with free market healthcare, the current U.S. healthcare system, and a socialized system.

Table 4: Accountability and Incentive for Healthcare Economic Models

Free Market Current U.S. Universal/Socialized
Accountability and Incentive Maximized Little Minimized
Doctors Licensing and guidelines decided by market, quality decided by consumers, types and levels of services decided by consumers, number of doctors decided by consumers, if a doctor fails consumers will not use the doctor – competition will enable the best doctors, services, etc to emerge Monopolized licensing and state boards often accept doctors under one level of guidelines, doctors who have failed are often shielded by the system, number of doctors is restricted by licensing and government-backed centralized control of medical education, types of doctors are restricted Licensing will be even more centralized and monopolized adding to and exacerbating problems of doctor accountability in current U.S. system
Patients Will pay for their service and insurance, those who cannot afford it are likely to receive private charity; this ensures least abuse of system; makes people accountable for their health so that prevention is more of a focus. The U.S. does not have a health care problem, it has a health problem. Anyone who asks for treatment can get it (regardless of ability to pay), many who need insurance and can’t afford it can get it – causes abuse of system and makes people less focused on prevention; also perpetuates laziness in drive to earn money to support one’s own healthcare System will be more centralized and monopolized reducing efficiency and increasing abuse, laziness, and lack of individual responsibility toward prevention – exacerbates problems of current U.S. system
Innovation If the treatment, device, equipment, or drug does not work, new one(s) will efficiently/most quickly emerge; best products/services emerge from competition among businesses driven by decisions of consumers Innovations are approved and released and have higher level chance of being defective or harmful because they are analyzed by a single regulatory group with no accountability; more people could be harmed by defective innovation as the regulating body is often blindly trusted; inefficient government regulation allows less competition and slow movement of product releases which keeps innovation from evolving efficiently Government will have more control over pricing and products created reducing incentive and increasing risk for private businesses to innovate, causing less competition and worse products – the government being the monopoly regulating body will not be punished sufficiently to cause efficient correction of errors
Insurance With no restrictions on insurance more insurance companies will emerge to create competition for the best services which also drives costs down, customers can leave insurer and publicize any lack of fairness that would make the given business lose customers Government insurance does not scrutinize patient health/circumstances well – cost of inefficient insurance is absorbed by taxpayer rather than the government organization, which does not incent or punish the system to drive correction of inefficiencies; government regulation fosters less competition among private firms and therefore less accountability to the insurance firm for failure Government enforced monopoly insurance does not allow for failure of insurance services that are counter-productive – tax dollars continue to prop up a system that perpetually loses money
Regulation Private regulation (certification, licensing, quality and safety ratings etc) through private organizations is subject to competition amongst regulatory businesses; if a regulation or regulating business fails, the better regulatory businesses will emerge efficiently/quickly Mostly government enforced monopolized regulation systems cause slow/inefficient release to market of treatments, devices, equipment, or drugs – When the regulation fails to protect the consumer, the regulation or regulatory organization is not efficiently punished or adjusted to produce desired results More centralized and monopolized regulation causes more inefficiency of regulation and exacerbates problems of current U.S. system

The Relentless Nature of Free Markets

Markets have a funny way of “rearing their heads” even when government intervention tries its best to hold them back. Below are some examples of how the market relentlessly emerges despite the government barriers erected.

  1. Medical black markets
  2. Medical tourism
  3. Price drops of less-regulated U.S. medical specialties
  4. New free market cost-reduction solutions
  5. Blocked free-market solutions

Medical Black Markets

Black markets for products and services emerge because of laws that forbid or restrict the use or trade of the given product or service. Laws do not stop the desire for the individual freedom inherent in making a purchase or sale. The emergence of black markets in the medical world shines light on the fact that medicine is a business like any other, and that government intervention in the medical industry is causing many people to go without the health care they need or desire. A couple of examples of medical black markets are the market for human organs and the market for pharmaceutical drugs.

Human Organs: Largely because of the organ shortages created by organ donor programs and laws against the trade of organs, a large black market for organs has emerged to accommodate the neglected demand from consumers. Take a look at the information and economic reasoning around organ donation, trade laws, trade ethics, and availability:

Organ Trafficking: A fast-expanding black market – Jane’s (2008)

Ending Black Market for Organs – New York Post (2007)

THE ORGAN TRADE: A Global Black Market; Tracking the Sale of a Kidney On a Path of Poverty and Hope – The New York Times (2004)

Organ Shortage Fuels Illicit Trade in Human Parts – National Geographic (2004)

India’s Black Market Organ Scandal – Time Magazine (2008)

Eight Ethical Objections to an Organ Market…And Why They’re Wrong (2005)

Organ Donations: Socialism or Laissez-Faire? – The Mises Institute (2004)

Die Waiting – The Mises Institute (1999)

Let the Market Save Lives – The Mises Institute (2002)

Death Toll Still Rising – The Mises Institute (2002)

Pharmaceutical Black Markets: The high costs and availability issues of pharmaceutical drugs are related to government regulation, such as the FDA’s costly and lengthy drug approval process. The emergence of black markets indicates that there is a market of people who are willing to take the risks associated with not having their chosen drug approved by the FDA.

Pharma’s Black Market Boom – Forbes (2008)

U.N. Warns of Growing International Black Market for Prescription Drugs – Join Together (2007)

Medical Tourism

Although much of the activity related to medical tourism is not considered illegal, the emergence of medical tourism shows the force of the market in attaining what it desires or needs. Consumers seeking healthcare treatments not offered, illegal, too costly, or with too long of a waiting list in their own country realize that the better option to poor health or death is to leave their country to get the service they need.

Medical tourism growing worldwide – University of Delaware (2005)

Medical Tourism: Everybody’s Guide to Affordable World-class Travel – US News (2008)

28 countries in above article

Ultimate Outsourcing – Newsweek (2008)

OECD Reviews of Health Systems Mexico – OECD (2005)

Explosive Growth in Medical Tourism and Rise of Retail Clinics Provide Huge Savings for Patients – Reuters (2008)

Price Drops of Less-regulated Medical Specialties

One of the invaluable results of free markets is that production costs and prices of products naturally drop over time. A couple of indicators of the potential for free market forces contradicting the growing U.S. healthcare cost trend are found in price declines within the less-regulated specialties of LASIK eye surgery and cosmetic surgeries.

Costs Go Down, Confidence Goes Up as Consumers Take Advantage of Easy, Safe and Affordable LASIK Surgery – Reuters (2008)

Why Are Health Costs Rising? – National Center for Policy Analysis (2007)

Moral Health Care vs “Universal Health Care” – The Objectivist Standard (2008)

New Free Market Cost-Reduction Solutions

As in the case of black markets, legal markets often come to the rescue to provide alternatives to products and services that have become too costly due to government intervention. This can be done by creatively (and legally) circumventing the legal system, or by discovering or creating concepts that have not yet been regulated.

Wal-Mart Cheap Prescriptions: Wal-Mart recognized the increasing costs associated with prescription drugs and insurance claims processes and leveraged their exorbitant buying power to offer a low-cost alternative to the normal drug purchasing channels.

Private Sector Health Care Leads the Way – The Mises Institute (2008)

Free-Market Prescription – National Review Online (2008)

Wal-Mart Launches Phase Three of $4 Prescription Drug Program – Wal-Mart (2008)

Retail Clinics: The emergence of walk-in retail clinics, such as those offered by CVS, Walgreens, and Wal-Mart, is offering consumers a low-cost and low-time-commitment alternative to normal doctor or hospital visits.

Drugstore Clinics are Bursting With Health – BusinessWeek (2006)

Explosive Growth in Medical Tourism and Rise of Retail Clinics Provide Huge Savings for Patients – Reuters (2008)

Blocked Free Market Solutions

Unfortunately, the government powers that lose power or financial benefits from new free market alternatives often rear their heads to combat the new threat. The argument used is usually one of patient safety concerns, which undermines the ability for consumers to make their own free decisions.  Below is information around the fights against retail clinics.

Drugstore Clinics Spread, and Scrutiny Grows – The New York Times (2007)

Doctors criticize plans for drugstore clinics – The Boston Globe (2007)

AMA Calls For Investigation Of Retail Health Clinics – Medical News Today (2007)

AMA takes on retail clinics; Doctors groups say patients in danger – Chicago Tribune (2007)

States Boost Scrutiny of Drugstore Clinics – The Wall Street Journal (2007)

Additionally, a little web searching will bring you to information about other helpful technologies and innovations that have been blocked through government monopoly and intervention.

AMA Moves to Fight the Posting of its Price Codes on the Internet – The Wall Street Journal (2000)

Physician Billing – Consumers in the Dark – Tom Pickering (2002)

Ethics and Information Technology – James G. Anderson and Kenneth Goodman (2002)

Additional Information For Understanding the Effectiveness Free Market Health Care

To understand more fully why a government cannot achieve these ends take a look at the Problems of Government.

To understand more fully why a free market will most optimally achieve these ends and more, take a look at Basics of Economics.

Articles

Free Market Medicine – Ron Paul – LewRockwell.com (2004)

Lowering the Cost of Healthcare – Ron Paul – LewRockwell.com (2006)

Ron Paul Unplugged: Get Government Out of Healthcare – ABC News (2007)

A Four-Step Health-Care Solution – The Mises Institute (1993)

Why I Choose Low-Quality Health Care – The Mises Institute (2008)

Free Market Health Care – Reason Online (2003)

Free Market Medicine – The National Review (2008)

Toward Free Market Health Care – The Heritage Foundation (2007)

The Real Free-Market Approach to Health Care – The Future of Freedom Foundation (1994)

The Cure: How Capitalism Can Save American Health Care – The Heritage Foundation (2006)

Organizations

Freedom and Individual Rights in Medicine (FIRM)

Free Market Cure

Obama Administration Healthcare Plan

Although the Obama administration has not yet outline a detailed healthcare plan, the actions to date show a clear path toward universal healthcare:

  1. Obama’s proposed budget includes a $634 billion down payment on universal healthcare
  2. Obama’s pick for Health and Human Services (HHS) secretary is Kathleen Sebelius. She had motivation for universal healthcare in Kansas and is bringing that motivation to Washington.
  3. Obama’s pre-election plan keeps in place many of the laws and programs that are troublesome today
  4. Obama’s pre-election plan adds additional regulation that will further exacerbate existing problems and create new ones

What are the implications of an HHS secretary, the person charged with the duty of running a complex organization and reforming an inherently insolvent Medicare program, when this person:

  1. Cannot successfully run the state she has governed for over 6 years. Kathleen Sebelius is the governer of Kansas and Kansas is insolvent and on the verge of bankruptcy (also withholding people’s tax refunds).
  2. Could not organize a universal healthcare program in the sate she governs. Obviously, as outlined earlier on this page, even if she had launched a universal healthcare program in her state, it would have been destined for failure.

As the new HHS Secretary gets settled in and a more detailed plan is outlined, more time will be spent on an Arbitrary Vote analysis.

Ruin Your Health With the Obama Stimulus Plan: Betsy McCaughy – Bloomberg (2009)

The Obama Health Care Plan: More Power to Washington – The Heritage Foundation (2008)

The Obama Health Care Plan: A Closer Look at Cost and Coverage – The Heritage Foundation (2008)

Budget office sees cash hurdles in health plans – The New York Times (2008)