Wednesday, July 29, 2009

Key to Healthcare Reform: Lively Competition, Not The Dead Hand of Government Compulsion

Jeff Jacoby writes in today's Boston Globe:

Imagine the sort of car you’d drive if government regulations made it illegal to sell any automobile that didn’t feature 380-horsepower direct-injection V6 engines, computer-controlled electric power steering, eight-speed automatic transmission, four-wheel-drive, automatic climate control, “smart key’’ technology, touch-screen navigation, backup cameras, LED headlights, acoustic glass, surround-sound stereo, and leather seat stitching.

If those were the minimum requirements every car had to meet before it could be sold, would you commute to and from work every day in a Lexus LS 460 or some other luxury vehicle? Well, you might, if the steep price wasn’t an obstacle. But it’s more likely you wouldn’t be driving at all. If the government barred you from buying anything but a high-end car, you’d probably have no choice but to rely on the bus or subway, or to find a job closer to home.

What is true of transportation is true of everything else: Increase the number of amenities that a product or service must include, and more consumers will be unable to pay for that product or service. That is why one of the simplest strategies for making health insurance more affordable is to reduce the minimum number of benefits that insurers are required to cover.

In every state in the union, legislators and regulators drive up the cost of healthcare by making insurance policies more comprehensive. Rather than allow the free market to determine which medical services health plans will cover, states force consumers to pay for an array of covered benefits they may not need or want.

The key to healthcare reform is lively competition, not the dead hand of government compulsion. Legislators, take note: Enacting new mandates won’t make medical insurance more affordable. Repealing old ones just might.

MP: It's a basic law of economics (Perry's Law) that market competition breeds competence (and lower prices) and government restrictions on competition and market forces breed incompetence (and higher prices). If we want affordable health care, we should encourage more competition, not less; and less government intervention, not more.

13 Comments:

At 7/29/2009 5:06 PM, Anonymous Anonymous said...

If we keep pouring money into the medical industry using medicare and medicaide or any other government medical program, it is only going to make the price continue upwards for everyone. We are even printing extra money, because of the deficits, to flood the industry with cash, pouring hundreds of billions of dollars into the medical community yearly. It is pure madness to think we can do this and bring down the prices.

 
At 7/29/2009 5:13 PM, Anonymous Anonymous said...

See Rahm Emanuel's call for health care vouchers, Chicago Tribune, 1-20-04....

 
At 7/29/2009 5:52 PM, Blogger 1 said...

That towering intellect in the House of Representatives, Maxine Waters says the stall is all Rahm Emanuel's fault...:-)

 
At 7/29/2009 7:13 PM, Anonymous Benny The Real Libertarian said...

Does Perry's Law pertain to higher education?
That is, the privatization of Michigan's public universities would result in better and cheaper education for Michiganders?
Why have public universities at all?

 
At 7/29/2009 7:53 PM, Anonymous Ἐγκώμιον Shill said...

"
restrictions on competition and market forces breed incompetence
"

The Very Perry Law

Entrepreneur is progressively restricted until he is stratified at his level of incompetence.

 
At 7/29/2009 7:53 PM, Anonymous Anonymous said...

If you feel health care is expensive now, just wait until it's free.
Buck

 
At 7/29/2009 8:09 PM, Blogger OBloodyHell said...

> Does Perry's Law pertain to higher education? That is, the privatization of Michigan's public universities would result in better and cheaper education for Michiganders? Why have public universities at all?

Indeed.

Is there an actual question in that accusation, or are you saying that no one who actually supports libertarianism (unlike, say, YOU, you liberal parrot) cannot possibly work in a "non-libertarianist" job, and must abandon all jobs which don't match the libertarian ideal?

Are you claiming you will never, ever vote for or against abortion, since you'r (presumably) male and thus will never need one?

That, not having served in the military (almost certainly), you will never ever even express an opinion on military matters, expenditures, or actions of any kind? (and, if you have done so, unlikely though I consider that, do you reject the notion that anyone who hasn't served can have a legitimate opinion?)

Requiring that "true libertarians" cannot have government jobs, and "true free-marketers" cannot receive a salary from any government source basically means that no libertarian can possibly become a government representative, executive, or senator.

This is, a-priori flat out stupid...

And if you had A-1 lick of sense, you'd grasp that this is the classic "chicken hawk" argument -- a fallacy -- in different clothing.

But then, you would not be Benny the (really, really really Real) Libtard, would you?

 
At 7/29/2009 8:50 PM, Anonymous Anonymous said...

Liberal Math:

Health Care reform = higher taxes

 
At 7/29/2009 8:51 PM, Anonymous Anonymous said...

Handling market competition in healthcare is a non-trivial exercise. What you really want is to measure the cost of providing qualified life years or increased productivity due to elimination of suffering while controlling for complexity of the case. We currently have no mechanism to do that -- we're not even close and no one is really trying that hard.

In this case, govt intervention could actually help competition along (in the respect that it might start measuring the actual important metrics).

 
At 7/30/2009 11:35 AM, Anonymous Anonymous said...

OBloodyHell:
Yes, I am asking the question: Why do we still, in this late stage of our country's development, still have public universities?
Perhaps in a developing country, a case could be made for public universities. But at this stage?
Surely, the private sector could do a better job. And I think low-cost, high-quality options would emerge, not just the Harvards (which I concede are horribly expensive).
Should not Dr. Perry advocate the abolition of the Michigan University system? That is a high-tax state.
Perry gets his health insurance paid for by the taxpayers of Michigan. Could he not get better health care in the private sector?
You can throw brickbats at me, but that does not answer the fundamental question.
What is your answer, other than more banal brickbats?

 
At 7/30/2009 12:02 PM, Blogger sethstorm said...

Jeff Jacoby wrote:

Imagine the sort of car you’d drive if government regulations made it illegal to sell any automobile that didn’t feature 380-horsepower direct-injection V6 engines, computer-controlled electric power steering, eight-speed automatic transmission, four-wheel-drive, automatic climate control, “smart key’’ technology, touch-screen navigation, backup cameras, LED headlights, acoustic glass, surround-sound stereo, and leather seat stitching.

Save for 175 missing horses, a Detroit heritage instead of a Japanese one, and a lot less gadgets, that's my Aurora. Walking w/o it won't kill me or put my health in implied danger. That, and no Chinese (or otherwise) contract workers were involved in assembling my car.

It's a shame they cant make that kind of muscle in a more affordable form.

As for healthcare, it is less forgiving of mistakes created by sub-standard care. While you might have a knock-off part wear down earlier on a car, it is less likely to kill you. Healthcare on the other hand, is harder to get right than parts on a car and less tolerant for cost-based errors.

As for what I think about the government plan/single-payer part of the reforms:
Add the socialized plan, you lower quality.

As an aside from another post that would be relevant here:
How about removing the bans on cloning as a part of healthcare reform?

 
At 7/30/2009 2:20 PM, Blogger 1 said...

Congressman Pat Ryan Schools MSNBC's Obamazoids on Health Care Competition and Free Markets

 
At 8/15/2009 8:29 PM, Anonymous YET ANOTHER METHINKS said...

"
Very Perry Law

Entrepreneur is progressively restricted until he is stratified at his level of incompetence.

7/29/2009 7:53 PM
Anonymous Anonymous said...

If you feel health care is expensive
"



Very Perry Principle

 

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