Saturday, January 5, 2008

Schwartz on Free Market Health Care

The January 4, 2008 Boulder Daily Camera published the following LTE by Brian Schwartz, PhD, on free market health care:
Free-market health insurance needed

"The goals of free market barons differ considerably (and obviously) from those of physicians. ...But given the powerful and wealthy forces arrayed against meaningful change, don't bet the farm on reform," writes Clint Talbott on health care (Editorial, Dec. 30). Mr. Talbott's second point is correct, but not in the way he intends.

Mr. Talbott tries to defile free markets by associating them with "barons," rich fat cats who care about profits -- to the exclusion of the general public. In a free market, greedy capitalists must satisfy customers, or else they go out of business. Customers could be physicians, or they could be patients, whom physicians serve.

But we don't have a free market in medical care or insurance. This explains common views of insurance companies as villainous "barons" unconcerned with patient welfare. Tax-exempt employer-provided insurance coddles insurers by tying us to our employer's plans. Insurers are committed to satisfying customers, which are employers, not you. Hence, they can afford to be stingy and deceptive: they know that losing your premium dollars requires that you change jobs.

What "powerful and wealthy forces" oppose changing this? Labor unions. Like Mr. Talbott, the AFL-CIO supports "single payer health care": politically controlled medicine with government as a monopolistic insurer. This is even worse than buying it through your employer. If you don't like what the government "health barons" offer, it's not enough to change jobs, you must move out of state to change providers.

If you like "single payer," don't worry that the 208 Commission on Healthcare Reform has not recommended it. They recommend an "individual mandate," which makes it a crime not to purchase politician-approved "insurance." Such compulsory insurance is essentially single-payer in disguise. Strict regulations on legal insurance plans severely limit competition, so insurance companies are effectively government contractors for politically-defined insurance.