Thursday, January 17, 2013

Free Market Health Care? "The more competitive the market, the worse these perverse outcomes will be."

John Mackey, CEO, Whole Foods Market, is another one of those blind free market fools. He’s quick to point to other free market countries as an excuse to turn health care into a purely profit driven business, instead of a lifesaving one. But like every other cool aid drinker, he fails to mention factors that would betray his argument. Take the Swiss system of health care; it’s private alright, with price controls and heavy regulation. It also exposes the major faults in the Republican version of a free market system.

First Mackey’s misguided and misinformed comments:
I made a poor word choice to describe our health care system, which I definitely regret. The term fascism today stirs up too much negative emotion … if the goal is universal health care, our country would be far better served by combining free enterprise capitalism with a strong governmental safety net for our poorest citizens and those with preexisting conditions, helping everyone to be able to buy insurance. This is what Switzerland does and I think we would be much better off copying that system than where we are currently headed in the United States.

I believe that health care should be competitive in the open market to promote innovation and creativity. 
I’m sorry, that doesn't even make sense. I haven’t seen a lack of innovation and creativity in medical advancements, have you? You might even go as far to say these advancements have made health care even more expensive. Obamacare actually provides for almost every point he makes.

But here’s what Mackey isn't telling you, or just doesn't know about, from
The Good. Swiss health care is predominantly private. Individuals are required to buy insurance and almost all of them do. Private companies compete to provide insurance, and there are subsidies for lower income buyers.  The insurance is individually owned, personal and portable. The Bad. Despite competition, It has mandated benefits, price controls on providers and other regulations that make it hard for entrepreneurs to solve problems.
Since when do medical entrepreneurs help the sick for pure financial gain? It doesn't happen.

But here’s where we see the problem of “junk policies,” coverage so stripped down with so many exemptions, that coverage is nonexistent. Republicans refer to this as “buying insurance across state lines.” If you remember anything from this blog, this is the most important argument against Paul Ryan’s free market solution to health care:
The Ugly.  The Swiss have been moving in the direction of managed competition; on the buyer side, people have an incentive to underinsure when they are healthy and over-insure when they are sick. On the seller side, health plans have an incentive to overprovide to the healthy (on whom they make a profit) and underprovide to the sick (on whom they incur losses). The more competitive the market, the worse these perverse outcomes will be. 
That last line is the kicker, and "perverse" is word that describes Ryan's free market health care fantasies.

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