That's effectively what Canada et al have done. Yes, I understand the government "negotiates great rates" for the citizens, but it's effectively the same thing as a blank check. It just takes a bit of shenanigans behind the scenes to sell the bureaucrats on your latest rate hikes. If you think pricing is bad now that the big insurance companies have to "negotiate great rates" for their clients, think how it'll be when there's only one party there.
Government-negotiated rates places the pricing totally outside the realm of necessity or reality and makes it a purely political matter, and politics is a messy, fickle thing built on personal favors and tit-for-tat. Not having your political activity interpreted as corruption or bribery mostly depends on not pissing off someone with more power than you.
Health care costs so much because of the insurance leech. The only way to restore sanity is to restore real competition and make the consumer pay directly. Doctors will have to charge reasonable fees to the patients, suppliers and vendors will have to charge reasonable fees to the doctors, etc. It will break the cycle of exorbitant cost in health care. That may be, in some senses, a painful transition, but it's the only sustainable thing in the long term. The cycle will not be broken by saying "Wow, health care sure costs a lot of money. Let's just get the government to print some extra cash and take care of that for us."
Insurance is typically a highly regulated industry because when insurance is involved, people get screwed. The incentives are misaligned; the insurance company only makes money when they don't give you what you're paying for. Insurance only works in events that are very unlikely. It's extremely likely that everyone will go to the doctor or need medical assistance. Insurance is a very, very bad model for this service.
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Government-negotiated rates places the pricing totally outside the realm of necessity or reality and makes it a purely political matter, and politics is a messy, fickle thing built on personal favors and tit-for-tat. Not having your political activity interpreted as corruption or bribery mostly depends on not pissing off someone with more power than you.
You might want to read how England does it. A national organisation (NICE) gives guidance about what care pathways and treatment should look like. Local CCGs (clinical commissioning groups) decide what they're goong to pay for.
Your description isn't even close to reality in England.
>Groups will have, in addition to GPs, at least one registered nurse and a doctor who is a secondary care specialist.
Doctors and clinicians deciding just how much they're going to get paid. Not subject to any kind of market or competitive force that may work toward an equilibrium based on supply and demand. The government has said "Here's a massive amount of money, fight among yourselves about who gets how much, good luck".
Politics is very much at play here, as it is in any system where the prices are determined by committees or small groups instead of the free market. This includes the current system in the US, which is effectively controlled by a handful of paper pushers in the insurance industry, leeching billions out of our system each year without providing any value and ever-inflating the costs for the patient.
There's no reason health care has to be a distorted market. Free market principles are applicable in health care as they are in any other field. While it's true that people need medicine to survive in many cases, people also need food and groceries to survive, but we haven't had to nationalize a grocery chain heretofore. There is enough competition in the space to keep prices low. There would be ample competition in the medical space if we could break the insurance cabals that currently exist.
The powers that be rather like our current system, and they love it now that the ACA has made it a crime to not purchase their product. They would certainly also enjoy the "print money til the doctors are happy" system proposed by many left-leaning persons. The one thing they're most afraid of is the one thing that restores equilibrium and stops their ability to gouge, which is real competition and a true free market undistorted by unfair practices and insurance company leeches.
Non-catastrophic medical insurance should be outlawed and clients should have to pay their doctors directly, forcing doctors to charge a reasonable amount of money or have no clients, forcing suppliers to charge a reasonable amount of money or have no customers, forcing medical schools to charge a reasonable amount of money or have no students. We can't just keep saying "The expensive way of doing this is easy and great, so let's just have the government pay for it." Things must be self-sufficient.
I am not competent enough to judge if the pills I purchase actually contain penicillin and only the inert ingredients listed on the label. We know from the less regulated dietary supplement industry that many manufacturers lie about the contents. I have no reason to believe that the pharmacological drug industry is fundamentally more honest.
There used to be a free market for health care. The FDA started as a political response to the adulteration and misbranding of food and drugs in that market. The early 1900 saw the rise of popular patent medicines containing radium, with so-called "radioactive quackery."
A true free market would have no restrictions on Doramad Radioactive Toothpaste, on the sale of snake oil made of petroleum, or of Bonnore's Electro Magnetic Bathing Fluid as a cure for cholera. The free market of that era produced Elixir sulfanilamide, which killed more than 100 people. The owner of the company justified it because they were "supplying a legitimate professional demand." A free market needs no more justification than that. Anything else is politics, yes?
I don't want to return to that sort of free market. What is your most convincing evidence or argument that your proposed free market will lead to an overall improvement in health consequences? Especially knowing the history of bad actors in the health care era.
You commented that "people also need food and groceries to survive, but we haven't had to nationalize a grocery chain heretofore." You omitted that we have nationalized oversight of the food production system supplying the grocery chains. Again, the FDA started because the free market system of the late 1800s couldn't handle the food safety concerns. People did die because of the adulterated food they ate.
They still do, as you know from various E. coli outbreaks, or the 2008 Chinese milk scandal with an estimated 300,000 victims.
Your argument regarding grocery chains therefore at best means that governments shouldn't own hospitals, not that the state and federal governments should get rid of the 'committees or small groups' which develop the regulations for the hospitals.
All of the examples you gave appear to assume that only the current actors - licensed doctors, regulated medicines, hospitals with government inspections - will be part of the free market system. However, an apolitical free market system must allow anyone to claim to be a doctor, anyone to claim to produce a medicine, and any barbershop, plumber, or auto shop to provide hospital services.
How does an apolitical free market prevent these known historical problems, including deaths, from becoming more common again? Why didn't the free market of the late 1800s come up with a free market solution?
I was addressing your definition of true free market in which you make it sound as if in a true free market anything would go down. Free market still has provisions to protect consumers. The market you describe is not a free but anarchic.
The context is "Politics is very much at play here, as it is in any system where the prices are determined by committees or small groups instead of the free market."
My point is that politics is always at play. The only way to remove politics is to have an anarchic free market.
It's 'committees or small groups' which made it illegal to buy radium toothpaste. It's 'committees or small groups' which made it illegal to put drugs on the market without testing. It's 'committees or small groups' which put into place federal meat inspections.
Could you tell me how a free market has provisions which are more effective in terms of health outcomes, than, say, the Nordic or Japanese models? And why it was that those provisions weren't effective in the free market of the late 1800s? Since my reading of history is that the failure of free market to provide protections is what lead to the protectionist system we have today.
>It's 'committees or small groups' which made it illegal to buy radium toothpaste. It's 'committees or small groups' which made it illegal to put drugs on the market without testing. It's 'committees or small groups' which put into place federal meat inspections.
You're missing the operative element of my statement, which was "any system where prices are determined". It refers to the specific corruptibility of artifical governmental price fixing and its devastating effects on a free market. It is true that there will always be some element of politics affecting the marketplace, unless there is no government in place. It's OK to have a government that is interested in neutrality and takes all reasonable precautions to ensure things remain free and fair for both the supply and demand sides of the marketplace. Yes, small committees will have some decisions to make, and yes, they would also be subject to possible corruption or bribery, but as long as the government stays roughly within its provisioned and proper sphere (and it's our job to ensure they do so), it shouldn't have such painful direct ramifications.
I was going to reply with the same thing rokhayakebe did. Regulation and government still exist in a free market. If the vendor intentionally misrepresents the contents of his product, he has committed fraud and should be held criminally liable. There's nothing fundamentally incompatible about a standards and testing body and the free market.
Free markets have rules to keep the playing field even and fair, and to prevent the balance of power from tipping too far in any one direction. A market is not free if it is impossible to enter due to monopolistic forces, and a market is not free if the consumers are mislead or otherwise deprived of the information needed to make an informed purchasing decision. Free markets are not anarchy.
I was considering that "illegal to purchase" is equivalent to setting the legal market price to infinity, along with possible illiquid aspects like jail time.
Of course, in practice business will spread over to the illegal marketplace. However, I think you also were excluding the illegal marketplace. Consider that if a committee or small group sets the price of wart removal to, say, $20,000, there will still be an illegal marketplace for that procedure. Vice versa, if the price of heart surgery is set to $1, then there will be no public marketplace for it, but it will still be available in the illegal marketplace.
So in truth there is no such thing as a committee or small group which can absolutely set the price. That said, I, like you, am only considering the public, legal marketplace.
You say "devastating effects on a free market" like it's a universal bad thing. The things I pointed out - the regulation of food and drugs - in truth did have devastating effects on the patent medicine market. I think that's a good thing.
Government price controls on the polio vaccine, and the nearly complete eradication of that disease, caused a collapse of the iron lung manufacturing marketplace. I do not cry over that loss. I don't even think the producers of those iron lungs were seriously distressed about their economic losses.
So I absolutely agree with you that some controls can be devastating. That's, um, why the controls were put into place.
Thus, I think you need to describe specific devastating effects on a specific market, and not make a blanket statement that covers the entire market. I'm happy that the market for 9 year old coal miners has been devastated. (Yes, this was done by prohibition. We could get the same effect by fixing the price of child labor to $1 million/hour.)
"If the vendor intentionally misrepresents the contents of his product"
As I pointed out with Elixir sulfanilamide, which killed 100 people, the producer did not really misrepresent the contents of the product. Quoting from http://www.fda.gov/%20AboutFDA/WhatWeDo/History/ProductRegul... "Selling toxic drugs was, undoubtedly, bad for business and could damage a firm's reputation, but it was not illegal."
Read it, to see how difficult it was to track down the 240 gallons of toxic elixir. The only crime, by the way, was the use of the word "elixir". Had they used "solution" instead then the "FDA would have had no legal authority to ensure the recovery of the drug and many more people probably would have died."
You say "There's nothing fundamentally incompatible about a standards and testing body and the free market". Obviously the standards and testing body has to set certain rules. How are those rules determined? Aren't they equally determined by a 'committee or small group' and as corruptible as the Medicare payouts are now?
For example, various states are trying to prohibit the Constitutional right to an abortion by the round-about means of making it extremely difficult and expensive to operate a medical center which carries out abortions. This is done under the guise of improving safety standards at those centers and making sure that the women getting the abortion are fully informed of the details and have had the time to reflect on the decision.
This seems like a prime example of how a standards body can block the free market, even without price controls.
To make up an example using a less sensitive topic than abortion, consider if every purchase of a beer required sitting through a 2 hour video on the negative effects of alcohol, including video of car crashes caused by driving while intoxicated and surgical footage of liver surgery due to liver cirrhosis. It makes sure that consumers are neither mislead nor deprived of information - and yet it's a burden on the free market, no?
So I don't see the difference. One is a financial limit, another is a regulatory limit, but both are limits to a free market.
How does a free market with a standards and testing body supposed to work, and also be significantly less subject to free market manipulation than what we have now?
Lastly, you used the phrase "provisioned and proper sphere". Such a sphere is only defined by politics, because your sphere and my sphere can be very different. Consider a law like the 14th Amendment, Section 4, which says that reparations for "any claim for the loss or emancipation of any slave" were null and void. Why can't an ex-slaveholder say that taking property isn't part of the proper sphere, and insist on getting compensation? Wouldn't that be the 'neutral' position of the market?
> Doctors and clinicians deciding just how much they're going to get paid. Not subject to any kind of market or competitive force that may work toward an equilibrium based on supply and demand.
How do you get to that conclusion? There is plenty of tendering happening in NHS.
> The government has said "Here's a massive amount of money, fight among yourselves about who gets how much, good luck".
> We can't just keep saying "The expensive way of doing this is easy and great, so let's just have the government pay for it." Things must be self-sufficient.
You know that the English government pays less per capita than the US government for health care and we have better health outcomes, right?
