Free Markets for Health Care

Here’s an illustration of why one is badly needed.  The Wall Street Journal‘s article is centered on health coverage plans, but the underlying problem is in health care provision and the monopolistic nature of both provision and coverage.

Last year, Cigna Corp and the New York hospital system Northwell Health discussed developing an insurance plan that would offer low-cost coverage by excluding some other health-care providers, according to people with knowledge of the matter. It never happened.
The problem was a separate contract between Cigna and NewYork-Presbyterian, the powerful hospital operator that is a Northwell rival. Cigna couldn’t find a way to work around restrictive language that blocked it from selling any plans that didn’t include NewYork-Presbyterian, according to the people.


Dominant hospital systems use an array of secret contract terms to protect their turf and block efforts to curb health-care costs. As part of these deals, hospitals can demand insurers include them in every plan and discourage use of less-expensive rivals. Other terms allow hospitals to mask prices from consumers, limit audits of claims, add extra fees and block efforts to exclude health-care providers based on quality or cost.

We’re on track to commit 20% of our GDP to health care costs, and the industries of health care provision and health care coverage operating outside a free market environment is the major driver of that expense.

The WSJ piece goes on at length in this vein.

If patients and our doctors were able to shop around and force hospitals, clinics, and coverage providers to compete for our business, we’d very quickly see better health care, better (actual) health insurance, and lower costs.  If our doctors had to compete for our business, we’d see just as quickly better care at lower cost.  And our doctors would need have no fear of costs—their fees—going too low: there’s a lot to be said for patient loyalty to a good doctor, both from a quality of care and continuity of that care perspective.

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