[M]edical care is a commodity, and treating it otherwise is foolhardy. To make a commodity cheaper and better, two elements are necessary: profit incentive and freedom of labor. The government destroys both of these elements in the health-care industry. It decides medical reimbursement rates for millions of Americans, particularly poor Americans; this, in turn, creates an incentive for doctors not to take government-sponsored health insurance. It regulates how doctors deal with patients, the sorts of training doctors must undergo, and the sorts of insurance they must maintain; all of this convinces fewer Americans to become doctors. Undersupply of doctors generally and of doctors who will accept insurance specifically, along with overdemand stimulated by government-driven health-insurance coverage, leads to mass shortages. The result is an overreliance on emergency care, costs for which are distributed among government, hospitals, and insurance payers.Yeah, that partial monopsony works so well for Medicare and Medicaid, and the full monopsony works so well in South Africa and Venezuela.
But with repeal and replace possibly in the works in Congress, it's time to eliminate the third-party middlemen, as Pajamas Media's Tony Corvo explains.
The single thread that connects the examples above, and there are hundreds of more examples out there, is the elimination of a third-party payer. This is at the heart of how the free market works, in that, the two parties actually invested in the transaction of goods or services and determine the prices. That’s why a can of corn costs less than a dollar and LASIK is affordable to nearly all who might want it.We could toss the corn and ethanol subsidies at the same time, but I digress. Why, though, dear reader, ought the advocates of single payer or continuance of the existing bureaucratic nightmare be exempt from having to explain why many cosmetic procedures, including nearsightedness correction, not to mention pills the greatest hazard to use appearing to be a four-hour stiffie, go down in price whilst medicines and procedures covered by the health care regulations, do not.
National Review's James C. Capretta suggests ways to introduce the price discovery into medicine.
- Grandfather existing coverage under Medicaid, under the assumption that people will earn their way off public assistance in time.
- Reform Medicaid as the safety-net insurer.
- Retain tax credits for households that buy insurance, rather than have it bundled with employment.
- Modify the tax preference for employer-paid insurance plans.
- More flexible health savings accounts.
- Automatic enrollment in employer-paid insurance plans.
I'd like to see more discussion of interstate sales of insurance, particularly of catastrophic care coverage, and greater commercial freedom in the provision of treatments for annoying but not catastrophic conditions.