We hear a lot about "market based solutions" to the health care issue in the United States, from all parts of the right wing and the more centrist parts of the left who still think the right is going to start working with them in good faith any day now. There's a lot of misconceptions about what is meant by "free market," in the same way that lots of people misunderstand what is meant by the term "theory" in things like "theory of evolution" or "theory of relativity." But as far as the scientific definition of "theory" goes: everyone takes a science class at some point. Even if it doesn't really stick, you've been exposed, by a teacher, to the idea that "theory" in science doesn't mean "idea," it means an evidence-supported framework for understanding the world.
But most people have not taken an economics class. It's just not part of the standard high school curriculum (which is separate rant) and not required in college (for those who go to college).
When most people hear "free market," they think it means "the government keeps their noses out of it." That's not what a free market is at all - government involvement is tangential.
A "free market," briefly, means a market where anyone who has something to sell can sell it, and anyone who wants to buy something can buy it, without interference. The only thing preventing you from buying something is if no one is willing to sell it to you for the price you are willing to pay. An economics class will go into all sorts of technical conditions that have to be met, but that's the gist of it.
So what's this mean in practice? Kids setting up lemonade stands are a good example of a free market. Imagine a neighborhood where every single kid sets up a lemonade stand. They've found the necessary start-up capital (probably by rummaging in the couch cushions or something), and they've all set up their card tables and are ready to sell their lemonade to anyone who wants it. How charming!
In walks a thirsty person. They look around, and see dozens of eager cherubs. So they go up to the closest little moppet and ask how much for a lemonade. The kid says, as they are free to do in a free market, "$20." The buyer is astounded - that's more than they're willing to pay! Luckily, the next kid over says "I'll sell you a lemonade for $19." And so the invisible hand sets to work, with the kiddos underbidding each other until it lands on someone who is willing to sell a glass of lemonade for exactly $0.00 profit. Someone willing to sell it exactly at cost. And of course, cause one glass of Country Time is the same as the other, that's where the thirsty person goes.
(as an aside: note that in this set-up no one actually makes a profit. This is a large part of how companies like Wal-Mart are able to muscle out small stores. Wal-Mart can afford to make pennies of profit on individual sales, because they have millions of transactions a day. It adds up. A mom & pop needs to make more than that per sale to survive, so they have to charge more.)
So how does this apply to health care? Free markets demand people making cold-heartedly rational decisions. In a true free market health care system, people having heart attacks would get get competing estimates on treatment costs rather than just going to the closest hospital. People would end up going to a place called Dr Bob's Discount Chemotherapy because it's cheaper than County General, with predictable results. Parents would tell their children, "sorry, little Timmy, but your dad and I ran the numbers, and it's more cost-effective for us just to have another kid. We'd wish you luck, but that seems a little cruel at this point." Grandparents would be pressured to refuse treatment because why spend money when you're going to die in a few years anyway, and besides, they'll just burn through more of the inheritance if they selfishly stay alive.
Sounds dystopian, and I did use some hyperbole for effect there - but not as much as you might think. Really only the "let-our-kid-die-and-have-another-one-because-of-the-sunk-costs-fallacy" is the one that I think (hope, and pray) doesn't happen. Everything else? If you live in the United States, you're damned right it does.
You can't make free-market decisions in a situation where you're prepared to pay any price. You are hostage to the person who is literally holding your life or the life of your loved ones for ransom. Why has insulin, a drug that's been around for like a century and not changed in that time, skyrocketed in price in recent years? Because the diabetics in this country have no choice but to pay what they're charged. Pharmaceutical companies will spread various lines about "funding research," but they're also making record profits. It doesn't begin to pass the smell test. They're jacking the price up because they can.
One last point: a for-profit hospital doesn't exist to treat people. It exists for profit. A for-profit health insurance company doesn't exist to help people afford health care. It exists for profit. And they will do what is profitable. As long as helping people get health care is profitable, then great! But there will always - always - be people it is not profitable to treat. Insurance companies will always - always - try to avoid paying as much as they can get away with it. This isn't a flaw of the system: it's a feature. A system that depends on greed to provide for health care will always leave some people behind. And as far as I'm concerned, the acceptable number there is zero. We'll probably never get there, but that doesn't mean we shouldn't try. And if I have to choose between a private industry bureaucrat and a government bureaucrat deciding what health care gets paid for, I'll take the one who won't get a bonus for finding a creative way to deny payment, thanks.
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