What Free-Market Health Care Looks Like

Democrats have their plates full defending the Afghan withdrawal, stirring up fear over breakthrough COVID cases, and rolling out the welcome wagon on the southern border, just to name a few issues they are dealing with.health care. No matter how busy they are, eventually, they will get around to health care and transforming the ACA (Obamacare) into a single-payer system. Health care? What if conservatives beat them to the punch by presenting an alternative plan, while the Democrats are still talking about transgender rights?

A free-market approach to health care (not health insurance) would begin with patients taking responsibility for their health and paying for their health care (That is not as draconian as it sounds, so please keep reading.) 

  • Patients would be good consumers by knowing what options are available to them, which would provide the best outcome for the dollars spent, and how much services cost.
  • Health savings accounts (HSAs) would be the cornerstone of the plan for health care. The accounts would be owned by individuals, independent of their employers' health care. Contribution limits would be increased so that most routine health care costs could be paid for directly by the patient using his HSA.
  • Employers would no longer have to pay for employees' insurance, so they would be able to raise salaries and wages.health care
  • That additional compensation could be used to fund an HSA, tax-free.
  • Lower-cost catastrophic insurance would cover large expenditures that could significantly impact finances. We use our car insurance to repair the vehicle after an accident. We do not expect the insurance to pay for routine maintenance like an oil change. Health insurance should be used in the same manner.
  • Patients would be free to use any providers they choose because there would be no government bureaucrat, insurance company, or benefit manager standing between the doctor and the patient.
  • Doctors would practice medicine and not file claims, push paper, and collect fees.
  • Employer-provided health insurance would be almost nonexistent because those plans would be taxed.
  • Medicaid and Medicare would be replaced with government-funded HSAs and premium support for catastrophic coverage for the elderly and the segment of society who are not able to pay for insurance or for health care. 

Government intervention has distorted the health care marketplace, and consequently, it is a mess.

Obamacare was the latest government meddling, and it meddled in a big way, but before Obamacare, there were Medicaid and Medicare.

The AMA opposed Medicare when it was proposed because the doctors feared that it was the first step toward socialized medicine.

So, when it finally passed in 1965, the government reimbursed providers generously to gain acceptance.

With a third party footing the bill, doctors and hospitals had no incentive to hold down costs, but eventually, costs had to be reined in.

Private health insurance companies tended to follow the lead of the government with generous coverage and reimbursement, but over time, they were forced to control costs.

Since Medicare and Medicaid, there have been several unsuccessful attempts to control health care costs.

Health Maintenance Organizations (HMOs) and Managed Care Organizations or capitation plans that paid doctors a fixed amount regardless of the amount of care provided were never widely accepted in the marketplace, primarily because patients had no incentive to keep costs low.

Premiums went up every year, but most were insulated from the rising cost because employers were picking up the extra expense.

The Obama administration talked about "bending the cost curve" with the ACA, but the real objective was to provide wider access to insurance.

How can you possibly control the cost of health insurance if you do not deal with the underlying cost of the care?

The common denominator in each of these failures is that choice and individual control were taken away from consumers and turned over to a third party.

In a free market, individuals have options and the freedom to choose based on criteria that are important to them.health careOur current system doesn't allow for choice because a third-party payer is in the middle, making decisions based almost entirely on cost.

If patients once again became responsible for compensating providers, there would be an incentive to find out if the care is necessary, whether it will lead to an improved outcome, and how it can be performed in the most economical way possible. In other words, patients would become better health care consumers. A well funded health savings account is the tool that would allow direct compensation for routine care. Health care costs would need to be disclosed by providers so that patients could make informed decisions. 

In addition to the financial benefits, patients would have an incentive to make better lifestyle choices. Eating a healthier diet, exercising more, and scheduling recommended screenings could lead to better overall health and help preserve savings for future needs.

I have confidence that this will work based on my personal experience.

I have been fortunate to have generous employer-provided health care insurance for most of my adult life.

As long as the insurance company was paying, I never looked at the price or questioned whether the service or RX was necessary.

Then I took a sabbatical, and after 18 months of COBRA, I was forced to buy insurance in the marketplace. The $120-a-month policy with a $10,000 annual deductible met my needs just fine, except the first time I had to have two prescriptions filled at a monthly cost of $500.

I immediately asked my physician to write new prescriptions for generic drugs, researched whether any pharmacy sold the drugs cheaper, and calculated whether it was cheaper to buy pills with a double-dose and cut them in half. In other words, when I was responsible for paying for my health care, I became a price-conscious consumer.

Still need to be convinced that prices will be pushed down by reducing dependance on third-party payers? Look no farther than the cost of Lasik eye surgery. This surgery is typically not covered by insurance, and the out-of-pocket cost is currently between $2,000 and $4,000, while the 1997 cost was $8,000, according to Forbes. Without a third-party payer in the middle, market forces worked to lower the price. Doctors invested in equipment needed for the procedure, and competition increased among providers. As competition increased, prices decreased. 

While progressives are touting the cradle-to grave Medicare for All plan, conservatives need to offer alternative plans. A free-market health care system that returns choice and control to patients and drives down health care costs should be discussed, debated, finally enacted.

Image: Bru-nO via Pixabay, Pixabay License.

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