A Free Market Proposal for Medical Reform
– Part 1

In my last article, “Prescription Follies,” I concluded that we all should probably pay more attention to medical costs, as we are destined to be consuming more and more of the ”product” over the rest of our lives. I don’t see this as being in conflict with my policy of not boring friends and relatives with talks of our aches and pains. It’s just being a smart consumer.

And it’s not easy being a smart consumer of medical services. Not that there isn’t a lot of information out there, especially for internet-savvy types like you and me. But most of the information is about medical problems and the products available to remedy them. There is very little information about costs.

I should emphasize here that I’m writing this articleas a fellow consumer of medical services. I am surely no expert in medical matters... but I know a thing or two about economics and free markets. And I am a big believer in competition. Generally, the purer the competition is, the better and fairer the deal is for the consumer. And on the other side of the coin, as a free market becomes more monopolistic and regulated, the natural economic benefits of Adam Smith’s “unseen hand” of market forces become short-circuited to a greater and greater extent.

So where are the benefits of competition in the medical field? You see them here and there, but for the most part, “the system” works against it. You can see competition among drug companies and medical equipment makers to get to the market first with new cures and treatments. Which may explain why America is still a leader in medical innovation.

But on the cost side, there is very little free market activity, and the prospects are not good for an increase. It seems like it will be just a matter of time before some kind of Universal Medical Insurance Coverage will be enacted. But as these matters are debated, let’s see if we can avoid throwing the baby out with the bath water, by which I mean making Universal Health Care Coverage a short hop to government run Nationalized Health Care, which in my view would ultimately ruin the best health care system in the world. My nightmare scenario includes lengthy waiting times for all sorts of medical procedures, doctors leaving their practices, medical schools having trouble attracting quality students, etc. Nothing in my experience with government leads me to believe that putting a government agency in charge of health care would improve health care.

But change is coming. So how can we influence its nature so that it will be an improvement? When I think about this question, to me the question becomes, “How can we preserve (and maybe even introduce) some semblance of competition in the medical marketplace? I already have some ideas germinating on this subject, but let me close for today with a definition of “perfect competition” from the University of Michigan website:

“An idealized market structure in which there are large numbers of both buyers and sellers, all of them small, so that they act as price takers. Perfect competition also assumes homogeneous products, free entry and exit, and complete information.”
What is there in that definition that can be preserved or introduced in our medical system? If you have any thoughts, please email me. I’ll share mine over the next few days. - Bob

Comments

Popular posts from this blog

<center>It's Unwise to Compare - But It's Human Nature</center>

<center>The Best Personal Finance Tip I Ever Gave (or Got)</center>

<center>A Dollar is a Dollar - Except When it Isn't</center>