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Free market health care

politicalwords

In his book Words that Matter, linguist Frank Luntz counsels against referring to “private health care,” if what you’re trying to do is to reduce, eliminate or de-emphasize such programs as Medicare and Medicaid (or, prospectively, the Affordable Care Act). Speak instead, he advised, of “free market health care.”
It does sounds friendlier, doesn’t it?
But what does it mean?
It means in practice, in the era of the Affordable Care Act (or Obamacare; Luntz was writing a couple of years before its passage): going back, in many respects, to what the United States had previously. The ferocious political debates of 2017 and 2018 brought forward to the nation what that meant: Eliminating or diminishing health care insurance coverage for tens of millions – maybe most – of Americans.
Here’s a dispassionate take, from Wikipedia, on what the term could be taken to mean:

“In a system of free-market healthcare, prices for healthcare goods and services are set freely by agreement between patients and health care providers, and the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. A free market contrasts with a controlled market, in which government intervenes in supply and demand through non-market methods such as laws creating barriers to market entry or directly setting prices. Advocates of free-market healthcare contend that systems like single-payer healthcare and publicly funded healthcare result in higher costs, inefficiency, longer waiting times for care, denial of care to some, and overall mismanagement. Skeptics argue that health care as an unregulated commodity invokes market failures not present with government regulation and that selling health care as a commodity leads to both unfair and inefficient systems with poorer individuals being unable to afford preventive care.”

Those “market failures” are not a matter of chance or an occasional slipup, but an inherent part of the system.

Free markets, in the classic and idealistic sense, operate at least theoretically under arms-length, willing-buyer-willing-seller conditions. In many marketplaces that can and does happen, but in others specific conditions do not allow for it. In the case of health care, while there are exceptions, the consumer and provider are not on a level playing field with comparable leverage.

My one experience with hospitalization began when my wife called for an ambulance – sent by the only outfit available – which then took me to the nearest hospital. No options were seriously considered even for a moment; there was no time and no capability to assess (much less do a price comparison) of alternatives. Upon arrival at the emergency room, the demand was made that I sign an open-ended – completely open-ended – agreement that I would pay whatever charges were imposed, with no ceiling on the number of dollars involved, nor any way for me to control them. My life was at immediate risk, and neither I nor my wife anywhere in the process was given a chance to consider options or even find out how much expense we were committing to. Checking the alternative of another hospital or medical provider was not even a remote consideration. (We did not have health insurance at the time either, though the situation would not have been greatly different if we had.) This was not an arms-length, willing-buyer-willing-seller transaction. The only real choice involved here was: “Your money or your life.”

(I should add in fairness that the actual medical care I received was excellent, and because of that I soon recovered fully.)

In other terms, the health care system involves (as a Nobel Prize-winning economist argued) “a huge mismatch of power and information between the buyer and the seller. If a salesman tells you to buy a particular television, you can easily choose another or just walk away. If a doctor insists that you need a medication or a procedure, you are far less likely to reject the advice. And … people think they don’t need health care until they get sick, and then they need lots of it.”

Even aside from life and death situations, true arms length transactions are unusual. Changing doctors or medical centers is often difficult or time-consuming. For many people, multiple providers may be involved. Many patients, especially those in advanced age, may have difficulty dealing with the options even if they were all practically available.

Some medical treatments really are discretionary or allow for the time and information patients need to make informed and thoughtful choices. The free market can and frequently does (or could) work in those cases. But much health care is not on that level, and for most people, most of the time, getting it to work in a fair, useful and affordable way probably would take still more regulation at some level.

The system is immensely complex, and while the core of it in the United States has emphasized involvement by private providers, there’s long been governmental regulation of various sorts as well – not to mention the ugly elements of a highly competitive for-profit system, which often has a tendency to drive up prices and cut costs (service and quality for patients).

Writer John Daniel Davidson remarked, “We’ve never really had a ‘free market’ health care system in the modern era. What we’ve had is more like crony capitalism. We spend hundreds of billions every year subsidizing employer-sponsored coverage, which mostly benefits large employers, while also paying for a Medicare entitlement that includes every American over age 65 – even billionaires. We could create a market-based system that subsidizes those who need it while driving down costs for everyone else. But it would mean disrupting the cronyism that has dominated American health care for 70 years. So far, neither party has been willing to do that.”

That may be in part because neither has been able to find a way to make it work.
 

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