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Congress Doesn't Create Free Markets for Health Care; It Only Destroys Them

health care
Patient Sharon Dawson Coates (L) has her knee examined by Dr. Nikhil Narang at University of Chicago Medicine Urgent Care Clinic in Chicago June 28, 2012. |

When people clamor for Congress to pass a "free-market health plan," they are forgetting two things: Congress only does laws, which restrict freedom. We need fewer laws, not more. And the free market is by nature not a plan.

Big laws like ObamaCare are designed by special-interest groups, such as the "insurance" (managed care) cartel, Big Hospitals, Big Pharma, and influential groups that want their benefits (abortion, contraception, drug and alcohol rehab, AIDS therapy, etc.) paid for by people who would never use them.

There are good ideas circulating, such as health status insurance, expanded health savings accounts, and critical illness insurance. How good? We won't know without trying them. The free market—voluntary decisions by free individuals—picks the winners and losers, and allows options that work for some but not others. The free market cannot achieve the utopian state in which everybody gets optimum care, paid for by everybody else. Neither can government. The government can only force everybody (except of course for the elite) into equally shabby care, paid for by extortionate taxes with huge losses to corruption and incompetence.

Obviously, government does not actually provide medical care. It just sets up the conditions under which doctors, nurses, paramedics, pharmacists, and others do that. Congressionally mandated conditions are making it more and more difficult for medical professionals to do their work.

The only thing government can do to create a free market is to get out of the way. Laws that constrain people's ability to innovate or to do their best need to be repealed—and many of these date back to the New Deal.
The key change is to restore the liberty of the people to make enforceable contracts—which the Roosevelt Supreme Court destroyed. Specifically, this would mean:

  • Prices would be set by agreement of buyer and seller. Over forty centuries, price controls have always and everywhere had the same results: shortages, misallocation of resources, corruption, and misery, whether imposed by Roman Emperor Diocletian, Hitler, Roosevelt, Nixon, or Medicare/Medicaid.
  • People could agree to limits on liability. Doctors should not have to risk impoverishment every time they try to help someone.
  • People could buy insurance at an actuarially fair price with the coverage they desire—or refrain from buying it at all. If federal mandates and impediments were repealed, it would just take one state to allow marketing of insurance to out-of-state residents to start a marketplace for people in states where the price of individual insurance is prohibitive owing to state mandates.

We can't just wipe out programs that people are dependent upon—although they are headed to inevitable bankruptcy. But why not let people turn down the benefits and "protections" if they choose to do so? That way we could relieve pressure on the programs, while finding out how the way of freedom is better.

Here are some things that some people would like to do without:

  • Medicare. Really. Some seniors even sued for the right to forgo Part A without paying back all their Social Security. Why? As a colleague wrote me, "You ought to see how academic centers don't want to take care of old people or high-risk people."
  • FDA restrictions on "unproved therapies." People who are facing certain death or disability want the right to try treatments that haven't been through years and $2.6 billion in testing to satisfy the FDA—or to have to first "fail" on approved but painful, toxic, minimally effective treatment first. Why not fail on the new treatment first and fall back on the old?
  • Electronic medical records. People want to have their doctor's undivided attention, and they don't want their life story in a government database. They can keep track of the important facts themselves, thank you very much.

The third-party system of scribes, coders, claims filers, preauthorizations (or denials), compliance monitors, managers, auditors, "re-pricers," etc. This probably skims off 40 percent of the "healthcare" dollar while providing nothing that resembles medical goods or services.

ane M. Orient, M.D., executive director of Association of American Physicians and Surgeons, has been in solo practice of general internal medicine since 1981 and is a clinical lecturer in medicine at the University Of Arizona College Of Medicine.

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