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Competition would save medicine too...

Competition so regularly brings us better stuff that we have come to expect it. We complain on the rare occasion the supermarket doesn’t carry a particular ice-cream flavor. We just assume the store will have 30,000 items, that it will be open 24/7, and that the food will be fresh and cheap. I take it for granted that I can go to a foreign country, hand a piece of plastic to a total stranger who doesn’t speak English... and he’ll rent me a car for a week. Later, Visa or MasterCard will have the accounting correct to the penny. Compare: Governments can’t even count votes accurately -- or deliver the mail efficiently. Yet now, somehow, government will run auto companies and guarantee us health care better than private firms? And the public seems eager for that! If you think it’s mainly the political class and mainstream media that are clueless, listen to the doctors. Dr. Atul Gawande, in an otherwise interesting article in "New Yorker" magazine on health-care costs, disparages medical savings accounts and high-deductible insurance.

First, he explains the theory behind this proposal to cardiologist Lester Dyke: “[People would] have more of their own money on the line, and that’d drive them to bargain with you and other surgeons, right?” Gawande comments, “He gave me a quizzical look.” The doctors then dismiss the idea with a sneer. “We tried to imagine the scenario. A cardiologist tells an elderly woman that she needs bypass surgery and has Dr. Dyke see her. They discuss the blockages in her heart, the operation, the risks. And now they’re supposed to haggle over the price as if he were selling a rug in a souk? ‘I’ll do three vessels for $30,000, but if you take four, I’ll throw in an extra night in the ICU’—that sort of thing? Dyke shook his head. ‘Who comes up with this stuff?’ he asked.” I do. Adam Smith did. Market competition is what’s brought us most of what’s made life better and longer. But the doctors have mastered the anti-free-market sneer: Markets are good for crass consumer goods like washing machines and computers, but health care is too complicated for people to understand.

That’s nonsense. When you buy a car, must you be an expert on automotive engineering? No. And yet the worst you can buy in America is much better than the best that the Soviet bloc’s central planners could produce. Remember the Trabant? The Yugo? They disappeared along with the Berlin Wall because governments never serve consumers as well as market competitors do. Maybe 2 percent of customers understand complex products like cars, but they guide the market and the rest of us free-ride on their effort. When government stays out, good companies grow. Bad ones atrophy. Competition and cost-conscious buyers who spend their own money assure that all the popular cars, computers, etc. are pretty good. The same would go for medicine -- if only more of us were spending our own money for health care. We see quality rise and prices fall in the few areas where consumers are in control, like cosmetic and Lasik eye surgery. Doctors constantly make improvements because they must please their customers. They even give out their cell numbers.

Drs. Dyer and Gawande don’t understand markets. Dyer’s elderly woman wouldn’t have to haggle over price before surgery. The decisions would be made by thousands of 60-, 40-, and 20-year-olds, the minority who pay closest attention. Word about where the best values were would quickly get around. Even in nursing homes, it would soon be common knowledge that hospital X is a ripoff and that Y and Z give better treatment for less. People assume someone needs to be “in charge” for a medical-care market to work. But no one needs to be in charge. What Hayek called “spontaneous order” and Adam Smith called “the invisible hand” would make it happen, just as they make it happen with food and clothing -- if only we got over the foolish belief that health care is something that must be paid for by someone else.

Dit artikel van John Stossel verscheen eerst in "The Freeman".

Meer teksten van hem op www.thefreemanonline.org.

3 Reacties:

At 10:45 Vincent De Roeck said...

"Arrogance" is een ander schitterend artikel van John Stossel.

It’s crazy for a group of mere mortals to try to design 15 percent of the U.S. economy. It’s even crazier to do it in a few months. Yet that is what some members of Congress presumed to do. They intended, as the New York Times put it, “to reinvent the nation’s health care system.”

Let that sink in. A handful of people who probably never even ran a small business actually think they can reinvent the healthcare system. Politicians and bureaucrats clearly have no idea how complicated markets are. Every day, people make countless tradeoffs in all areas of life based on subjective value judgments and personal information as they delicately balance their interests, needs, and wants. Who is in a better position than they to tailor those choices to best serve their purposes? Yet the politicians believe they can plan the medical market the way you plan a birthday party.

Leave aside how much power the State would have to exercise over us to run the medical system. Suffice it to say that if government attempts to control our total medical spending, sooner or later, it will have to control us. Also leave aside the inevitable huge cost of any such program. The administration has estimated $1.5 trillion over ten years with no increase in the deficit. But no one should take that seriously. When it comes to projecting future costs, these guys may as well be reading chicken entrails. In 1965, hospitalization coverage under Medicare was projected to cost $9 billion by 1990. The actual price tag was $66 billion.

The sober Congressional Budget Office debunked the reformers’ cost projections. Trust us, Obama says. “At the end of the day, we’ll have significant cost controls,” presidential adviser David Axelrod said. Give me a break.

Now focus on the spectacle of that handful of men and women daring to think they can design the medical marketplace. They would empower an even smaller group to determine–for millions of diverse Americans–which medical treatments are worthy and at what price. How do these arrogant, presumptuous politicians believe they can know enough to plan for the rest of us? Who do they think they are? Under cover of helping uninsured people get medical care, they live out their megalomaniacal social-engineering fantasies–putting our physical and economic health at risk in the process.

 
At 10:45 Vincent De Roeck said...

Het vervolg van "Arrogance" van John Stossel...

Will the American people say “Enough!”?

I fear not, based on the comments on my blog. When I argued that medical insurance makes people indifferent to costs, I got comments like: “I guess the 47 million people who don’t have health care should just die, right, John?” “You will always be a shill for corporate America.”

Like the politicians, most people are oblivious to F. A. Hayek’s insight that the critical information needed to run an economy–or even 15 percent of one–doesn’t exist in any one place where it is accessible to central planners. Instead, it is scattered piecemeal among millions of people. All those people put together are far wiser and better informed than Congress could ever be. Only markets–private property, free exchange, and the price system–can put this knowledge at the disposal of entrepreneurs and consumers, ensuring the system will serve the people and not just the political class.

This is no less true for medical care than for food, clothing, and shelter. It is profit-seeking entrepreneurship that gave us birth control pills, robot limbs, Lasik surgery, and so many other good things that make our lives longer and more pain-free.

To the extent the politicians ignore this, they are the enemies of our well-being. The belief that they can take care of us is rank superstition.

Who will save us from these despots? What Adam Smith said about the economic planner applies here, too: The politician who tries to design the medical marketplace would “assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.”

 
At 10:47 Vincent De Roeck said...

In het oktobernummer van "The Freeman" vond ik dit zéér interessant artikel terug over de opkomst en de neergang van Curacao als belasting- en investeringsparadijs.

 

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