No Coercion

Obama and the more leftist Democrats in Congress are bound and determined to “fix” American health care with some form of massive federal involvement in health insurance coverage. As with the financial crisis, the government is purporting to fix a problem that stems from too much government interference in the market…by imposing even more government interference in the market.

In industries burdened far less by government tampering consumers get products of ever-increasing quality at ever-decreasing prices. In a free market we would especially expect to see such a pattern in health care, but we don’t. And the reason has nothing to do with “greedy” doctors or drug companies or insurance companies–unless of course you think that greed (that is, the natural human desire to improve one’s circumstances) is limited to the health care industry and that all those cell phone, computer, and coffee maker companies are giving you better and cheaper products out of a sense of charity. No, the reason has everything to do with government actions hindering a free market.

Here are just a few of the ways, in no particular order, that government (often in the name of “protecting the consumer”) keeps you from enjoying the benefits of a free market in health care:

1) Professional licensing. Every state government requires health care providers (doctors, nurses, pharmacists, chiropractors, etc.) to be licensed by the state. This is simply a barrier to entry that existing providers tend to favor because it reduces competition and allows them to charge higher fees. Rather than protect consumers, it leaves them with fewer (and more expensive) choices.

2) Pharmaceutical and medical device regulation. The FDA regulates drugs and devices and imposes massive costs on their development. The result is that many drugs and devices that could help people never make it to the market, and those that do are delayed by many years, are much more expensive, and usually are restricted even further by being prescription-only.

3) Tax code. The federal tax code creates an incentive for employers-provided health coverage (a practice that originated as a result of totalitarian WWII-era wage controls), thus encouraging extensive third-party medical payments. When consumers pay less for something, they use more of it. Medical providers know that individual consumers are not shopping around, so there’s less incentive for them to be competitive on price.

4) Medicare and Medicaid. Just as with government subsidies for college tuition, the subsidizing of health care through Medicare and Medicaid cause demand to be artificially increased, thus causing prices for everyone else to rise well beyond natural market levels. And of course the increasing prices drain individuals’ income and thus create additional “need” for Medicaid and other government welfare. In addition, when you subsidize health care, you incentivize poor health, increasing demand yet again. Finally, the large number of Americans now on Medicare, combined with the rules governing reimbursements for each procedure or medication, means that medical pricing in America is now grossly distorted by the federal government. On a related point, the government requires hospitals to admit and treat anyone who comes in, thus further increasing demand on these facilities and raising prices for everyone.

5) Insurance regulation. Insurance companies are regulated by state governments, which restrict insurers’ and consumers’ freedom to contract with one another as they see fit. Insurers are forced by law to insure uninsurable risks, thus driving up prices. They are prevented from effectively discriminating between various risk levels among consumers, driving up prices even more. And states often prohibit the purchase of insurance across state lines, further limiting consumer options.

6) Perpetuating the “right to health care” myth. Government at all levels tends to make pronouncements and take actions that perpetuate the erroneous belief that there is a right to health care. Any regular readers of my blog know where I stand on that–it is logically impossible to have a right to something when the provision of that right requires the forcible confiscation of another person’s property (thus, there can be no such thing as a right to a certain level of health care, housing, wages, etc). But government creates a feedback loop with its health-care-is-a-right propaganda that boosts support for additional socialist measures to control health care.

These are just a few of the government actions that have caused our health care costs to rise so dramatically. And Obama’s solution is more government control of the industry? I can only hope there are enough Americans still possessing enough critical reasoning aptitude and desire for freedom and prosperity that this latest attempt to expand government oppression will fail.

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