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Government Healthcare Deregulation & Reform

Sunday, September 21st, 2008
Posted in Education by Joel Gross

The presidential race has brought the current awful state of healthcare and the desperate need for reform to the front of the minds of many Americans.‚  Right now, 30% of Americans have difficulty accessing healthcare due to its enormous expense and the difficult tangle of regulations that must be maneuvered through.‚  The US government has created a Byzantine tangle of healthcare regulation that makes both healthcare providers and healthcare insurers operate in an extraordinarily inefficient manner.‚  But what is the solution to these problems?‚  Universal healthcare coverage for all Americans?‚  Is there a less socialistic alternative?‚  Yes.‚  I propose we completely deregulate both healthcare providers and the healthcare insurance industry.

The Case for Healthcare Deregulation & Reform

Government healthcare deregulation and reform would vastly improve the standard of living for all Americans, from the rich to the very poorest people.‚  The Cato Institute has published a study that shows the direct cost of regulation to American society is $169.1 billion annually above and beyond their benefits.‚  But I wish to address the more indirect costs of regulation to healthcare and to the American people.‚  Think about this: in order to simply get 7 stitches at an emergency room, I was charged $1,700.‚  Ridiculous right?‚  Stitches are a very simple procedure that many, many people are capable of doing.‚  Instead, I was forced to see a professional doctor with over a dozen years of healthcare training and sit in a hospital bed to get it done.‚  People already allow trained workers with needles to work on them (tattoo artists) for far less money.‚  I would love to be able to go to a tattoo parlor and get my 7 stitches there for $25 out of pocket (half an hour to get the stitches at the premium rate of $50 per hour).‚  However, since the government has not deregulated the healthcare industry, I was forced to pay $3,400 per hour.

Healthcare Regulations Restrict Supply, Raising Healthcare Costs Drastically

Doctors, dentists, nurses and other healthcare professionals in America are forced to go through extremely long and rigorous training processes that put a very high barrier of entry into the healthcare field.‚  Essentially, the government is making your decisions for you: they are telling you how much risk tolerance you are allowed to have and how much you have to spend.‚  Imagine if the government did this in other industries… such as lawn care & landscaping.‚  If the guy who mowed your lawn & cared for your plants was forced to attend college and get a four year university degree in landscape design, you would pay enormously more for your landscaping.‚  The economics are simple: you make it very difficult to enter a profession and less people will attempt to compete in that industry; this will deeply constrain the supply which in turn drives prices up to unattainable levels.‚  Unfortunately, this is what has happened in the healthcare industry due to tight regulations.‚  Deregulating healthcare would release the artificial constrictions upon supply and would deeply cut the cost of healthcare for Americans.‚  I would love to have the option to go to a convenience store and get my bloody scrape cleaned up for $20 instead of going to a professional hospital and paying over a $1,000.

Dangers of Healthcare Deregulation?

Many of you now are saying, “But Joel, would deregulating healthcare be dangerous?‚  Wouldn’t a bunch of half-trained doctors start doing brain surgery for super cheap and kill many people?”‚  The answer to that is simple: What doctor you use is your choice.‚  If you want to have a doctor from Harvard stitch up your chin for $2,400 per hour, you can.‚  If you want Joe Blow from the hardware store to do your brain surgery for $15 per hour, you can.‚  But something tells me that you will be wise about what doctors you use because no one cares about your healthcare more than you do.‚  So you probably will visit Joe Blow for your scraped knee and the Harvard-educated professional for your brain surgery.

Won’t More People Die if You Deregulate Healthcare?

No.‚  Currently, about 4,000 people in America die annually due to a lack of insurance and the inability to afford healthcare.‚  Listen to what the Cato Institute studies have shown “Several studies have established a tradeoff between income and mortality: As income rises, mortality falls because people are able to purchase more health and safety. We estimate that by making Americans $169.1 billion poorer each year, health care regulations induce approximately 22,205 deaths annually.”‚  That $169 billion figure does not even include the higher prices due to restrictions in the supply chain.‚  Total healthcare spending in America last year was $2.3 TRILLION!‚  What if by introducing free market competition into the healthcare marketplace we cut that in half?‚  Imagine how many more people’s lives would be saved.

You may also think that deregulating healthcare will lead to people going to unqualified doctors who will make mistakes and cause harm to their patients.‚  I will admit that this will be an issue at first, but once the free marketplace for healthcare has become established, this issue will be resolved by a combination of industry trade associations that privately regulate their own members for a much lower cost and by the fact that people simply will not go to doctors who are known to harm patients, so those bad doctors will go out of business.

What Should be done to Reduce Prescription Medication Costs?

Don’t force people to go to a doctor to get a prescription for medication.‚  People should have free access to whatever medications they need at their local drugstore.‚  Most other countries have a far superior system than the United States in that they allow people to get their medication without the need for doctors prescriptions. Forcing people to go to a doctor to get a prescription wastes both the doctors valuable time as well as your time and money that you are forced to pay that doctor.‚  I also think that we need to revise the system of patents for drugs and everything else, but that is a topic for another post.

Deregulation Sounds Great, but What About the Poorest People?

The primary objection usually raised to my plan on healthcare deregulation is the fact that the poorest of people would not have the money to go to the best doctors for serious problems and thus would be forced to go to Joe Blow for their brain surgery.‚  Have you ever heard of the concept of natural selection?‚  Hahaha just kidding.‚  Charitable organizations pick up the slack here… private charities step in already in this type of situation and makes sure that low-income people get the healthcare that they need.

Why is socialized medicine aka Universal Healthcare wrong?

While the rest of the world is beginning to move towards capitalism and free markets and privatization of property and companies, why is the United States of America headed down the road of turning over everything from the financial systems to healthcare to insurance to the federal government?‚  Didn’t America just get done facing down the Communists in the Soviet Union and watch their way of life destroy their country?‚  Don’t we know better than to believe the hollow promises of criminal politicians and their attempts to gain power?‚  Sorry to answer a question with a question, but come on people.

Let me ask you another question: Has the federal government operated ANY formerly private program effeciently and provided high quality service?‚  We already allow the federal government to administer the Post Office, the DMV, public schools and public housing.‚  The federal government has horribly failed our country on all counts.‚  Even though taxpayers pump trillions of dollars into each of these programs, the federal government is so bad at providing these services that the private sector is forced to assist it (UPS, private schools, OpenID, etc.)

Why do we not want government healthcare insurance for all Americans?

Are you kidding me?!?‚  Did you see what happened to other federally created insurance programs?‚  Consider the FSLIC (Federal Savings & Loan Insurance Corporation)… it failed miserably.‚  Now we have the FDIC which supposedly insurers everyone’s money in the bank but is actually actuarially insolvent due to the fact that universal coverage has been provided to all banks and the flat fee insurance premiums are not adjusted for risk.‚  If several major banks fail, so will the FDIC.‚  Your money is not actually safe up to $100k.‚  The government is horrifyingly bad at managing risk, revenues & expenses and having them manage your healthcare would make HMOs look like Rolls Royces.

By allowing high risk people to pay artificially low prices for their healthcare insurance and requiring low risk people to pay artificially high healthcare insurance, we are creating what economists call a “moral hazard”.‚  What happened in the Savings & Loan industry in the late 80s was that the government insured all loans, which encouraged banks to loan to the riskiest people and when those people couldn’t pay, the banks just turned to the government and asked for insurance… only so many banks turned and asked for insurance at the same time that the federal government’s insurance program couldn’t pay and taxpayers were left paying $500 million out of our pockets.‚  The situation in healthcare would end up that a 26 year old superb athlete who takes very good care of his body would pay the same amount as an alcoholic 50 year old who chain smokes and eats peanut butter with chocolate chips for breakfast, lunch and dinner.‚  It’s not only unfair to people who take care of themselves, but it gives the 50 year old no incentives to improve her life via proper diet and exercise.

“Free” Government Healthcare is NOT Free at all

Many people with no understanding of economics think that the government can just provide free healthcare and healthcare insurance for all Americans.‚  This is sadly not true. The only way these “free” goods and services can be provided by the government is by having the government forcibly take these goods and services from productive people and give them to others.‚  You wouldn’t take a gun and go rob your neighbor every time you run into a personal problem, why would you ask the government to do it for you?

The government would pay for free universal healthcare and free healthcare insurance for Americans by taxing the working class and giving it to those people kindly known as “welfare queens”.‚  I am a person who would seem to most support free universal healthcare- after all, my own mother has used Medicare and other government benefits to support herself for the last twenty years, which means that I don’t have to give her any money myself… except that’s not true.‚  A huge portion of my salary each month is taken with the threat of imprisonment to support those who who refuse to help themselves.‚  If I don’t pay my taxes, I will be sent to prison and brutalized by Bruno.‚  Stealing my money is not the way for you to pay for your healthcare, food, housing, cable television or anything else.

Why Nationalize Healthcare When We Don’t Consider Nationalizing Food?

It confuses me that most Americans adamantly defend the free agricultural market, but are in favor of regulating healthcare and nationalizing healthcare insurance.‚  Many Americans can’t afford food, but we aren’t about to turn over all of the grocery stores, farms and factories in the United States to the federal government.‚  Or what about the real estate market?‚  Homelessness is a problem in our country, but we haven’t considered giving every American a house or otherwise nationalizing real estate.‚  Nationalizing healthcare would simply run directly contrary to every value that a red-blooded American holds dear.‚  If you want the government to make all of your decision for you, move to France.‚  I prefer my freedom.

Deregulating Healthcare Gives Americans Their Freedom Back

Over the last eighty years, the United States has been slowly taking away individual American freedoms.‚  We have lost many rights that we used to have through a long slow decay in our government.‚  We have lost the rights to issue our own individual currency, our right to freely bear arms, our right to spend our earnings as we please, our right to not have to support religions we disagree with (Faith Based Initiatives) and many other things the Founding Fathers held dear.‚  Now don’t get me wrong: we still have more freedoms than most of the rest of the world, but we are going down a very dark road. I say that we should start to take our freedom back by deregulating healthcare and gving individual Americans back their rights to choose who provides their healthcare and how it is paid for.

The American Medical Association is Worse than OPEC

OPEC is the notorious group of nations in the Middle East that limit the supply of oil, driving up the prices of oil.‚  Most Americans recognize that this group is a vicious cartel that harms ordinary people.‚  What most people don’t realize is that the American Medical Association (AMA) is actually worse for America than OPEC.‚  Why?‚  The AMA has a government that enforces its cartel.‚  No less a personage than Milton Friedman, the father of economics, described the American Medical Association as the strongest trade union in the United States and showed how it harshly crushes opposition and fights hard to limit competition in the medical fields.‚  The AMA’s Council on Medical Education and Hospitals restrict the number of approved medical schools and the number of entrants to those schools, drastically limiting the supply of physicians which drives up the prices for healthcare to unheard of levels.‚  The fact that the federal government backs the AMA on its policies ensures that the dominant cartel it has established cannot be broken.‚  At least other foreign countries can produce oil to compete with OPEC.‚  There is no such mechanism in healthcare.‚  Other medical organizations should be allowed to compete with the American Medical Association for the certification of physicians and hospitals.

Deregulation Improves Service While Reducing Costs

If we look at the deregulation of the airlines in the 70′s we see some of the benefits of deregulation.‚  For instance, the Airline Deregulation Act of 1978 is able to save consumers over $10 billion each year and airliner crashes have fallen by almost 50%.‚  I call that a vast improvement for consumers.

Deregulation of the railroads has reduced shipping costs by $4 billion a year and railroad accidents have fallen over 80%!!!!

The deregulation of trucking saves $8 billion per year in shipping costs and has reduced the rate of fatal accidents 40%.

Now why don’t we deregulate the most anti-competive industry in America and watch our costs drop and quality of service skyrocket?‚  How many times have you gone to a doctor and paid several hundred dollars in order to have him ignore you and rush you out of his office?

Below is a video on why healthcare deregulation would be beneficial to everyone in America:

Healthcare Deregulation Would Reintroduce Cost Consciousness

When was the last time you asked your doctor for prices before you went in for an appointment?‚  If your answer is never, you are just like me.‚  The current system of regulation in healthcare strongly discourages consumers from inspecting costs.‚  I think that the quality of healthcare service and the value received by consumers would dramatically improve if healthcare was completely deregulated.‚  People would not just hand over cash to doctors without making sure that they got their moneys worth first.

Deregulating Healthcare to Bring Back House Calls

Doctors no longer make house calls to patients because there is such a limited supply of doctors that they can sit in their office and be fat cats working only a few hours a week to make enough money to drive fancy cars, live in beautiful homes and cruise in fine yachts.‚  The AMA cartel has so drastically driven up prices for healthcare that doctors and dentists are the wealthiest class in our country and they provide less service hours than almost anyone else.‚  Why should we make plumbers, construction workers, electricians, computer scientists, and street sweepers provide great value and let doctors get away with scamming the public?‚  Deregulating healthcare would drive down costs and force doctors to once again be innovative and work hard.‚  Once the supply of doctors increased to meet the demand, doctors would again start to make house calls.‚  I would love to not be forced to drive half an hour and sit in a waiting room for three hours when I am feeling nauseous, vomiting and have a high fever.‚  Doctors used to make house calls, just like msot other professions do.‚  I want to bring that level of service and care back.

4 thoughts on “Government Healthcare Deregulation & Reform

  1. I agree with most of what you say in this article. I am a foreign trained Dentist and I witness how difficult it is to get licensed in the USA due to too many and difficult regulations. A foreign trained dentist has to do the national Boards which are comparable to exams that you do at the very beginning of dental school, after that we have to be very lucky to get accepted by a special foreign Dental program which costs up to $ 250,0000 and takes 2 to 3 years, some programs even 4 years. So the whole process takes minimum 3 to 4 years if you are lucky and most of the time much longer. Many people say that the standards of the foreign countries are lower than the ones of the US, which is sometimes true. But why is it that instruments and machines from the country that I come are used by any dentist every day??? Don`t get me wrong-I am not saying that there should n`t be any tests or regulations for foreign trained dentists! But I truly believe the regulations should be done more wisely and beneficial for the public. Not to forget that those foreign trained dentists could get to work much faster and in that way serve the country much better – and pay Taxes more quickly, be able to spend more money and help to grow the economy…. It would be so much more beneficial to the public if a foreign trained Dentist could instead of expensive programs enroll in to a Volunteer Program for under served people and get started with the licensing from there. I would love to actually use my skills for people in need, but my hand are tied. The reason I came to the USA is because I truly love this country and its people. I specially love and respect that the Americans give so much in charity ( I myself once benefited from this, as I also don`t have so much money due to the fact that I cannot work in my profession at this point) In a more socialistic USA where “the Rich“ are being taxed for “the Poor“ …in other words redistribute their well earned money.. I am afraid that this generosity would not last! Americas spirit could die I know from where I come from: Socialism does n`t work. People hate “the Rich“, are jealous, bitter and believe that the Government and the “Rich“ owe them everything. Let me tell you: you don`t want that kind of state of mind here. A socialistic USA would kill it`s spirit. America keep your good spirit!!!

  2. Lucia, thank you for your comment! I agree 100% with everything you said about the difficulties and regulations for foreign dentists and doctors to work in the United States. I wish our government would trust in the basic principles of America- freedom, capitalism, small government and free markets. I am afraid that we are losing the core of what made America great to lazy socialists.

  3. I agree. The current system is broken and forces people to be fearful of getting the care they need. I had a bad case of poison ivy in the summer and because of insurance reasons, I was not able to see the doctor I have had since I was kid. But why would I need to see a doctor? I clearly knew I had poison ivy. I don’t want to spend 100$ and pay for the prescription so I can get a drug I know would cure my problem. So instead I suffered with massive itchiness till it went away by itself. Thanks health care system!

  4. Excellent issues altogether, you simply received a new reader. What could you recommend about your post that you made a few days in the past? Any sure?

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