What free market in health-care?
A few months back, Yaron Brook and I noted that one reason people were so quick to demand more government intervention in response to the financial crisis was because they had been fed the wrongheaded notion that America’s system leading up to the crisis was a free market. In fact, we argued, massive government control infected virtually every corner of the economy.
Something similar is happening in medicine. Our health-care system is a total mess, and partly because the champions of government-run health-care have misled people into believing it’s a “private” health-care system, Americans are open to the idea that some form of socialized medicine is the solution.
The trouble is, there is no free market in health-care. Take just three examples:
- We have Medicare, Medicaid, SCHIP, and a government-induced third-party-payer system, which force some people to subsidize health-care costs of others. In the US today, nearly half of all spending on health-care is government spending.
- We have regulations that dictate what kind of options health insurance companies must offer, and which make health insurance more expensive.
- We have voluminous FDA regulations, which dictate what courses of treatment a doctor may prescribe. Not only does the FDA’s approval process drive up medical costs astronomically, but it prevents doctors and patients from voluntarily electing to try potentially life-saving treatments–even those that have long been available in other countries.
The point here is that none of these, nor the many other government intrusions, is consistent with a free market in health-care (you can read our take on what that means here).