Tag Archives: Medical prices

A lot of things are called “free market” and capitalism that are not. That would include the US medical system. From Hunter Lewis at lewrockwell.com:

In this Fox article, Edward K. Glassman, my long ago Harvard classmate, author of Dow 36,000 (predicting Dow at that level by 2005), and current director of the George W. Bush Institute, extolls our free market medical system. The first reader to comment agrees that we have a “ free market” system, but thinks that “ profit based healthcare” should be “outlawed.” Another reader thinks that we actually have “socialized medicine.”

So what do we have? I think the most apt description would be crony capitalist medicine, one in which powerful special interests conspire with government officials to create legally mandated monopolies, with the specific goal of thwarting free market competition.

Here is how it actually works:

 1. Most people wonder why there are no visible prices in medicine. You only find out what the charge has been after the service has been delivered. There actually are prices, controlled prices, but you aren’t supposed to know what they are. Each year a committee of the American Medical Association recommends a set of prices to Medicare. The committee is dominated by medical specialists, so specialists tend to do particularly well. Medicare is actually run, not by government, but by private insurance companies, and these companies adopt these prices for private insurance purposes as well.

Congress further sweetened this price controlled system for hospitals by requiring Medicare to pay  more for the same service if provided by  hospital employees. This has inevitably led to local hospitals buying out most of the surrounding private medical practices, which has in turn created local medical service monopolies that feed patients to the hospital for its more costly services.

2. These monopolies are further sweetened for doctors by legally barring nurses, chiropractors, four year trained naturopathic doctors, and other health professionals from using the full extent of their medical training. In this way, the supply of medical services is constrained, which further raises prices.

To continue reading: Free Market Medical System?