Someone I know told me the other day that they were one heart attack away from bankruptcy.  This individual has no insurance and has been denied  insurance due to their past cardiac history.   Some random thoughts.

What is your response to this?  Do you think that the evil and rich insurance companies should be forced to provide insurance to this individual?  Do you think that others should be taxed to pay this person’s medical bills, whether through insurance or some state-administered plan?  Do you think this is a problem that should be dealt with locally, not nationally or do you think that Washington, D.C. and folks greasing those gears should be in charge of mandating a solution for everyone?

These are all interesting questions and questions that people fundamentally disagree on. Property rights advocates and fans of the free market (like me) object to socialization on the grounds of principle, whatever the touted benefits of wealth confiscation.  Some who don’t mind the robbery of taxation as much just want to be sure that this loot is spent wisely.  More radical are the folks who believe that “we’re all in this together and what’s yours is just as rightly mine.”

Questions such as those above can also reveal an otherwise latent coercive tendency in even the most staunch libertarian.  Power corrupts.  When Mises was asked what he would do if anointed King for a day, he quickly replied, “abdicate.”  Haven’t you heard the old argument, “..if we could just get the Senate and maybe the White House, we could cram stuff through.”  Well, we’ve seen both sides’ of the aisle’s ideas of what they mean by that, haven’t we?

I suggest that we don’t allow others to distract our thinking about health care with faulty premises, such as, “health care is a right,” or “everyone needs health insurance.” Do we really want everyone to have insurance that pays bills at not-for-profit hospitals, for instance, that are ten times as high as that at our surgery center?  Is the lack of insurance really the problem?  Or is it a lack of rational pricing, caused by the distorting presence of the government in the marketplace with their Ponzi schemes and price controls and insurance mandates?  Could it be that drugs are expensive and increasingly scarce because of FDA policy and government price controls through Medicare’s new part D program?

The individual I mentioned at the beginning of this blog could just as easily be bankrupted by a hernia or gall bladder surgery at one of these price-gouging “not-for-profit” facilities.  What should the treatment for a heart attack cost?  I think what it costs is one thing, what the not-for-profit cartel charges is quite another.  Free market competition raises the quality bar and lowers prices.  Every time.  Health care is no different.  Real and rational competition will reveal over time what is called the “market clearing” price of goods and services.  This price is that equilibrium price where neither surplus or shortage occurs.  Rather than attempt to discover this price, we are on the path to discovering the bankrupting price of health care through this national plan many now call the Unaffordable Care Act.  

The low packaged prices on our website are having a deflationary effect on the charges at other facilities, this reaction a predictable one, in order to stem the flow of patients away from our competitors to us.  Price transparency would revolutionize the delivery of health care in this country, lowering the cost for everyone and injecting an accountability of quality that is sorely needed, as well.  A heart attack shouldn’t bankrupt anyone.  This, I think, illustrates that the issue is not a lack of insurance, but rather a lack of market discipline in health care pricing.

G. Keith Smith, M.D.