When I travel, particularly overseas, I run into a lot of people who are totally confused about the American healthcare system.
For all intents and purposes, they think the United States relies on the free market and that government (at least in the pre-Obamacare era) was largely absent.
So they are baffled when I tell them that nearly one-half of all health expenditures in America are directly financed by taxpayers and that the supposedly private part of our healthcare system is massively distorted by government interference and intervention.
When explaining how government has screwed up private health insurance, I talk about third-party payer and how genuinely private insurance works for home ownership and automobiles. And I cite examples of genuine free markets for cosmetic surgery and even (regardless of your views) abortion.
But from now on, I think I will simply tell people to watch this superb video from Reason TV.
This shows how a true free market operates. Efficiency and low prices are the norm, and consumers get a good deal.
My only quibble is that the video doesn’t explain how government policies – such as the healthcare exclusion in the tax code – should be blamed for the grotesque waste, inefficiency, and featherbedding in most parts of the medical industry.
But that’s a minor gripe. You should share this post with any and all fuzzy-headed friends and colleagues and tell them this is how smoothly the market would work if the government simply would get out of the way.
And if they want another example, here’s a report from North Carolina on free-market healthcare in action.
If we want this kind of system to be the rule rather than the exception, we need to scrap the healthcare exclusion in the tax code as part of a switch to a simple and fair flat tax. That will help bring some rationality to the health insurance market and address the part of the third-party payer crisis caused by indirect government intervention.