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What free-at-the-point-of-use Health Care looks like in a Free-Market

June 23rd, 2013 Posted in health, UK Politics by

My fear of hospitals has been exacerbated lately with the latest stories of cover-ups and bribes. This behaviour may be shocking but it is typical of all socialist industries. The problems facing the NHS are the problems that always occur in industries structured this way so throwing money at the problems of the NHS is won’t help. No amount of money can cure problems of structure.

When talking about different health care systems everyone always says to me ‘Oh, but the American system is so much worse…’ (as if the NHS and the American system are the only two health care systems on Earth…) The answer to this is obviously – yes! The American health care system should be used in the ‘what not to do’ section of every public policy handbook. It is a 50% government funded mess of regulation, red tape and bizarre diktats left over from WWII meaning health care is tied to employment and other such nonsense. That said, individuals who have health care in America generally have better health care than individuals in the UK. A large amount of Americans do not have health insurance, however, and the difference between not having health insurance and having the NHS is a lot bigger than that between having the NHS and having American health insurance.

People seem to think that since the American system is capitalist it is free-market. This is obviously false. People also seems to think that the NHS is the only version of free-at-the-point-of-use health care. Tellingly, when the Soviet Union fell, none of the former Soviet states, or anyone else is Europe for that matter, chose to structure their health care like the NHS.

So, in light of all this, it was put to me that a lot of people struggle with visualising what health care in a free-market would look like. I’ve written this piece so that some of those who do not get how free-market health care would work can visualise the system.

USING FISCAL TOOLS CORRECTLY

First of all split health insurance and health coverage. These are two different sets of fiscal tools. Insurance is a fiscal tool used to pay for things that happen infrequently and, if you’re lucky, not at all. I think health insurance should be mandatory but every adult picks which private provider they insure with, just like car insurance (it doesn’t have to be mandatory but I think this would more pragmatic – depends if you want to go full voluntaryist or not). Ambulance and A&E services would be paid for with these funds.

Health coverage is the fiscal tool you use for paying for health care costs you know you are going to need at some point in the future e.g. general GP visits, minor operations. In a free-market you could rely on the following means to fund your coverage; individually, with a health coverage company, with a Health Savings Account (HSAs), by joining a friendly society, by private charity and I wouldn’t be opposed to government vouchers in certain circumstances but they probably wouldn’t be necessary.

All health care providers would be privately owned and compete with each other in terms of quality, price and the nature of their care. They could be non-profits or for profits; share-held, cooperatively held or run by charities.

WHY IS THIS BETTER THAN SINGLE PAYER?

Right now, our ‘Lords and Masters’ manage funds allocated for health care and if we don’t like how they are managed we can vote some of them out at the next election (or try to) apart from the Civil Servants that we cannot. In a free-market, were a greater number of us to join friendly societies, we would have direct democratic control over who manages our collective funds and the option to leave if we felt they were being mismanaged.​ A greater plurality of ways to fund health care means all of those ways get better and you would spend a lot less on health insurance and coverage than you currently do on taxes to pay for your health care.

Friendly societies self-police. Why? Because you have a closer relationship with the individuals who are responsible for your health care and who’s health care, in turn, you are responsible for. You would have a greater incentive not to waste those resources since you are more connected to your money and who spends it. You would have multilateral relationships with other human beings and not a unilateral relationship with the state.

Drugs will become higher quality and less expensive. Monopsolies are a bad idea if you want cheaper drugs. In order to drive down their own costs health care providers would now have an incentive to bargain and negotiate for cheaper drugs. Pharmaceutical companies would have more of an incentive to create better, cheaper drugs. With a monopsoly, there’s nothing stopping drug companies cooperating with each other to charge higher prices.

Health care will go up in quality and down in price. There is only one sector of the health care market that operates closest to a freer-market and that is the plastic surgery sector. Quality in the plastic surgery sector has gone up consistently and prices have gone down consistently in the last thirty years.

Health tourism, as a problem, would disappear altogether. Non-UK citizens would be billed just like everyone else.

SO HOW DOES THIS FIT TOGETHER?

You get sick. You go to a private GP/hospital. They send your bill to you, your private coverage provider, your HSA manager, your friendly society or a charity after.​

You get in a car crash. The ambulance you’ve already paid for through your catastrophic health insurance takes you to A&E. They stabilise you. You are transferred to a hospital. The hospital sends your bill to you, your private coverage provider, your HSA manager, your friendly society or a charity after.

I wouldn’t rule out the use of government health vouchers for people who genuinely lose the health lottery, like kids who get cancer, for example. They distort the market less than other forms of government funding.

So there you have it! Health care in a free-market system. This is unfortunately one of those posts where I simply don’t have the time or energy to have the comments turned on because of the crazy it attracts. So much crazy… This post is essentially thought crime… but f*ck it, that’s my specialty.

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