I never claimed it did. My claim is that what we call "health insurance" in the US is not just insurance; it is a bundle of insurance (coverage for high cost unforeseen events) with other things that aren't insurance, but have to be bundled with it because the government says so.
> direct primary care offerings exist right now.
Yes, they do, but they are hamstrung by the fact that the US health care system disincentivizes patients from using them. If all primary care in the US was provided by such places, and patients paid the costs directly, that would be a free market, at least in primary care. But that's nothing like what we have. It's certainly nothing like what Medicare Advantage, which is the subject of this discussion, provides.
> Healthcare, when coupled with a profit motive, offers misaligned incentives, period.
Not in a free market. Health care in the US before WW II was provided by private companies (or individuals like doctors with their own practices), for profit, and worked better, given the technology of the time, than what we have now. What ended that system was laws passed during WW II that fixed wages, which meant that companies could not compete for labor in a free market by offering higher wages. So companies looked around for other benefits they could offer to compete, and health care was an obvious one. And then after the war the government decided to regulate the company-provided health care instead of ending it and restoring a free market.
What offers misaligned incentives is the bastardized system we have in the US, which combines the worst features of for-profit with the worst features of socialism. The for-profit part is not visible to the actual patients--as I have already pointed out upthread, patients have no idea what the services they are getting actually cost, so they have no idea whether they are worth what they cost. The socialized part is what patients see--the services available to them are determined by their health "insurance", not them--but decisions are made by third parties who have no skin in the game and suffer no consequences when they make bad decisions that cause harm to patients.
> nobody should be getting denied a cochlear implant because they are deaf due to 'paperwork issues' for months or years until they die.
Of course not. And this would not happen in a free market. It happens because we don't have a free market in cochlear implants, we have a non-free market system with misaligned incentives, as I described above.
What would happen in a truly free market is that a large percentage of elderly people with fixed incomes would be priced out of the medical care they need to live healthy, fulfilling lives past their 60s. This is very simple math, and it is something our society has decided not to support. There's a variety of factors driving that decision, not least that the elderly is a large, active voting bloc and politicians want to court their good will. If you have a solution for this that doesn't just assume "the free market" will work it out, that would be interesting.
“Free market” can only exist in specific sectors and rarely without extensive regulation.
Comparing computer and healthcare industries makes almost no sense (besides extremely superficial ways) due to perfectly obvious reasons.
> making health care more affordable
Doubtful (since there is zero evidence of this working anywhere). Try to imagine how would this work for cancer and other serious diseases (hint: it wouldn’t at all for the majority of the population without some form of ins)
Free markets have existed since the dawn of mankind. Their only prerequisite was the rule of law. They are responsible for the amazing wealth we are enjoying everyday, for the full shelves of products and the range of services offered to us. While regulations - brought for our own good and safety, of course - succeed in increasing costs and add delays. Just see healthcare, housing and education for some sad examples.
I am curious why you think they wouldn't work for healthcare since: a) they worked just fine before government started intervening somewhere mid-last century and b) their mechanisms (price signals, competition, law of supply and demand, etc) apply just as well like for any other essential goods (food, water, fuel, etc).
> they worked just fine before government started intervening somewhere mid-last century
Healthcare industry as we know it today did not exist back then (the costs and available treatments are on another level).
> b) their mechanisms (price signals, competition, law of supply and demand, etc) apply just as well like for any other essential goods (food, water, fuel, etc).
Not really or only in a very superficial way and extremely basic way.
> While regulations - brought for our own good and safety, of course - succeed in increasing costs and add delays. Just see healthcare, housing and education for some sad examples.
As far as healthcare and education are concerned this is almost entirely an American problem. Some countries like Switzerland or the Netherlands have entirely private/non-state run healthcare systems but extensive regulation has kept costs relatively low and accessibility at very high levels.
> Healthcare industry as we know it today did not exist back then
Not true - it always existed (with different costs and treatments of course) and it was rather developed and affordable in the '50s and beginning of '60s before government intervention started in the earnest.
> Not really or only in a very superficial way and extremely basic way
Why and how? Feel free to expand and provide some examples.
> this is almost entirely an American problem
Not true. Health care and education are quite expensive in all developed countries, including where they are paid from our tax money then offered to us "for free".
> extensive regulation has kept costs relatively low and accessibility at very high levels.
How does that even work? I never heard of a regulation able to lower prices. Price controls only create shortages. Swiss private healthcare is quite expensive, but the competition on their (relatively) free market is keeping the costs from exploding even more.
There are regulations affecting the food you eat, the home you live in, the cars you drive and the roads they're driven on. You'd be hard pressed to find anything run purely as a free market in the US, much less elsewhere.
Moreover, history is full of evidence that a pure free market begets regulation as a direct consequence of the natural desire to externalize the costs in a system. Pure free markets are an ephemerality in the world, undone by their own worst instincts soon after their creation.
Who said anything about purely free markets?! Markets are indeed over regulated around the world today. More so in Europe, than in the US, explaining why EU is lagging behind economically further and further. But much less so at the beginning of the last century where a tremendous amount of wealth and building got done in a very short time.
The truth is staring us in the face: the more we regulate (no matter how good the reason is), the higher the costs and delays. Culminating with the three broken markets of today: healthcare, education and housing.
> history is full of evidence
Please feel free to provide some then. The historical evidence I know (USSR and such) shows that countries that killed their free markets were unable to even feed their own citizens.
If I give you a list, you’re going to proceed to tell me that they all exist because of government regulation. I don’t argue with zealots.
If you define criteria you will accept as evidence before I give you a list, I’m willing to do the work to show you that pure free markets produce outcomes that force regulation on them.
Finally, if you aren’t talking about “pure free markets” when you say that regulations are bad, then what the heck are we even arguing about? I haven’t said we should turn the US into the Soviet Union, just that free markets require some regulation. This should be as uncontroversial as stating that gravity exists. You have to go very far back in academic economic literature to find anyone arguing that free markets are an unmitigated good.
Actually, free markets have a very efficient way of dealing with monopolies: it's called competition. Only when competition is restricted by governments (through regulations, certifications, patents and such) can a lasting monopoly be achieved.
> countless times in American history
Please provide some examples then. The most widely touted, Standard Oil, was already losing marked to its healthy competition before antitrust action even started:
American Tobacco Co - in 1890 and, through acquisitions and mergers, came to control virtually the entire American tobacco industry with around 150 factories. The U.S. Court of Appeals eventually deemed it in violation of the Sherman Antitrust Act and forced the company to dissolve.
Andrew Carnegie's Steel Co. - created a vertical monopoly in the steel industry by obtaining control over every level involved in steel production, from raw materials, transportation and manufacturing to distribution and finance. By 1897, he controlled almost the entire steel industry in the United States. In 1901, became part of the world's first billion-dollar business when it merged with a group of other steel businesses under the name U.S. Steel Corp. (ticker: X), to become the largest company in existence at the time, which remains among the largest steel producers in the world.
AT&T - operated as a monopoly in the telephone industry for many decades until 1982 when it was forced to break up into eight smaller companies, almost all of which have since become a part of AT&T again.
AT&T's monopoly was definitely government-granted: there was even a law forbidding users to install their own 3rd party telephone receiver "to protect the AT&T network"!
I am not familiar with the other 2 cases but I wouldn't be surprised if it was, again, government-granted or not an actual monopoly. Think about it, it's logical: why wouldn't competing startups attack a monopolized market? It's ripe for disruption, after all.
Monopolies can arise on the free market but unfettered competition will always defeat them.
> given the technology of the time, than what we have now
I’m not sure that’s at all a fair comparison. Due to the technology at the time (or lack of it) costs were massively lower because generally doctors couldn’t really do too much unlike today.
I never claimed it did. My claim is that what we call "health insurance" in the US is not just insurance; it is a bundle of insurance (coverage for high cost unforeseen events) with other things that aren't insurance, but have to be bundled with it because the government says so.
> direct primary care offerings exist right now.
Yes, they do, but they are hamstrung by the fact that the US health care system disincentivizes patients from using them. If all primary care in the US was provided by such places, and patients paid the costs directly, that would be a free market, at least in primary care. But that's nothing like what we have. It's certainly nothing like what Medicare Advantage, which is the subject of this discussion, provides.
> Healthcare, when coupled with a profit motive, offers misaligned incentives, period.
Not in a free market. Health care in the US before WW II was provided by private companies (or individuals like doctors with their own practices), for profit, and worked better, given the technology of the time, than what we have now. What ended that system was laws passed during WW II that fixed wages, which meant that companies could not compete for labor in a free market by offering higher wages. So companies looked around for other benefits they could offer to compete, and health care was an obvious one. And then after the war the government decided to regulate the company-provided health care instead of ending it and restoring a free market.
What offers misaligned incentives is the bastardized system we have in the US, which combines the worst features of for-profit with the worst features of socialism. The for-profit part is not visible to the actual patients--as I have already pointed out upthread, patients have no idea what the services they are getting actually cost, so they have no idea whether they are worth what they cost. The socialized part is what patients see--the services available to them are determined by their health "insurance", not them--but decisions are made by third parties who have no skin in the game and suffer no consequences when they make bad decisions that cause harm to patients.
> nobody should be getting denied a cochlear implant because they are deaf due to 'paperwork issues' for months or years until they die.
Of course not. And this would not happen in a free market. It happens because we don't have a free market in cochlear implants, we have a non-free market system with misaligned incentives, as I described above.