Can someone breakdown the argument against free-market private healthcare?

[samoyed]

History of United States antitrust law - Wikipedia

en.wikipedia.org

We spent a few generations laying down anti-trust regulations because companies don't behave in this idealized competition manner, and, as can be seen with modern telecoms, companies constantly spend time, effort and capital trying to circumvent these regulations instead of innovating and competing in some sort of fairy tale free marketplace.

 

[EdibleKnife]

We talked about this too. Basically he believes whether it's an insurance company, or directly a hospital, doctor, or whatever sized privated practice, so long as there is a need or market, (however low their budget or purchasing power is) a private entity will come in with a model to serve that group.

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Simple question to put to him when he lands on this argument: "When?" When exactly will that private entity built to serve the disenfranchised individual arrive? Health can't wait. If someone is ill now, they'd need treatment now and if there's not already that private company ready to cater to them, they don't have the luxury of waiting till it shows up if at all. Under a better system, you wouldn't have to wait till Perfect Company X comes to your rescue in a sea of other options you can't access and one could go with the convenient and current option at no cost or hassle.

In a weird way, it all happened at just the right time. My mom finished her radiotherapy just as the outbreak hit the US. She's fine and holed up. They want her to get chemotherapy as well but that's part of an experimental study she is in to see if it'll reduce the chance of occurrence and isn't something immediately necessary. They said they could put it off even a couple of years if necessary so she can wait out the virus. If she was still weak from radiotherapy, this would all be ten times more scary.

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That actually is a blessing. I have sickle cell and the facility of my specialist is one that caters to a majority of cancer patients with an infusion lab in the building. When I went there last week there were still people in need of therapy who had to still come in to continue their regimen. I have to go there this week to and I imagine the scene will be the same. These are some of the most vulnerable people to secondary illnesses in general let alone a pandemic strain so her dodging that bullet is fantastic.

 

[sapien85]

The idea that in a completely free market companies would willingly cover people with major illnesses that cost a way more to cover than the money most can afford to pay them without subsidies is a pipe dream.

 

[Clay]

We talked about this too. Basically he believes whether it's an insurance company, or directly a hospital, doctor, or whatever sized privated practice, so long as there is a need or market, (however low their budget or purchasing power is) a private entity will come in with a model to serve that group.

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Why can't everyone who wants to own a home buy one? Surely the market should be providing extremely low-cost homes for people with no savings or credit.

I bought there's a huge market for a sports car with comparable specs to a Porsche that starts at $20k. We've been making cars for decades, why hasn't the enormous demand for this product been met?

Fill in any luxury product. It's pretty obvious that private healthcare will leave many people unable to afford insurance.


Your cousin needs to reread his Econ 101 text. Markets are notable for efficiently allocating resources. The idea that they will provide any given service for anyone who wants it at any price is opposite to how they actually function.

 

[EdibleKnife]

History of United States antitrust law - Wikipedia

en.wikipedia.org

We spent a few generations laying down anti-trust regulations because companies don't behave in this idealized competition manner, and, as can be seen with modern telecoms, companies constantly spend time, effort and capital trying to circumvent these regulations instead of innovating and competing in some sort of fairy tale free marketplace.

Click to shrink...

Right? People with this "free market" ideal are the same people who get off on calling UBI, universal healthcare, and climate-focused energy "pie in the sky" progressive ideals yet can't explain what evidence they have to the idea that rich people will decide to automatically play fair when American capitalist history has shown the exact opposite. They can never explain what the exact incentives are that will make companies like Exxon Mobil, Wells Fargo, Blue Cross and on suddenly stop doing shady shit that already results in constant class action lawsuits that barely break their banks.

Also preemptively OP, don't let him change the subject by shifting the conversation to: "Well country X has single payer/universal healthcare and have you heard about how bad it is over there?" It's really lazy and irrelevant. The system we have now doesn't work. Relying on the conscience of wall street does not work. It makes people fall all the way through cracks the size of canyons. We need to try something else. So many people are so afraid of change that they can't even imagine it and rather convince themselves that the different thing must be worse to prevent even challenging the status quo. If we change it and as a nation we find that universal healthcare is somehow worse than privatized, at least changing it sets the precedent that it CAN be changed and modified and cultivated to something not perfect but better & radically different. That's a much healthier state for the country than staying stagnant and pathetically stuffing square pegs into holes they've never fit in for decades.

 

[WarpSpeedMolasses]

Thanks guys, a lot of good points here. I'm gonna present a lot of these to him, but taking a bit ot a break now as it was frankly a draining discussion.

 

[Any Questions]

If you think the free market is working in the US then you are stark raving mad. Politicians are bought openly via the lobbying system and greed runs everything. On paper your cousin has a point. In practice... Well let's just consider the opoid crisis.

 

[Elfotografoalocado]

Healthcare cannot possibly be a free market. Healthcare demand is not free and has no information.

 

[AcademicSaucer]

In countries with government run universal healthcare you still see private hospitals and insurance.

 

[RestEerie]

OP's question sounds like the plot of a critical acclaim Hong Kong Drama.

Big White Duel - Wikipedia

en.wikipedia.org

 

[oofouchugh]

Individuals cannot negotiate healthcare costs because we need it or we'll die. If you bring a group together you have bargaining power to negotiate prices for services because you're negotiating as a group. Your group negotiates these prices ahead of time so price of care is known before the care is needed. In terms of things like prescriptions, like say insulin, you're able to tell an insulin manufacturer, this is how many diabetics we represent and will need to buy X amount for Y time.

Your negotiating power increases based on the size of the group you represent. You literally can't get bigger than representing your entire country. If a healthcare provider doesn't want to play ball they lose out on literally the entire country as a customer. Now you have significantly more power to enforce treatment for those who need it but are high risk or poor. This increases coverage and brings prices down.

And now you get to the part with you don't have a for profit insurance company sitting in the middle of this process inflating prices because they're beholden to shareholders to maximize profit. The only question mark that conservatives love to bring up is "but the government is bad at running things" as if they've never dealt with a private insurance company trying to screw them over on some prescription coverage in their lives.

 

[arcadepc]

His argument was that telecom companies collude too much by pie-ing off areas of service among eachother, and people living in particular areas are left without choice, and that this isn't an example of true competition.
His hypothetical is private businesses fulfilling needs while promoting R&D due to competition, but not being allowed to collude or section off areas just for specific businesses.

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Also phone companies can also expand and make deals with other markets and countries.
When it comes to Healthcare, many medicine students from poorer countries prefer to study and work abroad for better wages and career prospects.

In countries with government run universal healthcare you still see private hospitals and insurance.

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And government health care agencies cover part of the costs if you get examined in the private sector

 

[jkk411]

On a long enough timeline maybe free market innovation could eventually lead to some Jetsons-level technology where the cost of even the most complex care is negligible. I'm talking "Any sufficiently advanced technology is indistinguishable from magic"-type shit. In the meantime, people are dying from treatable disease all the time because the free market is failing them. We can make the decision as a society to collectively absorb the cost of health care for all. People can hypothesize a universal system would cost more or stifle innovation or increase wait times or whatever nightmare they want to peddle. I would check outcomes in other countries to see how most of those fears probably aren't true. At the end of the day it's simply a humanitarian issue. I'm not sure there's any getting through to someone who doesn't see it that way.

 

[devilhawk]

The attractive notion about the free market is it encourages innovation and progress. Health insurers are just middlemen, creating a risk pool and not an actual product. Essentially they can only charge more, pay out less, or decline service. So what can they innovate? What even is competition in this sense? This is where you start to question their entire existence.

 

[mclem]

So my cousin and I were having a debate. I firmly believe in universal, single-payer, tax funded, FULL COVERAGE FOR ALL healthcare. I don't think basic essentials and rights that we need just to exist, should be commoditized or provided through private means. My cousin was of the view that if we had a true free market for healthcare (which afaik we've never had) with full market exchange, the competition would fill the need for coverage because "if there's a need, competition will serve it".

Can someone (I suppose more well read than I am) breakdown as to why this wouldn't work for healthcare?

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It strikes me that the easiest answer is:

"There is a need for a treatment that is cheaper than the cost to administer that treatment. How does free-market private healthcare solve that?"

Ultimately, some people will need healthcare for free. They are not useful customers for free-market private healthcare; it has no interest in serving them.

 

[Fudgepuppy]

The people making the money in capitalism, aren't the people actually making the things that create the value.

It's not the doctors that are being incentivized to give better services for better money, because the money goes to the investors, the owners, the CEO's etc. The same goes for basically all innovations of mankind. It's not the CEO of Boeing that comes up with a better engine or plane that can fly using solar panels; it's the engineers who are there because they want to make it.

For every cent you spend on healthcare, large portion of it goes to the people at the top of the hospital, who have no incentive to cure you if it means they make a loss on it.

Anyone who believes that for-profit healthcare is the optimal solution, are either incredibly uninformed, downright evil, or both.

 

[Rover]

We also had a debate that touched on this aside from healthcare. I believe businesses (or absolutely anybody for that matter) should never be allowed to exchange money, goods, or services so that they can legislate a law in return. Regardless of whether it's called lobbying or bribery. He disagrees, and believes that rather than taking an entity's ability to funnel money for laws away, we should instead heavily reduce politicians' abilities to write and legislate laws without heavy oversight from citizens.

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If money becomes akin to voting, then we give up the guarantee of equality that 1 person = 1 vote.

What he doesn't seem to understand is that it would take a very disproportionate amount of citizens pushing for oversight to counter 1 CEOs lobbying.

 

[Rygar 8Bit]

The idea that there would be competition is a myth and not well supported. Big market providers tend to consolidate and merge. For example, internet/telecom providers, airlines, certain industrial manufacturing. Once they merge they can collude or work together to lower the standard of service and to raise prices or add additional charges.

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This, it's all a fucking scam. But with health it will lead people to die.

 

[nelsonroyale]

Cost of healthcare expenses per capita are highest in the US: https://www.businessinsider.com/per...-healthcare-countries-ranked-2019-3?r=US&IR=T

By comparison its stats are poor compared to relatively wealthy countries: https://www.healthsystemtracker.org...n-ischemic-stroke-and-hemorrhagic-stroke-2015

 

[Bjones]

The biggest claim against it and Obama care showed this is that a lot of people get inadequate care. They get kicked out of hospitals and care facilities sooner than they should. My wife who is an occupational therapist has been talking about this ever since the plan went into action. they go by certain guidelines instead of what the doctors / caregivers suggest.

basically doctors / Caregivers have to wait longer for responses and patients get overall worse shorter care.

 

[absolutbro]

I have spent the last 20ish years working for either DoJ's Antitrust Division, or the FTC's Bureau of Consumer Protection. I have seen market manipulation and price fixing for just about everything under the sun, from agricultural feed additives to shipping costs to healthcare. A truly free market has never, does not, and will never exist. It's a pipe dream peddled by scam artists and morons who ignore the multitude of issues with human nature , situational influences and frankly basic reality.

 

[Mars People]

The simple fact is that nobody should be denied access to heath care becuse they have no money.
Nobody.

I've seen posters on this very forum terrified of calling an ambulence becuse they can't afford the cost of it.
The mere idea that an ambulence or any sor of emergency care would cost you anything is unthinkable to me.

 

[EdibleKnife]

The simple fact is that nobody should be denied access to heath care becuse they have no money.
Nobody.

I've seen posters on this very forum terrified of calling an ambulence becuse they can't afford the cost of it.
The mere idea that an ambulence or any sor of emergency care would cost you anything is unthinkable to me.

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I'd say that it's baffling that this simple point doesn't penetrate the heads of "free market" idealists but I know for too many of them it's simply that they despise the disenfranchised and use the argument as a roundabout way to justify punishing the disenfranchised under the cover of Randian, "survival of the fittest" bs. The most generous I can even be to the rest is that they're naive people who are relatively healthy, privileged and self-concerned who, through lack of experience or willful ignorance, have no genuine empathy for people with chronic medical issues that have to depend on the system for their survival more than they do; probably seeing a GP once or twice a year and thinking that's the way it is for everyone else. Since they're so set apart from the realities of healthcare they get to just consider it solely from the perspective of "how much it will cost/fuck government oversight" rather than "does the system actually make things better and more equitable for vulnerable citizens & average citizens in general".

 

[Wumbo64]

I want nationalized health care that works. This crisis has shown our existing system is a joke. However, I have always understood that America in particular would be a challenging country to implement it.

First off, nobody can get a firm price estimate. Well, other than it would likely cost a lot. When I say a lot, some economists claim in excess of what the war in the Middle East cost cumulatively, but per year. This could open up a whole can of worms. The tax fallout could be utterly enormous. To keep ahead of potential debt making our dollar worthless, taxes would likely skyrocket. This would likely fall squarely on the shoulders of poor and middle class folk, if history shows us anything. Higher taxation for better social services only succeeds if the rich are compelled to pay them, and I would guess wealthy individuals and their enterprise would sooner up and leave than fork over a dime. Plus, we would also have to depend on our politicians to even competently negotiate rates and a structure that doesn't sink us long or short term. Personally, I don't trust Washington or even local governments to follow through.

Secondly, a nationalized health care system could be repealed outright or at least hampered by political opposition. Imagine conservatives willingly partaking in a system where they help pay for those who can't help themselves. Yeah, I can't either. We would probably need to wait 30 or 40 years before even trying to pass MFA, just to make sure all the old farts are dead who would make it an uphill battle. Citizens and representatives would have to be exhaustively diligent about snuffing out legislation and campaigns to weaken the system annually.

Lastly, there is a concern about our facilities becoming regularly overloaded and the quality of individual treatment declining. If we dump truckloads of cash into subsidizing education for folks who want medical industry jobs, building hospitals, etc... then it isn't really an issue. Though again, think about how your state and federal government operate even under our most efficient leadership. I just don't see it working smoothly unless there are some big changes.

Really that is the overarching theme. You could conceivably pass sweeping healthcare reform, but our government has to maintenance it. Our society would also have to buy into it fairly ubiquitously to function well.

Though I echo what other folks in here are saying about your friend OP, the free market stifles innovation. There is a mountain of research and distressing news you could show him to refute the notion privatized healthcare is even close to optimal.

 

[shadowsdarknes]

What exactly is the libertarian solution for healthcare for senior citizens?

Most senior citizens are on a limited income as they are not working full time and have not accumulated vast amounts of wealth. Seniors are not desirable to the free market for insurance purposes. They use healthcare more than others.
They are among the least desirable demographic for insurance risk pools. So what exactly would the free market do to provide seniors with affordable healthcare? Tons of seniors would be priced out of the healthcare system. High cost barriers will just lead to bad health outcomes, lower life expectancy, etc. Not desirable unless you believe we are to serve the market. Not serve people.

 

[iksenpets]

So, like, your cousin is right, but in a way that ends up being pretty stupid. If there were a true free market in healthcare, yes, services would be provided at all price ranges. However, a true free market would involve the abolition of medical licensing, and those new low-cost alternatives would be essentially quack doctors. Informational asymmetry is too great in medicine for a fully free market to ever really exist, as is the potential for harm from a poor decision. Consumers don't understand the services they're buying well enough to make informed decisions without getting themselves scammed or putting their lives at risk. The logic for why free markets do a really good job at providing better and better television sets at lower and lower cost just falls apart for medical services because of that.

 

[Zombegoast]

Health Insurance industry made billions in profit. Health Insurance have high deductibles and premiums and people can't afford to go to the hospital if they have cancer or other diseases. You have people on GoFundMe asking for donation to get their treatments covered. Some can even deny to cover you .

When I had to go to the ER last summer and get 8 stiches on my finger, it cost me over $3000 and needed Financial Assistant which destroyed my credit score. And since I'm a part timer, I don't get benefits and my only option is the ACA with the cheapest plan being $8000 in deductible with a monthly payment of $340.

It was cheaper for me to go the hospital uninsured.

Here in America, you're only going to get good healthcare if you work full time and at a Union. And some that are running for office are offering something worse than that.

 

[Don Fluffles]

free markets don't materialize on their own. Free markets happen under certain conditions and these conditions just don't exist in health care. Nobody is going to shop around for the best value health care while they are having a heart attack.

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Especially when hospitals don't even bother displaying prices. Many European countries have private healthcare and insurance iirc, but they're often strictly regulated to be fair and extremely affordable.

 

[Steenbock]

On a long enough timeline maybe free market innovation could eventually lead to some Jetsons-level technology where the cost of even the most complex care is negligible. I'm talking "Any sufficiently advanced technology is indistinguishable from magic"-type shit. In the meantime, people are dying from treatable disease all the time because the free market is failing them. We can make the decision as a society to collectively absorb the cost of health care for all. People can hypothesize a universal system would cost more or stifle innovation or increase wait times or whatever nightmare they want to peddle. I would check outcomes in other countries to see how most of those fears probably aren't true. At the end of the day it's simply a humanitarian issue. I'm not sure there's any getting through to someone who doesn't see it that way.

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Even if technology advanced to the point where complex care is dirt cheap, the only thing that the private companies would see is the absurd amount of profit they could make by radically overcharging for it. They always look for the easiest/cheapest way to get the biggest possible profits.