Business and Investments

Bank of England's Paul Tucker warns on inflation rate

On 17 Apr 2012 |0 comments

Inflation may stay above 3% during the rest of this year, according to Paul Tucker, a deputy governor of the Bank of England. Mr Tucker said the short-term r

Private equity firm buys College of Law

On 16 Apr 2012 |1 comments

A private equity firm has bought a UK college with its own degree-awarding powers - in a groundbreaking deal for the UK's higher education sector. The Colle

Political Issues

Is There a Republican 'War on Women'?

On 11 Apr 2012 |0 comments

According to recent polls, Barack Obama is trouncing Mitt Romney nationally among likely female voters, and many have pointed to the supposed Republican “War

Met suspends eight officers and civilian in racism inquiry

On 06 Apr 2012 |0 comments

Eight Metropolitan Police officers and a civilian staff member have been suspended as the IPCC investigates complaints of racism against the force. Earlier t

News and Media

Traveller family members deny slavery and abuse charges

On 17 Apr 2012 |0 comments

Seven people from one traveller family abused and beat up to 24 vulnerable men they kept in captivity making them work without pay, a court has heard. The si

MPs call for better porn filters to protect children

On 13 Apr 2012 |0 comments

A cross-party parliamentary inquiry into how safe children are online has concluded the government and internet service providers need to do more. It found t

Weather Broadcast

Hosepipe bans enforced in drought areas

On 05 Apr 2012 |0 comments

Hosepipe bans affecting about 20 million customers have been introduced by seven water authorities in parts of southern and eastern England. People who flout t

Tornadoes reported near Dallas-Fort Worth area

On 03 Apr 2012 |0 comments

BURLESON, Texas (AP) — Dallas Police say possible tornadoes have touched down in the southern part of that city as a band of severe weather moves through north

Other Recent Articles

Traveller family members deny slavery and abuse charges

On 17 Apr 2012 | 0 Comments

Seven people from one traveller family abused and beat up to 24 vulnerable men they kept in captivity making them work without pay, a court has heard. The si

Bank of England's Paul Tucker warns on inflation rate

On 17 Apr 2012 | 0 Comments

Inflation may stay above 3% during the rest of this year, according to Paul Tucker, a deputy governor of the Bank of England. Mr Tucker said the short-term r

Private equity firm buys College of Law

On 16 Apr 2012 | 1 Comments

A private equity firm has bought a UK college with its own degree-awarding powers - in a groundbreaking deal for the UK's higher education sector. The Colle

Give a 'hoodie' a job, says Employment Minister Grayling

On 16 Apr 2012 | 0 Comments

Companies should give a job to "the surly young man in a hoodie", the employment minister is to say. In a speech later, Chris Grayling will say that "it's ea

MPs call for better porn filters to protect children

On 13 Apr 2012 | 0 Comments

A cross-party parliamentary inquiry into how safe children are online has concluded the government and internet service providers need to do more. It found t

UK unemployment falls by 35,000 to 2.65m, ONS reports

On 13 Apr 2012 | 0 Comments

UK unemployment has registered its first fall since last spring, according to official figures. Unemployment fell by 35,000 to 2.65 million over the December

The Folly of "Free Market" Healthcare Reform

By John on Monday, March 26, 2012 0 comments

The purpose of the Supreme Court hearings on President Obama's health reform law is to determine whether a key provision, the individual mandate, is constitutional. But the case may end up demonstrating something else: That there is no "free market" solution that will extend coverage to millions of uninsured people and get skyrocketing costs under control.

[See photos of protesters outside the Supreme Court.]

It's worth stepping back for a moment to examine why the individual mandate even exists. The idea is to force healthy people to buy insurance even if they think they don't need it. That will bring more revenue to insurance companies, which they'll use to keep premiums down for sick people and those with preexisting conditions. Penalty fees paid by those who refuse to get insurance would bring in more revenue to help subsidize policies for those who want them, but need financial help. And healthy people who unexpectedly need care would get it through their plan, instead of racking up huge emergency room bills that typically get passed on to everybody else who pays for healthcare.

The whole scheme is meant to mimic free enterprise, in which people make rational choices about how to spend their money.

The justices must determine whether buying insurance is a form of commerce that Congress has the authority to regulate. But they've also highlighted the absurdities of pretending that healthcare is just another product people buy and sell. Several justices, for example, suggested that if Congress can require Americans to buy health insurance, then by the same logic it can require them to buy cell phones, broccoli, pre-paid funeral arrangements, and in fact, anything.

[See what would happen if Obamacare were repealed.]

Obama administration lawyer Donald Verrilli argued that each of those instances is different, because health insurance is a unique product. Legal eagles and policy wonks will endlessly debate the technical questions about what kind of product healthcare really is. But the broader takeaway may be that it's not possible to design a free-market dynamic that will accomplish the main goal of Obama's health reform law: Extending coverage to everybody.

Even without Obamacare, the healthcare and insurance industries are a badly distorted version of what most people consider pure capitalism. Hardly anybody pays for healthcare out-of-pocket because it's far too expensive. You can't look up prices for hospital procedures, or comparison-shop for them. And prices are largely set by middlemen—the insurance companies—not by a marketplace agreement between buyer (the patient) and seller (the healthcare provider).

[See the real reason Obamacare scares people.]

Beyond that, the practices that people find most objectionable tend to reflect what often happens in a truly unregulated free market: One party becomes too powerful and exploits the others. Refusing coverage to sick patients or charging them exorbitant premiums, for example, is a very rational thing for insurance companies to do because it protects the profits that are at the heart of a free-market system.

Verrilli is right that healthcare is a unique product, but he didn't go far enough. There's no evidence that the free market can provide the combination of quantity, quality and affordability of healthcare that we deem necessary. The administration's lawyer had no choice but to defend the free-market mechanism that Obamacare attempts to create.

But the mechanism interferes with capitalism instead of enhancing it, which makes it flawed whether it's constitutional or not.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success, to be published in May. Follow him on Twitter: @rickjnewman.

http://www.usnews.com/news/blogs/rick-newman/2012/03/28/the-folly-of-free-market-healthcare-reform

Category: Feature , Health

0 comments:

Post a Comment