The Benefits of Competition

Recently I was asked to Washington D.C., to testify before the House Budget Committee on the distorting role government plays in healthcare markets. The full text of my remarks can be found here, and the full video of the testimony can be found here for those of you who are interested.

One of the first points I made was the distorting role government had played in the conversation of healthcare reform in the last few years, focusing primarily on the millions of uninsured rather than the actual cost of care. There really was no attention paid to the fact that an operation is $40,000 at a so-called not-for-profit hospital across town from me and the same operation by the same surgeon is a tenth of that at my facility.

Rather than focus on that, the focus was “let’s get everybody insurance so this $40,000 operation can be paid.” The obvious beneficiaries of this approach are the members, as I like to say, of the cartel of corporate healthcare.

If you are selling a product or service, the purchase of which is mandatory, you are obviously going to be the beneficiary of this mandate. No one really wanted to talk about the cost because that was not consistent of the agenda of the folks who were supporting and who, I argue, wrote the Unaffordable Care Act.

The government’s real distorting influence, I maintained, was that the conversation really revolved around coverage than it did around cost. I’m going to expand on this in future blogs because it’s very important to keep our eye on the ball and know that competition does in healthcare what it does in every other industry – it tends prices lower and tends to increase quality all simultaneously.

Thank you for joining me. We’ll see you next time.