Thursday, February 16, 2006

Why We Need Market-Based Health Care

Russel Roberts over at Cafe Hayek has a great post comparing health statistics in the US (more free-market health care) vs. European countries (more socialistic health care). Dr. Roberts says (emphasis mine):
I was speaking to someone yesterday who had lived in England. She said that the nationalized health system there is great for children, but as you get older and older, the attitude is "you've had your turn" so you have access to fewer medical resources. A pretty horrifying way to treat human beings. She said that the wait for an MRI is 4-6 months and that there was virtually no preventive care. If that is correct, it would help explain these data:

This table says a lot. If this data is correct, it seems to imply that Europe keeps its health-care expenses down by not caring for its sick. How ghoulish is that?

After volunteering for many years at Give Kids the World and seeing terminally ill kids on a weekly basis and seeing my Aunt Barbara die after a long and horrible fight with cancer, it breaks my heart to think of anyone (young or old) suffering from a life-threatening illness being denied treatment that could have been provided except for government mandated price-controls and rationing.

People extolling the virtues of government-run health care either do not realize or simply do not care about the ramifications of what they are trying to accomplish. Regardless of their intentions, the results are the same -- unnecessary denial of health and life to those who would have had a chance otherwise.

Questions: Is there any way that government or private charities could help subsidize rather than provide health-care in a way that does not violate liberties, avoids setting-up perverse incentives and only helps those truly in need? Could some type of combination of means-testing and universal catastrophic coverage (paying only if the total health bill exceeds 10-20% of an individual's annual income) be combined in a market-friendly way that still would encourage efficiency and innovation in the health care market? Are there any other reforms that could be made (such as liability reform) that might also help to lower costs, increase efficiency and spur innovation?

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