Why I continue to advocate for markets in health insurance

It’s easy to understand–Milton Freidman said it best–there is no free lunch.

Healthcare is a service, and should be subject to market incentives. Healthcare as a gift or government provided handout will always be mediocre and expensive.

The Rights revolution created a welfare state mentality–and that is always anti free market/statist.



2 responses to “Why I continue to advocate for markets in health insurance

  1. Um, not to be critical, but the study is hardly compelling. It says its cheaper for the companies, not the consumer. It also says nothing about health outcomes for the consumer. To be clear, imho, a huge part of the problem in health care is the massive amount of regulation that serves to artificially restrict the supply of providers and thus artificially inflate the price of care.

  2. The problem is the healthcare economic model is that it monopolistic. The anti-trust laws cannot resolve that issue specifically because insurance is there obscuring harm which is necessary to establish the anti-trust case. The number of hospitals in an area are explicitly limited leaving consumers with no real choice but the facade of a choice in the form of the insurance providers. Those providers, the true consumer, are then faced with the monopoly which is the reason prices go up. In the past, the network model functioned because of the number of providers; however, with the ACA has come a pretty substantial consolidation of the provider market as the big hospitals buy up practices and bring those doctors in-house as “1099s.” That is why even the “not for profit” hospitals rake in big dollars.

    The regulation is there as well in the form of the number of residencies allowed — this is your barrier to entry, again consistent with a monopolistic market. That barrier wasn’t placed there by the industry but by government regulation as Andrew points out above!

    Government intrusion is what created the healthcare spending inflation and yet we think more government intrusion will resolve it? The ONLY way that would be true is if the solution were to breakup the hospitals ala the Bell companies 40-50 years ago and removing the “1099 economy” model where one visit to an ER results in at least 3 different bills coming your way. Couple that with an audit of the “charge master” against true cost for all “not for profit” hospitals.

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