Saturday, February 10, 2007

Oh, but He was a Tightfisted Hand at the Grindstone...

From a comment at John Edwards' blog to my post on the Senator's health care plan:
A "market" where the "sellers" work hard to turn customers away and equally hard at taking customers money but not handing over the goods purchased ... that is a broken market.
My reply:

I guess that maybe I should have been clearer. Health Markets are unnecessary given (2) above. Once we open up Medicare to everyone who wants to get on board, then we no longer have to worry about creating a new Health Market.

Now if it turns out that Medicare is really, really good at providing services at a competitive rate, then it will attract more customers. Eventually, if it's really good, we'll end up with what amounts to single-payer health care. If, on the other hand, Medicare does a really crummy job, well, then it's probably a good thing that it's not single-payer.

Of course, there's always that other sort of option for Health Markets. That would be the sort of market where people (let's call them doctors) offer services to clients who need those services (let's call them sick people). Sick people then pay for the services that they use. Non-sick people don't pay for any services at all. And those too poor to pay for the services themselves can get block sums of money to pay for their medical services.

"Ah," you say, "but the cost of health care is too high for anyone to afford without insurance."

"Ah," say I, "then you don't understand how markets work."

Providers of services charge what the market will bear. Get rid of insurance and the market will bear far, far less. Medical costs will race to the bottom as doctors cut rates to attract patients. The thing preventing the existence of a functioning health market is not insurance companies. They're not in the health market, anyway; they're in the insurance market. Their job is to turn a profit selling insurance. Doctors have the job of selling health care.

No, the reason we don't have actual health markets is that we've made a distinction between the people who use health care and the people who pay for health care. Get rid of that link and you've got yourself a functioning health market.

My god, I sound more like a libertarian everyday. Either that or I'm just angling for Jonathan to make my guest writer stints at Catallarchy permanent.


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