Competition Will Drive Down Healthcare Costs Sez Free-Market-Magic Believing Libertarian

Willis Hart, a true believer in the Libertarian "free market" fairy tale, says those who think a healthcare free market wouldn't work for obvious reasons are wrong...

Willis Hart: "On the Idiotic Assertion that Competition Won't Bring Down the Cost of Healthcare Because Healthcare is a Necessity"... This is an easy one to refute... All that you have to do is compare healthcare spending as percentage of GDP prior to Medicare and Medicaid with that of what it's been since these programs. ... For the first 180 years or so... healthcare spending as a percentage of GDP was consistently in the low to middle single-digits, and it wasn't until government got massively involved (in the 1960s) that the numbers started skyrocketing. And the reasons for this are obvious. Whenever government gets into the business of subsiding something, the cost of that something invariably escalates. (6/10/2014 AT 7:23pm).

Missing from Willis' analysis of the healthcare market is the fact that other industrialized nations have Single Payer insurance. And THEIR subsidization is very high. However, their costs are much lower. But Willis foolishly overlooks this fact to make his magical "free market" argument.

Of course the reason prices have been going up has absolutely nothing to do with the fact that healthcare and healthcare insurance USED to be provided on a not-for-profit basis... NOT.

So why did health care costs being skyrocketing in the 60s? Willis blames government subsidization, and foolishly says it's "obvious" that "whenever government gets into the business of subsiding something, the cost of that something invariably escalates".

Sorry, but no, that was NOT the reason. As Forbes points out, in an article titled the "capitalist case for nonprofit health insurance", the reason for the costs going up was because we switched from a nonprofit to a profit model.

Forbes: Blue Cross, the most recognizable name, began in 1929 as a tax-exempt insurer... Blue Shield was started as a tax-exempt insurer... [We moved away from the nonprofit model] starting in the 1960s and through the 1980s when Wall Street discovered there was money to be made turning nonprofit health insurers, hospitals and nursing homes into investor-owned companies. (excerpt from a 10/12/2009 article by John Girouard).

So, we should be getting government out of the way and the "free market" will solve the problem when the problem was CAUSED by us going the for-profit route (free market = for profit)? I don't think so.

We already know what model works. Not-for-profit worked pre-1960 in the US, and it works in all the other industrialized nations Currently (Single Payer being not-for-profit). And a transition to single payer would be far easier to implement. Unlike the foolish Hartster's idea of getting rid of HCI altogether (except for catastrophic coverage).

Also, the assertion that competition won't bring down costs because healthcare is a necessity is not "idiotic", it is TRUE! People do not have the option of not buying AT ALL, as consumers in a true free market do. Supply and demand drives a free market, and, obviously, when the demand is such that people must buy your product or die, the supplier can charge more. The only thing idiotic here is that someone would be deluded enough (by Libertarian free market fantasies) to believe this is not the case.

OST #19. See also SWTD #261.