In the United States of America, political movements advocating for “healthcare reform” have exploded. They point out that there is an inherent problem with the current healthcare system, Capitalism. These people are inherently wrong. Capitalism is not the problem with the United States healthcare system, a constrained healthcare market is. The next route of attack for opponents of the current system is the profit motive, claiming that healthcare companies have the profit motive to harm consumers, not help, but this cannot be further from the truth. The proponents of a single payer healthcare system also fail to realize that the government is vastly inefficient compared to the markets, and because if this, they are unsuitable to maintain any public healthcare system. Despite the unpopularity of the position, there are those who realize that the free market can fix the healthcare system and that private healthcare does work.

Economists can agree upon the fact that the chief factor that makes capitalism work is competition. According to Michael Cannon, a specialist at the Cato Institute, this is precisely what is lacking in the US healthcare system; “Each state protects its domestic insurers from competition by barring entry to products licensed by other states. If you live in California, you can’t buy a less-expensive policy available in Nevada.” (Cannon). This policy prevents competition in the healthcare market, making it so that healthcare companies can artificially raise healthcare costs, hurting the consumer. This policy is unprecedented in any other market we see, and it accounts for a lot of the problems with modern healthcare. Tom Coburn, former US senator and medical doctor, explains how this phenomenon compares to other markets in the economy, “For instance, imagine if when consumers wanted to design their own car or computer they were told what they could only design their machine based on arbitrary government mandates that varied state-by-state. Imagine if when consumer wanted to shop for any product they couldn't find basic pricing information or reviews because the government set up a system that made those choices for them. The American people know that innovation, choice, and competition work because they see these forces work every day. Consumers expect that the market will produce better, safer, and more efficient cars at a reasonable price. Consumers expect the market will make electronics faster and cheaper, and so on. History has confirmed this fact time and time again. In 1908, Henry Ford made a car for $850. Eight years later he produced the same car for $360. Today, we see that prices for plasma and LCD TVs have dropped by about 50% in the past two years.” (Coburn). This practice of anti competition law is fundamentally harmful. No other market works like this, and it shouldn’t, because that is not how a sustainable market economy works. When competition is taken out of capitalism, monopolies are created, which harms the consumer, the very group the government claims to protect.

One of the chief critiques of market healthcare is the profit motive. The critics say that the profit motive is against consumers, and that it incentivizes companies to not fulfill on their obligations to help their customers, but this is hardly the case. “What Adam Smith said about the butcher, the brewer and the baker is equally true in health care. You can’t be successful in the medical marketplace unless you are meeting other people's needs. The more needs you meet, the more successful you will be. Profit is one measure of how much good you are doing.” (Goodman). If companies do not meet the requirements of their customers, they won’t continue to get business, putting them out of business. They also have the incentive to perform well, if they are generous and good to their customers, then they will attract more business than their competition, and they will be successful, this is how any company operates. Cannon talks about how market healthcare is the most optimal system, he talks about how because they have the profit motive, they always have the motive to improve their services. (Cannon) This is important to note, as the government has no profit motive in healthcare, meaning they have no motive to provide quality service to the people and they have no motive to innovate.

More than just common sense policy can show that a private system works, there are also real world examples. Switzerland, who has one of the world’s best healthcare systems, is completely private. The healthcare market is completely private and there is no free healthcare, instead, all Swiss are mandated to purchase healthcare. (Schwartz). This is further evidence that private healthcare does work, as the Swiss have a completely private system yet they are extremely successful. There are also examples of countries who lack any meaningful private healthcare option, such as Venezuela. In Venezuela, doctors and medical care are a scarce commodity. They also lack basic medical supplies and are relying more and more on foreign countries for medical care and doctors (Mahjar-Barducci). The Venezuelan government can no longer provide decent care, as the success and basic health of the people relies on the government. They do not have any sort of real private options in Venezuela, showing once again that having a government monopoly on healthcare is very dangerous.

Private healthcare is the victim of misconceptions and ignorance. Many do not understand the United States healthcare system, and so they assume that it is private healthcare that is the issue. Private healthcare does work, it has proven to be so in Switzerland. The reason the United States is having problems isn’t due to private healthcare or capitalism, but because of the lack of it, the lack of capitalism and the lack of private healthcare. The more private healthcare available, the more options people will have, which will lead to affordable prices and quality care, as found in countries like Switzerland. In places with a lack of private healthcare we can see the effects, no innovation, lack of actual care, apathy on the part of the government, and terrible health conditions. Private healthcare not only works, but is a necessary part of the healthcare market and system. More private healthcare is needed, not less.

Sources

Cannon, Michael. “Break Local Monopolies by Letting Insurers Compete across State

Lines.” 2009 https://www.cato.org/publications/commentary/break-local-monopolies-letting-insurers-compete-across-state-lines Cato Institute. Accessed 31 August 2018

Cannon, Michael. “Give Market Forces Room to Breathe, and Costs Will Decrease.”

Cato Institute, September 18, 2009. https://www.cato.org/publications/commentary/give-market-forces-room-breathe-costs-will-decrease. Accessed 7 September 2018.

Coburn, Tom. “Competition Solves Health Care.” 2008 https://www.nysun.com/

opinion/competition-solves-health-care/72610/. New York, The Sun. Accessed 1 September 2018.

Consumer Health Care. Gale, 2014. 2 Vols. Accessed 2 Sept 2018.

Goodman, John. “Why Making A Profit In Healthcare Is Good.” Forbes, 2015

https://www.forbes.com/sites/johngoodman/2015/10/21/why-making-a-profit-in-health-care-is-good/#69841e24320c Accessed 31 August 2018.

Mahjar-Barducci, Anna. “The Failure of Chavez’s Socialist Health Care.” Gatestone

Institute, 26 August, 2011. https://www.gatestoneinstitute.org/2371/chavez-socialist-health-care. Accessed 23 Sept, 2018.

Schwartz, Nelson. “Swiss Health Care Thrives Without Public Option.” New York

Times, 30 September, 2009. https://www.nytimes.com/2009/10/01/health/policy/01swiss.html?pagewanted=all. Accessed 23 Sept, 2018.