Every so often I read something that just makes me see red and this statement from John Stossel’s article on healthcare reform at Reason.com was one of them:
When politicians interfere with free markets, unintended consequences harm everyone, except the companies that lobby hard enough to protect themselves.
Although the article is about healthcare insurance the clear implications of the statement are that a) without government interference there would be a free market in healthcare and b) we’d be better off if that were the case.
Malarkey. To both. Has the man never heard of asymmetrical information? There is not now a free market in healthcare and hasn’t been at least since 1906 when the Pure Food and Drug Act was passed. What’s more we wouldn’t want a free market in healthcare.
Under a free market in healthcare there would be no certification that medications were safe and effective and the absence of patents would provide fewer incentives for research and development. If antibiotics were ever developed, they’d have stopped being effective due to indiscriminate use (that’s already going on in some places in the world). There would be no malpractice lawsuits to protect those who’d been injured by doctors who didn’t follow the standards of their practice. The elderly would routinely be beggared by their healthcare expenses. There would be no metropolitan sewer districts or mosquito abatement. No regulations for innoculating children or dogs against communicable diseases.
The list of beneficial interferences in healthcare by government is so large that you’d think you wouldn’t need to mention it but apparently you do.
Should some regulations be abolished? Of course. Here’s an example: certificates of need should be abolished. They’re anti-competitive and clearly raise the cost of healthcare. They were intended for a different age.
What I believe most people who talk about a free market in healthcare mean is that they want to be able to pick and choose the regulations they’d prefer to have and I believe that’s prudent. No regulations at all? I blanche at the thought.