I understand why a universal healthcare plan will drive healthcare costs up. But why is American healthcare currently so expensive? What is going on in the current market that is keeping costs up?
FDA regulations have cartelized the pharmaceutical industry, and the AMA has cartelized the medical profession. That’ll do it.
Here are two articles which were just posted a couple of days ago which covers some of the problems with health care in the US:
And here is a great one on the idea of Health Insurance:
Here are my top 5 reasons in order of most significant to least significant. These are all caused by government intervention in the marketplace for health care:
-
Price/Payment Fixing by Medicare, CHIP, Medicaid, etc make it difficult for people without insurance to afford health care. Moreover the government has laws about who care providers can serve and what they can charge if participating in these programs. So health care providers have no reason to to compete on price as all the folks using these services have no incentive to economize. The result of this fascism is predictable: Higher prices and Fewer Choices.
-
Regulation of the development, manufacturing, marketing, distribution, advertising, etc of medical devices, pharmaceuticals, alternative medicine etc only helps those large organizations who have expertise in managing the process over those other providers. For example: Kellogs is removing a claim on cholesterol reduction under pressure from the FDA. Why, who does this help, it certainly does not help consumers of food. It does help cholesterol reducing pharmaceuticals.
-
Licensing of doctors, nurses, etc. These licenses are extremely difficult to get. They are given out by “accredited” agencies to people they favor only. The medical industry would save billions by letting the licensing be done by private organizations. Then people would have the ability to request the certifications of their providers. You can have the following done by non-certified people: parenting, educating, communicating, manufacturing, producing food, etc. Why does the government need to license doctors when it does not license who makes your food?
-
Regulation of insurers, people are not allowed to buy insurance across state lines and insurers have lots of mandates on them that increase costs. If the mandates were removed and people could buy insurance across state OR BETTER YET INTERNATIONAL boundaries then the price would be dramatically reduced.
-
Insane liability system for negligence. This part is completely nuts. There is a weird lottery where the whole system is at the whims of a jury. How about a system where the two parties the plaintiff and defendant each select an arbitrator or agree on one to hear the case. Then the arbitrators would pick a third who has binding authority. This would not only save billions but would be much fairer to those who have been damaged.
A couple of others are the state limiting insurance choices (you can only buy insurance in your state, you cannot buy insurance from other states). Medical malpractice is another issue. Apparently “insurance” is also defined by the state. A doctor recently had to raise his rates because his business model was considered “insurance”.
It all comes down to government legislation.
Thank you everyone.
What was the thinking behind preventing people from purchasing insurance in another state? What is the intended outcome of that law?
Oh god, where to begin…
First off, 90% or more of all hospitals in the US are owned by local governments, not individuals, thus they are inefficient. Secondly, health insurance companies have near-monopolies in the states that they operate in, because they can’t legally sell insurance in other states. Thirdly, insurance companies are forced to provide people with many insurance policies, even if the consumer doesn’t want to pay for them. Next, the AMA has a stranglehold on licensing doctors and saying who can and can’t legally practice healthcare. Lastly, the FDA is highly corrupt in deciding which drugs are legal/illegal and stalls the legalization of drugs. These are the only things I can think of off the top of my head.
I have another question. I was debating nationalized healthcare with someone, who brought up the point that no countries with nationalized healthcare have had a shortage of the H1N1 vaccine, while the U.S. has. Does anyone have an answer to that?
To keep people from circumventing the law. Each state mandates what the insurance companies for that state must insure. If people were allowed to purchase insurance from other states, everyone would purchase insurance from the states with the fewest mandates.
[H]
It’s very frustrating to argue these things with people, and get called an idiot for your troubles. I don’t know how you guys do it.
Because it’s not a free market.
Healthcare is a medieval style guild. They hate competition.
Short answer: The healthcare companies and institutes are firmly attached to the monopoly on force known as the US government, so people’s monetary interactions with these companies and institutes aren’t very “free market.”
I’m not sure but it’s a stupid argument considering U.S. vacines are being handled BY THE STATE
For the love of god do not let them use europe as an example of how socialism works. Europe produces practically nothing but then sells their technology to the third world for natural resources. Of course, the exchange is very very favorable to Europeans, since the EU conspires with the US to destroy these countries with IMF aid and UN policy.
You lend money to a dictator, he fails to repay, you sell off their national resources to corporations. You restrict weapons trade in Africa because there are warlords running around killing people, then the common man has no weapon and is more vulnerable than ever before. There has been AMPLE time for this country to industrialize on its own. Neo-imperialism keeps these countries in the hole, and the EU/USA reaps the benefits.
Europe isn’t an example of how socialism works, its an example of how slavery works for slavemasters.
So think of it like this: Europe doesn’t have universal health care because the majority of its workers are in other countries. They only provide health care to a select few, so if its good, we should not be surprised.
Basically, this can be answered by dividing it up into two causes: contraction of supply and expansion of demand.
Contraction of Supply: licensing/regulation of doctors, nurses, hospitals, urgent care centers, health insurance companies, etc. Also, a misconstrued tort-system allows extensive rent-seeking to add a tax on medical providers, thereby reducing supply of doctors, nurses, etc. Patents can be blamed for a lower supply of medicine.
Expansion of Demand: Extensive mandates on health insurance companies, Medicare, Medicaid, S-CHIP, free emergency room service, a third-payer system (health insurance through employers), etc.
Countries with single-payer systems have been able to keep costs in check by rationing care and creating waiting lists.
Other countries have shortages in many other aspects of health care, like “life expectancy” or “cancer survival”. I know where I’d rather be. 
My mother, who works as an insurance adjuster, often complains about people going to doctors for the most minor problems. Over time, I’ve come to believe as somewhat mentioned in one of the above responses, that a direct result of our prescription drug management system, it is nearly required that one visit a doctor to receive medication that actually does work. This causes more people to visit the doc for things they shouldn’t have to.
So, I believe the control of medicine to be a significant factor in creating a false demand for going to the doctor, thus driving the price of not only the visit up, but also the price for the medicine up. Especially when you consider that most people, because insurance “pays for everything” does ZERO price shopping for these services.
Bogart,
FYI, I
[quoted]
(http://blog.mises.org/archives/011051.asp) this excellent post of yours in the MIses Blog, and it touched of an excellent debate in the comments that is currently going on. Great work!