It never fails. Someone always finds fault with the fact that we are charging a tenth of what most not for profit hospitals are charging for the same services. “But what about those who can’t come up with $3740 for their knee arthroscopy,” is a common critique, one which seems to satisfy assorted collectivists that our transparent model is therefore discredited. I am going to call on an old friend, Frederic Bastiat, to help deal with this “straw man” critique. Let’s try our hand with Bastiat’s reductio ad absurdum method in an attempt to expose this logically fallacious criticism.
Having reduced the price of an available knee arthroscopy from $30,000 to $3740 (our inclusive website price), how many more people can afford it? What has happened to the percentage of people who perhaps with the assistance of family members can’t afford this? Let’s take it further. Bastiat would ask these questions, I think:
“What if the price were reduced to 5 cents, or 1 cent?”
“Would there still be a group of patients unable to come up with this amount of money?”
“Would we deserve criticism for not being able to serve those who had not even a nickel?”
“What percentage of people would be able to afford a knee arthroscopy?”
“Would we get credit for reducing the percentage of folks who could not afford it, or be criticized for those who couldn’t come up with 5 cents?”
“Is the powerful market force responsible for this dramatic drop in the price of this service to be completely discredited because one single patient cannot afford this service, discredited because this system is not therefore “perfect?”
The free market isn’t perfect and never will be once you understand that resources are limited, always limited in relation to demand. This is true whether market rules are followed or not. If the government is in control, robbing one group for the benefit of another, the fact that resources are limited is not changed. Without exception, history has shown the allocation of these resources is more efficient in a free and competitive market. Competition serves to keep prices within the range that the maximum number of people can gain access to the products and services, for without “customers” those providing the service have no business.
When the government is in charge, shortages of supply result, partly due to inevitable price controls and partially due to the artificially high demand due to the perception that “since the government is paying for it, it is free.” The perfect allocation of resources that collectivists attribute to government involvement is the “straw man” utopia in which so many have so much faith. Even a Canadian (a “beneficiary” of universal health care in his country) presenting himself for surgery here in Oklahoma City is not sufficient to shake the faith many collectivists have in this mythical and unachievable “perfect” resource allocation.
The fact that the free market results in a more efficient allocation of resources is not the primary reason I endorse it, however. I believe the free market is preferable because all parties involved are free, free to buy, or free to not buy, buying with their own money, not someone else’s. In addition, the sellers cannot succeed without providing a valued service or product to the buyers.
In short, I believe the free market is preferable because I prefer to be free. That the allocation of resources is more rational and efficient is secondary to me. That the free market causes the group of people who are completely reliant on the charity of others to be the smallest possible group, seems to matter less to many collectivists than their ideological pride , pride bolstered by their attacks against those promoting liberty.
I have come to the conclusion that there will never be a price where a knee arthroscopy is affordable for everyone. This fact, rather than discredit our transparent model, highlights even more clearly, I think, that knee arthroscopies will neither be available to everyone under a socialist universal system. Indeed, Canadians come to Oklahoma City to our surgery center and many other facilities in the U.S. ready and willing to pay for their health care needs, needs which their socialist and utopian system obviously cannot meet. Doesn’t sound like a “perfect” system to me.
Many of those who are too poor to afford the prices at the so-called “not for profit” hospitals, can now afford to have the surgeries they have needed because of our pricing. If the price of health care fell 80%, the average savings our prices represent, what sort of health care “crisis” would we have? I think Bastiat might ask this last question, as well.
G. Keith Smith, M.D.