Case against private healthcare

[Fried_Egg]

In another forum, someone posted this argument against private healthcare. I think I see flaws in in it but I was interested to see what people here thought:

The problem of fully private heathcare is in the nature of the relationship between the providers (the doctors) and the customers (the patients).
In this particular domain of healthcare, doctors should rationally cooperate instead of entering full competition, because there will always be a proportion doctors/patients (at least in the foreseeable future, and because to be qualified as a doctor is difficult) ensuring that each doctor is fully occupied. Contrary to a grocery store, nobody can decide to be a doctor overnight and open a practise. In addition, a sick person cannot reasonably decide not to purchase the service of a doctor. All these features makes the position of a doctor very powerful in the relationship provider/consumer, and unlike any other such relationship. An healthcare left to private interest will therefore lead to an inflation in prices, and as a consequence to the exclusion of a part of the population from this service.

In a more structured way then:

Hypothesis A: Private unregulated healthcare

1. nb of patients / nb of doctors very big
2. a patient cannot choose not to go to a doctor (in most case)
   consequence 1: doctors collaborate to fix the price of their service to their liking
   consequence 1.1: some people are too poor to go to the doctor
   3: still more than enough patient, and they pay high fee, so doctors are still well-off
   Final consequence: a part of the population is excluded and healthcare service is over-costly.

Hypothesis A does not provide healthcare to the whole population, so it has to be rejected if the state is bothered by the welfare of its members.

The argument can be broken further and analysed in more details, in the US case, one may look at the role of the AMA (the lobby of doctors).

[Bostwick]

doctors collaborate to fix the price of their service to their liking

I thought he was going to prove that doctors were unlike any other relationship. Seems like I’ve heard that argument about every single profession.

[banned]

@Fried Egg

In this particular domain of healthcare, doctors should rationally cooperate instead of entering full competition

@Fried Egg

doctors collaborate to fix the price of their service to their liking

lol.

[rroopstr]

Totally public healthcare results in improperly managed hospitals, underpaid doctors, and long waiting lists.

Totally private healthcare results in many of the problens described above.

Some intermediate solution where the public sector guarantees universality while the health care sector works privately seems a viable approach.

[hayekianxyz]

@Rubén

Totally private healthcare results in many of the problens described above.

Prove it.

[hayekianxyz]

@Fried Egg

(at least in the foreseeable future, and because to be qualified as a doctor is difficult)

Whose fault is this?

@Fried Egg

Contrary to a grocery store, nobody can decide to be a doctor overnight and open a practise.

Sincr when can anybody open up a grocery store today? Moreover this person assumes that the only providers of medical service in a free market would be “doctors” as we know them today, which simply isn’t the case.

This person’s entire argument is that there isn’t enough competition in the market for healthcare, therefore the state must intervene. Funny, when we consider that the state can only reduce competition.

[billott1]

1. The supply of doctors is artificially kept low by government fiat. In a private world there would be doctors credentialed by the AMA or some other private body and doctors who aren’t. It would be up to consumers who pay for their services to use different levels of credentialed doctors. For example: If I had a sinus infection I would go to the doctor with low credentials but if I had 5 sinus infections in 5 weeks then I would seek more expert help.

2. The supply of doctors is kept low so patients always have to scramble to find them. If doctors fixed their prices then people would seek alternatives. For example:Lots of folks in England travel to Poland for dental care as their dentists can not separate themselves on price so they have too many patients. Keep in mind it is profit that gives people the incentive to enter a market.

3. Doctors have and will always be well off. And the higher paid doctors are the ones that take on the most difficult problems. If I have migraine headaches affecting my work and family then I will pay handsomely to have a doctor who can fix that. I would forgo a whole lot of spending to pay the doctor.

[Natalie]

@billott1

For example: If I had a sinus infection I would go to the doctor with low credentials but if I had 5 sinus infections in 5 weeks then I would seek more expert help.

Or you could go and just buy antibiotics at your own risk. In a free market medications would be freely available to everyone and would be much cheaper.

(The statists would say that people are too stupid to be allowed to choose their own treatment)

[Jon_Irenicus]

Let’s see how much nonsense we can uncover in here:

In this particular domain of healthcare, doctors should rationally cooperate instead of entering full competition,

Competition also involves cooperation, where profitable.

because there will always be a proportion doctors/patients (at least in the foreseeable future, and because to be qualified as a doctor is difficult) ensuring that each doctor is fully occupied.

Yeah, it’s called the AMA and licensing. Oh, we can’t let quacks practise? Except, this quasi-guild isn’t just hindering “quacks” from practising, no, it’s ensuring doctors have inflated salaries. It is a glorified union. The current system is geared to boosting prices as much as possible, due to its compulsory nature.

Contrary to a grocery store, nobody can decide to be a doctor overnight and open a practise.

Why can’t they decide “overnight”?

In addition, a sick person cannot reasonably decide not to purchase the service of a doctor.

Why not? Can they be trusted to purchase their own food even?

All these features makes the position of a doctor very powerful in the relationship provider/consumer, and unlike any other such relationship. An healthcare left to private interest will therefore lead to an inflation in prices, and as a consequence to the exclusion of a part of the population from this service.

No, it makes it nothing of the sort. There are ratings and information agencies to fill in any “asymmetries” there might be. Consumers make decisions with the assistance of experts all the time, why should medicine be essentially different? Because some ego-driven maniac says so? And no, no proof has been offered that the prices will be high due to “inflation” (wha!?) What has been proven is the utter ignorance of the person who posted it. Moreover, where did this “right” to healthcare come from?

-Jon

[liberty_student]

@Rubén

Some intermediate solution where the public sector guarantees universality while the health care sector works privately seems a viable approach.

In a world of finite resources, how can a government guarantee universality, without compromising the availability of resources to some other need or want?

Magic?

[Natalie]

Judging by the number of medical mistakes (and fatal, too) AMA doesn’t protect patients from “quacks” any more than FDA protects against dangerous medications. This goal could be better achieved by private accreditation organizations and consumer agencies that at least would have a reputation to care about. In addition, they hinder the progress of the medical science and limit our choices by restricting access to new and alternative methods even if they’ve been used successfully in other countries.

[Jon_Irenicus]

This reinforces what I said. The wonders of socialized provision of services. [8-)]

-Jon

[Stanley_Pinchak]

1. This is due to artificial restrictions on entry to the profession. All unions and guilds will attempt to introduce price floors and restrict entry. Furthermore, through government fiat, non-membership in the cartel while practicing is not an option, so the economic effects of efficient health care providers are eliminated and the natural instability of the cartel is stabilized through state intervention.

2.1 People can not choose to not eat too (under most cases), but there is much less restriction into the entry of the profession loosely titled food provider. As such it is the restriction on entry to the profession which makes this claim seem reasonable.

2.1.1 Some people are too poor to eat, but if there is a psychic satisfaction to be obtained from altruism and charity, then this problem is much mitigated as compared to the alternative of state intervention encouraging the inability to pay for service, or worse yet, crating conditions where supply can not meet demand and no amount of charitable money can obtain a particular medical procedure for one in need. (sorry to mix examples)

3. Again see the problem with unions/guilds/cartels with state backing. This is only a small foretaste of the problems that result under socialist production of medicine. Either over production and poor service result, or underproduction and government mandated poor health result. In our current middle of the road approach, we seem to have more of the latter problem.

The market is the best mechanism for aligning the desires of consumers and producers of a particular service. Only when entry to the supply side is dependent purely on the demand of consumers will the harmful effects of the guilds and other government intervention be eliminated.

[Fried_Egg]

Jon Irenicus

Yeah, it’s called the AMA and licensing. Oh, we can’t let quacks practise? Except, this quasi-guild isn’t just hindering “quacks” from practising, no, it’s ensuring doctors have inflated salaries. It is a glorified union. The current system is geared to boosting prices as much as possible, due to its compulsory nature.

Forgive my ignorance of the American system (I’m British) but the AMA isn’t a government organisation, is it? What would stop them doing what they do in a free market?

[Jon_Irenicus]

No, I think it actually sets licencing restrictions on who can legally practise as a doctor. If it were a mere accreditation agency it’d have no such power. At best it’d be a brand name, like the Underwriter’s Laboratories.

-Jon

[Bostwick]

@Fried Egg

Forgive my ignorance of the American system (I’m British) but the AMA isn’t a government organisation, is it? What would stop them doing what they do in a free market?

Because in a free market they could not socialize the costs of enforcement by using government services. If the States did not licenses medical schools the AMA could not convince States to pull licenses.

100 Years of Medical Robbery