Without Government Who Would Artificially Increase the Cost of Healthcare

Advocates of government monopolized healthcare (they usually call it “national” or “universal” healthcare) argue that their favored system is necessary because market actors have an incentive to constantly increase the cost of healthcare. The opposite is true. Market actors have an incentive to provide cheaper and more effective services because doing so will attract new customers by both attracting customers who formerly couldn’t afford their services and siphoning customers away from their competitors. However, government has an incentive to increase healthcare costs because doing so protects its favored providers:

Dr. Gajendra Singh walked out of his local hospital’s outpatient department last year, having been told an ultrasound for some vague abdominal pain he was feeling would cost $1,200 or so, and decided enough was enough. If he was balking at the price of a routine medical scan, what must people who weren’t well-paid medical professionals be thinking?

The India-born surgeon decided he would open his own imaging center in Winston-Salem, North Carolina, and charge a lot less. Singh launched his business in August and decided to post his prices, as low as $500 for an MRI, on a banner outside the office building and on his website.

There was just one barrier to fully realizing his vision: a North Carolina law that he and his lawyers argue essentially gives hospitals a monopoly over MRI scans and other services.

In all fairness to the politicians of North Carolina, I’m sure the hospitals in the state paid them a tremendous amount of money to buy such a favor.

The reason healthcare in the United States is so costly is because the government has inserted itself more and more into the healthcare market. Medical products cannot be released without obtaining approval from the Food and Drug Administration (FDA), which demands a princely sum before one can receive approval. Drugs that used to be over-the-counter now require people to first pay a doctor to write a prescription before acquiring them. Government protected monopolies in the form of patents allow drug companies to charge whatever price they want because they have no fear of competitors offering a cheaper alternative. And stories like this, where new market actors are crushed by bureaucrats in order to protect their favored healthcare providers, are rampant.

When something is causing a problem, more of it isn’t going to alleviate that problem. Government is the reason healthcare in the United States is so expensive. Handing the government a complete monopoly over healthcare isn’t going to alleviate that problem.