The health care/ACA/AHCA commentary from readers continues to be uniformly excellent. (It was originally spurred by the post, No, Insurance Companies Treating People With Pre-Existing Conditions Differently From Other Customers Is Not “Discrimination.”) Spartan’s Comment of the Day on the topic has itself sparked its own Comment Of The Day, this one authored by Charles Green.
By fortune’s smiles, I was able to finally meet Charlie last week face to face, as he kindly alerted me that he would be passing through my neighborhood. Finally having personal contact with an Ethics Alarms reader is always a revealing and enjoyable experience, and this time especially so. I think you would all enjoy Charlie; I certainly did. Maybe I need to hold an Ethics Alarms convention.
Here is his Comment of the Day on the post, Comment Of The Day: “No, Insurance Companies Treating People With Pre-Existing Conditions Differently From Other Customers Is Not ‘Discrimination’.”
…The claim that “a free market system” and “freedom of choice” is the solution to all that ails us is a mindless mantra that is only occasionally true, but not always.
It’s important to be clear about when free market solutions are good, and when they are not. It’s not all that hard to sort out. Basically:
Free market solutions ought to be the presumptive default. Unless there is good reason to the contrary, they ought to be the rule.
1. Exception Number 1: Natural monopolies. It makes no sense to have competition for municipal water supplies; airports; multiple-gauge railroads; fishing grounds; groundwater; or police departments. The basic reason is the putative economic benefit is either simply not there, or is absurdly overwhelmed by the social confusion engendered by multiple suppliers.
In these cases, a form of regulated monopoly is desirable. (By the way, the airline industry at a national level is precisely this kind of market; we do not have too little competition there, but too little regulation).
2. Exception Number 2a: Wallet-driven market power monopolies. It’s strategy 101 in business schools that the way to be successful is to be #1 or #2, and the best way to do that is to get more market share than your competition, so you can drive them out of business. The one guaranteed way to do that is to cut prices so low that no one else can compete. Think Walmart. Think Amazon. Think Japanese in the 60s and 70s in any industry.
The reason we have anti-monopoly laws is to reset the playing field when a competitor dominates the market too strongly.
3. Exception Number 2b: Product-driven market power monopolies. Where the product is so obscure, expensive, infinitely variable, and difficult to understand that the producers are de facto in control, because it is too confusing and too dangerous to challenge them.
Drug prescriptions are an interesting example. The ‘free market solution’ to high drug prices was (partly) to let drug companies advertise, and to loosen up the definition of what constituted a ‘new’ drug. What did we get? New diseases like RLS, new definitions of ‘new’ (moving ‘off label’ to ‘on label’) and even higher drug company profits. Because who’s still going to argue with your doc? Especially when he or she gets side benefits from giving in to the latest DTC ads on network news programs?
Healthcare falls a bit into all three categories. You really only need so many hospitals in a given area. The AMA limits the number of doctors. The only reason for having a middleman in the business (aka insurance companies) is because people like you insist that a “free market solution” is better. We are the only developed country that believes this, and it’s an incontrovertible fact that we are the highest cost. DOH!
Single payer is a significant step toward a rational model of an industry that is subject to some natural monopoly limits, and is beyond the reach of the average consumer to be self-educated (those med students aren’t just beer-ponging, medicine is complicated).
We already regulate the following:
– drug patent time
– medical licensing
– drug efficacy
– health provider procedures
– insurance provisions at state and national level
A single payer system wouldn’t solve all our healthcare problems, but it would be a significant start. A base program of Medicare for all, with an option for concierge level care for those who can afford it, would simplify loads of stuff.
Both parties don’t like to admit it, but there has to be what the GOP used to derisively call “death panels.” The only question is how to do it, because there’s no way we’re going to pay for everyone to get the most expensive treatment. Every other country has figured this out, we can too.
The other thing both parties don’t like to admit is that we won’t stand as a society for dumping ill people on the side of the road. We will reimburse emergency rooms for serving everyone. The thing is (and this the GOP should be faulted for not acknowledging) that health-care-by-ER is absurdly expensive, and inefficient.
Single payer offers solutions to both those issues – “free markets” do no such thing. And those are major issues.
The medical writer Atul Gawande explored the highest-medical-cost county in the US, and the lowest-medical-cost county in the US. They turned out to be Hidalgo County TX (highest cost), and Grand Junction CO (lowest cost).
After exploring all other options (demographics, hospitals, income) he figured out the difference.
–Hidalgo County had doubled down on free markets; every doctor had an ownership stake in a diagnostics lab; they ordered boatloads of studies and tests, because in an unregulated natural monopoly there’s nothing to prevent over-capacity of diagnostic clinics.
–Grand Junction had agreed to collaborate. They co-located in the same buildings, and used pooled resources for diagnostics (“go upstairs to CatScanCo and get a CatScan, I’ll call them and tell them you’re coming”).
Basically the high cost solution is your “free markets” idea run wild, without regulation. If you want to call Grand Junction the socialist solution, but if you’ve ever been to Grand Junction you might want to think twice before using those words: they’re a lot more likely to cotton to “sticking together as a community” than “socialism.”
Free markets are not the automatic knee-jerk solution to everything, and I wish everyone who trots out that old hackneyed phrase without thinking, believing that it actually means something, would give it a rest.