Thursday, May 27, 2010
The only solution to the problems in health care is to allow price competition to flourish once again. In order for this to be possible, politicians and Americans in general must accept at least three facts: health care is a good, not a "right"; any current crises exist only because the government has so ineptly interfered with a free market in medicine for many decades; and the market is the best agent to fix health care, not government, for all government solutions are political solutions, and therefore subject to influences that have re-election as the primary concern - not the people. Where a free market is allowed to exist in medical care the price inevitably comes down precipitously. The obvious example is the price of eye surgery to correct vision problems. This surgery is rarely covered by private insurance plans or government programs. The result has been a price war between providers who have lowered the price to such an extent that it is available to almost every one for a reasonable price. This could happen in every part of the health care industry if it is allowed to happen. But when the government fixes prices, there can be no price competition in the market place and prices don not go down because there is no incentive to innovate and be more efficient. Price floors keep affected products or services beyond the budget of many people, and price ceilings artificially increase demand, in turn creating shortages and, inevitably, higher costs to producers. It should be obvious that government health care is a prescription for higher costs on society, less health care availability and the end of innovation in medicine.
Posted by Doug Cloud at 2:18 PM