No Examples of Free Market Health Care?
Paul Krugman: There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn’t work.
Don Boudreaux: I can list lots of examples of successful health care based on the principles of the free market: the regular, smooth, widespread, and affordable supply of aspirin, bandages, decongestants, toothpaste, dental floss, toothbrushes, contact lenses, running shoes, and gyms. I could go on.
MP: And how about Lasik eye surgery (costs a third today of what it did 10 years ago), low-cost convenient retail health clinics (1,200 in the U.S. and growing), cosmetic surgery (stable prices despite a 6X increase in demand since early 1990s), medical tourism around the world, $10 prescription drugs at Wal-Mart for a 90-day supply of 300 different generic prescriptions, the No Insurance Club, medical savings accounts, etc.
9 Comments:
Well there are folks out there that have been keeping track of Krugman's questionable rantings bsides Donald Luskin...
KRUGMAN TRUTH SQUAD
Really Dr. Perry, you could spend everyday debunking Krugman's economic claims. He'll say anything that Liberals want to hear, and Liberals in politics and media love him for it.
I would add plastic surgery to that list. Because of insurance, it cost me more for 17 rather routine stitches than my neighbor paid for implants. Same doctor.
An example? Come to Mexico. Many doctors mean fierce competition and low fees.
"No prescriptions needed" means adults can self-medicate, without paying for a doctor visit.
What does Krugman know about market mechanisms that account for informational asymmetry? He clearly could not have predicted E-bay.
I have only secondhand anecdotal evidence from Finland. My Father who (a psychiatrist) has worked in public sector in administrative role and in private sector as therapist tells me that an average therapist in the public sector takes in 1-2 patients per day (45min sessions) but every therapist who has private clinic takes in at least 5 patients. That's why municipalities rather buy their therapy services (finland has municipal healthcare that offers to some extent even psychotherapy) from private providers than hire their own union therapists.
In other specialties and in general medicine also municipalities have increasingly chosen to buy the healthcare, they have legal responsibility to provide´from private firms instead of employing doctors themselves.
This has lead to an outrage, when media and the public think that private doctors and firms make too big profits. And they have been making huge profits. Many Firms have tight relationships with the municipal authorities and the markets aren't really working yet, but still the private providers are a lot cheaper than having doctors with union contracts employed by the municipality.
I'm sorry about my english and lack of evidence, but i'm pretty sure that someone has researched finnish healthcare if anyone is interested.
Well Paavo your English is much better than my non-existant Finish and I had NO problem understanding your comment....
Well said sir!
I think the point Krugman was making--correct me if I'm wrong--is NOT that there are not individual instances within broader national health care system of certain kinds of care and treatments that have been successful in the free market, but rather that an entire national health care system has not been able to provide quality health care at a low cost to ALL of its people if it relies solely on the free market. And on this point, Krugman is obviously very right. Not only is economic inequality and a certain degree of poverty a given in the free market system, access to expensive "luxuries" is also highly limited within a free market system. The poor are excluded, and if you count them in your estimation of the true quality of a national health care system, obviously you are going to argue that the free market does not work. At least, not for everyone.
It does not make sense, even for those who advocate for free market solutions to health care, to argue that the free market can provide the most successful forms of health care, unless you ignore the not unsubstantial portions of the population who are excluded from health care in the free market. Support of the free market to an extent means you necessarily support economic and wage inequality and are willing to put up with the extreme stratification in quality of care (and quality of life in general) depending upon wealth of individuals in society--those at the top obviously can get the best, those at the bottom often get nothing. Arguing that plastic surgery and lasik and other non-necessary, non-life saving, and almost always completely OPTIONAL services have managed to stay inexpensive is sort of beyond the point, as is pointing out a handful of instances where you can get SOME less expensive drugs or care. On the whole, unless you completely ignore the poor and working class, free market health care does not work in America. And, in fact, it hasn't worked anywhere, which is why the countries with the highest quality of care are all NOT using free market solutions to provide the bulk of the care in their country. (And that includes Finland, Paavo.)
Government interventions produce unemployment by restricting entry through licensing requirements, support for Unions, and minimum wage laws to mention a few.
Jeff Tucker commented earlier this year, when you "take a market and beat it, tax it, regulate it, subsidize it, flood it with fake money, punish its performers and reward its losers, hobble its capital sector, strangle consumers, nationalize stuff at will, and erect every possible barrier to trade and cooperation," that can barely even be referred to accurately as a "market" – and it certainly isn’t a "free" one; it is, by definition, severely hampered.
I think removal would allow each to be employed to the extent of his abilities and inclinations and more money available for charitable institutions to provide for care beyond what earnings allow.
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