Obamacare Alternative

In two separate posts (here and here) at the blog The Incidental Economist, Aaron Carroll, a determined advocate for centrally directed healthcare, is upset and frustrated with the critics of Obamacare and suggests they propose some “sensible alternatives that actually address the policy issues.”

Well, okay, that’s easy. First, a sensible alternative would embrace federalism. We speak of a healthcare “system” in this country, but there is no system. Medical care is provided in numerous geographic markets located across the country and there is no particular connection between providers operating, for example, in Pittsburgh and those operating in Lubbock, Texas. Healthcare is a local activity.

Respect for freedom and self-government would call for regulation of local activities on no higher than the state level. Yet by placing hundreds of millions of people under the thumb of a central authority, Obamacare represents movement in the wrong direction. Even the Europeans don’t go this far:  the E.U. doesn’t regulate healthcare for the citizens of France, but leaves that up to the French government (and its people).

Second, because history proves that market-based economies are superior to centrally directed and controlled economies, a sensible alternative would embrace markets and competition. This would mean aggressively enforcing the antitrust laws in all health-care markets (hospital, physician, insurer, drugs, etc.). We would rely on direct gov-ernment regulation only in those markets determined to be natural monopolies.

Third, it appears there are more hospitals and doctors per capita in European countries than in the U.S., so we may have a relative shortage of providers here, resulting in higher prices than necessary. So a sensible alternative would include steps to increase the number of hospitals and physicians (although liberals like Carroll tend to agree with this suggestion).

So here we have a start:  an alternative that revolves around the concepts of decentral-ization and competition. This would go a long way to create healthcare markets that benefit consumers in the form of lower prices and improved quality. That’s what com-petition does, and healthcare would be no exception in most of the hundreds of geo-graphic markets relating to medical care.

But don’t expect Carroll and other Obamacare supporters to acknowledge the truth about decentralization and competition. Carroll is a “competition denier” and his support of Obamacare is nothing more than support for relative stagnation and decline.

P.S.:  Achieving competitive healthcare markets would not automatically provide addi-tional insurance coverage to low-income individuals, although they would benefit from a more vibrant economy. But access is an inequality issue, not one of healthcare per se, and dealing with inequality by advocating stagnation for almost 20% of the economy is bizarre, to say the least.

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