Most single-payer advocates believe that our health care system would operate more efficiently if it were “managed” by our masters inside the Beltway. David Strom of the Minnesota Free Market Institute uses the following hypothetical scenario to show why they are wrong:
An economist examines consumers’ automobile purchases and comes to the conclusion that the market is completely out of whack … consumers are making irrational decisions about what cars to buy, raising the costs of automobile purchases far above what is economically sensible.
What to do about this awful situation? Get some experts to tell everyone how to spend their automobile dollars!
Consumers could save huge amounts of money by buying the “best” cars based upon cost, safety, fuel consumption, and other criteria set up by experts. Better yet, by standardizing automobiles society could benefit from diverting enormous resources to other, more worthy social goods.
Sound crazy? Well, both contenders for the Democratic Presidential nomination advocate something very like this for health care. And most “progressives” support their view:
The next wave of health care “reform” is driven by this logic. The solutions being peddled to an unsuspecting public include dramatically more government regulation, imposing “best practices” requirements on doctors and hospitals, and reducing the already restricted consumer sovereignty in health care.
The problem, of course, is that such systems always fail. Why? Because no panel of policy wonks can possibly possess the information conveyed in a market-determined price:
Experts cannot adequately account for diverse consumer preferences; innovation will slow to a crawl as research and development gets centralized; and lack of competition will inevitably cause industry to stagnate and become increasingly inefficient. The history of socialist experiments bears these criticisms out.
Well, Strom must be a knuckle-dragging reactionary who wants to thwart the will of the people and maintain the status quo … right? Wrong.
There is no doubt that our current health care system needs reforms … The solution, though, is not more government intervention in the system, but less.
Huh?
The logic of consumer sovereignty which works in the automobile, housing, food, and consumer products sectors of our economy should be applied to the medical sector as well.
Is it really that simple? Yep.
Comments 1
I have a couple of questions for you regarding regulation of healthcare in the U.S. First, is it really true that the federal government has certain laws prohibiting the provision of 100% free healthcare? Second, I read an article in my local newspaper about hospitals losing money to Medicare for “overcharging?”. One hospital lost $28 million last year and of that amount, $13 million was to Medicare. I think what the Medicare Association does is make an estimate of how much each procedure will cost and then, if a hospital charges more, they are forced to pay the excess amount to Medicare.
Posted 08 Mar 2008 at 6:21 pm ¶That’s the way I interpreted the article, but I’m not 100% percent sure. As someone who claims to work in the healthcare industry, I would think that you would be able to provide some clarification. Thanks.
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