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Competition, Not Government Control, Can Make Health Care Cheaper

How do you feel about the current healthcare system in America?

by The Daily Signal | Updated on 2.26.19

This piece was authored by The Daily Signal, and its content solely reflects the published views of The Daily Signal and its journalists.


In a new Gallup poll, 35 percent say government is the worst problem facing the U.S. In the 55 years that Gallup has asked the question–“What do you think is the most important problem facing this country today?”–this is the highest percentage of people who have identified the government as the nation’s worst problem.

Given how many Americans see the government as a large problem, you have to wonder about so many Democratic politicians’ ambitions to give government increasing power over our lives–particularly in an area as important as health care.

“Medicare-for-all” is the new rage among Democrats, and each of the announced Democrat presidential contenders favors some version of this.

However, as Democrats surge to the left, the enthusiasm of the nation as a whole for government-run health care is more muted. A December Gallup poll shows just 40 percent in favor of a government-run health care system.

Given what we should be looking for in a quality health care system–the best quality health care at the lowest possible prices, making sure that those who are economically challenged get care, too–the answer is less government, not more.

University of Michigan economist and blogger Mark Perry makes a strong case for why we would be better off with open, competitive health care markets.

According to Perry, in the 20 years between 1998 and 2017, the nation’s overall consumer price index increased 50.3 percent. Over this same period, the cost of medical services increased by 105.3 percent and hospital services by 189.3 percent.

Perry–and many other economists with a free-market bent–argue that it is lack of competition in health care that drives up prices far more than general price escalation.

Health care is defined as having a “third-party” payer. That is, someone else pays your bill–your employer, your insurance company, or the government.

Just think about a typical visit to the doctor. Your health plan gets you in the door, but you have no idea what the doctor is being paid or the cost of anything he or she prescribes you–whether various procedures, tests, or drugs. Even the doctor has no idea the costs of what he or she prescribes.

How can a market possibly function this way?

Can you imagine going to the supermarket and seeing the shelves filled but no prices displayed? How could you decide what and how much to buy?

Could you imagine buying a house and having a third party represent you and negotiate what you will pay?

Perry shows, practically, the implications of a third-party payer in terms of costs. He brings the example of the cosmetic surgery market, in which procedures are overwhelmingly elective and individuals pay for them on their own.

Looking at a basket of 20 cosmetic surgery procedures, the average price increase between 1998 and 2017 was 34.2 percent–less than the consumer price index and about one-third the increase of general medical services.

From 1970 to 2017, the portion of U.S. health care expenses made by a third party–insurance or government–went from 65 percent to 89 percent. The portion of expenses made out-of-pocket by consumers went from 35 percent to 11 percent. Over this same period, per capita health care spending increased by at least a factor of six.

The government is involved in the health care of just about every American. About 130 million Americans get health care through Medicare or Medicaid. Another 156 million get it through their employer; they still have the government involved because employers provide health coverage as a tax-deductible business expense.

The best thing we can do for the country is get health care back to a real market with real transparent costs and competition. For those that need help, provide subsidies, but don’t distort prices.

In other words, we need to go in the opposite direction of “Medicare-for-all.”

DISTRIBUTED BY CREATORS.COM

The post Competition, Not Government Control, Can Make Health Care Cheaper appeared first on The Daily Signal.

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(148)
  • singinghawk926
    Voted Sad
    03/01/2019
    ···

    Medicare for All is the best choice for improving the ACA. It will be affordable, it will cover EVERYONE, and we can make it happen. Once it has been implemented and allowed to function fully, the American people will wonder what took so long! The billions that would have been spent on insurers’ premiums, drug manufacturers’ profits and equipment providers’ charges will be negotiated using the needs of the entire American population as the bargaining chip. We will have better care, for everyone, for an overall cheaper price.

    Like (36)
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  • Stewart
    03/01/2019
    ···

    For die hard Capitalists, you can argue that competition drive costs, but the very definition of “free market” Capitalism contradicts the idea of competition because it ALLOWS FOR MONOPOLIES. Break up the big Pharm monopolies and socialize medicine. The private sector has shown itself incapable of providing reasonably priced drugs and medical care without government intervention.

    Like (21)
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  • Mark
    Voted Happy
    03/03/2019
    ···

    Medicare for All is nothing but a deceptive repackaging of the failed and miserable Obama Care. No way in hell am I going back to that crap. Congress can take all of this Democrat Socialist garbage and shove it right where the sun doesn’t shine. Get the hell out of my health care. Get the hell out of my life.

    Like (18)
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  • Ken
    Voted Apathetic
    03/01/2019
    ···

    You would think that more people would want affordable health care but that’s not going to happen as long as we let for profit insurance and big pharma control the market. As long as Trump occupies the White House this is the way it will be. The next house that Trump occupies will have free health car.

    Like (11)
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  • I.Got.an.Idea...
    Voted Sad
    03/02/2019
    ···

    The free market has not provided quality healthcare and they have proven that they won’t, because they lose money if people are not sick. We need a single-payer, non-profit entity providing all healthcare. Take Greed and money out of healthcare, and we will see 350 million healthier Americans and healthcare costs will go down, because people are healthier and we will not have billboard signs on highways marketing how great someone’s Emergency Room is. Emergency rooms are not a sign of good healthcare. In fact, it is the result of poor healthcare.

    Like (16)
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  • Steven
    Voted Happy
    03/01/2019
    ···

    Get the government out of it let the free market rule and cost will come under control.

    Like (14)
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  • David
    03/02/2019
    ···

    The Daily Signal is one of the propaganda tentacles of The Heritage Foundation. Given that, nothing they publish is going to be honest. Free market competition has been the framework of our healthcare system system since Richard Nixon, and fully for profit since Ronald Reagan. The result is a system that works for the wealthy and no one else. We pay ridiculous premiums on top of out of pocket expenses. People choose between food and medication, and in some cases attempt to ration their medication because of cost, resulting in their death. The World Health Organization ranks the United States 37th in healthcare worldwide in a study published in February 2018. Competition in healthcare in this country has resulted in the healthcare mess we have now. Wealth does not easily share power. Keeping healthcare for the 1% is power.

    Like (10)
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  • JTJ
    Voted Apathetic
    03/02/2019
    ···

    Deregulate the health insurance industry and allow them to compete across state lines.

    Like (10)
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  • Jim
    Voted Sad
    03/01/2019
    ···

    Competition hasn’t worked. Individuals have no power to negotiate and many in need can’t afford it. Just look at the happiest countries in the world, Scandinavian countries, for government healthcare that works much more effectively and at a lower cost than the US

    Like (12)
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  • Kodiwodi
    Voted Sad
    03/02/2019
    ···

    We’ve seen how well competition works in healthcare. One giant healthcare group buys up another until there is no competition.

    Like (9)
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  • Phillip
    Voted Sad
    03/01/2019
    ···

    The business of insurance companies (they are NOT healthcare companies) is to make profit. That is accomplished by denial of medical treatments or paying as little of the cost as they can thus making the consumer pay more and collecting exorbitant premiums for little service. Single payer insurance would be cheaper and Better results would follow. People would not be kept from obtaining healthcare by financial woes. Insurance companies could still make a hefty profit from those people who want add ons to the basic medical help a single payer would get. But they would not be able to hold us for ransom like they do now.

    Like (9)
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  • Hillary
    Voted Sad
    03/01/2019
    ···

    Healthcare in America is really wealthcare for a few rich, selfish jerks who put their profits above all else. universal healthcare now.

    Like (8)
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  • TexasTRex
    Voted Sad
    03/02/2019
    ···

    The answer is NOT the government. Free market competition will reduce costs and increase quality.

    Like (7)
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  • ManfromNebraska
    Voted Sad
    03/02/2019
    ···

    Get the government out of healthcare! Leave it to the free market. Medicare for all is a horrible idea. It destroys healthcare and our economy. It’s not the government’s job!

    Like (7)
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  • SirRobert
    Voted Sad
    03/01/2019
    ···

    Competition, corruption, and greed in healthcare has led to the horrific state that healthcare is in America. A one payer system like Medicare would create mass buying power and drive costs down.

    Like (7)
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  • Matthew
    Voted Sad
    03/01/2019
    ···

    Medicare for All. NOW.

    Like (7)
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  • Scott
    03/02/2019
    ···

    Universal healthcare. Every other first world nation can do it. Why not us?

    Like (7)
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  • Glowurm
    Voted Sad
    03/02/2019
    ···

    Not in this country, it won’t!

    Like (7)
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  • KansasTamale
    Voted Sad
    03/02/2019
    ···

    Insurance companies are the Death Panels the GOP was so concerned about when we discussed real healthcare for Americans. What the Republicans have done to ACA has devastated, but it’s the best we have. WE NEED BETTER. MEDICARE FOR ALL NEEDS REWRITING. THR INSURANCE COMPANIES wrote the prescription insurance law for George W. And it is horrible. Medicare is run by insurance companies too and THE COMPANY MAKES THE DECISIONS about the patient NOT THE DOCTOR. These companies let you on the first time you buy secondary insurance, BUT YOU ARE STUCK WITH PRICE RAISES IF YOU HAVE CERTAIN CONDITIONS. The company can deny you new insurance. NONE OF THESE THINGS WOULD BE HAPPENING IF THE GOVERNMENT WERE IN CHARGE TELLING THE INSURANCE COMPANIES WHAT TO DO. None of these would be happening

    Like (5)
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  • NoHedges
    Voted Sad
    03/01/2019
    ···

    More of the same... no thank you. We have tried your competitive market method and it has NOT proven to be effective. In fact the US has the highest childhood mortality rate of any of our world peers. So..If the majority of those same world peers can figure out how to provide national healthcare for their citizens... so can you all. Or....we will find a representative who CAN get the job done. Your choice. But understand this... you will not have a job in two years if there no national healthcare plan in place, and your chance at the presidency will become even slimmer. Get the job done boys and girls.

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