Competition in Health Care

A friend sent me this short blog post from Mark Perry, which points to a company that performs blood tests on the cheap, with a transparent pricing plan, and is succeeding well thanks to its successful attempt to use a market-based approach in the industry.  The quite reasonable argument is that more market-based solutions can bring down health care costs.

But then Perry ends with this:

At the same time that Obamacare is planning a complete government takeover of health care and medicine in America that will stifle competition and raise prices, the market continues to offer many new, innovative, alternative solutions to health care that are competitive, affordable and convenient.

It's unfortunate that the writer would follow up a perfectly legitimate point about a way to decrease health care costs with this kind of polemic and fact-free sentence. ObamaCare is not "a complete government takeover of health care and medicine in America". It's the creation of health care exchanges, mandates to get health insurance, subsidies to help the uninsured afford it, taxation to pay for it, and a panel to reduce Medicare expenditures (a program that was already a "government takeover") through refusing to pay for treatments that aren't effective. A complete government takeover would be the UK system. A partial government takeover would be the Canadian system. This is neither of those.


And I have to point out that the evidence in terms of costs is pretty striking- the US currently has the system with the lowest amount of government involvement in the Western world, and the US also is #1 in health care costs in the Western world. The next-most privately-dominated system is Switzerland's, and it is #2 in health care costs per capita. All the evidence in the health care field points to the sad fact that the free market does not produce cost-effective results due to the unusual nature of medicine.  In fact, administrative overhead inherent in a competitive system is a primary driver of higher costs.

The market has completely failed to produce cost-effective outcomes over the past 50 years in the US. I don't see how that's even debatable. Where our system produces the most satisfaction is in Medicare- the Single Payer part of the system, and also one in which government-run spending is more cost-effective than the privately run alternatives.
I think that conservatives could have had more competition (and could still have it), as well as tort reform, if they would just compromise with Democrats and agree to universal coverage. Democrats were dying for some Republican cover on this bill. We can have the best of both worlds if Republicans would take yes for an anwer.