Competition in health care?

Sheldon Richman explains why more competition would be good in health care.  He writes:

Competition is the universal solvent: it dissolves all kinds of problems. (I refer to competition in its broadest sense, including what goes on in the unrestricted marketplace of ideas.) The reason competition is so effective at enhancing public welfare is that no person or group has a monopoly on knowledge and wisdom. These are scattered throughout society, and we cannot know who has the information or vision that is exactly what some or all of us are looking for. With goods and services, knowledge comes largely in the form of prices, which communicate supply and demand conditions and give entrepreneurs clues to how they can satisfy hitherto unsatisfied consumer demand and thereby earn profits.

Everything in the previous paragraph applies to medical care and insurance. The dogma that such services and products are outside the scope of economics is merely self-serving nonsense.

He then goes onto explain how competition is currently “curtailed”:

The practice of medicine (physicians, nurses, etc.) is licensed by state governments. The medical-facility industry is largely governed by state certificate-of-need requirements. Medical schools are subject to government-linked accreditation. The insurance industry is ruled by 50 state governments in cahoots with insurers and, since 2010, the national government; the Department of Health and Human Services defines basic coverage, criteria for acceptance, and price rules. Drugs and medical devices are the domain of a government bureaucracy, the Food and Drug Administration (FDA) and patent law. Individuals are mandated to have insurance. This only scratches the surface.

I know it’s very, very tough for people to imagine a world where doctors are not licensed by the state government.

Who will make sure they are any good?

The same people who do now. Us.

Anecdotes prevent licensing from going away. It only takes one horror story of an unlicensed doctor to get most people to think, “See! This is why doctors need to be licensed.”

Yet, even with licensing there are horror stories. Nobody asks, “How did licensing let this one through?”

Advertisements

Comments

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s